FCC Releases Digital Discrimination Rule that Could Further Exacerbate Housing Affordability

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By Kevin Donnelly, VP of Government Affairs, Technology and Strategic Initiatives, NMHC

Kevin Donnelly is Vice President, Government Affairs, Technology and Strategic Initiatives, with responsibility for representing the interests of the multifamily industry before Congress and federal agencies

The FCC, for the first time, interpreted its regulatory authority to cover property owners in its new Digital Discrimination Rule, which takes effect in March 2024. This extension lacks statutory authority and is a significant departure from the FCC’s existing regulations. The FCC, also for the first time, adopted disparate impact analysis to its framework for determining whether facially neutral business practices have an unlawful discriminatory effect on the basis of a resident’s income.

As part of the Infrastructure Investment and Jobs Act (IIJA), Congress required the FCC to initiate this rulemaking to define digital discrimination and enact rules to prevent it. While the proceeding is largely aimed at broadband providers, over the last year the FCC has used this as an opportunity to raise questions about whether multifamily property owners have a role to play in digital discrimination and whether the FCC should revisit rules governing agreements and relationships between broadband providers and property owners.

A Hindrance Not a Help

The FCC’s rules are broad and vague and are more likely to hinder than help efforts to bridge the digital divide – the IIJA’s broadband investments’ stated purpose. For example, these new rules serve as financial roadblocks to housing providers trying to upgrade their facilities and those in smaller communities that are trying to provide housing with digital access. This will ultimately manifest in one of two ways: 1) increased costs for the housing providers that will drive further unaffordability in rental housing or 2) an exacerbation of broadband access and choice for residents in communities nationwide—both scenarios do nothing to support the resident.

NMHC has been regularly engaged with the FCC throughout this rulemaking process—working with industry coalition partners to educate the Commission on potential impacts to housing affordability. If left unchallenged, both misinterpretations could allow the FCC to further regulate pro-competitive practices, including property access/control, revenue share agreements, bulk billing arrangements, managed Wi-Fi, etc., all of which could impact housing operations and, therefore, affordability.

As part of our robust advocacy efforts, NMHC filed three rounds of comments in the proceeding and met with the FCC to express our support for the underlying goals of the proceeding but cautioned that regulation of property owners was unnecessary and unwise. We also repeatedly communicated through comments that apartment owners, developers and operators work tirelessly and take on considerable expense to ensure broadband connectivity for their residents and actively work against digital discrimination.

Housing Providers Agree—Connectivity is Key

Ensuring all Americans have reliable access to broadband so they can work, learn and play is imperative to their individual success and the fabric of the communities in which they reside. Housing providers are keenly aware of and sensitive to the needs and expectations of their residents. Robust broadband service is at the top of the list. Indeed, in many rental properties, the quality, reliability, speed and pricing of broadband service is often better than in nearby single-family areas.

That’s why it is absolutely critical that the FCC focus its efforts on where the digital divide actually exists—in smaller, lower-income multifamily communities, where broadband providers have made the economic decision not to upgrade infrastructure or serve a community because of its perceived lack of profitability.

Kevin Donnelly kdonnelly@rettc.org