Americans for Tax Reform & Digital Liberty File Comments to FCC on Best Practices for Preventing and Eliminating Digital Discrimination
Americans for Tax Reform and Digital Liberty jointly filed comments on February 21st with the Federal Communications Commission (FCC) regarding the agency’s Notice of Proposed Rulemaking on Digital Discrimination. These comments explore the pitfalls that would result from the agency’s adoption of a disparate impact standard to measure digital discrimination, as opposed to a far more useful and fair disparate treatment standard.
The comments address the NPRM question regarding how to define “digital discrimination of access.” The two options are (1) a disparate impact standard, which prohibits practices that have a differential impact between different racial, economic, religious, and other groups of consumers, regardless of intent or (2) a disparate treatment standard, which bans practices that intend to treat consumers differently. The comments analyze the use of these standards to measure discriminatory practices against consumers based on their income, race, and national origin.
The economic pitfalls for using a disparate impact standard to prevent discrimination based on income could establish a dangerous prohibition on “an ISP refusing service to someone who cannot pay for it.” Further, Digital Liberty’s comments argue that:
One of the most dangerous possible outcomes for this rulemaking would be to define as discrimination an ISP refusing service to someone who cannot pay for it. This would be a perfectly reasonable business decision, not a form of illegal discrimination. It is not economically feasible for ISPs to invest large sums to provide service to customers who cannot pay. ISPs should be given safe harbor both for refusing continued service to customers long in arrears on their bills and for not yet having built out to areas that are expensive to reach and have very few paying customers.
As a result, comments argue that the FCC should avoid pursuing policies that would force ISPs to make irrational economic calculations, as “greater profits for ISPs necessarily mean greater investments in high-speed broadband and lower rates for consumers.” The FCC should pursue policies that incentivize this outcome, not increase costs and discourage investment.
The comments identify even clearer evidence to assert that the disparate impact standard should not be utilized to prevent racial broadband discrimination. The most obvious technical argument identified in comments recognized that:
The disparate impact standard should also be rejected in the arena of race, and the evidence for this argument is even more clear than it is for income level. On a technical level, it is nearly impossible to deny a customer wireless service based on race, at least as measured by the disparate impact standard. The radiofrequency spectrum that carries cellular data permeates the air around us. When one erects a cell tower and turns it on, anyone with a cell phone can pick up the signals regardless of race.
As a result, the policy would result in no new useful tools for regulators to combat digital discrimination for racial minorities. Further, the comments argue that the disparate impact standard is inappropriate for fiber internet, citing a 2022 study from the Phoenix Center for Advanced Legal & Economic Public Policy Studies which found that:
Government data show that areas with the fewest minority residents (0-10% of the population) also had the lowest rates of fiber availability at around 40%. Areas with the most minority residents (90-100% of the population) had among the highest rates of fiber availability at nearly 52%. Under the disparate impact standard, FCC must conclude white Americans have been the victims of systemic digital discrimination by the fiber industry. Rather than grow their profits by reaching all customers irrespective of race, fiber providers have either decided to forgo profits to deprive the white race of broadband access or have structured their business in a way that has the same effect.
The evidence suggests that this racial disparity is likely a result of white Americans residing in the rural geographical areas that are costlier to reach with fiber lines. This reality, however, would have to be ignored in favor of a presumption that these disparities arise out of some form of racially charged discrimination. The facts would be ignored in service of a stubborn agency policy that insists upon fitting square pegs in round holes.
The FCC must acknowledge the sweeping implications of a presumptive disparate impact standard before proceeding with its new rulemaking. In light of the available evidence, the FCC should instead utilize a disparate treatment standard, which would ensure that all suspect practices actually involve racially discriminatory impacts.
You can read the full comments here.