Well, it is so nice to be with you all today. Thank you for coming to our FCC panel, or FCC policy panel. I would love to introduce our esteemed panelists and give them a chance to introduce themselves. So Angie, would you like to start?
Yeah, sure. Thank you so much, Kelcee. And thank you for the opportunity to speak here at State of the Net on the 20th anniversary. Really exciting. I am Angie Kronenberg, I'm the president of INCOMPAS. INCOMPAS is the leading trade association that is representing new network builders, as well as online Internet innovators, and I'm really looking forward to talking to you about our policy agenda for the year, we are focusing on bringing more broadband competition to consumers, into businesses, as well as ensuring that, no matter which network provider you may choose, you can access the online content of your choice without undue interference from your broadband provider. So, thank you again for the opportunity to be here. Looking forward to our conversation.
Absolutely. Let's keep it going down the line.
Good afternoon. I'm Chris Lewis. I'm President and CEO of Public Knowledge. Thank you for inviting me. Public Knowledge is a digital rights nonprofit and civil society group here in DC, and we are a part of a large field of allies working on behalf of the public interest. Our mission is to promote free expression, and an open Internet, and affordable access to communication tools and creative works, and that means a lot of work at the FCC.
Great to hear it. You're in the right place. Great, Diane, please tell us a little bit about yourself and what you do.
Thanks, Kelcee. Good afternoon. Thank you for having me. It's a pleasure to be here. My name is Diane Holland. I am a partner at Wiley Rein, here in DC. I am also currently serving as president of FCBA, the tech bar, so I have two full time jobs and I don't get a lot of sleep, even when there's not a Super Bowl keeping me up late at night. I spent a little over 20 years as an FCC staffer, I just left about a year ago. And so, much of my practice now is advising clients about FCC matters, and helping them sort of navigate rules and processes at the agency. I'm also enjoying working on a few non-FCC issues, including doing some diversity and DEI counseling in light of the recent supreme court decisions that outlawed the use of race-based decisions in college admissions, and so, since those rulings are sort of spilling out into the private sector, I am working with a few clients in trying to sort of navigate and understand what those mean for private sector employees. So, I'm having a lot of fun, still doing FCC work, but also sort of branching out.
Alright, I'm Matt Brill. I'm a partner at Latham & Watkins, and I chair our group we call Connectivity, Privacy, and Informatio,n which encompasses communications law, privacy and data security and copyright litigation. We have clients throughout the Internet sector, from broadband network owners to tech companies. My work at the FCC often focuses on the broadband network providers, and, in particular, I've done a lot of work for NCTA, the Internet and Television Association, over the last number of years focusing on broadband classification and net neutrality issues, or, recently, on digital discrimination, both of which are hot topics, I'm sure we'll talk about today. So, delighted to be here with you all.
Fantastic. Well, let's jump right into it. As of September, the FCC is at critical mass, and we're lucky to have a full slate of commissioners now. It was lovely to see Commissioner Gomez speaking right before this, so she's kind of a tough act to follow. Unfortunately, hate to break it to everybody, it's an election year if we weren't aware, how much do we think the FCC can realistically get done before there's potentially a new administration in town? Who'd like to take a shot at that?
I can start, I think you can get a lot done. So, it was not ideal that it took a while to get the fifth FCC commissioner on board with the Biden administration, but, once she arrived, the agency really sped up the process, and issued several notices of proposed rulemaking, and so have really we've started the process of some of what I would describe the more controversial issues, right? Which I know we'll get to. In particular, on the deployment agenda, what INCOMPAS has been very happy to see is action on some of the most basic needs of broadband providers in order to build their networks. As we just heard, the Commissioner discussed, you know, we have a massive investment going into the availability of broadband networks, which means we have a lot of deployment that is underway, both what we describe as middle mile deployment, as well as last mile deployment, and INCOMPAS and several others have been advocating that we needed more clarification of the rules about accessing things like poles and conduit, things that put everybody to sleep, and we're talking about how you deploy a network. But, they're really important functions for telecommunications providers to be able to build their networks, and access to poles and conduit is one of them. And, we saw them take action in December, as well as tee up some additional opportunities for them to address even larger builds, by clarifying what the timelines are for providers who are going to be doing these really significant builds as a result of the BEAD funding. So, that's one area where we're already seeing action, and, I think, additional action could happen, which we think is incredibly important for the overall Internet for All agenda that the Biden administration has.
That's a great point, especially with infrastructure in general, being such a hot topic and so much money flowing into it right now. Chris, yeah,
I agree. I think there's a lot they can do, and it's a shame that sometimes, you know, only the most controversial topics at the FCC get the attention. You know, we're definitely watching the theTitle II proceeding, which I think is incredibly important, that they they moved quickly on. But, there are many smaller things that happen at the FCC, and many of them through bipartisan votes, or even at the bureau level, so, like the declaratory ruling on AI and robotexts, just in the last few weeks, is an example of I think, something that everyone can agree with, but clarified the law in a very simple way. It's important to have an expert agency that can keep up with the pace of technological change.
Absolutely, yes. Diane, would love to hear from you.
Sure, I... Of course, this Chairwoman has been very busy. She's had a very robust meeting, just about every month. The last few months, there have been 8 items, 10 items. And so, I think one of the differences you can see is, prior to September, before Commissioner Gomez was confirmed, and two of the other commissioners were also reappointed, but before that the types of things, that the commission was able to do, were slightly different, and you can see sort of a different bent after September, the next couple of months, brought, of course, the net neutrality, or the Open Internet proceeding, digital discrimination.
And so, you saw things that she could get, of course, the requisite number of votes on, and after that, you're seeing a lot of 3-2 votes. Interestingly, you're seeing 3-2 votes on notices of proposed rulemaking as well, which are just asking questions. And so, I don't think the pace slows at all, the pace probably speeds up, especially in light of this being an election year. I served at the Commission through three administration changes. I left for five years and came back, so I missed one of the administration changes, but... and the same thing happens in an election year, you are trying to get as much done as you can, because you don't know if you're going to have more of a chance after the election, or if the administration changes, then the chair also changes and the agenda also changes.
In my experience, election years do change the focus of the FCC, there does tend to be a kind of stopping point for more controversial items. I mean, this this is a commission that deserves credit under Chairwoman Rosenworcel, she and her colleagues, when the agency was 2-2, got a lot done, and there was a lot of consensus on consumer protection items, with robocalls and robotexts, and spectrum items, and other things. But, I think the more controversial and divisive issues, we had one with digital discrimination, we will have another with the Open Internet proceeding, there just aren't going to be too many of those.
And I think, you know, we look back historically, there's peril for an administration sort of doing things too close to an election, when we won't know the outcome. I remember when Chairman Wheeler presided over the Commission, and launched a proceeding on business data services, and the election took a turn in 2016 that I don't think he expected, and many others didn't expect, and Chairman Pai came in, and the outcome in that proceeding was pretty much 180 degrees opposite of what Chairman Wheeler had intended. So, that may be is a cautionary tale for chairs, like launching proceedings, when there's just so much uncertainty about the future direction of the agency.
Yeah, and we even saw that with the election, where Chairman Wheeler led an effort to update privacy laws for the broadband age, and Congress came in and repealed those privacy laws. Now, we have Congress clamoring for privacy laws, so the swings of politics can really be damaging.
And on the kind of opposite side of that question, if we don't see a new administration, how disruptive are you expecting this election cycle to be? I think your answer just now, Chris, kind of gets at that. Anyone want to take a swing at that?
How disruptive can the election be?
Well, yes, yeah.
Just in tech policy? Thanks for laughing. I think it can be like the panel described, it can be destructive in the way that we don't move forward on big things. And, quite frankly, it can be challenging because the FCC, you know, with the experts who are diving deep into the issues, may be ready to move forward on something but Congress may not be able to, and I think that can hold it back. Prime example, Congress hasn't renewed auction authority for a spectrum auction authority at the FCC, and yet, there's great work that can be done at the agency on spectrum, and there's traditionally been, again, a lot of bipartisan support on how to get that done in a technical way that benefits both licensed users and unlicensed users.
Chris alluded to the Congressional Review Act, that allows Congress to just overturn a rule that they can get enough votes to do so, and even if the administration stays with the same party, there's no guarantee that Congress will, an,d of course, with Congress holding the purse strings of the FCC, and having the power of the Congressional Review Act, and other steps that they can take to sway an independent agency to act in ways that Congress wants them to act, there can definitely be an impact, regardless of who's sitting in the White House.
I think, you know, for me, it isn't about partisanship. It's just different ideologies, and when you look at Internet policy, the Republican-led FCC track record, and democratic-led FCC track record, are just diametrically different, because I think, without overgeneralizing, the Republican administrations have favored a more market-based hands off approach to Internet governance, and Democrats have favored classification of broadband under Title II, really maximizing regulatory authority, and the most recent round of rulemaking efforts really doubles down on that, saying that it's not just about net neutrality, it's about national security, public safety, cyber privacy, you know, there's a long laundry list of areas where this this administration at the FCC wants to assert oversight and control. So, I don't think it's about disruption so much, it is just as consequential, because there are very profound differences in how the parties have approached these fundamental questions about Internet governance.
Well, let's turn to something that we're hearing a lot about from both sides of the aisle, the Affordable Connectivity Program. Obviously, the pandemic was a bad time for a lot of us in a lot of ways, but one of the positives that seems to have come out of it is the Affordable Connectivity Program. We heard the case for the ACP during Commissioner Gomez's speech, just before this, I actually had an outdated number, I had the fact that 20 million households have been connected. Commissioner Gomez says we are up to 23 million households and counting, now. So, obviously, that signals a huge impact on a lot of people getting connected, but the bad news is that that funding is obviously running out. So, I would love to hear from you all on what you think about the prospects for the ACP being renewed, and maybe you could talk a little bit about the hurdles that stand in the way of this program that does seem to have bipartisan support.
This is a significantly important program. From the perspective of the new network builders, those who are going to be participating in the upcoming BEAD program, it can lower their costs by up to 25% to build, according to one study. You heard the commissioner discussing in terms of, well, when you know that there's the potential for a customer that can pay, i.e. through the government, it does have give them more incentive to build, as well as lowering their costs to build, which is think is fairly significant. Also, the fact that the BEAD program was tied to the ACP, there was an intent by Congress that the two would work hand in hand to deliver the network availability, as well as the availability to afford it, for low income families.
So, INCOMPAS has been actively working the hill, with many others on this panel and in this room, to obtain additional funding from Congress to secure it, at least for another year, and the estimates are we're gonna need $6 to $7 billion annually for this fund to be able to continue to meet the success that it has, and the projection of success that we expect, based upon how well it has done, and the ability of so many who have worked to bring families into connectivity, that had not previously had it. But, the politics are hard, and, as we heard from the Commissioner, this is bipartisan, the legislation to extend it has been bipartisan. The success of the program shows, whether it's a Republican district or a Democratic district, people are signing up for this program, so I don't think it's about the program itself, rather, I think, it's about all the other things that are going on, and the things that need funding, and that's the bigger conversation that's happening in Congress, and, as we've seen, it's not incredibly functional at this point. We've had some some recent disappointments, but perhaps this will make it through the process. I think there's lots of reason to hope for that, we are continuing to work the Hill to encourage them to do that. There's been a significant effort to engage the households, to inform them, obviously, but also for them to engage directly with their representatives in Congress to support the extension of the program.
I can't agree more, I think it's tragic. We've seen this program steadily increase in enrollment, because there's such a great need for folks to get support to access broadband, the number is now up to 23 million. That number is going to halt, because the FCC has had to start telling companies that they need to stop signing up people for the ACP program, because it's about to be shut down, it will be shut down within months. And, given the broad bipartisan support in Congress that receive some supporting renewing the ACP, including this proposal from Senator Welch and Senator Vance and others, to simply plus up the money in the program without any reforms to it, it will be a tragedy if they don't move forward with that bill, and keep the program from shutting down. You can go all throughout this conference and find folks who disagree on a number of issues that we'll be talking about, but I don't know anyone who disagrees with renewing the money on this program, and it just shows you that the way that Congress is making policy these days, is not meeting the needs of the tech sector. They're not holding hearings enough on the sector, they're not moving legislation through regular order, everything's being negotiated largely at the leadership level, and it leads to this potential tragedy in the coming weeks.
So my last position at the FCC was in the Wireline Competition Bureau, and I had the responsibility of working on the ACP program, as well as Lifeline. Throughout just the administration of the program, it was clear how successful this program was, how popular this program was, on both sides of the aisle, And so, it's definitely not the program. There was a recent report that came out that is looking at some of the shortcomings, and some things that can be tweaked, but that's the case with almost every program of this nature, where you're having a benefit that's helping millions and millions of people. And so, doubling down last year on spending $100 million on outreach means, or meant, that this program is probably in trouble because of its own success, spending more money to get more people signed up, doing that, and then having the money run out.
When this came out, it was thought that the appropriation, $14.2 billion, was enough to make the program lasts for five years. If it goes away in April, that's less than three years. it's very much shy of that, and so it's it's sort of inexplicable, why we haven't been able to get more money into this program? I think there are some things that can be changed and tweaked and made better, but the program is needed. Customers and providers alike believe that.
Well, this is an issue that we as panelists will all agree on, maybe the only issue, and that's telling, because, as Chris said, the challenges this funding is facing aren't about the merits. Anyone who works in this field understands this is an incredibly good and sound investment in connectivity. Having low income consumers have access to the Internet is not a debatable proposition in today's society, but we're dealing with a congressional environment, we're spending billions of dollars, when there are competing demands for Ukraine, or Israel, or border security, is obviously a very challenging process. So, I don't think this is anyone on the Hill doubting the efficacy of this program, so much as just the difficulty of enacting spending legislation in this environment.
Definitely, well, I think you all have just hit the nail on the head. I would love to ask you about another controversial program, controversial in a different way, I guess, let's turn to net neutrality. Up until September, the 2-2 makeup of the Commission meant that Democratic leadership couldn't move ahead to restore a Title II Internet regulation treatment, but Chairwoman Rosenworcel then proposed net neutrality restoration rules a day after Commissioner Gomez officially joined the agency. So, I think that lands us in a pretty interesting spot, including in, like we were talking about, an election year. So, I would love for all of you to maybe tell me a little bit more about what we can expect, as the chairwoman looks to revive the net neutrality rules going forward, and maybe you could also explain some of the hurdles that the FCC majority would have to clear before those rules do become a reality.
Thanks so much. So, the way INCOMPAS sees this is, net neutrality policy is competition policy. It would set a national framework that ensures that consumers and small businesses can access the online content of their choice, without the undue interference from their chosen ISP. So, as such, we have filed comments at the FCC, and support them moving forward, we understand that the Title II framework really is the only legal basis that the FCC can now exercise in order to institute this national framework, and we're very happy to support their effort to do so. We believe that it will give consumers, no matter where they live, or where they do their business, the opportunity to have the protections, to ensure that they can access that lawful online content that they want to. What we're seeing is, really, so many consumers and small businesses that are relying on streaming services as an alternative to their traditional broadcast, or cable television. We're seeing consumers and small businesses also rely a lot more on cloud computing, and there are so many cloud offerings, as well as cloud communication services. So, new opportunities for consumers and small businesses to use other online platforms in order to have their connectivity for their voice service, their texting service, and so we do think it is important for the Commission to move forward.
You asked about the hurdles, so I think it appears that theChairwoman believes she has the votes on the floor, right? And so I fully expect... we have a full docket already, we've already gone through comments, reply comments, ex-parte process has begun. So, I fully suspect that the chairwoman will put forward an order in the very near future in order to secure the rules for consumers and small businesses, as she has proposed and the Notice of Proposed Rulemaking.
I have a feeling Matt wants to go next.
Well, let's spice this up a little. We had our moment of unity, so let's shatter that now. Well, this is an issue I've been working on for a long, long time. We sort of go through this in Washington every four years or so. It's worth stepping back and asking, What are we doing? What are we trying to solve? And, is it on balance going to be a kind of governmental intervention that actually contributes more than than it costs? I think at this point, we have a pretty good experience in the marketplace to know this is not an area where we need FCC common carrier regulation, because on balance that would impose a lot more harms and benefits. After the commission under Chairman Pai, and the Restoring Internet Freedom order, repealed the conduct rules, but kept in place the transparency requirements, there were pretty dramatic forecasts of doom, there were statements that the Internet was now going to be delivered one word at a time, the Internet was dead and over as we know it, and the sky was falling, and a lot of Chicken Littles were out there. I don't think any of that happened. As far as I know, in my own experience, as a consumer, my experience in this industry, the Internet only got stronger through more investment, got faster, got more reliable.
We saw incredible challenges during the COVID pandemic, with unprecedented spikes in demands, and the networks held up remarkably well, and I think proved that we didn't need a heavy handed governmental regime to make the Internet function better. Chairwoman Rosenworcel often says, we need the Internet to be fast and free. It is both of those things, it is fast, it is free. So, common carrier regulation is something that is not going to make the Internet better. Regulations have costs. Common carrier regulation, in particular, is a framework designed for the 1934 model of telephone service. It's a poor fit. it absolutely impedes investment and generates the kind of uncertainty that we don't need in an environment where we're asking providers to spend billions of additional dollars, alongside government dollars, to bridge the digital divide.
So, solving the major problems we have is not going to be achieved by this. I'm sure we'll get into the legal merits, but it's also not something that the commission is going to be able to do given the where the Supreme Court has been, the Chevron doctrine, and where that's likely going, and probably more salient is the major questions doctrine, where we already had one member of the Court, Justice Cavanaugh, when he was on the DC Circuit, articulate precisely why this issue cannot be addressed, why Title II cannot be imposed by the FCC, consistent with the major questions doctrine. This whole thing is a build up to eventual reversal by the Supreme Court. So, it's not a good use of resources. It's a big deterrent to the kind of investments we want and need, and those are some pretty big hurdles.
Yeah. A lot of these hurdles could be in the courts. It sounds like even just that Internet performance data, that you pointed to, could be used to undermine a potential revival. Please go ahead. Chris.
You missed the opportunity to find unity here. There's broad agreement that there needs to be protection from blocking, and throttling, the core net neutrality protections. The marketplace shows why we need it, because it's happening. You can go and find, all over the Internet, examples, since the rules were repealed about traffic being throttled. You talked about it being a pro-competition set of protections, about broadband providers preferencing their own content over competitors. The public safety concerns, when traffic was throttled during the wildfires in California, there's numerous examples of why this protection's needed. There's broad bipartisan support for it both out in the public, where it's really not controversial, but also, if you believe them, in Congress, where everyone says, Well, we should be able to find a way to protect at least those core net neutrality rules. Problem is that Congress hasn't been serious about policymaking, and so the working groups and all the things they have set it up, if not actually met, or held hearings or anything like that. But, you can at least believe that they say they think it can happen.
What we're missing here is... What was really smart from the Chairwoman, in this Title II proceeding, is that it's not just about net neutrality. The Pai FCC not only repealed the net neutrality rules, except for the transparency part, but they also said basically said that the FCC should not have authority over broadband. Far more important issues than just the net neutrality are wrapped up in that. Making sure that the agency actually has authority to deal with broadband and consumer protection, has to do with the reliability of your broadband networks, and whether or not the FCC can get involved with that. It has to do with what Commissioner Carr said earlier today, that he he wants to take a market based approach to looking at the broadband market, but the FCC wouldn't even have the authority to look at the broadband market, and come up with any sort of analysis or protections of it. This is why Chairman Pai, when the pandemic hit, had to go and ask and beg the broadband providers to to make sure that they continue to give service to folks during the pandemic, because he doesn't have the power to do anything else, to create rules.
Consumers get it, they want to cop on the beat. Hopefully Chair Rosenworcel will move forward with that, and set up for the agency to look past net neutrality to universal service, to the reliability issues, to the public safety issues that the agency should be looking at, as the consumer protection agency over broadband and communications networks.
So Chris, you bring up a really interesting point, that kind of gets to another question I wanted to ask on the topic of net neutrality, which is, how is the conversation different this time around? I really like what you just said, how net neutrality, in some ways this time, is not about net neutrality, it's about all of these other follow on issues, that kind of flow from it. I would love to let you jump in here, Diane.
I am not going to repeat what what everyone has already said. I will say that I think Matt did a good job of articulating what the challenges are going to be for this commission this time around. At the same time, like you, Matt, I've been working on these issues since 2004, when Chairman Powell came up with his Internet principles. I don't think there is a ton of fundamental difference about what we all want the Internet to be. We all use it, we all want it to be fast and free. We want to be able to search for what we'd like to, without our provider determining what we can search for, how fast we can get it. All of those are things that I think people fundamentally agree on. The issue, again, is how to achieve that. This time around, the conversations are different, because the Chairwoman decided, just as you said, Chris, instead of just talking about net neutrality, she brought in a lot of other principles. The claim is that, withoutTitle II authority, we can't protect the Internet from national security, law enforcement won't have the tools that they need.
Again, I'm trying to stay down the middle, and not debate either side, because I think it's sort of beside the point when you look through a broader lens at this proceeding. The fact is, that with each change of administration, there's been a change in the approach to trying to achieve Internet freedom, and there's something fundamentally unfortunate about that. I think if Congress could make a decision about how much authority the FCC should have to regulate the Internet, and its use by consumers, and access by consumers, that would go a long way to prevent sort of the whiplash that we keep going through. Honestly, at the end of the day, I think that's the solution that would be best for all of us. It's a long slog ahead. Like your firm, my firm is representing folks involved in this proceeding. I have personal views, which are not relevant to this conversation, but I will say the count, the other calculus, that's changed, which Matt talked about a little bit, has to do with where the courts are. It's a very different world with regard to deference to agencies than it was just a mere four years ago. I don't think the FCC can depend on getting the benefit of the doubt this time around, and so it makes it a lot harder to change the the decisions that were made a few years ago, and to move forward on a different path.
It's a very interesting point about the evolution in the courts and how that affects agency rulemakings, in maybe some ways that we haven't seen going forward. Angie, I think you wanted to add something
I did. So, last week was the 28th birthday of the 1996 Telecommunications Act, which did significantly amend Title II, allowed for the entry of new competitors to offer local telecommunication services, including by large cable companies and small cable companies, to ultimately offer alternative services to what was largely a monopoly marketplace. think it's really important to look at that, and also think about the larger context in which the Chairwoman has positioned the NPRM, and how it is different this time around as compared to the effort under then Chairman Wheeler. That is because it's not just in response to the DC Circuit, who told then Chairman Wheeler and the FCC commissioners that the only way to really do this is via Title II, but rather within the context of COVID has changed everything so much.
So, we have a Congress that has allocated close to $100 billion. There's several congressional pieces of legislation to say everyone needs to get connected. We need network access to everyone, and it needs to be affordable. Well, in order for that to happen, we need the Title II functionality and protections that the FCC can exercise, and she has teed that up in this NPRM. As I had referenced earlier, the need for access to poles and conduit today, that's really only available to those who offer a telecommunication service, or offer a cable video service. So, by clarifying that broadband Internet access service is also a telecom service, this is now going to allow for the many providers that only offer broadband service to get non-discriminatory access to poles, conduit, to get the same protections that the commission affords access to consumers, and small businesses, and multi-tenant environments, that Commissioner Carr discussed in his remarks.
So, the FCC exercising its rightful oversight and authority over broadband Internet access service is critical to ensuring that consumers not only get access, but also that they have choice. That network choice is really important to be driving competitive opportunities, which we know helps drive more innovation and investment, as well as affordability. This is one of the reasons why INCOMPAS, for over a decade, has supported the Commission using the authority that it has, to have this oversight, and ensure that every American has the opportunity to be connected to the highest speed, network availability as well as the opportunity to choose their network provider.
Well, I think we could talk about net neutrality all day. Matt, do you want to just cap off those remarks?
Just one quick thing. I was noting, Chris earlier was talking about a cop on the beat. And, one part of this debate that that I think is getting a little lost sometimes, too, is that the Federal Trade Commission is a pretty important cop on the beat, and an aggressive one these days. And, I think Chris, you also mentioned, Angie also mentioned privacy, this Title II proposal would severely undercut privacy, but for two reasons. One is the Federal Trade Commission doesn't have jurisdiction over common carriers, so Title II classification removes the FTC's jurisdiction, and takes broadband out of that that holistic oversight of the Internet ecosystem, which really doesn't make any sense at all.
And too, Chris, you alluded earlier to the Congressional rejection of the 2016 FCC broadband order. Under the current Congressional resolution act, that means the FCC cannot reinstate that broadband privacy order. So, if it goes forward with Title II, the Commission won't have the ability to adopt broadband-specific privacy rules, which would mean creating a gigantic void, a privacy void. I mean, most of us think there ought to be some kind of national legislative framework dealing with Internet privacy, but, until we have that, this would actually detract from oversight by eliminating, again, FTC oversight, and preventing the FCC from taking further action.
Well, let's move on. Sorry,
You guys should do a privacy panel, because... No, really, the overlap of privacy in telecom, and privacy at the FTC, where there are no current privacy rules. They just say, are you following the rules that you created for yourself or not? It's not much of a regime. That's why they everyone at the FTC wants a comprehensive privacy law. You know, I mean, you could do a whole panel on that.
And just one final word, because there are privacy laws out there in this at the state level, and that's a whole nother conversation about do we want 50 different regimes? And so this? Yeah, I'll stop there.
It's a whole panel.
Well, I think this you all are hitting on something that makes me find covering telecom so interesting. There's so much interplay between these issues, you can't possibly silo net neutrality, without talking about privacy, without talking about broadband deployment, and I think that's why we all are like drawn to this. It's very intersectional, and all of these issues like affect each other.
So, I would love to talk about another one of these like pretty messy policy issues, which is the Digital Discrimination Order. This has been generating, if not as much heat as net neutrality, maybe possibly more heat in some circles, so I'd love to kind of break down what's happening here. This order was adopted in November. importantly for our discussion, the agency adopted a disparate impact standard for judging when a company's policies and practices are impeding fair broadband access, and this is now being contested in the courts. So, Matt, I would love to maybe throw it to you to kind of summarize where we're at in this lawsuit cycle over the FCC's order, and also feel free to correct me if you don't think I summarized that correctly.
Yeah, I'm in this is another one of these issues where I think it's unfortunate because there's some really important things the FCC is charged with doing, and should be doing, but it has overreached and gone well beyond its its legal authority, and I think that's just going to end in a lot of unnecessary litigation and and probably a real setback for the FCC in this arena. So, the statute that we're talking about is section 60506 of the infrastructure act. It was a small part of this massive legislation that created billions of dollars in funding. We talked about ACP and the BEAD program, and it appropriately, with the support of clients like mine who are in the broadband industry, prohibited what was often called redlining, but here was called digital discrimination, and there's a straightforward textual provision that says that the FCC shall adopt rules prohibiting digital discrimination.
The problem the commission is facing is that that phrase, prohibiting discrimination, has a long history in the courts and civil rights contexts, like employment and housing, and it means that intentional discrimination or disparate treatment standard. The Supreme Court has weighed in on this repeatedly, a leading case is called 'inclusive communities', and there are certain magic words that Congress would have had to have used if it wanted to legislate that the FCC deal with the effects of discrimination, and Congress did not do that. This interpretation by the FCC, imposing a disparate impact standard, is unique because it applies not simply to race or other traditionally protected classifications, but to income. If you think about what a disparate impact standard means, applied to income, it is truly radical, because, if a broadband provider charges a uniform price, let's say $75 a month, that is now unlawful if it has a disparate impact based on income, it can't be justified by economic or technical infeasibility of pursuing some alternative.
A uniform price is always going to have a disparate impact based on income, because people of lower means have more difficulty affording it. The FCC similarly mentioned credit checks. Well, credit checks disparately impact people with bad credit who have low income. So, the problem with this overreach is it sets up a completely unworkable standard that cannot be justified in the courts. I represent four state broadband associations that have challenged this order.
Friday afternoon, this is all breaking news, the judicial panel on multidistrict litigation consolidated all the appeals, which include petitions that were filed in six circuits in total, those are now consolidated in the Eighth Circuit Court of Appeals, so that that case will go forwardimminently, and I do think the Commission is going to have a very difficult time justifying this unprecedented disparate impact regime.
I will just add that I think there was a missed opportunity here, because if you look at Section 60506, in what the commission was charged with doing, it was also about rooting out, finding instances of discrimination of access and remediating them, figuring out how to get broadband to those places that aren't getting broadband. I read the Commission's order, and there's all of this structure in these rules about what to do when it's found, and it sets up what will certainly be instances of enforcement action, and other actions that are taken.
But, I don't see much of, if we find that an area is being impacted, either intentionally or through disparate impact, intention is a whole nother issue, the Commission could always do something about that, you could always do something about intentional. But, if you find that an area is not getting access in a way that they should, what's in place, what is the commission going to do about that? What are the steps that the commission is going to do? I think that was a missed opportunity not to set up, at least to give some more meat to what tools the commission already has, and what they can do in working with the industry, and working with these communities, to actually remedy the problem.
I'm glad to hear you say that, Dan, because that was one of the questions I had after looking through that rulemaking. To me, it did still seem unclear what the enforcement mechanisms would be if this disparate impact, I guess, was found, Chris looks like you might have something to add,
I was going to, one, agree with Diane. I mean, we were disappointed that there wasn't stronger clarity on the enforcement side, that if complaints are brought, if they would necessarily be addressed or not, like many other complete processes. However, I think the thing to celebrate in these rules is that they exist at an agency that, but for the infrastructure law, it was unclear if they would have moved forward with this, and I credit Chair Rosenworcel for moving forward expeditiously on a vote that was controversial, because, now we have an actual rule that you cannot discriminate in how you deploy your networks. to specific neighborhoods, and that's incredibly important.
The point that Matt made about pricing. My understanding of it is that, when you look at the studies of folks who were having their neighborhoods overlooked, they were often being asked to pay the same price for an inferior product. Maybe they still have dial up or DSL, when a wealthier neighborhood nearby has high speed fiber, that has gigabit speeds, but the prices being advertised look different. And then, sometimes you saw neighborhoods where, not only where the network's not being upgraded, but they weren't even in the plans for companies to roll out broadband to.
How do we know this, and what studies I'm talking about? Well, they were led by civil society groups, some of our allies, who have people on the ground studying these marketplaces, it wasn't because the FCC study, that's not why Congress put this in there. So, it just goes to show you that when you don't have an agency with authority look at the broadband market, then you're missing a huge part of what's causing the digital divide, and that some neighborhoods were just being passed by. So, shout out to the National Digital Inclusion Alliance, who did the first of those studies. Others in California, Greenlining Institute. NDIA is having their conference tomorrow, the largest digital equity conference in the country, with folks who are on the ground who see the impacts of digital redlining, and they will be celebrating these rules. You know, we have a long, long path to go in the courts, there's a number of challenges, and we'll see where they go, and I'm concerned about them. But, at its core, the FCC should have the right to make sure that it can meet its universal service goals and obligations, by making sure that passing over low income neighborhoods or communities of color is simply illegal.
Just one quick thing, because I want to stick up for my clients who are cable operators, cable operators have been building out under a principle of universal service throughout their existence. Part of that is because of the Title VI laws around franchising, cable franchise agreements have always required cable operators to build out in a non-discriminatory manner and have prohibited redlining for decades. I can't speak for over builders who may have chosen to build in one area versus another, but the cable companies that I'm representing have not overlooked communities, the statistics that we put in the record of the FCC's proceeding bear this out. Communities of color have access at as high, or higher, rates to the fastest speeds that are being offered, the gigabit speeds, and there was simply no evidence of discrimination, and the Commission agreed with that in his order.
So, our concern is not that we want to defend practices of building unequally, quite the contrary, my clients are committed to building equally, and being subjected to non-discrimination rules. The problem is that disparate impact can really have unintended consequences that, like the Title II proceeding, are going to end up deterring building, deterring investment, and leading to a lot of legal uncertainty that isn't going to advance the ball.
One other point?
Yes. So, let me just briefly say we have the five minute warning. So let's try to wrap it up. But yes, please, Dan,
I will be quick and just say that I want to be clear. I think that there are some huge challenges for this order and the way it was implemented. I agree with with Matt, and with what the Commission said, there's really not a lot of evidence out there, and I think this some parts of this item will be a distraction, and will sort of take the focus off of making sure that broadband is is is getting to the places where it needs to get, so I think it's a tough road ahead on this item for the FCC.
Wonderful. Well, I think that's probably all the time we have today. I will I'd love to continue picking your brains about what's happening with USF contribution reform, but, unfortunately, I think that will take us far over time, so let's leave it there for today. Thank you all so much for being here. Thank you to our wonderful panelists, and thank you all for listening, it's great having you
