8th Circuit Vacates FCC’s 2023 Digital Discrimination Rules

The Eighth Circuit Court of Appeals has vacated the Federal Communications Commission’s 2023 Digital Discrimination Order, holding that the Order, which adopted rules interpreting digital discrimination of access to include both intentional discrimination and disparate impact, exceeded the FCC’s statutory authority under the Infrastructure Investment and Jobs Act (IIJA).

The Eighth Circuit found that the FCC exceeded its authority in two fundamental respects:

1. By adopting a disparate impact theory of liability not supported by the statute, and 
2. By extending the rules to a broad universe of “covered entities” beyond broadband providers.

The decision vacating the DD Order significantly narrows the scope of federal digital discrimination regulation and has immediate implications for broadband providers, as well as for contractors and other entities involved in BEAD-funded deployment efforts.

Infrastructure Investment and Jobs Act

Section 60506 of the IIJA required the FCC to adopt rules to facilitate equal access to broadband internet access service “insofar as technically and economically feasible.” Under Section 60506, the FCC must establish model policies and best practices that states and localities can adopt to ensure that broadband internet access service providers do not engage in digital discrimination.

FCC’s Digital Discrimination Order

The FCC adopted rules to ensure that historically unserved and underserved communities have equal opportunity to receive high-speed broadband service.  Under the rules, the FCC could:

• Analyze companies’ policies and practices to determine if they impede equal access to broadband service without adequate justification; 
• Investigate potential instances of broadband access discrimination, work with companies to solve problems, facilitate mediation, and penalize companies for violating the rules; and 
• Review digital discrimination consumer complaints through an improved consumer complaint portal.

More specifically, the Commission defined “digital discrimination” to include both disparate treatment (intentional discrimination) and disparate impact (facially neutral practices that produce discriminatory effects). The Commission emphasized that liability could attach even without discriminatory intent, focusing on the effects of policies on consumers’ access to broadband.

The FCC also adopted a broad definition of “covered entities.” Rather than limiting the rule to broadband providers, the Commission applied it to any entity providing services that facilitate and affect consumer access to broadband including landlords and contractors. The rules also established a burden-shifting framework under which a covered entity could avoid liability for discriminatory effects only by proving that the challenged practice was justified by genuine issues of technical or economic feasibility. These features—particularly the combination of disparate impact liability, expansive entity coverage, and a feasibility-based defense—prompted numerous industry challenges.

When the DD Order was adopted, then FCC Commissioner (and now FCC Chair) Brendan Carr dissented, arguing that the rules represented a significant regulatory overreach, expanding far beyond Congress’s intent in Section 60506. Carr criticized the rules for sweeping in a broad range of entities outside the broadband sector, lacking clear enforcement authority, and potentially enabling rate regulation. Carr emphasized that the FCC identified little evidence of intentional discrimination yet adopted a novel disparate impact framework unsupported by the statutory text. Commissioner Nathan Simington also dissented warning that the rules could improperly undermine legitimate business considerations, including profitability.

Eighth Circuit Decision

The court concluded that Section 60506 does not authorize disparate impact liability. Based on the statutory text, the court held that the prohibition on “discrimination of access based on” protected characteristics reflects a requirement of intentional discrimination, not effects-based liability.

The court emphasized that, unlike statutes such as Title VII, the Age Discrimination in Employment Act of 1967 (ADEA), or the Fair Housing Act, Section 60506 lacks results-oriented language—such as “otherwise adversely affect” or “otherwise make unavailable”—that courts have relied upon to infer disparate impact liability. Accordingly, the Eighth Circuit determined that the FCC’s adoption of a disparate impact framework exceeded its statutory authority.

The court also held that the FCC improperly expanded the scope of regulated entities beyond broadband providers. The statutory framework consistently focuses on the relationship between providers and subscribers, with no textual basis for regulating contractors, landlords, local governments, or other third parties. The court rejected the FCC’s attempt to extend liability to any entity that affects broadband access, finding that such an interpretation lacked statutory grounding and would improperly extend the FCC’s jurisdiction into unrelated industries.

As a result, the Eighth Circuit vacated the rules adopted in the DD Order in their entirety and declined to reach other issues that are no longer ripe for Article III judicial review.