ICLE Issue Brief Explores the ‘Income Conundrum’ in Digital Discrimination

PORTLAND, Ore. (Nov. 14, 2022) – As part of the Infrastructure Investment and Jobs Act (IIJA), Congress asked that the Federal Communications Commission prevent discrimination in broadband access based on income level, race, ethnicity, color, religion, or national origin, while also taking account of issues of technical and economic feasibility.

But while evaluating discrimination based on race, ethnicity, color, religion, or national origin is relatively straightforward, a new issue brief from the International Center for Law & Economics (ICLE) finds that it is virtually impossible to disentangle the factors affecting the economic feasibility of broadband projects from factors correlated with income.

Income level will influence consumer decisions to adopt broadband, which in turn affects providers’ ability to deploy to a given area, ICLE Senior Scholar Eric Fruits and Director of Innovation Policy Kristian Stout argue. Not only is income a key factor influencing whether a given consumer will adopt broadband, but it is also highly correlated with race, ethnicity, national origin, age, education level, and home-computer ownership and usage, the authors note.

Given this backdrop, as well as recent U.S. Supreme Court precedent regarding  “disparate impact” analysis in the context of discrimination law, Fruits and Stout argue that the FCC’s rulemaking against digital discrimination should apply only in cases of intentional discrimination in deployment decisions, and that “mere statistical correlation between deployment and protected characteristics is insufficient to support a finding of discrimination.”

The FCC should also be cautious to avoid creating inefficient bureaucratic processes through which broadband providers would be forced to defend economically justified deployment decisions, as this would make it more difficult to close the so-called “digital divide,” Fruits and Stout write.

“For this reason, FCC rules should articulate a presumption of non-discrimination, in which allegations of digital discrimination must be demonstrated, rather than a presumption of discrimination that must be rebutted for each deployment decision,” the authors write.

A copy of the full report, “The Income Conundrum: Intent and Effects Analysis of Digital Discrimination,” can be downloaded here. To schedule an interview with Eric Fruits or Kristian Stout, please contact ICLE Media and Communications Manager Elizabeth Lincicome at [email protected].