Understanding NTIA’s Plan to Impose Command and Control Broadband Regulation  

You may have heard about the Federal Communication Commission’s (FCC) effort to regulate net neutrality and impose utility-style regulations on the broadband industry, but another rulemaking endeavor may be similarly consequential and harmful to consumers and businesses alike.

The FCC is developing a rule to implement the digital discrimination provision of the Infrastructure Investment and Jobs Act (IIJA). The purpose of the provision is to facilitate equal access to broadband across income level, race, ethnicity, color, religion, or national origin. Congress required the FCC to finish the rules by mid-November and the Commission is on the cusp of releasing a copy of the rules.

Current State of Play

On October 6th, the National Telecommunications and Information Administration (NTIA), the agency responsible for articulating the Administration’s priorities on broadband and technology policy, proposed that the FCC pursue a regulatory approach on digital discrimination that would fundamentally transform the broadband marketplace.

NTIA called for broadband price controls and an application of a ‘disparate impact standard’ to evaluate digital discrimination claims, both of which are unlawful and would hinder the goal of connecting all Americans.

Moreover, NTIA’s proposal comes just weeks away from the FCC’s expected completion of the rulemaking, which, in effect, limits the ability of impacted stakeholders to meaningfully respond.

Why it Matters?

Closing the digital divide is crucial to ensuring that millions of Americans benefit from a digital 21^st-century economy and the private sector leads in connecting Americans networks. For nearly 30 years, from the Telecommunications Act of 1996 to the IIJA itself, Congress has pursued a pro-competition, market-based approach to broadband deployment, supported by federal funding for hard-to-build and low-income areas. This approach has created a competitive broadband marketplace where the quality of service is continuously improving, and where broadband prices are dropping. NTIA’s proposal flies in the face of this longstanding strategy, runs contrary to the law, micromanages broadband deployments, and exposes business to expansive and speculative lawsuits.

Imposing Broadband Price Regulation

Neither Congress nor the FCC has ever before compelled broadband deployment or regulated its prices. IIJA contains references to 'terms and conditions' of services, but not to rates. Yet elsewhere, the Communications Act and IIJA explicitly refer to 'rates' when Congress seeks to address broadband prices. Also, IIJA’s $42 billion broadband deployment program specifically prohibited price regulation and established the $14 billion Affordable Connectivity Program to enable low-income consumers to purchase broadband. Congress did not pursue this approach simply because it doesn’t work; command and control in other contexts lessens investment and innovation.

Micromanaging Broadband Deployments 

NTIA’s proposal that the FCC adopt a 'disparate impact standard' to assess digital discrimination means that even if a broadband provider didn’t intend to discriminate, they still could be liable for discrimination. As noted previously, the text of the IIJA only supports a ban against intentional discrimination, not disparate impact. Courts have also questioned this approach in other issue areas. Moreover, NTIA’s expansive interpretation means that a broadband provider could be held liable even if a particular broadband build-out would be unprofitable. In short, this mandate empowers the trial bar, activists, and regulators to reconsider broadband deployment decisions, which increases regulatory costs and chills private sector investments.

Disappointing and Disconcerting NTIA Action 

NTIA’s approach is an attack on broadband markets at every turn in its call for unfunded buildout mandates and price controls, contradicting the law and years of positive experience. Ironically, NTIA’s proposals would harm consumers and negatively impact federal broadband investment programs, including NTIA’s very own Broadband Equity, Access, and Deployment (BEAD) Program. This punitive filing by NTIA is more than head-scratching from an agency that has publicly claimed to be interested in partnering with the broadband industry to connect all Americans. 

A Better Course of Action for the FCC

The FCC should reject NTIA’s command and control approach and instead harness these rules to protect against intentional discrimination and continue supporting a pro-competition and targeted federal investment approach to ensuring all Americans are connected.

About the authors

Matt Furlow