Litigation Update: Minnesota Telecom Alliance v. FCC

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Welcome to FEDSOC Forums, a Federalist Society podcast. I'm Elizabethlattery,
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Vice President of Practice Groups. Be sure to subscribe wherever
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you get your podcasts so you won't miss an episode. Now,
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please enjoy today's conversation.
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Welcome to this FEDSOCK Forum webinar call. Today, July fifteenth,
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twenty twenty six. We are delighted to host a discussion
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entitled Litigation Update Minnesota Telecom Alliance versus SCC. My name
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is Lily Freemeier, and I am a rising to l
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at Washington and Lee University Law School, serving as student
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liaison to the Communications Technology Practice Group Executive Committee at
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the Federalist Society. As always, please note that all expressions
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of opinion are those of the experts on today's call,
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as the Federalist Society takes no position on particular legal
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or public policy issues. In the interest of time, I
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will keep the introductions brief, but if you would like
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to know more about any of our panelists, you can
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access their full bios at fedsoc dot org. Today we
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are fortunate to have doctor Christopher Ali, Jennifer B. Dickey,
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and Daniel H. Kahn as our speakers and Matthew Furlow
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as our moderator. Doctor Ali is the Pioneer's Chair in
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Telecommunications at Penn State University. Miss Dickey is the Vice
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President and Deputy Chief Council of the US Chamber Litigation
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Center at the US Chamber of Commerce, and mister Kahn
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is a partner at Wilkinson Barker now Ur LLP. And
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mister Furlough serves as counsel for the US House Committee
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on Energy and Commerce. One last note throughout the panel,
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if you have any questions, please submit them through the
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question and answer feature in zoom so that we will
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have access to them for that portion of the webinar.
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We do ask that questions submitted they are both pertained
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to this discussion and end with a question mark. With that,
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thank you for being with us today, mister Furlow, the
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floor is yours war joins.
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Thank you so much, Lily, and thank you for all
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the panelists for kind of being here today.
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Before kind of diving to the questions, want to provide.
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It just a very brief overview of the issue. In
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twenty twenty one, Congress enacted the Infrastructure Investment and Jobs Act,
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which was a major surface telecom Energy Investment legislation. Within
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that legislation included section sixty five oh six, which directed
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the Federal Communications Commission to issue rules to prevent digital
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discrimination access a broadband deployment and service.
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The FCC issued a.
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Final order in twenty twenty three, and in doing so,
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the FCC opted to pursue a disparate impact framework to
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address digital discrimination. As a result, numerous industry groups filed
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lawsuits against the order, and ultimately the Eighth Circuit took
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up the case. But before we go into the case
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and kind of and some of the litigation details, I
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kind of want to start a little bit more high
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level and with kind of the legislative and regulatory background, Chris,
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could you kind of provides an additional background on, you know,
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what is digital discrimination, why it's important, Why did policy
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makers really kind of enact enact this section.
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Yeah.
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Absolutely, Thank you so much for the question, Matt, and
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thank you to fed SK for for inviting me to
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be on. This is talent that is really exciting, a
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great way to spend a July afternoon. So a little
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bit of background that that led to Congress's decision. A
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couple of things that we need sure remember is that
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broadband is not a utility here in the United States
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and therefore not subject to many of the universal service
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provisions or rate regulation provisions as other basic utilities. The
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univers the universal Service mandate has been rather inconsistently applied
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and and broadband has become largely a market failure in
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many communities across the country.
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Through the pandemic.
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For instance, we saw a huge gap in available and
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affordability of broadband. One study, for instance, said that upwards
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of forty two million Americans do not have access to
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the Internet during the pandemic. Lots of studies have also
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reported that low income neighborhoods and neighborhoods with predominantly people
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of color have slower broadband speeds and sometimes more expensive
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broadband subscriptions than neighboring wealthy communities, and study studies have
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shown that this has been the case in cities like
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Cleveland and Detroit, Kansas City, New York, and certain areas
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of California. And this has largely been known as digital redlining,
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which echoes the kind of housing red lining of decades past.
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So the Digital Discrimination Orders were passed as a package
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of measures taken by Congress as I said in the
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twenty twenty one Infrastructure Act, to address the wider issue
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of digital equity and inclusion, or rather the lack of
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digital equity inclusion here in the United States. And just
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it's a little bit of background, we can think about
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digital equity inclusion as connectivity plus everything else. The recognition
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that connectivity alone will not bring people forward to the
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Internet make us a digitally savvy community of neighbors. Instead,
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we need programs like affordability programs, we need skill development,
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we need device access for instance, and all this would
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fall under the larger umbrella of digital equity and inclusion,
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as does digital discrimination. So along with this this order came,
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for instance, the Affordable Connectivity Program, which was a fourteen
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billion dollar program to offset broadband to low income households.
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And just as a little kind of footnote here, we
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in the United States pay the most for broadband monthly
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than anywhere else in the OECD. We also in the
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Infrastructure Act had the two point seven five billion dollar
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funding programs through the Digital Equity Act. As an example
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around affordability, over fifty million households qualified for the Affordable
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Connectivity Program and over twenty three million subscribed. And as
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a point of reference, there are only one hundred and
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thirty three million households in the United States, so it's
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suggesting that one third of American households qualified for the
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Affordable Connectivity program. So, in combination, these efforts were kind
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of meant to to to well digital discrimination and build
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an ecosystem of digital equity and inclusion in the country.
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Thank you, Chris, And kind of let's dive a little
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bit deeper on section of sixty five or six. Can
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you kind of walk us through what did that section
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actually direct the f CC to do and order some
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of the some of the key provisions for sure.
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Yeah, so the SEC was ordered to take steps to
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ensure equal access to broadband throughout the country. And it's
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important to think about this kind of equal access or
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equal service kind of phrase.
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There.
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They were to create rules preventing digital discrimination of access
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relating to income, race, ethnicity, color, religion, or national or origin.
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They were identified. They were managed to identify steps also
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to eliminate digital discriminations. We have these two provisions, right,
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preventing discrimination on one hand and eliminating existing discrimination on
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the other hand. This is all in service to the
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facilitation of equal access to broadband internet services. And I'm
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just going to actually define I'm going to read how
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the statute defines equal service. Equal service is defined as quote,
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the equal opportunity to subscribe to an offered service that
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provides comparable speeds, capacities, latency, and other quality of service
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metrics in a given area for comparable terms and conditions
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end quote. So again, that's what we're doing this in
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service to. There is a pretty large caveat with all
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of this that the SEC had to take into account
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to quote, technical and economic feasibility. So it wasn't just
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that the SEC could propose these rules, but if a
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company could justify their actions based on technical or economic feasibility,
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then they were considered not to have done digital discrimination.
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The SEC was also ordered to develop model policies and
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best practices for station and localities. It was ordered to
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revise its public complaint process to accept complaints from the
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public directly related to digital discrimination. But first of all,
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to do all of this, the FCC had to of
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course define digital discrimination, which was never actually defined in
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the statute. And you want me to go ahead, and
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I can also just read how the SEC will find
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it just to get us started here. So again this
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is this is a direct quote for everyone listening or
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watching here. So this digital discrimination of access, according to
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the Federal Communications Commission, is defined as policies or practices
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not justified by genuine issues of technical or economic feasibility,
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that differentially differentially impact consumers access to broadband internet access
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service based on their income level, race, ethnicity, color, religion,
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or national origin, or are intended to have such differential impact.
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End quote. Thank you, Chris.
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And now that we're at the kind of the SCC
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is considering the world, dank you kind of walk us
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through how the FCC tackled some of these statutory ambiguities
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and what were some of the key points to kind
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of contention in the docket.
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Of course, thanks Matt. So the FCC began it's proceeding
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to implement this statute with what it calls a notice
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of inquiry, which is a wide open series of questions,
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not a lot of concrete rulemaking proposals, essentially asking what
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should we do with this?
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And then it took that record and.
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Issued a Notice of proposed rulemaking, which is a much
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more concrete set of proposals of here all of the
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steps we're proposing to take. The notice of inquiry is
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often a sign that the agency isn't really sure what
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to do in the first place, which perhaps isn't the
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surprise given the newness of the statute. It's a pretty
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short statute and doesn't have any legislative history that really
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informs its meaning. And we saw over the course of
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those initial ailing periods. I'd say to a whole series
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of issues being debated that I think started with two
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different worldviews, and Chris gave one of them really well,
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I'll just articulate the other one, which I advocated for
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on behalf of my clients, which is that we are
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and it's a very different, in my view, at least
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more optimistic viewpoint, that we're in a kind of unprecedented
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age of broadband expansion and affordability. Even as there's been
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a lot of inflation across the entire economy, broadband prices
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have been going down, and that's because of competition and
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the deregulated environment that Chris.
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Mentioned in comparison to Europe.
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People like to debate these, but I think the pandemic
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really stands out as a great example of During the pandemic.
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Several European nation heads had to ask their broadband providers
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to intentionally slow down services like Netflix so that people
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could access essential content, and we didn't see anything like
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that in this country, which spoke, i think to the
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robustness of the broadband networks and they've only gotten better
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from there with the advent of news services like five
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G home and low Earth orbit satellite service. So, turning
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back to the rulemaking, we had a very robust debate
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about is this starting with the viewpoint that I articulated
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a narrow statute, that it provides a backstop in the
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context of a statute that's enacting huge and unprecedented funding
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programs like BEAD, which is fund allocated forty two point
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five billion dollars for broadband deployment for the Affordable Connectivity
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Affordable Connectivity Program I'm sorry that Chris mentioned, and there
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was a Digital Equity grant program as well. Is this
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a backstop that prevents targeted forms of discrimination or.
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Is it more of a.
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Transformation of the relationship between the FCC and the broadband market,
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which I think is the other viewpoint that came about
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in part.
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Because of some of the.
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Criticisms that Chris mentioned, and this had a lot of
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different axes. The biggest and most prominent and one that
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the court ultimately addressed was is this a statute addressed
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only specifically.
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To disparate treatment or intentional discrimination?
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Or does it also encompass a disparate impact meaning essentially
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unintentional discrimination. But that wasn't really the only big issue.
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There was also a big question about the scope boo,
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who's regulated, Whether it's just broadband providers or as the
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FCC ultimately concluded, anyone who affects broadband? Is the scope
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of what exactly is regulated? Is it just deployment? Is
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it a lot more than that? Again, that's what the
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FCC ultimately concluded. How should the complaint process be structured?
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And that had a lot of different That was pretty
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multi access. I would say there were a lot of
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different perspectives on that. And what sort of penalties are available?
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Are the penalties that the FCC can apply under the
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Communications Act available or by situating the statute outside of
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the Communications Act in Congress carved those out. I don't
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know if you want me to talk about the where
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the FCC came out on all this as well.
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Or yeah, maybe especially kind of walking through how the
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FCC came out on the disparate impact first disper treatment issue.
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Sure, of course, the FCC took what I at least
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personally view as a fairly maximalist approach.
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In the final order, it concluded that there was.
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No evidence of intentional discrimination in the broadband industry, and
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one might conceive that that is a positive finding that
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might mitigate toward more and more narrow approach, but that's
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not the direction the FCC when it concluded that was
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a basis for pivoting mainly to disparate impact liability, and
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the FCC developed at least what to me reads as
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its own kind of bespoke disparate impact standard that it
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doesn't really follow the standard that the Supreme Court had
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articulated in the Inclusive Communities case around the Fair Housing
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Act and some of the other statutes that are subject
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to a disparate impact standard. Under the FCC's test, well, Chris,
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I don't need to repeat it since Chris articulated it.
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But anyone who impacts broadband deployment has to essentially consider
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way technical and economic feasibility is with particular reference to
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their competitors and if.
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Something essentially, if something.
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Is and again it was, in my honesty, it was
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not the clearest articulated test. But if some thing was
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technically or economically feasible than the provider had with reference
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to the specific protected groups articulated in the statute, then
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the provider or whatever other regulated entity would have to
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seriously consider taking that step and potentially take that step.
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The FCC didn't limit this to deployment, but rather applied
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it to anything that has to do with the broadband market,
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any providers in the broadband market, and it concluded that
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it could apply any sort of penalty that it ordinarily applies.
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And just to wrap it up, the SEC also indicated
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that wasn't the end of the story. At the time,
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it had a further notice of proposed rulemaking that proposed
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moving from substantive compliance to procedures for compliance, with proposals
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around required internal reporting mechanisms and structures for how to
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measure compliance and various reporting requirements.
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Thank you, dad.
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I think maybe before we go it's the litigation, I
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would like to dive a little bit deeper on the
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actual kind of impact either or you intended, or on
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disparate impact. First, disparate treatment, Dan, How in practice would
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a disparate impact liability standard and impact of broadband providers
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deployment decisions?
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How would that work in practice?
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Then after that, Chris, I'd love to kind of understand
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your perspective as well.
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Yeah, thanks, Matt.
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It's a great question and a very hard question that
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the industry, as you can imagine, was grappling with in
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the wake of disorder, and I do think it's important
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to have to clarifications off the bat. The first is
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just to reiterate, as I mentioned, it's not just deployment
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that the FCC purported to regulate, but everything, including things
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like advertising and discounts.
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And I also just.
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Want to repeat the point I made before about how
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we're not just talking about a kind of hypothetical disparate
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impact standard, but rather the specific kind of customized disparate
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impact standards that the FCC articulated, but applying that in
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the context of frankly, pretty much any business decision around
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broadband a provider or other entity would have had to
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it would have been hard to escape considering publicly available
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demographic data about the areas where it's considering deploying or
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whatever the other action is, and then way taking that
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action in a way that's balanced with respect to the
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specific factors identified it in the statute.
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In my view, that would.
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Require if we're talking about deployment, for instance, that would
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result in less deployment overall, since deployment wouldn't be based
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solely on cost or demand or maximizing profit that could
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then be invested in future deployment in future years. Those
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in favor of a disparate impact standard presumably would argue
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that's worth the trade off. It also would I think
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even before the FCC was going to require your various
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procedural compliance mechanisms, establishing a lot of internal mechanisms to
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track how these decisions are being made, because I think
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in an investigation that would have been a lot of
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the evidence of compliance likely brought forward, partly because the
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requirements were pretty nebulous. In my view, it ultimately meant
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you needed to always be prepared to tell a story
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about what you're doing and explain it.
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Thank you for that, Chris, would you like to kind
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of jump in at all on that, Yeah.
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Just just to provide maybe two examples that were kind
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of major talking points in the comments to this one
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was of course the deployment of technology.
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Right, So if you had if you were if you
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were an is broaduct.
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Inter provider providing fiber optics to one area versus six
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wireless to another area, right, And those which are two
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different technologies for schwens, you get two diferent upload and
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download fees, different set of latency, or one of those
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directed towards a covered population, and then you'd have to
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have that kind of technical or economic justification. We have
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seen this happen repeatedly, right, particularly with low income areas
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where a different technology, usually a subpar technology, is deployed
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in those areas. The other thing that was a major
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fight here amongst commentators towards the SEC docket was around
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price and pricing. Right, should price be included as the
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potential for discriminatory behavior? And again we have seen examples
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and I think everyone could point to an example of
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how they're paying a different set of prices and maybe
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their neighbors paying a different set of prices, or the
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community across the street is paying. And the question then becomes,
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how does that look when we add in these these
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demographic factors stand mentioned, and are we seeing kind of
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systemic or systematic U price differentials between for instance, a
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wealthy neighborhood and a low income neighborhood. And there have
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been some documented cases as well. And again it kind
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of all feeds into this concern particularly from the public
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interesting academic community around digital redlining and whether or not
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providers are kind of mimicking the redlining that happened in housing,
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you know, in the nineteen fifty, sixties and seventies.
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Thank you.
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So let's kind of turn to the case, Jen. I know,
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the Chamber, along with state of local chambers, filed extensive
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comments to the dock at both the NI and PRM stage.
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You've got to outlined first some of the chambers key
348
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concerns with what the FCC ultimately issued, and then also
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some of the primary arguments that the Chamber outlined against
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the legality of the rule.
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Sure, so on.
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The policy side, the US Chamber was I think a
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little bit closer to where Dan is in terms of
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like optimistic.
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We are supportive of closing the digit divide.
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We view the private sector as having really led the
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charge and investing billions of dollars to build out networks
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and make other improvements that have made it Internet connectivity
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more affordable and more accessible to Americans.
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So like, just as of two thousand and nine.
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About a third of Americans did not have broadband, but
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by the end of twenty nineteen, approximately ninety six percent
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of Americans had access to broadband at home. Nevertheless, some
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Americans still don't have broadband, and that could be either
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because they live in remote rural communities where the per
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00:21:32.839 --> 00:21:36.880
unit costs of deploying internet infrastructure are high and the
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investments just not financially justifiable for the Internet service providers,
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or because the Americans choose not to purchase broadband for
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economic or other reasons. So for example, someone might say
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I have cell service with internet on my phone, I'm
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not going to pay for broadband separately because I don't
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like that's too expensive. Or they might say I just
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prefer not to have internet my home. But still, you know,
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the Chamber is generally supportive of efforts to close the
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digital divide, and we were concerned that the digital discrimination
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rule was actually going to harm that the that the
377
00:22:08.000 --> 00:22:11.279
record didn't support the claim that there was actually any
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intentional discrimination going on, and that disparate impact liability would
379
00:22:15.519 --> 00:22:19.640
actually open the door to second guessing deployment decisions, and
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00:22:19.759 --> 00:22:24.440
that would lead to deployment chilling of new deployments because
381
00:22:24.920 --> 00:22:27.720
companies would have to shift their resources from investing in
382
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the deployment and in research and development to regulatory and
383
00:22:30.720 --> 00:22:34.880
legal compliance. So we argued that the Commission should focus
384
00:22:34.920 --> 00:22:37.920
on other barriers to broadband deployment, such as, you know,
385
00:22:38.319 --> 00:22:43.519
the expiration of funds for the Affordable Connectivity Program or
386
00:22:43.640 --> 00:22:49.559
reducing permitting barriers to deployment. That was kind of like
387
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the policy argument from the chamber side. And then in
388
00:22:52.480 --> 00:22:55.000
terms of the legal side, we argued that the statute
389
00:22:55.039 --> 00:22:58.599
just simply did not authorize the FCC to impose disparate
390
00:22:58.599 --> 00:23:03.519
impact liability or some of the broad enforcement mechanisms that
391
00:23:03.519 --> 00:23:05.160
the Commission was envisioning.
392
00:23:05.839 --> 00:23:08.599
And I guess shifting to sort of the litigation.
393
00:23:09.240 --> 00:23:12.839
Once once the rule was finalized, we filed the petition
394
00:23:12.920 --> 00:23:16.319
for review petitions for review or like typically very bare balloons,
395
00:23:16.400 --> 00:23:19.200
and then you see all the arguments. Actually once like
396
00:23:19.279 --> 00:23:21.519
the opening brief is filed, and there's a lot of
397
00:23:21.559 --> 00:23:23.559
rigor mo role before you get to an opening brief
398
00:23:23.599 --> 00:23:26.640
because the FCC has like a judicial lottery statute.
399
00:23:26.920 --> 00:23:28.759
But there were a bunch of petitions filed.
400
00:23:29.039 --> 00:23:31.880
We all ended up consolidated in front of the Eighth Circuit,
401
00:23:32.359 --> 00:23:35.599
and when the Chamber filed it's opening brief, we made
402
00:23:35.920 --> 00:23:39.200
five claims. The first is the one I sort of
403
00:23:39.200 --> 00:23:42.000
already previewed, which is like the big one. The Commission
404
00:23:42.079 --> 00:23:46.000
lacks statutory authority to impose disparate impact liability because Section
405
00:23:46.119 --> 00:23:50.480
six five oh six only authorizes disparate treatment liability, so
406
00:23:50.559 --> 00:23:54.440
only when you're intending to discriminate, not when there's disparate
407
00:23:54.480 --> 00:23:59.279
impact sort of disparate effects based on a protected characteristic.
408
00:24:00.160 --> 00:24:03.200
Or two, we said that the Commission lacked its statutory
409
00:24:03.240 --> 00:24:07.359
authority for the novel burden shifting framework that it adopted,
410
00:24:07.880 --> 00:24:12.000
where basically, if the FCC found that a covered entities
411
00:24:12.079 --> 00:24:17.880
policies or practices were intentionally discriminatory or having discrimatory effects,
412
00:24:18.000 --> 00:24:20.519
the defendant was supposed to demonstrate that the policy was
413
00:24:20.640 --> 00:24:25.759
justified by genuine issues of technical or economic feasibility, and
414
00:24:25.920 --> 00:24:30.440
the rule noted that that could include proof that available
415
00:24:30.519 --> 00:24:34.200
less discriminatory alternatives were not reasonably achievable at the time
416
00:24:34.279 --> 00:24:37.200
the policy or practice was adopted. But that approach is
417
00:24:37.240 --> 00:24:39.839
different from the ordinary rule that the defendant just has
418
00:24:39.880 --> 00:24:43.920
to come forward with any substantial, legitimate, non discriminatory interest
419
00:24:44.119 --> 00:24:46.680
in support of its policy, and then ordinarily the burden
420
00:24:46.720 --> 00:24:49.519
would shift back to the plaintiff to identify a less
421
00:24:49.519 --> 00:24:52.519
discriminatory alternative that is equally effective. So we were basically
422
00:24:52.519 --> 00:24:56.200
saying you should have followed the normal burden shifting framework
423
00:24:56.440 --> 00:24:59.839
for disparate impact. And then our third argument was that
424
00:25:00.119 --> 00:25:03.640
Commission lacked statutory authority to regulate entities other than Internet
425
00:25:03.640 --> 00:25:08.599
service providers, which Dan mentioned. You know, the SEC took
426
00:25:08.599 --> 00:25:11.440
a very maximalist view on who could potentially be covered
427
00:25:11.599 --> 00:25:15.319
by the disparate impact liability. Our fourth argument was that
428
00:25:15.359 --> 00:25:18.519
the Commission lacked statutory authority for the full suite of
429
00:25:18.640 --> 00:25:23.039
enforcement mechanisms it claimed, including the postility of monetary remedies.
430
00:25:23.359 --> 00:25:25.240
And so this argument is like fairly simple.
431
00:25:25.319 --> 00:25:31.480
Basically, we said, normally the Commission's enforcement mechanisms come from
432
00:25:31.480 --> 00:25:35.519
the Communications Act, but Congress chose not to incorporate section
433
00:25:35.599 --> 00:25:38.680
six zero five zero six into the Communications Act, so
434
00:25:38.759 --> 00:25:42.480
then you just have to rely on other implied remedies.
435
00:25:42.559 --> 00:25:45.519
And our argument was that section six zero five zero
436
00:25:45.599 --> 00:25:49.559
six is very forward looking like prevent discrimination, eliminate you
437
00:25:49.599 --> 00:25:54.759
knows discrimination, and those forward looking remedies would not include
438
00:25:54.799 --> 00:25:58.599
monetary backward looking sort of monetary relief.
439
00:25:59.000 --> 00:26:01.440
It would really be like like cease and desist orders.
440
00:26:02.440 --> 00:26:04.720
And our fifth argument was that the order was arbitrary
441
00:26:04.720 --> 00:26:08.440
and capricious for failing to justify its departure from the
442
00:26:08.480 --> 00:26:15.400
standard burden shifting framework, and also for failing to consider
443
00:26:15.440 --> 00:26:19.200
the full costs on especially on like non ISPs who
444
00:26:19.200 --> 00:26:21.400
would be covered, and to.
445
00:26:21.480 --> 00:26:22.960
Justify that sort of broad coverage.
446
00:26:22.960 --> 00:26:26.799
So those are the five arguments that we brought and
447
00:26:26.839 --> 00:26:27.720
that the industry brought.
448
00:26:27.759 --> 00:26:30.799
Sort of in general, thank you kind of sticking with
449
00:26:30.880 --> 00:26:33.200
you from what you mentioned you briefly kind of discussed
450
00:26:33.200 --> 00:26:36.319
this burden shifting framework. Can you kind of go a
451
00:26:36.359 --> 00:26:40.599
little deeper in how courts and other statutes have addressed
452
00:26:40.720 --> 00:26:45.640
this shoal sorry, discriminatory treatment versus disparate impact.
453
00:26:46.880 --> 00:26:50.599
Sure, so, disparate impact liability really got its like in
454
00:26:50.759 --> 00:26:53.400
promoter from the Supreme Court in a nineteen seventy one
455
00:26:53.440 --> 00:26:56.759
case called Griggs versus Duke Power Company, And that was
456
00:26:56.799 --> 00:27:01.480
where the Court interpreted Title SEVENS language about depriving any
457
00:27:01.519 --> 00:27:06.279
individual of employment opportunities or otherwise adversely.
458
00:27:05.720 --> 00:27:08.519
Affecting his status as an employee to.
459
00:27:08.559 --> 00:27:13.000
Create disparate impact liability because that otherwise adversely effect language
460
00:27:13.200 --> 00:27:17.640
focused on the consequences of employment practices, not simply the motivation.
461
00:27:17.799 --> 00:27:20.279
And so the Court said, they're focused on the consequences,
462
00:27:20.279 --> 00:27:22.759
it doesn't really matter why you did it. If it's
463
00:27:22.839 --> 00:27:26.039
like discriminatory effect, you might be on the hook. Then
464
00:27:26.240 --> 00:27:28.880
in Smith versus City of Jackson, which was in two
465
00:27:28.920 --> 00:27:32.400
thousand and five, a plurality of the Court reached a
466
00:27:32.400 --> 00:27:37.400
similar conclusion. Under the ADA, there there was again that
467
00:27:37.599 --> 00:27:41.279
otherwise adversely effect language. And then a decade later, in
468
00:27:41.279 --> 00:27:44.559
Inclusive Communities in twenty fifteen, the Supreme Court held that
469
00:27:44.599 --> 00:27:48.799
the Fair Housing Act authorized disparate impact liability, and there
470
00:27:49.240 --> 00:27:52.680
the otherwise adversely effect language was not in the operative provision,
471
00:27:53.000 --> 00:27:57.160
but it was in a nearby provision, and where it's
472
00:27:57.160 --> 00:28:00.279
a had language about otherwise making unavailable or to denying
473
00:28:00.319 --> 00:28:03.440
a dwelling to any person. And there were also some
474
00:28:03.920 --> 00:28:07.640
subsequent statutory amendments and legislative history that the Court thought
475
00:28:08.480 --> 00:28:12.359
suggested Congress intended that to have disparate impact liability. But
476
00:28:13.200 --> 00:28:16.440
inclusive communities is a really interesting decision because the Court
477
00:28:16.480 --> 00:28:18.599
there was really grappling with what I think is a
478
00:28:18.640 --> 00:28:25.279
philosophical debate underline disparate impactly, is disparate impact liability an
479
00:28:25.279 --> 00:28:32.039
effort to just eliminate differences in terms of how protected
480
00:28:32.119 --> 00:28:37.480
characteristics like protected characteristics like have effects to like eliminate
481
00:28:37.559 --> 00:28:41.160
any racially discriminatory effects, or is it really about like
482
00:28:41.240 --> 00:28:45.799
smoking out intentional discrimination where we think there's something underlying
483
00:28:46.319 --> 00:28:48.400
the decision that we can't really point out, Like there's
484
00:28:48.480 --> 00:28:51.480
someone didn't say I'm doing this because of your characteristic
485
00:28:51.559 --> 00:28:54.759
but a lot of there's a lot of fire. There's
486
00:28:54.759 --> 00:28:57.400
a lot of smoke that suggests there's fire of intentional discrimination.
487
00:28:57.480 --> 00:29:00.960
And you see kind of both trends, I think inclusive communities,
488
00:29:00.960 --> 00:29:03.680
like on the one hand, the majority talks about the
489
00:29:03.799 --> 00:29:07.640
vestiges of DIJR discrimination that are still alive in housing
490
00:29:07.640 --> 00:29:10.680
today and talked about you know, flight from the cities
491
00:29:10.839 --> 00:29:14.279
and how racially polarized housing is like really our vestige
492
00:29:14.319 --> 00:29:17.440
of those official things, And that sounds like they just
493
00:29:17.480 --> 00:29:20.119
want to get rid of, you know, those vestiges, which
494
00:29:20.240 --> 00:29:22.880
you know is a laudable goal, But then you also
495
00:29:23.200 --> 00:29:26.480
have them say disparate impact liability must be limited, so
496
00:29:26.519 --> 00:29:29.519
employers and other regular entities are able to make the
497
00:29:29.599 --> 00:29:33.519
practical business choices and profit related decisions that sustain a
498
00:29:33.599 --> 00:29:37.599
vibrant and dynamic free enterprise system, which does not sound
499
00:29:37.720 --> 00:29:41.000
in eliminating vestiges, but sounds more and like we want
500
00:29:41.039 --> 00:29:43.279
to make sure we're not being unduly.
501
00:29:44.319 --> 00:29:46.359
We're not putting too much pressure on businesses.
502
00:29:46.400 --> 00:29:48.880
They still need freedom to act as long as there's
503
00:29:48.880 --> 00:29:52.559
like legitimate, you know, business decisions going on. So you
504
00:29:52.640 --> 00:29:55.200
had that tension in the opinion, and what the court
505
00:29:55.279 --> 00:29:58.200
ended up doing is it announced several guard rails about
506
00:29:58.279 --> 00:30:03.079
how disparate impact liabilit should be imposed. So, for example,
507
00:30:03.119 --> 00:30:06.319
it said, you can't just rely on a statistical disparity.
508
00:30:06.400 --> 00:30:09.240
You have to find that the there's like a strict,
509
00:30:09.359 --> 00:30:12.759
robust causality requirement that you have to show evidence that
510
00:30:12.799 --> 00:30:15.920
it's the policy or practice of the defendant that's causing
511
00:30:16.319 --> 00:30:21.720
that differential impact, not just like something that existed in society.
512
00:30:21.200 --> 00:30:23.240
Generally that they're kind of being held on the hook for.
513
00:30:23.880 --> 00:30:26.680
And then you know, the burden shifts to the defendant
514
00:30:26.759 --> 00:30:29.799
to prove that the challenge practice is necessary to achieve
515
00:30:30.319 --> 00:30:34.119
one or more substantial, legitimate, non discriminatory interest. That's like
516
00:30:34.160 --> 00:30:38.079
trying to again smoke out discriminatory intent. And then finally,
517
00:30:38.119 --> 00:30:41.079
if the defendant identifies such an interest, the burden shifts
518
00:30:41.079 --> 00:30:44.519
back to the plaintiff, who can only prevail upon showing
519
00:30:44.559 --> 00:30:49.240
that there's a substantial showing that the same substantial, legitimate,
520
00:30:49.279 --> 00:30:52.240
non discriminatory interests could be served by another practice that
521
00:30:52.279 --> 00:30:53.759
has a less discriminatory effect.
522
00:30:53.920 --> 00:30:56.200
And there again you're kind of looking at.
523
00:30:56.079 --> 00:31:00.359
Like, well, if you could avoid the discriminatory impact equally
524
00:31:00.359 --> 00:31:02.880
serve that interest, why wouldn't you like that seems like again,
525
00:31:02.920 --> 00:31:06.279
maybe like you're trying to smoke out intentional discrimination. And
526
00:31:06.319 --> 00:31:09.119
the Court said this whole framework was necessary to protect
527
00:31:09.200 --> 00:31:14.200
potential defendants against abusive disparate impact claims. And then so
528
00:31:14.359 --> 00:31:16.440
in the last ten years, the Court has not found
529
00:31:16.599 --> 00:31:21.160
a new disparate impact regime. So while lower courts after
530
00:31:21.279 --> 00:31:23.920
Griggs have been they were much more open to finding
531
00:31:23.920 --> 00:31:26.680
disparate impact liability and statutes and the agencies were too.
532
00:31:26.720 --> 00:31:30.039
You saw agencies interpreting their statutes have disparate impact liability.
533
00:31:30.319 --> 00:31:32.160
I think there's been a noticeable.
534
00:31:31.680 --> 00:31:35.519
Turn away from that framework since inclusive community communities, and
535
00:31:35.559 --> 00:31:39.160
of course now the Trump administration is adjusting its regulations
536
00:31:39.160 --> 00:31:43.039
and litigating positions to oppose reading such liability into federal
537
00:31:43.039 --> 00:31:45.680
statutes and to strictly limit it when it's there. So
538
00:31:45.720 --> 00:31:48.839
that's kind of the philosophical debate that was underlying it
539
00:31:48.880 --> 00:31:50.079
and where we're at right now.
540
00:31:50.920 --> 00:31:54.599
Thank you, very detailed overview, very very very helpful. So
541
00:31:55.000 --> 00:31:58.319
kind of given this background and framework, Dan, how did
542
00:31:58.400 --> 00:32:01.880
the Eighth Circuit eventually come to their decision and what
543
00:32:01.960 --> 00:32:04.279
were how did they kind of fought what were the
544
00:32:04.359 --> 00:32:05.799
key their key holdings?
545
00:32:07.000 --> 00:32:10.160
Sure, and it took them a while to do it,
546
00:32:10.160 --> 00:32:13.160
because the case was with them for almost two years,
547
00:32:13.240 --> 00:32:18.039
but it came out for that a pretty i think, straightforward,
548
00:32:18.200 --> 00:32:24.720
clear opinion largely based on low or bright. With respect
549
00:32:24.920 --> 00:32:30.599
to disparate impact, the Court concluded that the statute did
550
00:32:30.720 --> 00:32:33.559
not authorize a disparate impact standard.
551
00:32:34.000 --> 00:32:35.000
It looked at a few things.
552
00:32:35.039 --> 00:32:43.640
It looked at the cases that Jennifer mentioned that where
553
00:32:43.680 --> 00:32:46.079
the Court did find where the Supreme Court specifically did
554
00:32:46.160 --> 00:32:49.960
find disparate impact liability, and they all had that similar
555
00:32:50.000 --> 00:32:53.160
structure with the catch all language at the end that
556
00:32:53.240 --> 00:32:56.440
didn't look at intent and used the word otherwise in
557
00:32:56.519 --> 00:33:00.519
a special formulation that signified a shift to disparate impact.
558
00:33:01.799 --> 00:33:05.039
As Chris mentioned in the beginning, the Digital Discrimination Statute
559
00:33:05.400 --> 00:33:08.839
doesn't have that framework. Instead, it says the FCC is
560
00:33:08.839 --> 00:33:14.640
supposed to prevent digital discrimination of access based on income level, race, ethnicity,
561
00:33:14.759 --> 00:33:18.160
color of religion, or national origin. And the Court looked
562
00:33:18.160 --> 00:33:22.559
at that based on language and interpreted it according to
563
00:33:22.599 --> 00:33:27.559
its plain meaning of because of meaning discrimination because of
564
00:33:27.599 --> 00:33:31.680
a very particular characteristic, which the Court concluded, based on precedent,
565
00:33:31.759 --> 00:33:34.359
points to intentional discrimination.
566
00:33:36.400 --> 00:33:37.599
It looked at various.
567
00:33:37.279 --> 00:33:43.480
Counter arguments, including particularly the idea that feasibility isn't compatible
568
00:33:43.480 --> 00:33:47.400
with an intentional discrimination standard, and the Court pointed out
569
00:33:47.480 --> 00:33:52.759
rightly that feasibility can be relevant to indirect evidence in
570
00:33:52.839 --> 00:33:59.519
an intentional discrimination case. Turning from the disparate treatment versus
571
00:33:59.519 --> 00:34:04.519
disparate packed issue to the covered entities issue. The Court
572
00:34:04.559 --> 00:34:07.839
also concluded that the statute can only be understood to
573
00:34:08.000 --> 00:34:12.440
regulate broadband providers and not anybody else. And again, the
574
00:34:12.480 --> 00:34:17.159
Court focused pretty closely on the statutes text and noted
575
00:34:17.199 --> 00:34:20.960
that it only really refers to two parties in the
576
00:34:21.119 --> 00:34:24.599
context of the provision of broadband service, the subscribers and
577
00:34:24.639 --> 00:34:28.480
the providers. It also looked to the statement of policy
578
00:34:28.519 --> 00:34:33.559
that declares that subscribers should benefit from equal access to
579
00:34:33.599 --> 00:34:37.159
broadband internet access service within the service area of a provider,
580
00:34:37.639 --> 00:34:41.840
again referencing a provider. So the Court didn't see any
581
00:34:41.880 --> 00:34:45.239
sort of textual hook, certainly not a textual hook that
582
00:34:45.280 --> 00:34:50.159
would meet the low or bright standard to justify regulating
583
00:34:50.199 --> 00:34:55.480
anyone other than broadband providers. The Court had an interesting
584
00:34:55.480 --> 00:34:59.480
discussion where it articulated two other issues that were debated
585
00:34:59.519 --> 00:35:02.440
in the rec but didn't quite decide them. First, it
586
00:35:02.960 --> 00:35:09.880
talked about the debate about whether penalties would be available
587
00:35:10.039 --> 00:35:12.719
in the way that the FCC described, using the FCC's
588
00:35:12.760 --> 00:35:19.039
forfeiture authority and other authority that derives from the Communications Act.
589
00:35:21.880 --> 00:35:23.679
I would say the decision hinted around.
590
00:35:23.480 --> 00:35:25.719
The idea that the Court might have really some of
591
00:35:25.719 --> 00:35:29.079
the judges might have agreed to with the argument that
592
00:35:29.119 --> 00:35:32.639
those penalties aren't available at least in the disparate impact context,
593
00:35:32.679 --> 00:35:34.679
but it didn't quite come out and say so.
594
00:35:36.599 --> 00:35:37.159
The other.
595
00:35:39.239 --> 00:35:41.840
Thing issue that the court discussed but declaimed to reach
596
00:35:42.039 --> 00:35:47.599
was the arbitrary and capricious argument. But there's a footnote
597
00:35:47.599 --> 00:35:51.400
that says that the FCC didn't explain its departure from
598
00:35:51.679 --> 00:35:54.119
the inclusive community standard. The court said it didn't need
599
00:35:54.159 --> 00:35:57.960
to reach this issue because it was deciding the case
600
00:35:58.000 --> 00:35:59.719
based on these other broader issues.
601
00:35:59.719 --> 00:36:00.840
But I felt like that.
602
00:36:01.360 --> 00:36:03.320
Kind of gigaway where it would have landed had it
603
00:36:03.360 --> 00:36:05.480
reached that particular issue.
604
00:36:07.360 --> 00:36:12.039
Thank you, maybe Dan so Jen Dan kind of mentioned
605
00:36:12.039 --> 00:36:15.039
the Eighth Circuits application of Low or Bright. Can you
606
00:36:15.119 --> 00:36:17.599
kind of go a little bit deeper into that discuss
607
00:36:17.679 --> 00:36:21.280
how the Eighth Circuit of slide loperor Bright and its
608
00:36:21.679 --> 00:36:23.199
analysis of disparate impact.
609
00:36:24.599 --> 00:36:29.119
Yeah, I mean it basically so the reason that you know,
610
00:36:29.239 --> 00:36:33.880
after lower Bright, there's no difference even on difficult questions
611
00:36:33.880 --> 00:36:34.559
to the agency.
612
00:36:34.599 --> 00:36:36.920
Instead, it's the court's job to figure it out.
613
00:36:37.400 --> 00:36:40.880
And so you know, it came up sprinkled throughout, but
614
00:36:40.960 --> 00:36:44.639
it just basically focused its analysis on the traditional tools
615
00:36:44.639 --> 00:36:48.199
of statutor interpretation, the text, the statutory context, and it
616
00:36:48.599 --> 00:36:51.480
thought that under those tools, the FCC had exceeded its
617
00:36:51.519 --> 00:36:55.639
authority on both of the issues. Dan mentioned it said,
618
00:36:56.119 --> 00:36:57.960
I thought it's kind of memorable. Lie on this was
619
00:36:57.960 --> 00:37:00.320
like the agency asked us for a trust us approach,
620
00:37:00.800 --> 00:37:03.880
which provides little comfort to regulate your parties facing enormous
621
00:37:03.960 --> 00:37:08.280
non compliance penalties and so then it held that approach impermissible.
622
00:37:09.440 --> 00:37:12.039
Thank you, and kind of kind of going down the
623
00:37:12.079 --> 00:37:12.480
line here.
624
00:37:12.559 --> 00:37:17.159
A significant focus of the Eighth Circuits discussion was analyzing
625
00:37:17.199 --> 00:37:20.280
the language of Section sixty five oh six. The determined
626
00:37:20.280 --> 00:37:25.159
whether or Congress intended to include disparate impact liability. Obviously,
627
00:37:25.239 --> 00:37:27.880
as someone in Congress, this is something that's also very
628
00:37:28.159 --> 00:37:31.119
important to us as we draft statutes. Would love to
629
00:37:31.199 --> 00:37:34.679
get each panelist kind of perspective of how the Court
630
00:37:34.760 --> 00:37:38.199
got it right, got it wrong. Dan, I'll kind of
631
00:37:38.199 --> 00:37:41.079
start with you then, Chris ben Jen.
632
00:37:43.320 --> 00:37:47.880
Sure, I think the Court got it spot on. I
633
00:37:47.920 --> 00:37:50.000
can only go based on what the text is the
634
00:37:50.039 --> 00:37:52.400
statute says. I can't get in the head of every
635
00:37:52.960 --> 00:37:56.039
legislator who might have had a particular view on what
636
00:37:56.079 --> 00:38:00.480
the statute meant. But going off of the text and
637
00:38:00.760 --> 00:38:04.400
understanding that to reflect the will of Congress, I think
638
00:38:04.440 --> 00:38:07.480
the opinion is just spot on. It reasons from the
639
00:38:07.519 --> 00:38:10.719
wording of the statute and from case law based on.
640
00:38:13.360 --> 00:38:17.360
What because of or based on means.
641
00:38:17.400 --> 00:38:21.199
In the discrimination context, the Court looked to case law
642
00:38:21.760 --> 00:38:25.840
based on inclusive communities in other cases where disparate impact
643
00:38:25.880 --> 00:38:30.000
has been found and rightly concluded that that sort of
644
00:38:30.079 --> 00:38:33.360
language wasn't available there, which presumably the drafters would have
645
00:38:33.400 --> 00:38:36.320
included if that's what they wanted to signal.
646
00:38:38.000 --> 00:38:39.559
If I don't have a lot to add to.
647
00:38:39.559 --> 00:38:42.119
The opinion, if I could add anything, I think that
648
00:38:42.239 --> 00:38:45.159
they There are also some structural.
649
00:38:44.679 --> 00:38:46.840
Arguments in favor of the Court's approach.
650
00:38:47.079 --> 00:38:50.760
That this provision was tucked into the very end of
651
00:38:51.079 --> 00:38:55.960
a very long broadband section within an enormously long section statute.
652
00:38:56.000 --> 00:38:58.679
The fact that section six five H six says something
653
00:38:58.719 --> 00:38:59.880
I think, and.
654
00:39:01.719 --> 00:39:04.079
I think it's reasonable to conclude that if the Court
655
00:39:04.079 --> 00:39:06.320
had wanted to go in more of a West Virginia
656
00:39:06.840 --> 00:39:09.679
Major Questions kind of direction, it's reasonable to conclude that
657
00:39:09.760 --> 00:39:15.039
Congress wouldn't have transformed how broadband and lots of entities
658
00:39:15.079 --> 00:39:18.000
that interact with broadband are regulated in the context of
659
00:39:18.039 --> 00:39:22.840
this small sort of at the end statute. I'll just
660
00:39:22.880 --> 00:39:26.199
also add that while the Court rightly decided based on
661
00:39:26.239 --> 00:39:29.519
the law, as a regulatory attorney, I have trouble not
662
00:39:29.599 --> 00:39:31.880
mentioning policy, and we do.
663
00:39:32.400 --> 00:39:33.400
There's a lot we all agree on.
664
00:39:33.440 --> 00:39:36.679
We all agree that we want everyone to have broadband,
665
00:39:36.760 --> 00:39:38.639
we want people of all backgrounds connected.
666
00:39:39.280 --> 00:39:41.719
I think this decision sets.
667
00:39:41.559 --> 00:39:44.800
Up the right path to get there by avoiding a
668
00:39:44.840 --> 00:39:48.039
lot of second guessing that would have been likely to
669
00:39:48.039 --> 00:39:52.920
deter deployment in investment, and instead, let's what's been working,
670
00:39:53.119 --> 00:39:53.679
keep working.
671
00:39:55.480 --> 00:39:57.280
Thank you, Chris.
672
00:40:00.239 --> 00:40:04.039
Yeah, so I just to caveat what I'm about to say.
673
00:40:04.039 --> 00:40:06.119
I am not a lawyer, so I'm going to offer
674
00:40:06.159 --> 00:40:11.920
maybe something from a historical or academic perspective, but also,
675
00:40:12.880 --> 00:40:16.280
as full disclosure, I served on the Communications Equity Diversity
676
00:40:16.320 --> 00:40:20.159
Council working group that research digital discrimination for the Commission,
677
00:40:20.159 --> 00:40:21.639
So I do have a bit of an investment in
678
00:40:21.840 --> 00:40:23.800
what I'm about to say. But I think that one
679
00:40:23.800 --> 00:40:26.039
of the things we really need to think about.
680
00:40:26.880 --> 00:40:27.480
I'll go back.
681
00:40:27.800 --> 00:40:29.800
I don't think the core call it right, but here's
682
00:40:29.800 --> 00:40:32.360
my explanation for this. I think one of the things
683
00:40:32.360 --> 00:40:34.480
that we really need to think about is what exactly
684
00:40:34.800 --> 00:40:38.639
is broadband? Is it a market good like any other commodity,
685
00:40:38.719 --> 00:40:40.920
or is it something bigger? Is it a utility, or
686
00:40:40.960 --> 00:40:43.400
perhaps is it, how the UN and EU have said it,
687
00:40:43.440 --> 00:40:46.960
a human right. The SEC obviously took the larger approach
688
00:40:47.559 --> 00:40:49.559
than I think you called it the Maximbell approach. The
689
00:40:49.559 --> 00:40:52.360
Maximus approach right, and You're absolutely right. They offered a
690
00:40:52.400 --> 00:40:55.440
wide regulatory framework that obviously the court is struck down.
691
00:40:56.079 --> 00:40:57.599
But I think this is something that we really need
692
00:40:57.639 --> 00:40:59.480
to think through. And I'll remind everyone here that we
693
00:40:59.679 --> 00:41:02.440
don't have a working national broadband plan anymore. But I
694
00:41:02.440 --> 00:41:04.199
think we need to ask why are we pushing so
695
00:41:04.320 --> 00:41:07.800
hard for digital equity and inclusion, because the answer being
696
00:41:07.880 --> 00:41:10.920
that broadband is so much more than commerce. Right, It's education,
697
00:41:11.000 --> 00:41:13.960
it's public safety, is healthcare, is the economy, it's agriculture,
698
00:41:13.960 --> 00:41:16.320
it's quality of life. It is quite literally our window
699
00:41:16.360 --> 00:41:20.519
into the world. So achieving universal service, therefore should require
700
00:41:20.599 --> 00:41:23.760
stronger regulatory safeguards because the market's going to do what
701
00:41:23.800 --> 00:41:25.840
the market's going to do right and without, and the
702
00:41:25.840 --> 00:41:29.480
market has failed in so many of these areas. So
703
00:41:29.679 --> 00:41:33.000
these these these regulatory safeguards, I think, and what I
704
00:41:33.079 --> 00:41:35.199
found in my own research have been you know, are
705
00:41:35.280 --> 00:41:38.599
really crucial to achieving those universal service goals. So I
706
00:41:38.639 --> 00:41:42.000
was disappointed to see how the court ruled because I
707
00:41:42.039 --> 00:41:45.119
do think that the digital discrimination rules for a good
708
00:41:45.119 --> 00:41:46.000
step in that direction.
709
00:41:47.840 --> 00:41:50.679
Thank you. Chris jan Andy additional kind of thoughts.
710
00:41:51.559 --> 00:41:53.440
Yeah, I mean, look, this was our case, so we
711
00:41:53.440 --> 00:41:56.280
were happy to win. Everyone's always happy for a win.
712
00:41:56.960 --> 00:41:59.960
I would say the two things that really jumped out
713
00:42:00.119 --> 00:42:03.119
to me when I looked at this provision ward number one.
714
00:42:03.679 --> 00:42:08.280
Congress has had three statutes interpreted to include disparate impact liability,
715
00:42:08.360 --> 00:42:11.880
all of which use that like otherwise adversely effect language,
716
00:42:11.880 --> 00:42:13.400
and it wasn't in this one.
717
00:42:13.559 --> 00:42:14.599
And I just think at.
718
00:42:14.440 --> 00:42:17.519
Some point, if Congress wants to do something, it should
719
00:42:17.559 --> 00:42:19.880
use the language that the Court has held did it before,
720
00:42:19.960 --> 00:42:25.480
Like a novelty in legislation in terms of like text
721
00:42:25.480 --> 00:42:29.239
of legislation is not a good for like the law.
722
00:42:29.239 --> 00:42:31.880
It's just better to stick with what we understand has
723
00:42:31.920 --> 00:42:35.519
been interpreted particular ways. Everyone then understands what Congress is
724
00:42:35.519 --> 00:42:38.639
trying to communicate. And the second thing I would say
725
00:42:38.679 --> 00:42:41.639
is it's really hard to imagine how a regime adopting
726
00:42:41.679 --> 00:42:45.159
disparate impact based on income level would even work. Like
727
00:42:45.239 --> 00:42:47.880
that was something we highlighted on our briefs here. This
728
00:42:47.920 --> 00:42:51.000
would be the first disparate impact regime where a protected
729
00:42:51.119 --> 00:42:55.519
characteristic was income level, but like it also applied to
730
00:42:55.559 --> 00:42:58.760
things like pricing, and every price change will have a
731
00:42:58.800 --> 00:43:02.800
disparate impact based on inc because you know those with
732
00:43:02.880 --> 00:43:06.280
lower incomes can less afford price increases and are going
733
00:43:06.320 --> 00:43:09.480
to benefit more from price decreases and coupons and stuff
734
00:43:09.519 --> 00:43:12.000
than those with the higher incomes. So every single price
735
00:43:12.079 --> 00:43:14.840
decision made, it's going to have a disparate impact on
736
00:43:14.880 --> 00:43:17.760
the basis of income level, and that just makes it
737
00:43:17.800 --> 00:43:20.320
so hard for businesses to operate, and I think it
738
00:43:20.360 --> 00:43:22.880
would also make it very hard for a court to
739
00:43:22.920 --> 00:43:25.159
even try to grapple with that kind of claim. So
740
00:43:25.199 --> 00:43:27.480
those two features always like jumped out in me as
741
00:43:27.559 --> 00:43:31.639
like the big indicators that there wasn't desperate impact liability here,
742
00:43:31.679 --> 00:43:33.199
and we thought the court got it right.
743
00:43:34.079 --> 00:43:36.880
In concluding it didn't, thank you, John.
744
00:43:38.239 --> 00:43:41.639
Another big point of contention that the Chamber and others
745
00:43:41.719 --> 00:43:45.360
raised was did the FCC have authority to regulate just
746
00:43:45.440 --> 00:43:48.559
broadband providers in this context or other entities outside of
747
00:43:48.599 --> 00:43:49.880
broadband providers.
748
00:43:51.639 --> 00:43:53.559
The Court concluded.
749
00:43:53.119 --> 00:43:57.480
That it did not, Dan and then Chris, can you
750
00:43:57.559 --> 00:44:01.360
kind of walk through what does this mean for the
751
00:44:01.400 --> 00:44:04.719
broader implications on the FCCS, the kind of authority in
752
00:44:04.760 --> 00:44:09.840
the space you know, ban On kind of thinkres sure.
753
00:44:09.840 --> 00:44:13.519
I think it's a good reminder to this agency and
754
00:44:13.559 --> 00:44:16.760
other agencies that they're meant to regulate who Congress told
755
00:44:16.760 --> 00:44:20.559
them to regulate, and particularly for an expert agency like
756
00:44:20.599 --> 00:44:26.400
the FCC to stay within its area of expertise. Congress
757
00:44:26.440 --> 00:44:32.639
has occasionally told the FCC specifically to regulate specific areas
758
00:44:32.639 --> 00:44:35.360
that it wouldn't typically regulate, things like certain kinds of
759
00:44:35.400 --> 00:44:40.079
devices or online video with respect to closed captioning in
760
00:44:40.119 --> 00:44:41.079
some contexts.
761
00:44:41.639 --> 00:44:43.719
But Congress has been pretty clear when it's done that.
762
00:44:43.760 --> 00:44:47.519
And historically, the FCC, even at high points of regulation,
763
00:44:47.639 --> 00:44:51.079
even when it had things like its utility style approach
764
00:44:51.159 --> 00:44:55.880
to net neutrality, it was focused on regulating the communications
765
00:44:55.880 --> 00:45:01.719
service provider there and not everyone else. The digital discrimination
766
00:45:01.760 --> 00:45:05.280
approach really would have transformed the SEC into almost like
767
00:45:05.320 --> 00:45:08.920
the Federal Trade Commission and kind of reaching across the economy.
768
00:45:10.079 --> 00:45:12.760
I mean, you could have interpreted it to regulate any
769
00:45:12.760 --> 00:45:15.320
one of us on this call who was advising somebody
770
00:45:15.360 --> 00:45:21.000
with respect to the compliance or the litigation in the
771
00:45:21.000 --> 00:45:24.000
Digital Discrimination proceeding. And that's kind of a sign that's
772
00:45:24.039 --> 00:45:28.320
gone a little too far, I think, And so I
773
00:45:28.360 --> 00:45:35.760
think this is a helpful kind of refocus for the agency.
774
00:45:35.840 --> 00:45:38.880
Yeah, I'll agree totally with Dan Harry. One of the
775
00:45:38.880 --> 00:45:42.119
things that when you read the SEC order. That is
776
00:45:42.159 --> 00:45:44.880
hard to imagine this How would the SEC regulate apartments
777
00:45:45.519 --> 00:45:45.840
which was.
778
00:45:46.159 --> 00:45:47.440
It actually used as an example?
779
00:45:47.519 --> 00:45:47.679
Right?
780
00:45:47.880 --> 00:45:49.599
How are they going to tell apartment managers what to
781
00:45:49.599 --> 00:45:52.679
do that? That's a difficult that's a difficult task, indeed.
782
00:45:52.920 --> 00:45:56.840
But I think it also now puts pressure on Congress
783
00:45:58.039 --> 00:46:00.760
to rethink what should be in the SEC's orbit. Now
784
00:46:00.760 --> 00:46:02.679
I'm not saying apartment should be in the SEC's orbit,
785
00:46:03.440 --> 00:46:05.679
but you know, there's a lot of conversations right now
786
00:46:05.800 --> 00:46:08.400
in DC around rewriting or reopening the nineteen ninety six
787
00:46:08.480 --> 00:46:12.679
Telecommunications Act, and so are these are you know, is
788
00:46:12.719 --> 00:46:15.199
this an invitation? This is something that Congress should take up,
789
00:46:15.440 --> 00:46:17.800
which is that, hey, if we really want all of
790
00:46:17.800 --> 00:46:20.920
these other entities to be in the SEC's orbit. You know,
791
00:46:21.039 --> 00:46:24.079
there's been talk of putting AI algorithms within there as well.
792
00:46:24.199 --> 00:46:26.840
That requires the rewriting of the Telecom Act. And Congress
793
00:46:26.880 --> 00:46:29.519
is really serious about these things that included, then it's
794
00:46:29.599 --> 00:46:32.360
up to Congress to open that Act up or rewrite
795
00:46:32.400 --> 00:46:35.119
the Act, which is a major undertaking. But as it
796
00:46:35.199 --> 00:46:38.000
is now, you know, it just turned thirty a couple
797
00:46:38.079 --> 00:46:41.280
of months ago. You know, I think it's really time
798
00:46:41.360 --> 00:46:45.079
for a for an overhaul, but you know, to agree
799
00:46:45.119 --> 00:46:47.639
with Dan, I mean, I think that the courts made
800
00:46:47.679 --> 00:46:50.000
the right decision to limit the SEC's jurisdiction to what
801
00:46:50.079 --> 00:46:52.639
is actually in this jurisdiction. But this is an invitation
802
00:46:52.880 --> 00:46:55.840
for Congress to continue the larger conversation around the ninety
803
00:46:55.840 --> 00:46:56.280
six Act.
804
00:46:57.559 --> 00:47:00.320
Yeah, it's actually trans transition as well to kind of
805
00:47:00.360 --> 00:47:01.960
like what's next on this.
806
00:47:04.159 --> 00:47:05.360
Chrys will kind of stick with you.
807
00:47:05.400 --> 00:47:08.400
So even though the Eighth Circuit vacated the rule of
808
00:47:08.440 --> 00:47:10.920
the section, the orquatash requirement still in the books, the
809
00:47:11.039 --> 00:47:13.920
FCC has to address it in some form or fashion.
810
00:47:14.039 --> 00:47:16.239
Kind of taking out your Crystal ball, what do you
811
00:47:16.280 --> 00:47:18.159
kind of see as kind of the Commission doing this
812
00:47:18.239 --> 00:47:20.840
space maybe Congress as you discuss and also at the
813
00:47:20.840 --> 00:47:23.639
state of local level, and then Crystal start with you,
814
00:47:23.679 --> 00:47:24.639
then we'll go to Dan.
815
00:47:26.199 --> 00:47:28.239
Yeah, I think you know, the onus now is really
816
00:47:28.239 --> 00:47:30.679
going to fall to state. So obviously, like you said, Matt,
817
00:47:30.679 --> 00:47:33.239
the SEC is obligated by statue to address the issue,
818
00:47:33.360 --> 00:47:37.280
but we're also in a political acligmate as as Jennifer mentioned,
819
00:47:37.280 --> 00:47:41.599
that is quite hostile to dei endeavors not only also
820
00:47:41.639 --> 00:47:44.039
but actively punishes it right, and the SEC has certainly
821
00:47:44.079 --> 00:47:46.119
been part of what I would consider to be this
822
00:47:46.199 --> 00:47:49.800
rather regressive political ecosystem. So my prediction is that, I mean,
823
00:47:49.840 --> 00:47:51.880
the SEC will have to will have to do something,
824
00:47:51.920 --> 00:47:55.000
but they'll probably flow to revise digital discrimination rule that
825
00:47:55.039 --> 00:47:59.079
will focus only on different treatment and intentional discrimination.
826
00:47:59.199 --> 00:47:59.280
Right.
827
00:47:59.320 --> 00:48:00.559
In other words, I think they're going to do the
828
00:48:00.599 --> 00:48:04.519
bare minimum as required by Congress that also was outlined
829
00:48:04.559 --> 00:48:08.199
in the courts. Let's not forget that as part of
830
00:48:08.239 --> 00:48:11.280
the Digital Equity Act, which the Trump administration also struck down,
831
00:48:11.480 --> 00:48:16.159
states were required to create statewide digital equity programs. So
832
00:48:16.360 --> 00:48:19.320
be up to states if they want to pursue these agendas.
833
00:48:20.199 --> 00:48:22.440
So I think, like in so much in broadband in telecom,
834
00:48:22.519 --> 00:48:25.519
right now, the owners is going to fall onto states
835
00:48:25.559 --> 00:48:30.559
and localities to include should they choose any sort of
836
00:48:30.599 --> 00:48:35.000
digital discrimination UH mandates and in their kind of UH
837
00:48:35.400 --> 00:48:37.519
digital equity plans or in their kind of you know,
838
00:48:37.639 --> 00:48:40.199
state wide policies moving forward. But that is also fraught,
839
00:48:40.199 --> 00:48:42.840
and we saw this with attempts to regulate net neutrality
840
00:48:42.960 --> 00:48:45.119
at the state level as well.
841
00:48:45.159 --> 00:48:46.280
And it's also affordability.
842
00:48:46.280 --> 00:48:47.920
If you look at you know, what New York is
843
00:48:47.960 --> 00:48:49.480
doing with the Affordable Broadband Act.
844
00:48:49.800 --> 00:48:51.800
So it's you know, it's it's going to get messy.
845
00:48:51.800 --> 00:48:53.360
But I think you know what the SEC is going
846
00:48:53.400 --> 00:48:54.719
to do is they're just going to walk away from this.
847
00:48:54.719 --> 00:48:56.719
They're going to do a you know, they said, we
848
00:48:56.760 --> 00:48:59.239
didn't see any intentional discrimination there, so they're going to
849
00:48:59.239 --> 00:49:01.559
say we're going to ban intentional discrimination and we're going
850
00:49:01.639 --> 00:49:03.639
to walk away because that's exactly what we think Congress
851
00:49:03.679 --> 00:49:04.880
wanted us to do, and that's what the courts that
852
00:49:04.960 --> 00:49:06.679
we should do. So I think we'll see a really
853
00:49:06.679 --> 00:49:09.199
minimalist approach to the SEC. And then we're going to
854
00:49:09.239 --> 00:49:12.360
see some states I ave two dollars who don't step
855
00:49:12.440 --> 00:49:14.960
up and take on dismantle and other states not.
856
00:49:15.960 --> 00:49:16.840
Thank god. Dan.
857
00:49:18.559 --> 00:49:20.599
Sure, yeah, I.
858
00:49:20.559 --> 00:49:23.800
Agree that the FCC is going to have to eventually
859
00:49:23.800 --> 00:49:26.719
adopt rules. I certainly hope that they're ones that delign
860
00:49:26.920 --> 00:49:29.719
with the Statute and achieve what I think is Congress's
861
00:49:29.800 --> 00:49:33.960
vision has articulated in the Statute of providing a backstop
862
00:49:34.000 --> 00:49:39.599
against intentional discrimination, which happily the FCC concluded the broadband
863
00:49:39.679 --> 00:49:41.599
market is free of but it certainly needs to stay
864
00:49:41.599 --> 00:49:45.800
free of it, and rules preventing that can only help
865
00:49:45.800 --> 00:49:50.800
in that regard, even if the risk is low. As
866
00:49:50.880 --> 00:49:56.360
for states, I, as Chris suggested that they could be,
867
00:49:56.719 --> 00:49:58.639
they could look at a lot of different directions. My
868
00:49:58.760 --> 00:50:01.599
hope would be that they would look at things like
869
00:50:01.800 --> 00:50:06.920
permitting reform or eliminating requirements in certain states that keep
870
00:50:07.880 --> 00:50:11.880
certain carriers tied to updated networks, things of that sort
871
00:50:11.880 --> 00:50:15.599
of change that would make it easier for the providers
872
00:50:15.679 --> 00:50:19.440
to do what everybody agrees is beneficial, which is investing
873
00:50:19.480 --> 00:50:23.000
in all sorts of communities to deploy broadband and faster
874
00:50:23.119 --> 00:50:27.079
speeds and create more competition that can continue to lower prices.
875
00:50:29.960 --> 00:50:30.320
Thank you.
876
00:50:30.360 --> 00:50:33.480
And then kind of final question for jen so Minnesota,
877
00:50:33.559 --> 00:50:37.880
the decision kind of look to pursue kind of traditional
878
00:50:37.960 --> 00:50:40.639
stashtory analysis. They looked at this in the context of
879
00:50:40.679 --> 00:50:44.519
inclusive communities. What does this kind of decision mean for
880
00:50:44.719 --> 00:50:50.840
other you know, statutory regimes on discrimination and other types
881
00:50:50.880 --> 00:50:55.119
of other potential litigation on the FCC's authority.
882
00:50:55.800 --> 00:50:59.079
So, I think it's a cautionary tale for agencies that
883
00:50:59.719 --> 00:51:02.559
you know, they're not getting the deference that they once did,
884
00:51:02.639 --> 00:51:05.920
so they need to be really careful about looking at
885
00:51:05.920 --> 00:51:10.079
their statutory authorities when they are making decisions. Obviously there's
886
00:51:10.079 --> 00:51:12.320
a lot of doctrines about, you know, trying to serve
887
00:51:12.360 --> 00:51:15.639
the purposes that Congress set out, But it's all going
888
00:51:15.719 --> 00:51:18.920
to be viewed through the prism of, you know, what
889
00:51:19.000 --> 00:51:22.239
is the statutory text adopted that gives the FCC authority
890
00:51:22.280 --> 00:51:24.639
to act in the space or another agency to act
891
00:51:24.639 --> 00:51:26.719
in the space. And you know, Chris makes good points
892
00:51:26.760 --> 00:51:30.000
about like clearly Congress was trying to do something in
893
00:51:30.119 --> 00:51:33.480
terms of expanding broadband deployment like that there are so
894
00:51:33.599 --> 00:51:38.840
many indicators, but here maybe this was not in the
895
00:51:38.920 --> 00:51:41.960
suite of tools that the FCC could use. At least
896
00:51:42.000 --> 00:51:44.440
that's you know, what the Court concluded. And I think
897
00:51:44.480 --> 00:51:47.760
that this decision can also be read as a cautionary
898
00:51:47.840 --> 00:51:50.519
tale in particular about disparate impact liability.
899
00:51:50.920 --> 00:51:53.599
So, you know, while the Supreme Court, you know.
900
00:51:53.559 --> 00:51:57.719
In Inclusive Communities, it found disparate impact liability, it adopted
901
00:51:57.760 --> 00:52:01.559
lots of guardrails, and it seemed kind of hesitant about
902
00:52:02.000 --> 00:52:02.800
disparate impact.
903
00:52:02.840 --> 00:52:06.320
And the Court has changed, it has moved since Inclusive Communities.
904
00:52:06.320 --> 00:52:08.360
You know, Justice Kennedy who wrote that opinion is no
905
00:52:08.440 --> 00:52:11.239
longer on the court, and the Court hasn't found a
906
00:52:11.239 --> 00:52:14.280
disparate impact regime since so it definitely has the feel
907
00:52:14.320 --> 00:52:16.079
in some ways of like the sand of all line
908
00:52:16.119 --> 00:52:19.079
of cases, like the Court was implying causes of action
909
00:52:19.239 --> 00:52:21.760
and then they say, now we're not doing it anymore.
910
00:52:21.760 --> 00:52:23.760
We're out of the business. And that's kind of how
911
00:52:23.800 --> 00:52:26.320
it feels on disparate impact. So if Congress wants desperate
912
00:52:26.360 --> 00:52:29.400
impact liability, it's going to need to be clear and
913
00:52:29.440 --> 00:52:31.400
it's going to need to put that in the statute,
914
00:52:31.679 --> 00:52:34.639
and both Congress and any agencies are going to need
915
00:52:34.679 --> 00:52:37.599
to think about making sure that any disparate impact regimes
916
00:52:37.639 --> 00:52:41.159
that they adopt comply with the constitutional guardrails as set
917
00:52:41.159 --> 00:52:44.079
forth by the Supreme Court in that Inclusive Community's decision.
918
00:52:44.880 --> 00:52:47.920
It doesn't mean disparate impact liability is gone. Congress could
919
00:52:48.039 --> 00:52:51.000
enact it. The Supreme Court has not held it to
920
00:52:51.000 --> 00:52:54.280
be unconstitutional, but they're going to need to really hewe
921
00:52:54.280 --> 00:52:57.119
closely to those guardrails that the Supreme Court has identified.
922
00:52:58.159 --> 00:53:00.719
Thank you, Jen, and thank you for one for these
923
00:53:00.800 --> 00:53:05.440
very insightful analysis and comments on the past president future
924
00:53:05.440 --> 00:53:06.159
of this issue.
925
00:53:06.760 --> 00:53:09.360
Lily, I will turn it back to you. Thanks.
926
00:53:09.400 --> 00:53:12.199
Matt On behalf of the Federalist Society. I want to
927
00:53:12.239 --> 00:53:14.920
thank our experts for the benefit of their valuable time
928
00:53:15.000 --> 00:53:17.679
and expertise today, and I want to thank our audience
929
00:53:17.719 --> 00:53:21.679
for joining and participating. We welcome listener feedback by email
930
00:53:21.760 --> 00:53:26.119
at Fedsocforum at fedsoc dot org. As always, keep an
931
00:53:26.159 --> 00:53:28.800
eye out on our website and your emails for announcements
932
00:53:28.840 --> 00:53:32.360
about other upcoming virtual events. Thank you all for joining
933
00:53:32.440 --> 00:53:33.880
us today. We are adjourned.
934
00:53:34.800 --> 00:53:38.599
Thanks for listening to FEDSOC Forums, a Federalist Society podcast.
935
00:53:38.960 --> 00:53:41.519
Be sure to subscribe wherever you get your podcasts so
936
00:53:41.559 --> 00:53:44.480
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937
00:53:44.519 --> 00:53:46.400
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