Will Digital Discrimination Policies End Discount Plans for Low Income Consumers?

The Federal Communications Commission plans to adopt both a disparate treatment (intent) and disparate impact (effects) analysis to determine whether there is any discrimination of internet access. As part of its rules, the Draft Order requires “pricing consistency” across protected classes. There is a serious unintended consequence of this requirement—that is, the low-income pricing plans offered by broadband providers—many of which were strongly supported by (if not mandated by) the FCC, the National Telecommunications and Information Administration, the White House, and even state organizations issuing subsidy dollars—are explicitly designed to discriminate by income level (“intent”) and, since income and race are correlated, these income-based discount plans lead to a disparate impact along racial lines. Accordingly, a reasonable reading of the FCC’s forthcoming rules is that these low-income discount plans offered by broadband providers are likely now illegal and thus risky to offer. As a result, an unintended consequence of the FCC’s Digital Discrimination rules may be to cause such discounted plans to disappear, raising the price of broadband to low-income households (to ensure the mean price is equal across income levels and race).