Minnesota Telecom Alliance v. FCC: ACR Project Amicus on the Unconstitutionality of a Disparate-Impact Regime Policing Across Ability to Pay

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In the consolidated litigation challenging the FCC’s “digital discrimination” rule, the ACR Project filed an amicus brief with the Eighth Circuit Court of Appeals supporting the petitioners’ challenges.

Congress included a first-of-its-kind provision in the relevant statue.  Here, Congress extended the frame for laws against discrimination to bar that “based on income level.”  The FCC went further, imposing into this uncharted territory disparate-impact liability for anything and everything “affect[ing]” broadband service and infrastructure.

Others have raised the administrative law problems with the FCC’s rule–its violation of the major-questions doctrine and inconsistency with Congress’s legislated language.  The ACR Project brief takes a different tack, assuming for the sake of argument that administrative law poses no barrier to the FCC’s rule.  Instead, we explore whether–if the FCC had such power–the federal statute (as the FCC interprets it) would be Constitutional.

It falls far short of Constitutional compliance.

The bill’s more familiar components make the FCC racially classify Americans and incorporate racial balancing into its assessment of every act by every participant in a vast industry.  The FCC would back those assessments with potentially massive, punitive fines.  Such a policy would need to meet strict scrutiny to be Constitutional.  This one could not.

Its more novel provisions are worse.  Income differences are universal and gradient.  That backdrop means that no regulated party could ever avoid presumptive violation of the law (as the FCC interprets it).  No decision by any business to invest in infrastructure, open locations, deploy personnel, or advertise could ever not.  The FCC would make everything illegal, unless parties prove an affirmative defense.  The agency promises to flesh out that defense as it goes on a case-by-case basis.  The FCC’s regulatory definition of it appears to render the defense an empty set.  Even if it didn’t, this structure provides no notice to anyone of what they can or must do to avoid liability.  That approaches the Platonic ideal of voidness for vagueness.

Finally, by denying regulated parties any apparent legal use of their assets, the law (as the FCC interprets it) appears to work a regulatory taking of unprecedented scale.  Governments’ prohibitions entirely depriving owners of the economically beneficial use of their assets trigger the same compensation obligations as do uses of eminent domain.  The U.S. domestic broadband industry generated $111.73 billion in total revenues in 2022.  At that size–much less at its larger, current one, given the speed of broadband’s expansion–the act (as the FCC interprets it) commits Congress to fund at least hundreds of billions of dollars in compensatory damages.  No evidence suggests that Congress ever assessed such costs, budgeted or appropriated any funds to cover them, or even contemplated that its act might incur such an obligation.

Unless the Court of Appeals embraces a saving throw advanced by some petitioner or amicus, the act (as the FCC interprets it) violates the Constitution. Barring such a roll, the Court must declare it void.

You can read the full brief, below.


Published On: April 30th, 2024Categories: Blog, Filings and CasesBy