On May 6, 2026, the U.S. Court of Appeals for the Eighth Circuit issued a sweeping ruling that vacates—wipes off the books entirely¹—the Federal Communications Commission's (FCC) final rules prohibiting digital discrimination in broadband access. The decision leaves millions of consumers—particularly those in low-income communities and communities of color—without the federal anti-discrimination framework Congress directed the FCC to create. The ruling simultaneously removes regulatory obligations that broadband providers, contractors, landlords, and other entities had been subject to under the now-vacated rules.

The ruling affects every stakeholder in the broadband ecosystem: consumers who believed the rules protected them, broadband providers who challenged them, state broadband officials implementing the Broadband Equity, Access, and Deployment (BEAD) program, digital equity practitioners whose advocacy shaped the rules, and the FCC itself, which is now under an explicit court-recognized obligation to start the rulemaking process over.

[Editor's note: The Benton Institute for Broadband & Society was a party to this litigation, serving as both a petitioner (case No. 24-1317) and an intervenor on behalf of the FCC against the industry petitioners' challenge.]

How We Got Here

In 2021, Congress passed the Infrastructure Investment and Jobs Act, which included a provision that declared it U.S. policy that broadband subscribers "should benefit from equal access to broadband internet access service within the service area of a provider." Congress directed the FCC to adopt rules "to facilitate equal access to broadband internet access service," specifically "preventing digital discrimination of access based on income level, race, ethnicity, color, religion, or national origin."

FCC Rules

After a Notice of Inquiry in March 2022 and a Notice of Proposed Rulemaking in December 2022, the FCC adopted a final digital discrimination rule on November 20, 2023, in a 3-2 vote. The rule had six core features:

1. Two theories of liability. The rule prohibited both disparate treatment (intentional discrimination) and disparate impact (facially neutral policies that nonetheless disproportionately affect protected groups). The FCC concluded that the statute "focuses on the impact of a policy or practice on the consumer's chance or right to obtain service rather than intent." 
2. Broad coverage. "Covered entities" included not just broadband service providers, but any "entities that provide services that facilitate and affect consumer access to broadband," including contractors, infrastructure owners, and a catchall for any entity that "otherwise affect[s] consumer access." 
3. Burden-shifting. Covered entities found to have discriminatory policies or practices could escape liability by demonstrating the policy was "justified by genuine issues of technical or economic feasibility," with the burden of proof on the entity by a preponderance of the evidence (that is, more likely than not) . 
4. Enforcement authority. The FCC asserted authority to bring "its full suite of available remedies, including the possibility of monetary forfeitures."
5. Complaint procedures. The FCC updated its complaint process to accept informal digital discrimination complaints from consumers, but declined to adopt a formal complaint process.
6. Safe harbor. Entities whose policies complied with the non-discrimination requirements of the BEAD Program or the Universal Service Fund (USF) high-cost program received a presumption of compliance with the digital discrimination rules.

Legal Challenge

Telecommunications and broadband industry groups filed petitions for review in six federal circuit courts within days of the rule's adoption. The U.S. Judicial Panel on Multidistrict Litigation used a random lottery to consolidate the petitions in the Eighth Circuit. The case was argued on September 25, 2024. Two sets of petitioners challenged the rule on opposite grounds:

1. Industry Petitioners: a coalition that included the Minnesota Telecom Alliance, USTelecom, NCTA-The Internet & Television Association, the U.S. Chamber of Commerce, and more than a dozen other broadband and telecommunications associations sought to set aside the rule in its entirety. Their principal argument: Congress did not authorize the FCC to impose disparate impact liability. 

2. Public Interest Petitioners: the Benton Institute for Broadband & Society, Great Public Schools Now, and Media Alliance intervened in support of the FCC's rule but separately challenged two of its provisions as insufficiently protective: the refusal to allow formal complaints, and the BEAD safe harbor presumption.

Court Ruling

A three-judge panel—Circuit Judges James B. Loken, Duane Benton, and L. Steven Grasz—ruled for the Industry Petitioners on the two core issues and vacated the entire rule.

The court applied the standard established by the Supreme Court in Loper Bright Enterprises v. Raimondo (June 2024), which overruled the longstanding Chevron doctrine. Under Chevron, courts had deferred to a federal agency's reasonable interpretation of an ambiguous statute. Under Loper Bright, courts must independently determine the meaning of the statute, giving agencies no special deference. The court was explicit that this change in legal landscape was material to the outcome: the final rule "was adopted in a different legal environment, when agencies relied on the courts to give 'Chevron deference' to their interpretation of the statutes under which they regulate the private sector."

Disparate Impact Liability

The court's most consequential holding is that the Infrastructure Investment and Jobs Act does not authorize the FCC to impose disparate impact liability. The analysis proceeded in three steps.

Step 1: Dictionary and precedent. The court began with the plain meaning of "discrimination," noting that standard dictionaries define it as treatment "based on class or category" and that the Supreme Court has repeatedly described its "normal definition" as "differential treatment." The court further noted that in various contexts, the Supreme Court has read "discriminate against" to require intent.

Step 2: Comparison to statutes that do authorize disparate impact. The court conducted a careful comparison of the Infrastructure Investment and Jobs Act to three statutes the Supreme Court has held authorize disparate impact claims by implication: 1) Title VII of the Civil Rights Act of 1964, 2) the Age Discrimination in Employment Act (ADEA), and 3) the Fair Housing Act (FHA). In each of those statutes, courts found disparate impact liability based on "results-oriented language"—specifically the phrase "otherwise adversely affect" in Title VII and the ADEA, and "otherwise make unavailable" in the FHA. The court called this language "of central importance" and found it "noticeably absent" from the Infrastructure Investment and Jobs Act. Without it, the court concluded, the Infrastructure Investment and Jobs Act "lacks any language shifting the emphasis of the prohibition from 'preventing digital discrimination' to a phrase 'looking to consequences, not intent.'"

Step 3: Rejecting the FCC's textual arguments. The FCC offered several alternative readings. The Commission argued that the word "prevent" in the Infrastructure Investment and Jobs Act implies broad authority over any practice that affects broadband access; that the word "eliminate" authorizes rooting out disparate impacts; and that the statute's reference to "equal opportunity" mirrors language found in Title VII and the ADEA. The court rejected each argument. "Prevent" and "eliminate," the court reasoned, are forward-looking terms; they address future action, not retrospective liability.  And the word "opportunity" in Title VII and the ADEA appears before the shift to disparate impact coverage, not as the marker of it. 

The court also noted that Congress is presumed to know existing legal standards: if Congress had wanted to authorize disparate impact liability, it could have used the judicially recognized "otherwise adversely affect" formulation. The judges found that "there is no apparent reason for Congress not to use the judicially recognized 'otherwise adversely affect' formulation other than to confirm its intent not to authorize the imposition of disparate impact liability."

Covered Entities

The court also held that the FCC exceeded its statutory authority by extending the rule to entities beyond broadband providers. The court read the Infrastructure Investment and Jobs Act as consistently focused on a two-party relationship: providers and subscribers. The statute's statement of policy says subscribers should have equal access "within the service area of a provider", defines equal access as "the equal opportunity to subscribe", and the model-policy provision specifically references "broadband internet access service providers." [Court's emphasis]

The FCC acknowledged in its own Report and Order that it was "not explicitly tasked with regulating entities outside the communications industry." The court agreed with then-FCC Commissioner (now Chairman) Brendan Carr's dissenting description of the scope: landlords, construction crews, unions, marketing agencies, banks, and even government entities were covered under the rule as adopted.² Without textual support in the Infrastructure Investment and Jobs Act for that reach—and with Chevron deference no longer available—the court found the extension unlawful.

Other Challenges Deemed Not Ripe

Both the Industry and Public Interest Petitioners raised additional challenges—to enforcement remedies, the burden-shifting framework, the lack of formal complaint procedures, and the BEAD safe harbor. The court declined to decide on any of them.

On monetary forfeitures, the court identified serious statutory questions: the Infrastructure Investment and Jobs Act was not incorporated into the Communications Act (unlike the Affordable Connectivity Program (ACP), where Congress explicitly authorized forfeitures under Section 503 of the Communications Act), and the forward-looking language of "prevent" and "eliminate" does not obviously authorize backward-looking penalties. But having vacated the rule entirely, the court found that the question of what remedies would be lawful for a future rule was distinct from what the vacated rule presented.

On the Public Interest Petitioners' challenges to the formal complaint process and the BEAD safe harbor, the court similarly found these claims "not ripe for review on this administrative record" because the entire rule has been vacated and a new rule will need to be developed.

What Happens Next?

FCC Chairman released a statement via X:

The court was explicit that vacating the rule does not end the FCC's obligation: the agency retains an "unfinished obligation to 'adopt final rules to facilitate equal access to broadband internet access service.'" The FCC must go back through a notice-and-comment rulemaking to produce a new rule. Apparently, a new rule would be limited to prohibiting intentional (disparate treatment) discrimination and covering only broadband providers and subscribers.

The parties in this case have 45 days from May 6, 2026, to file a petition for rehearing before the panel of judges or rehearing before the full Eighth Circuit Court.

Notes

1. Perhaps more accurately: the rule doesn't simply stop being enforced; it is legally treated as if it never had legal effect from the moment of the court's judgment.
2. The court is citing the dissent approvingly to illustrate the breadth of coverage. The court adopted a critic's characterization of the rule's scope, not an independent factual finding. 

The Benton Institute for Broadband & Society is a non-profit organization dedicated to ensuring that all people in the U.S. have access to competitive, High-Performance Broadband regardless of where they live or who they are. We believe communication policy - rooted in the values of access, equity, and diversity - has the power to deliver new opportunities and strengthen communities.

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Kevin Taglang
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