The Federal Communications Commission (FCC) had labeled any broadband practice that “differentially impacts” consumers based on income, race, ethnicity, color, religion or national origin as illegal discrimination. The rule applied not only to ISPs but also to landlords restricting provider choice in multi‑unit buildings. 8th Circuit judges this week threw the regulation out, saying it overreached the agency’s mandate.

The challenge arrived from a coalition of telecom and cable lobbyists, including the NCTA, CTIA and USTelecom, alongside state groups from Minnesota, Missouri, Ohio, Florida, Alabama, Mississippi and Texas. They argued the rule punished “unintentional discrimination” – policies that appear neutral but produce disparate impact. The court found the Infrastructure Investment and Jobs Act never granted the FCC authority to enforce such disparate‑impact liability.

Republican lawmakers had already introduced legislation to repeal the rule, but it never reached a vote. With the appellate decision, ISPs and property owners face no new federal liability for neutral policies that happen to affect protected groups, while consumer advocates warn the move could stall efforts to close broadband gaps in underserved neighborhoods. The ruling also curtails the FCC’s ability to craft future equity‑focused broadband policies.