Navigating the FCC’s Digital Discrimination Rules

Chayila Kleist: Hello and welcome to this FedSoc Forum webinar call. Today, May 22nd, 2024, we're delighted to host a discussion on navigating the FCC's digital discrimination rules. My name is Chayila Kleist and I'm an Associate Director of Practice groups here at the Federalist Society. As always, please note that all expressions of opinion are those of the experts on today's program as the Federalist Society takes no position on ongoing legal or public policy issues. Now, in the interest of time, we'll keep the introduction of our guests today brief, but if you'd like to know more, you can access their impressive full bios at fedsoc.org.

Today, we are fortunate to have with us as our moderator Danielle Thumann, who is a Senior Attorney in Government Relations at Crown Castle. Before joining Crown Castle, Ms. Thumann served as Legal Advisor to Commissioner Brendan Carr at the FCC. Previously, she also worked as a communications attorney in the Washington DC office of Wilkinson Barker Knauer, LLP, focusing on a wide range of regulatory policy and transactional issues with special emphasis on infrastructure, public safety, and spectrum policy. I'll leave it to her to introduce our panel. A last note and then I'll get off your screens and let us get into the discussion. If you have questions, please submit them via the Q&A feature found at the bottom of your Zoom screen, so those will be accessible when we get to that portion of today's webinar. With that, thank you all for joining us today. Ms. Thumann, the floor is yours.

Danielle Thumann: Thank you so much for the kind introduction. I'm excited to be moderating this wonderful panel of speakers. So first we have Diana Eisner, who's Vice President of Policy and Advocacy for USTelecom. Diana joined USTelecom from Frontier Communications where she previously served as Director of Federal Regulatory Affairs and helped develop the communication company's regulatory strategy on broadband deployment, robocalls and cybersecurity. Prior to that, Diana was an associate attorney at Manatt, Phelps & Phillips, LLP. She's a graduate of Rutgers University and earned her JD from Temple University Beasley School of Law. Next, we have Denny Law, General Manager and CEO of Golden West Telecommunications. Prior to becoming GM and CEO, he was the Eastern Region Manager for Golden West. Prior to that, Denny served as general manager of Sioux Valley Telephone and Hills Telephone Company. Denny graduated from South Dakota State University and went on to obtain his Master's from the University of South Dakota.

We also have Alisa Valentin, Broadband Policy Director of Public Knowledge. Before joining Public Knowledge, Alisa was the Senior Director of Technology and Telecommunications policy at the National Urban League. Alisa previously worked as a special advisor to FCC Commissioner Jeffrey Starks and as a communications justice fellow at Public Knowledge. She is also an adjunct professor at Norfolk State University. Alisa received her PhD in communications from Howard University, her Master's in journalism from Northwestern University, and her Bachelor's in telecommunications from the University of Florida. So thank you guys so much for joining us. Alisa, to kick us off, can you talk a little bit about the goals of the FCC's digital discrimination proceeding and the history leading up to the adoption of Section 60506 of the Infrastructure Investment and Jobs Act or "IIJA" as we will refer to it throughout the panel?

Alisa Valentin: Yeah, sure. Thank you so much for having me join your panel today, Danielle. I really appreciate it. So the history here for me starts with the fact that there are places in the country that have been left behind, and that don't have access to broadband, and don't have the same adoption rates as other parts of the country due to lack of investment. And that is in communities like Selma, Alabama or Beattyville, Kentucky, or (unintelligible) around border towns in Texas. And when you look at studies of who does and who does not have access to broadband, the disparity that really pops out is the fact that low-income communities and communities of color don't have access to broadband at the same rate as other communities.

And a lot of these disparities mirror historic redlining. So I see the digital discrimination rules as an opportunity to not necessarily right the wrongs of the past because the rules aren't retroactive, but looking at the future, because the fact of the matter is the more of us who are connected to broadband, we all benefit, right? And digital discrimination rules really present an opportunity to really shape the behavior of providers as well, and also offer opportunities with model policies for localities and states to also find a way to increase broadband adoption rates and broadband access so that communities who have historically been at the margins are not continuously left behind.

But I would also just add that digital discrimination rules fit into the broadband provisions of the infrastructure law because Congress said "Access to affordable, reliable, high-speed broadband is essential to full participation in modern life in the United States." And they also noted, Congress noted that the digital divide disproportionately impacts communities of color, lower-income areas and rural areas, and the benefits of broadband should be broadly enjoyed by all. So we're here because of Congress through the infrastructure law on a bipartisan basis, and really they're aiming to fix all paths, all parts of the digital divide, whether you're talking about affordability, access, or adoption. But equity is at the center of all of that. And I know that right now the word 'equity' is getting a little bit of a bad reputation, but ultimately to me it's about opportunities and also the barriers that are kind of in some folks' paths. And at the end of the day, we should make sure that we're removing barriers that people in Hazelhurst, Georgia, Baltimore, Maryland, or South Louisiana aren't burdened because of where they were born or the circumstances that they were born into. And again, this is about making sure that all of us thrive, no matter our geographic location, no matter our race, no matter our income level.

Danielle Thumann: Thank you so much. Diana and Denny, can you guys give a little bit of an overview of the involvement that your association and your company have each had in the proceeding over the last few years and the perspectives that you bring to the table? Diana, if you want to go first, that would be great.

Diana Eisner: Sure. Thank you, Danielle. And thank you to the Federalist Society for having me. Really happy to be here and talk about this important issue with all of you. So USTelecom has been involved in this proceeding for, as you said, Danielle, the past few years starting with the NOI. And for us, I think it is really important to remember that broadband providers who are our members have an incentive to connect as many people to broadband as possible. That is their business, their businesses, connecting communities, and that is what they're trying to do. And I think that we really need to acknowledge that the broadband marketplace is vibrant. It's increasingly competitive, services are being turned up at new locations every day, and providers are investing more than ever in their networks, including a record 102.4 billion in 2022. And that was just in private investment, not even federal dollars. Light touch regulation of broadband has worked. Imposing really stringent, wide-ranging regulatory frameworks like these rules could very well take us backward. And we really believe that the best way to facilitate equal access, which is the commission's charge in Section 60506, is through positive policy changes to incentivize deployment such as removing permitting barriers, getting rid of outdated regulations that require providers to dump capital into underutilized legacy networks, ensuring a stable USF base to support the highest cost areas of our country. And that's really to us how we get to this goal of connecting everyone.

Denny Law: Well, Danielle, thanks for inviting me to join this important discussion today. I'll give you just a brief description of Golden West and then I'll bring it back to a higher level in terms of Golden West Telecommunications Cooperative is a rural-based telecommunications provider. I'm in South Dakota. We are, as I mentioned, a cooperative, which means we are owned by our members. The people that we serve are our actual owners. We serve rural areas in South Dakota. The largest community we serve has roughly 4,000 people in it. That's the largest community that we serve, but we serve a geographic area that's the equivalent of Maryland, New Jersey, Delaware, and Connecticut combined. That's the geography that we cover. And so I'll use that backdrop from Golden West's perspective as a larger umbrella, so to speak, as our involvement in NTCA - the Rural Broadband Association, which represents roughly 800 providers similar to Golden West across the country.

And we serve rural and remote areas primarily either cooperative or privately-held, family-owned in most cases. And we serve roughly 30% of this country's geography. So when you talk about hard-to-reach areas, that's I'll say in our wheelhouse and in other NTCA member wheelhouses. And our goals have been the same for many years, which has been deployment and advancement of broadband capability throughout our service area and throughout other member company service areas. And the discussion today on digital discrimination, certainly I'll say has an impact, but our overarching goal has always been to provide service to all, and I would capitalize and underline the word 'all' of our members.

Danielle Thumann: Thank you. So as you guys previewed a little bit already, the FCC just adopted its rules in November, and as part of the report and order stemming from the FCC's proceeding, we saw the FCC conclude that section 60506 of IIJA authorizes a disparate impact liability standard. And so this standard is then incorporated into the FCC's definition of digital discrimination of access. For our listeners, can you explain what is the disparate impact standard and why has it been an important part of the conversation?

Diana Eisner: So I would define the disparate impact standard as meaning that a provider could be in violation of the FCC's digital discrimination rules, even if it has uniform policies that it applies consistently across all of its service areas, it does not engage in intentional discrimination, but those policies have an incidental effect on the protected classes enumerated or one of the protected classes enumerated in the statute.

Danielle Thumann: Alisa, Public Knowledge has been very vocal about its support for this standard in the adoption of the rules over the course of the proceeding. Can you talk a little bit about why this standard is so important to Public Knowledge and why from PK's perspective, the FCC got it right?

Alisa Valentin: Yeah. So Congress stated that its policy is that all people of the United States should benefit from equal access to broadband service. And from our perspective at PK, this language is really similar to the Communications Act of 1934 because when Congress created the commission, it said that they should make it available as far as possible to all people in the United States - communication services. So we really feel like that mirrors right? But over the years, the commission has relied on that directive to adopt rules that promote access to basic phone service, mobile services, cable services, and broadband. And over time, those rules and policies haven't focused solely on intent, right? Instead, the commission has focused on advancing policies to ensure that providers of these services make their services available to all people. So Congress told the commission that you must affirmatively ensure that equal access to broadband services is available.

And also I think that directive really focuses beyond a provider's sort of intentions. And I think that if you were to focus just on disparate treatment or that intentional discrimination, you would be forced to kind of find a smoking gun of an email that says, "We will not deploy to X community because of X reason." We're not going to find that sort of smoking gun. And so I definitely think that this was the best approach here. And then also seeing people who have worked on disparate impact so much over the years in the civil rights community speak about it as well was also really amazing to see. And I am sure that's probably the only time that you heard a round of applause for disparate impact when Chairwoman Rosenworcel announced it at UCC last November at the Everett Parker Awards because everyone in our community, in the public interest community, as well as in the civil rights community, we were so excited to hear that the FCC had adopted the standard.

Danielle Thumann: Great. Thank you. Denny, do you have anything that you'd like to add on that point? Not at this time? Okay. I think that brings - oh, go ahead, Diana.

Diana Eisner: Sorry. I think it's really great that Alisa mentioned the Communications Act because from our perspective, we need to remember that Congress is very intentional in what it does, and Congress did not incorporate section 60506 into the Communications Act, which is one of the reasons that we think that the rules put forth - and we can get into that more in detail - just really are not going to hold up and are very concerning, as well as the adoption of the disparate impact standard.

Danielle Thumann: Great, thank you. I look forward to unpacking that a little bit more in a few minutes. So let's turn next to the definitions of technically feasible and economically feasible. So in the FCC's report and order, these definitions were - the FCC defined these terms to mean "reasonably achievable as evidenced by prior success by covered entities under similar circumstances." This definition could be very difficult to navigate in the real world. How is USTelecom advising its members on whether or not deployment and network maintenance or upgrades are reasonably achievable?

Diana Eisner: So as an association, we don't provide compliance advice to our members, but happy to give you my take. So our take is we read the order as requiring a provider to show infeasibility so that no other provider has had success as opposed to, for example, being permitted to provide a reason why a decision not to deploy was made based on the particular needs of that provider. We think that this requirement that it is specific to the provider, not any provider is inherent in the statute based on the language to take into account technical and economic feasibility. We think that the commission's interpretation really creates a bespoke framework unlike anything that we've ever seen and also just turns it on its head.

And part of the reason that the technical and economic feasibility is so important, and with respect to the deployment and network maintenance and upgrades issue you had asked about, every provider is different, they face different capital constraints, have different risk tolerances, business models, et cetera. Even if they're of the same size. The statute tells the commission to take that into account. Just because one provider made the decision to deploy in a certain area doesn't mean the same decision would work for another provider. And we just don't think that the commission recognized this and that this is going to create huge, huge hurdles for providers and just not be workable in this environment and with every provider being so unique.

Danielle Thumann: Denny, you talked a little bit about coming from a rural co-op earlier. I think that you have a very unique perspective to offer here. Is one other provider's experience enough to make deployment or network upgrades feasible? Or how is Golden West viewing this requirement?

Denny Law: Certainly, our experience is that it is entirely unique to individual entities and sometimes even within an individual entity such as Golden West, it's unique how we may have done something or why we may have done something in one geographic locale, network topology, geographic topology, what have you, could be entirely different in one area, comparative to a different area within our same service area. Now if you layer on, I'll say what I'll call a neighbor, an adjacent provider or provider even within our own scope, but an adjacent provider or other providers of similar size or capabilities, it's not comparable. I mean there's zero comparability to that, whether that be funding, whether that be network, whether that be engineering practice, all of those items - network design, just to give you an idea - Golden West has been on a path to replace our copper network with fiber optics on a hundred percent level.

We began that process in 2007. We're still working on it. We'll get to the finish line here within the next couple of years we hope. But even over that period of time, and so when you start talking about what was reasonably comparable for someone else or another network provider to accomplish comparative to what we may or may not have done, it's not apples and oranges, it's apples and Toyotas. It's not even in the same category. And I would be very hesitant to use Golden West's experience to compare to some other provider if they were being asked that. And I would not want to be compared in our practices to someone else.

Danielle Thumann: Alisa, do you have anything to add or any response?

Alisa Valentin: Yeah, I mean, I think the only thing to add, and I'm sure we'll get into it here shortly, is that of course the devil is in the details here and I think that we'll see more when enforcement takes place. I think that's really where we're going to learn more about the direction that this goes. So yeah, but I believe in the very, very smart and capable people at the commission where we were both working to guide us along here.

Danielle Thumann: So you just mentioned enforcement, let's talk about enforcement and the FCC's investigation and complaint process. Do we have an understanding yet of how the FCC is going to be enforcing these rules and investigating providers for compliance?

Diana Eisner: From my perspective, we don't, and that's part of what's so concerning with this whole order. These rules have an unlimited scope. They reach each and every aspect of a provider's operations from advertising to service suspension and with no idea of what compliance looks like and no sense of how the FCC will enforce, we don't even know what the penalties would be because this is not part of the Communications Act. The commission wouldn't seem to be limited by the $15,000 per violation. The order gives no sense of if there's a cap on penalties, what penalties might be. So it's really a very scary prospect, but we need to continue to incentivize investment and I'm hoping that the commission will continue to try to do that with its enforcement and investigation powers. So it should really use these powers sparingly and really only require provider responses to complaints where circumstances warrant it, unlike the commission's existing complaint process where you have to be a customer of the provider to file a complaint, this is an potentially unlimited universe of who could file a complaint.

There's no requirement that you be in the provider's footprint. There's no requirement that you actually be a consumer. So this could lead to an unlimited volume of complaints coming in, and those complaints should only be answered by providers when necessary. And the same thing with enforcement. The commission should really only move to enforcement in the most egregious circumstances such as intentional discrimination, which is what we believe is the only type of standard that's authorized under the statute. Otherwise, you're going to be distracting providers from what their real job is and their job is to get these networks deployed and keep them running and keep your customers connected.

Danielle Thumann: So I know we plan to talk about compliance challenges a little bit further down the line, but do you anticipate that companies will be setting up individuals or groups to review these complaints or what do we actually anticipate from industry in terms of responsiveness to investigations and complaints?

Diana Eisner: I think as the industry always is, it will be responsive and cooperative with inquiries from the commission and the same way that it responds to FCC complaints now, but I think the whole goal here would be not to have to have companies set up entire groups of employees whose only job is to review these complaints, especially when they could be entirely frivolous. We don't know yet. And I think part of this is companies are really trying to work through what compliance looks like, having no roadmap for it, and this being just such a completely bespoke framework in so many ways that we don't yet know. And we're really hoping that the commission will be very judicious in how it actually administers these rules and the whole process so that providers aren't in the position of having to take resources away from deployment to pay employees who are going to sit and review FCC complaints all day.

Denny Law: If I could just add - oh, I'm sorry. Go ahead.

Danielle Thumann: Go ahead. Nope, that's fine. Go ahead, Denny.

Denny Law: I would only add to that I'll say from the small provider's perspective, and my colleague Ms. Eisner - USTelecom has small providers as part of their membership as well - it's not as though a company like Golden West and I'll say we're large within the small space, meaning we're a small company by every metric and measure. At the same time, an average rural broadband provider probably has 20-ish employees. It's not like we have a compliance department that this is going to land in. And so even if there is, whether it is an allegation, investigation, or otherwise, it is going to be what I term spin cycles. It is going to spin cycles from a regulatory perspective, hiring of consultants, hiring of advisory counsel, internal perspectives to fill that data, and whatever those requests may be. And I see this being the potential for an endless rabbit hole to run down. And that's concerning for us. That's a tremendous risk for us.

 Diana Eisner: That's a really good way to put it.

Alisa Valentin: Danielle, can I jump in? I'm kind of backtracking though about the enforcement question if you don't mind. So I do think just on the point about enforcement and the Communications Act, from what I understand in the past, the commission hasn't hesitated in various instances if it's not, the Communications Act is not expressly stated or amended to still use its Section Five authority and to treat these statutes as part of the Communications Act. And I know that most recently, the commission considered and rejected that exact challenge to its enforcement authority with the broadband label rules. And I also would just say that the commission did say in their rules that they're going to use the kind of full gamut of their enforcement toolkit here, which ranges from, of course, the letters of inquiry to remedial orders to forfeiture proceedings and all of that. And the commission said that they're going to rely on a self-initiated enforcement scheme.

But I do want to offer up something that Public Knowledge really wants to see that we think could actually help the commission in these efforts, which is that we want to see the commission set up an Office of Civil Rights in order to coordinate that informal complaint process, not only for the folks who are filing those complaints but of course with the providers as well, to really offer up a place where folks can have those robust discussions to figure out what the path forward needs to be. And that's something that quite a few of us have advocated for and that we're going to continue to advocate for because we don't want these rules to kind of fall by the wayside when it comes to future commissions. We want it to still be a major priority.

Danielle Thumann: Thank you. Do you anticipate seeing the FCC provide more guidance on the complaint process or has that been teed up in the notice that accompanied the RNO?

Alisa Valentin: I don't think so.

Danielle Thumann: You just said that you continue to advocate in front of the FCC for this.

Alisa Valentin: The office of - yeah, so we've continued to advocate for an Office of Civil Rights because that was teed up in the FCC's NPRM.

Danielle Thumann: Got it. That's what I was asking. That's what I was asking - if it was still open. Yes, if it was just still open before the FCC in the notice portion. Okay, got it. Okay. Jumping back a little bit, Alisa, you had mentioned the model policies and best practices earlier. So the FCC adopted these model policies for states, localities, and tribal governments. I'm curious about what you guys are seeing in terms of conversations across states on how states or localities may be addressing digital discrimination. Denny, if we could start with you in South Dakota, that would be great, and then we can turn to Diana and Alisa if you guys have anything to add.

Denny Law: I'll say directly as it relates to digital discrimination, I've not seen those discussions up to this point. I think that's probably for a couple of reasons. The primary reason is South Dakota is large geographically, but small in terms of population. The focus right now is on availability, which is probably maybe an overarching part of the digital discrimination aspect. But in terms of where the pockets of unavailability remain in this state, how do we accomplish that, whether it is upcoming BEAD money, whether it is current providers, or all the different tools in the toolkit right now for that? But in terms of specific digital discrimination discussions, I'm not aware of anything along those lines, at least where I operate.

Danielle Thumann: Diana or Alisa, anything to add to that?

 Alisa Valentin: I would just say -

Diana Eisner: Go ahead. Sorry. Please go ahead.

Alisa Valentin: I would just say that states and localities are really the folks who know what's going on on the ground and their voices really matter. And with the advisory council that the commission has - during the last iteration of the advisory council, there weren't enough of those voices on that council. And now Public Knowledge is a part of it, and that's something that we're going to make sure that we continue to try to find ways to lift up those voices because we all know there needs to be increased coordination between the federal level states and localities. And I think that's going to be really important going forward.

Diana Eisner: And just to add to what Denny said, from the more national perspective, I'm also not really aware of states that are really digging into this. And I think that's in large part because we have BEAD coming and BEAD is such a huge opportunity and I think that states are rightly focused on let's get our BEAD dollars out and let's get these unserved and underserved locations served. And then we may not have a problem here. I mean, we firmly believe as USTelecom that digital discrimination is not a thing, it's not occurring, it's not happening. Providers make deployment decisions for many reasons. None of them have to do with animus. They make their decisions on a race, income, gender, everything-blind basis, so let's really focus on BEAD. And I think that's where the states rightly have their focus right now. Let's get everyone connected.

Danielle Thumann: Do you see though, in the conversations that are happening for BEAD in the states, are you seeing conversations about digital discrimination or do you think that the focus is just on serving the unserved areas?

Diana Eisner: I think it's serving the unserved areas. I think that the states, as Alisa said, the states and localities are really the ones on the ground literally, and they know what the geography is, they know what these areas look like, and they know how sparsely populated they are. I think they understand that there are legitimate reasons that these areas don't yet have next-generation connectivity. Their focus is on making sure that the circumstances are right to fill in those areas as opposed to really looking at this as a problem of digital discrimination.

Alisa Valentin: And I do think a couple of months ago, California, I don't remember the person's name, but someone in California introduced a bill to prevent digital discrimination that kind of mirrored some of the things that the FCC is doing. I think it was just introduced. I don't know if it's gone anywhere, but I know California is one example of that, but I can't speak to other states. Yeah.

Danielle Thumann: Okay, great. So we have touched on some of the different facets of the FCC's framework. What are the biggest compliance challenges that you see coming down the pike?

Diana Eisner: From my members' perspective, and what I see when I look at this is, and I know I mentioned the unlimited scope, I think that is the biggest hurdle. How does a provider using company-wide neutral policies comply? So I'd mentioned that this touches a provider's advertising. For example, could you advertise at the Super Bowl? The Super Bowl is a very expensive event to attend. It's a popular sporting event. It gets a lot of eyes on it, but because it's so expensive to attend, would that be a violation of the digital discrimination rules because that could be seen as having a disparate impact on lower-income individuals who maybe can't attend the Super Bowl or don't have cable TV and can't see all of that advertising? Another big issue is the elements of service that are covered implicate the same concern. So if a provider is dealing with a technician shortage in an area with predominantly protected classes, does the provider need to slow truck roll times in other areas to ensure parity?

Same thing with consumer premises equipment. A provider gets a limited quantity of next-generation routers. There are only so many that they can provide to customers. Do they have to make sure that they're giving them out to protected classes and to non-protected classes equally to make sure that there's no disparate impact? And I think this all goes to perhaps a larger concern from the provider community, which is that providers do not collect demographic data, they don't want to. Are these rules going to force them into doing that so that they can ensure compliance? Are they going to have to start collecting information on income, on race, on things of that nature?

Denny Law: I'll maybe just add from a compliance perspective it adds yet another item. And in our case, it is already hard to serve, difficult to serve, uneconomic, all of the above. What it does is inserts two additional items that I don't have a solution for - uncertainty and risk. And the uncertainty and the risk in addition to the uneconomic aspect of it, make it incredibly challenging. And when I read in the order about "the full force of the FCC's enforcement capability", I don't get a warm fuzzy from that, and the reason I don't get a warm fuzzy is look, am I comfortable with the decisions that we have made and that I have made as it relates to deployment and services and capabilities and pricing and all those items? Absolutely. Even the mere thought of an inquiry, just an inquiry or a complaint will cost us time, will cost us money, will cost a diversion of resources that I don't have.

And so I'll say that overhang introduces a challenge for small operators right out of the gate. And while there's, I'll say a presumptive belief inside of the order regarding the fact that we're a Universal Service Fund recipient, there's a presumptive belief that we'll be in compliance. There is no safe harbor, however. And so I don't want to say that's a hollow, but it's not exactly, I'll say a warm fuzzy feeling for a provider such as mine. To give you one anecdotal item, our insurance providers, our general liability insurance providers have reached out to us to ask us about this order because they insure us. And so now in the event there is a claim, in the event there is an enforcement action, am I going to see that - some type of reflection of that in my upcoming liability rates? I don't know. I certainly hope not. But this definitely introduces uncertainty and risk in an already uncertain and risky business.

Diana Eisner: Well, and to piggyback on what Denny said and also what Alisa said about the full force of the FCC's enforcement abilities, I mean, are we looking at deployment mandates? Are we looking at the FCC saying to a provider, you should have deployed in this area even though there's already a different competitor there, but you didn't build fiber there, so we're going to tell you that you now must deploy there to remedy this situation? It's really uncertain and I think that creates a lot of fear for providers and you know, where do I invest? What do I invest? How do I do this?

Danielle Thumann: Alisa, do you have any reactions to those compliance challenges?

Alisa Valentin: Yeah, so in my opinion, the commission was really guided by the fact that this is a consumer focused statute. And the goal here is to not make highly formalistic requirements for providers. It's to make sure that we aren't leaving people behind in the information age. And I'm glad that the commission didn't just focus on deployment. I know some folks advocated for that because then I think that we wouldn't have been able to address barriers to adoption like price and quality of service, which is also important for making kind of meaningful comparisons of offered services. And as it relates to non-technical services, Public Knowledge did advocate before the commission that actual and advertised service prices and technician responsiveness, the availability and advertising of promotions, additional fees that those should all be looked at as well. And we said this because if the actual kind of quality of service or terms and conditions of the two services differ so substantially that they're no longer comparable, then the customer doesn't have equal access. And so when a community has slower or a more lagging kind of broadband, they're a victim of digital discrimination, right? If they experience more outages or a higher price, they're likely a victim of digital discrimination. And so again, this is just about making sure that we're finding innovative ways to promote equity because we all do benefit.

Denny Law: If I could just respond for a moment to a couple of comments that Alisa made. You used a couple of examples toward the end that I think are probably examples of my concern, which are a community that is subject to perhaps slower capabilities or something along those lines is a victim of digital discrimination. I'll give you an example. So we have multiple communities within our service area. Some of them have multiple generations of electronics throughout our network. Some of the stuff we did, as I mentioned, we began in 2007, it's now 2024 and we're still going forward. We've probably got most of the 2007 electronics out, but we have 2011, 12, 13, 14, 15 electronics that don't do anything necessarily comparable to what the services are that are available today on the new gen equipment. But our focus is on deployment at the moment and getting fiber to the various premises - to all of our premises. Am I then liable from a digital discrimination issue? Because I live in Wall, South Dakota, so I'll use Wall as my example. So Wall's running on 2015 generation equipment, now other communities are running on 2024 generation equipment. Is Wall - the community I live in - being digitally discriminated against? And I use that as the hypothetical, but that's the type of navigational uncertainty that providers like I have.

Danielle Thumann: Denny, you mentioned that there's a presumption of compliance for USF recipients. Does that presumption extend to companies that are receiving the dollars since there is an obligation to build out to 100% or?

Denny Law: My understanding is that the BEAD and USF were, if I recall correctly, BEAD and USF dollars are treated similarly in terms of obligations. But again, don't confuse it with a safe harbor, it's not.

Diana Eisner: Okay. The commission was very careful not to use the language "safe harbor" despite the urging of many. And so essentially what it is, is there is a presumption of compliance if you deploy consistent with your obligations under your USF program or under the BEAD.

Danielle Thumann: Okay, that's very helpful. So turning next to the notice that accompanies the report and order, the notice saw comments on additional obligations including new annual reporting obligations for providers pertaining to deployment projects and upgrades, as well as setting up internal compliance programs, replies were filed last month. Can each of you talk a little bit about the notice and the potential advantages or disadvantages of these additional obligations?

Diana Eisner: So we think that the notice goes far, far beyond what the statute allows. We are very concerned about these proposed requirements. So going beyond the scope of the statute, the annual reporting is just unnecessary given the BDC. Providers already report on availability, which also means they report on upgrades because an upgrade typically means you're getting a higher speed and the BDC was a massive effort by the commission. It took years and we're still working on it. It's an iterative process, but we should be relying on that. And providers put a tremendous amount of effort into the BDC reports. They require a lot of manpower, a lot of effort, and a lot of resources. We should really be relying on that. There's no reason for providers to have to do a second round of reporting specific to this. And the other issue is that this compliance program would be an unprecedented intrusion into how companies operate.

The further notice lays out all of these different requirements that the commission is contemplating in a compliance program, including having a committee, and how you report to senior management. I mean this is really dictating how these companies operate and companies - same reason they choose their deployment decisions - companies need the flexibility to craft their compliance in a way that works for their specific needs. Every provider's different and a one size fits all approach won't work. And again, without any evidence that there is digital discrimination afoot, requiring companies to implement these stringent, stringent compliance requirements is just such an intrusion into the way they operate and it's going to be a distraction from the business of deployment and keeping customers connected.

Denny Law: I'll pick that up next and I'll add to a couple of the items that Diana mentioned. So Diana mentioned the BDC filing. That's one, if you're a USF recipient or an eligible telecommunications carrier, which Golden West and most of the small rural telecommunications providers are, we have what's known as a Form 481, which is part of our ETC filing, which is in many ways but not entirely duplicative of the BDC. There's some nuances there. So that's one and two for us, this would be three. That's just from the reporting aspect of it. The other concerns with it are really probably twofold from my perspective. One is there is a competitive aspect to this, which is for public disclosure now releasing both current as well as future network architecture plans, upgrades, and all those items. That's not the type of information we typically publicly disclose. And when, rarely if ever even asked about, I'll say some of the technical detail that's contained in the further notice as it relates to our network, that's item one.

Item two is, I will tell you, I don't mean to - all of you have done various levels of public service, and I do not mean to speak negatively of folks who have done public service in terms of FCC work or otherwise - but this was very clearly written by someone who has never operated a network before. Because when I read the comments about every deployment upgrade and maintenance project undertaken during the prior year, we're a little company. We do thousands of maintenance projects and we do thousands of upgrade projects. We do dozens of deployments. So deployment I get, but as was mentioned, we do that in both the BDC as well as the ETC. But in terms of maintenance and upgrades, we do thousands of those. Is it maintenance and upgrade of what, the electronics? Which electronics? The electronics in the home? We have over a hundred thousand devices we support in customer's homes.

They are all at various levels. They have a software load. It's no different than I'll say you with your iPhone or whatever phone you have and upgrading the iOS on it. Same thing. We push those upgrades out all the time. We are constantly doing that. You now want me to report on when I do those maintenances in terms of upgrades, what's going to qualify as an upgrade? Is it an edge router? What part of the network? Middle mile? Last mile? Which mile is it? I will tell you that while I'm disappointed in the digital discrimination order as a whole from a provider perspective when I read the further notice, it doesn't give me much comfort.

Alisa Valentin: And if I could just jump in here, Danielle, I think what the commission is trying to get at here is that word "prevents." How do we prevent digital discrimination? How can we have some affirmative obligations so that maybe it's not you, maybe it's not your member companies, but how can we make sure that we're not engaging in this behavior in the future? And I think on the compliance issue in particular, we agreed with other folks in the civil rights community who said that ISPs should file an annual certification with the FCC signed by an executive of the company with responsibility for the provider's compliance. That says that you are in compliance with the FCC's digital discrimination rules. And we think that that kind of mirrors the CPNI rules and also accessibility record keeping and that the certification process in our minds is a way to be able to promote ethical behavior and mitigate risks that if unchecked can negatively impact protected classes.

I also think that, and I don't know off the top of my head all of the comments that were submitted and what you all submitted as it relates to the FNPRM, but I think that it also provides an opportunity, even if it's not, maybe it's with a different kind of set of questions. How can you all promote the good work, the really good work that you all are doing in your communities? And something that we raised that is something that the FCC should collect is the low-cost offers, right? Even before ACP, various companies had low-cost offers in place. How can we make sure that it is publicly known that you all are doing good work in your communities? And so I think that's what I'm kind of thinking about when it comes to affirmative sort of obligations. Obviously, people have had the opportunity to weigh in here with the commission and the commission will take everyone's comments into account here.

Also going back to what I said earlier about the Office of Civil Rights was also included in this FNPRM and some of the things that we said we kind of borrowed from the Office of Civil Rights work at FEMA, but we think that an Office of Civil Rights should focus on compliance, right? Creating and reviewing various policies and plans and procedures at the FCC and making sure that they're also engaged in a complaint process and engaging in alternative dispute resolutions with various stakeholders. And that's a lot of what you saw from the public interest community and civil rights community was focused on the commission standing up in the Office of Civil Rights in this kind of round of comments.

Diana Eisner: Just real quickly, to piggyback on Alisa's, very good point about publicly available information about the good work and the offerings that providers have. We have the broadband labels. It's great. They rolled out in April for larger providers, they're going to roll out in October for all the rest. And everything has to be word-searchable, that information's going to be submitted to the commission in like a CSV format. So some of this information is already going to be in the commission's hands and I think that it's a great way to show all of the good work that broadband providers are doing in the community.

Alisa Valentin: Yeah, I agree with that. I agree with that.

Danielle Thumann: That's a great point, Diana. So in our last 10 minutes, let's turn to the appeals that are currently before the Eighth Circuit. Nearly two dozen industry groups, including wireless and cable stakeholders, have challenged the report in order in three different circuit courts. We're looking at an appeal before the Eighth Circuit and oral arguments are tentatively set for late September. Let's read the tea leaves a little bit, although I know from my time at the FCC and my time at Crown Castle that it's a very dangerous game to try to guess what an appeals court may end up deciding. What are some of the biggest issues that we're going to see in front of the court? And if you'll indulge me, where do you think that the court is going to land?

Diana Eisner: Well, if I was clairvoyant enough to answer that question, I'd probably be in a different line of business, as much as I love my job and I love broadband, for us, this really comes down to the fact that the FCC's order is not what a bipartisan Congress intended. Disparate treatment is going to be a big one. The text of the statute it's based on makes it very clear this is an intentional standard. Other canons of statutory interpretation should take care of that. And if that doesn't carry the day, we believe the major questions doctrine will.

Let's think about the IIJA in context. This was a 1,039-page statute. Section 60506 is, I think, about three-quarters of a page tucked into that statute. Broadband is such an important part of everyone's life. The economy of this country, especially post-pandemic, I mean the pandemic really drove home how important the work that Denny and all the other broadband providers are doing every day is. We don't think it is conceivable that tucked into this three-quarters of a page provision out of 1,039 pages Congress could have intended this kind of sweeping control over such an important sector and every aspect of that sector from advertising to deployment to service quality to everything else. It just doesn't make sense that Congress would use that kind of general language to delegate such sweeping authority. And we are very hopeful that the Eighth Circuit will agree with that.

Alisa Valentin: I would just say I am very much so not in the predictions game at all for good things or for bad things, but I agree that I think that the question about disparate impact and major questions doctrine and Congress's intent is going to be the core of what is focused on here. But yeah, I'm not going to be in the prediction game here as to what happens, and how this plays out.

Denny Law: And I don't think I'll weigh in. I think of the four people on this call, I'm the only one with no JD letters at the end of their title, so that's probably deeper water than I can get in.

Danielle Thumann: That's fair enough. Before moderating this panel, I did one of the Seat at the Sitting Federalist Society panels, and so everybody's talking about different Supreme Court cases and everybody gives their predictions on what's going to happen and I always love to look back and see who was right and who was wrong. So that's why it's fun to try to predict. So let me look to see. We can start taking some audience questions in the last few minutes that we have. Let me just open it up.

Alisa Valentin: Can I just add, Danielle, not on the digital discrimination point, but I know that I just want to flag and hopefully I don't get in trouble for going off script here, but we're all also advocating for sustainable funding for the Affordable Connectivity Program. The funding is scheduled to run out at the end of this month. That program has helped to connect 23 million households, not just people, but 23 million households. And that's something that we're going to be focused on here. We continue to be focused on at Public Knowledge and I know the great folks at USTelecom, and various smaller providers are also focused on this as well. We have the issue before us as it relates to short-term funding and how we can have funding for the remainder of 2024 for the Affordable Connectivity Program. But we're also focused on longer-term funding for the Affordable Connectivity program because we're not going to solve income inequality tomorrow. We think it's been a great program. It's got a lot of bipartisan support. So just wanted to flag that for the folks listening in that that is something that we're working on. Industry public interests, Republicans, and Democrats are advocating for sustainable funding for this program.

Diana Eisner: Alisa, I'm really glad you highlighted that and we appreciate the partnership with public knowledge on that. And thank you for flagging how heavily involved we've been on this issue. Again, it is really important, I think some of this - to bring this home a little bit - there were so many different parts of the broadband provisions of the IIJA, which took care of or purported to take care of things that the FCC still included in the order, like looking at affordability as part of digital discrimination. We have ACP and hopefully we'll have ACP again. So we think that the IIJA was such a tremendous effort that the digital discrimination aspect is one itty-bitty part of it. And it's become so much bigger, I think, than it was ever intended to be. Instead of worrying about being mired in compliance for your advertising at a sporting event, let's focus on getting ACP refunded and helping make sure that even though broadband prices in this country are more affordable than ever, down counter to inflation, I mean I think it's the only industry. I mean eggs have gone up, gas has gone up, the broadband is down and consumers get more value than ever. It's still going to remain out of reach for some, as Alisa said, there is income inequality in this country. There are people who just cannot make ends meet and let's focus on getting more money for ACP so that we can keep those people connected.

Danielle Thumann: Thank you both for raising ACP and for those comments, I think that's actually responsive to one of the questions that we have in the queue, which is "What if any role is there for public subsidies or public funding to support broader broadband deployment and improved service?" So I think ACP is a really important part of that. And Denny, do you have anything to add? As a recipient of Universal Service dollars in the Dakotas, how important are those public subsidies to the provision of broadband?

Denny Law: Yeah, they're absolutely critical, but I always caution people, and I could use BEAD as an example of that, which is it is never a one-and-done type scenario. Anytime you're looking at broadband deployment, you've got to be looking at what I term to be four abilities. First and foremost is availability. Is it available? Second is, and if it's not, how do you get it that way? And that's where the public subsidies obviously come in. Capability is the second one. It's got to be broadband that's capable of providing things. The third item is affordability. If people can't afford to purchase the service that providers build, it's a wasted effort. And then the last one, and this is the one that is most often overlooked in my cautionary tale regarding BEAD and other programs, is sustainability. You're not done once you put this, in my case, put it in the ground, we bury a lot of fiber. And so the public subsidy aspect and Universal Service funding or other future programs, if you don't look at all four of those abilities, not just one, not just affordability, not just capability, not just availability, but also sustainability. You have to consider all four. So to whomever asked that question, is there a role? There's absolutely a role for all of those items and a public subsidy in many cases is the only way that will work on a widespread basis.

Danielle Thumann: Great. In the last few minutes, let's just do some closing remarks. If you guys have any closing remarks, final thoughts for the audience, for the commission, for any of the listeners, that would be great.

 Diana Eisner: So from my perspective, thank you so much for this conversation, Denny, Alisa, it's been great having this conversation with you. Danielle, of course, is always an excellent moderator, and I think from our perspective, let's focus on closing the digital divide. Let's focus on getting these unserved and underserved locations turned up to fiber and other next-generation networks. Let's not get distracted by things that really have no proof behind them. Let's build it, let's build it, and get people connected. That is where our focus should be and we remain laser-focused on that as do our members.

Alisa Valentin: And I would just add that similar to what Denny just said, that it's not a kind of one and done when we're talking about closing a digital divide. We talk about all of this funding here through the infrastructure law. There's going to be a lot more work that needs to be done. And when I think about the digital divide of today, I think it's going to look different, of course 10 years, 20 years from now. But we have to think about how, again, we give people opportunity, right? Right now we're talking about the fact that folks don't have access to broadband, they may not be able to afford it, they might not have access to devices. But when we get all those sort of issues figured out, then we have to think about making sure that we're building out the digital equity field and the digital skills sort of field so that we can make sure that people benefit from the kind of next technological innovation that is AI, because that's what we're going to be talking about now and in the future when we're talking about the digital divide. But as always, great to join you all and thank you so much for inviting me. Yeah.

Denny Law: Well, I'd also echo that I appreciate the opportunity to join. I appreciate learning from my colleagues on this call, other perspectives, and other viewpoints and other items. I would also focus on the - I'll say the availability/capability side of this is really the biggest part of the equation that's necessary now. While I am certainly understanding of digital discrimination and the negative impacts it would have if I were to believe it was occurring on a widespread basis or even on a limited basis, I think focusing on the availability will help solve that. And I think the digital discrimination path that we're on right now is perhaps unnecessary noise in a larger project. So thank you.

Danielle Thumann: Well, thank you guys so much for a thoughtful discussion. It was wonderful having all three of you with us. And I will turn it back to Chayila to close this out.

Chayila Kleist: I'll echo those thanks. On behalf of the Federalist Society, thank you so much for giving us this portion of your days and sharing your expertise and insight. Thank you also to our audience for joining and participating. We welcome listener feedback by email at fedsocforums@fedsoc.org. As always, keep an eye on our website and your emails for announcements about other upcoming virtual events. With that, thank you all for joining us today. We are adjourned.