Update: FCC approves 'Orwellian equity plan to control Internet' in narrow 3-2 vote

Eliyahu Tulshinski

November 16, 2023

The Federal Communications Commission (FCC) adopted sweeping new internet regulations in a narrow 3-2 vote along party lines. Commissioner Brendan Carr, who publicized his strong opposition to the rules, was only able to garner the support of one fellow commissioner.

Senate opposition

In a press release following the vote, U.S. Senate Commerce Committee Ranking Member Ted Cruz (R-Texas) blasted the FCC for adopting regulations that usher in “affirmative action and race-based pricing” for internet service:

Despite admitting there’s ‘little to no evidence’ of discrimination by telecommunications companies, Democrats are hoping to convince the American people that broadband Internet is so racist they need to plow ahead with government-mandated affirmative action and race-based pricing. [Emphases added].

Cruz went on to accuse the federal agency of “Orwellian” tactics in passing overzealous regulations under the guise of promoting equity. He continued, “The only beneficiaries of this Orwellian ‘equity’ plan are overzealous government regulators who want to control the Internet.”

Cruz was joined in his opposition to the new rules by 27 other senators, each of whom co-signed a letter to FCC Chairwoman Jessica Rosenworcel, a few days before the vote, imploring her to abandon the planned rules in favor of ones which would serve the public, not the government.

As you approach the statutory deadline for issuing rules to implement this section, we strongly urge you to reconsider your Draft Order.

Instead, do your job: Follow the statutory text, implement rules that will incentivize rather than deter private investment, and promote rather than undermine the goal of ubiquitous broadband. [Emphases added].

No other way?

Rosenworcel released a statement defending her vote in favor of the rules:

The digital divide puts us at an economic disadvantage as a country and disproportionately affects communities of color, lower-income areas, and rural areas.

We know broadband is essential infrastructure for modern life, and these rules will bring us one step closer to ensuring everyone has access to the internet, no matter who they are or where they live. [Emphasis added].

The chairwoman even used COVID to defend the FCC's power grab. She wrote, “[Poorer, less white neighborhoods were found to have received lower investment in broadband infrastructure] especially . . . during the pandemic.”

Rosenworcel did not explain, though, why the billions of taxpayer dollars already spent on digital equity did not achieve that goal. Nor did she explain why the FCC needed to adopt a 218-page order, entitled “Preventing Digital Discrimination” instead of a simple one-sentence rule such as this, “ISPs shall not charge marginalized communities more than the average rates in the same region unless justified by non-discriminatory factors.”

The government could even pay the entire average $900 annual cost of high speed internet service using some of the at least $60,000 it spends yearly on each family receiving welfare.

And assuming that it is the government's job to ensure high speed internet access for all, the government could itself choose to fund broadband infrastructure for the 18 million plus rural Americans who cannot get the high speed service at any price. The government would merely need to close the gap between the FCC’s 2018 estimate of an $80 billion price tag for installing the necessary infrastructure to achieve universal access and the billions already allocated. This would at least avoid the extensive regulation of the internet industry in the possibly illegal book-length order it adopted.

Illegal abuse of power

Senator Cruz and his colleagues warned Rosenworcel, in their letter, that the new rules were both an abuse of power and unlawful, since they allow the FCC to penalize private businesses for discrimination even in the absence of actual discrimination, despite Congressional legislation limiting penalties to cases of actual discrimination:

The corresponding rules—buttressed by the theory that the lack of actual discrimination somehow authorizes the FCC to redefine digital discrimination to expand its authority—turn section 60506 [of the Infrastructure Investment and Jobs Act] on its head and constitute a major abuse of the agency’s power.

First, your Draft Order’s “disparate impact” standard of liability is unlawful. [Emphases added].

Commissioner Carr similarly wrote that, “Congress never contemplated the sweeping regulatory regime that President Biden asked the FCC to adopt,” as previously reported by Frontline News. Under the analysis of the senators and Carr, the new rules could be overturned by the judiciary since they conflict with Supreme Court civil rights precedent as well as violating free speech protections.

Not just ISPs

The senators' letter went on to warn that the new rules will "subject an untenably broad array of broadband business
decisions to intrusive regulation." Commissioner Carr agrees. He specifically warned that land owners, construction crews, marketing agencies and even banks may be penalized under the rules.

Opposite of congressional intent

The senators concluded that the net effect of the regulations will be not to lower internet prices in rural areas but to discourage providing services in those areas altogether:

The idea these regulations will not impact rural deployment defies credulity:

If practically every business decision is subject to potential liability, companies will inevitably shift resources that would have otherwise been spent on deployment and innovation to hiring more lawyers and asking the FCC “mother-may-I.”

Industry executives agree. USTelecom, a broadband industry group, posted this warning on its website in the name of its president and CEO, Jonathan Spalter: “However well-intentioned, the FCC’s draft rules create a regulatory structure that could stifle investment and force providers to divert limited capital away from deployment.”

Race based price controls

Despite Hoover Institute findings that "price controls don’t work, period," the senators noted “the Draft Order makes clear that broadband prices are fair game for scrutiny.” Carr adds that Gongress never gave the FCC the power to issue these price controls:

The FCC arrogates to itself the power to review and determine the lawfulness of promotional pricing and discounts. It even puts the use of credit checks squarely in the cross hairs. Of course, Congress did not give the FCC the power to do any of this—the agency just creates it out of whole cloth. [Emphases added].

Race issues may not be limited to pricing. The NGO Diversity for Social Impact, for example, promotes the notion that websites must be “easy to use” for all:

Digital equity has been further defined as “the capability of individuals and households to participate in, and benefit from, digital opportunities.” . . .

Not everyone has the skills necessary to use technology effectively. This can leave them at a disadvantage when competing for jobs or participating in online communities. . . .

We need to ensure that the internet is where people can find the information they need. This means creating websites and online resources that are easy to use and available in multiple languages. . . .

Design technology in a way that is easy for everyone to use. [Emphases added].

This could be interpreted to mean that websites that are more readily understood by high income people would be in violation of digital equity.

First Amendment doesn't cover websites?

Indeed, podcaster Glenn Beck reported on Carr's opposition and concluded that the government is in fact limiting free speech protections for online activity.

Carr likewise wrote that the draft of the new rules “reads like a planning document drawn up in the faculty lounge of a university’s Soviet Studies Department.”

Carr published a nine page dissent to the adoption of the new rules, referring to them on X as "an unlawful power grab that gives the government a roving mandate to micromanage nearly every aspect of how the Internet functions.”

Pretext for regulating everything

The Washington Examiner quoted additional critics of the regulations:

Former FCC policy adviser Evan Swarztrauber said of Biden's plan, "To call it 'extreme' or 'radical' doesn't do this proposal justice."

"Biden is turning 'digital discrimination' into a pretext for regulating everything. For equity," Phil Kerpen, president of American Commitment, said of the Biden plan for the FCC. [Emphasis added].

See our previous coverage of Big Tech and the internet: