The Supreme Court has agreed to decide whether the funding mechanism for the Federal Communications Commission’s Universal Service Fund is unconstitutional.
The court decided Friday to take up the matter, which was before it on a petition from the Biden administration.
"If left in place, the decision will upend the universal service programs, to the detriment of millions of consumers nationwide,” the government’s petition said.
In July, the 5th Circuit Court of Appeals in New Orleans ruled, 9-7, that in choosing what fees to collect from telecommunications carriers for the $9 billion fund, the FCC and the Universal Service Administrative Company, an independent corporation, violated the Constitution by harnessing the “quintessentially legislative” power to tax.
The FCC cited conflicting decisions from the 6th and 11th Circuit Curt of Appeals in petitioning the Supreme Court for review. Fifteen Republican state attorneys general filed a brief opposing the petition.
They argued that Universal Service Fund assessments violate the “nondelegation doctrine” by placing Congress’s authority to tax in the hands of USAC. “Congress needs to be the one to act here, not a private band of unaccountable industry participants,” they said.
In its order granting review, the court said, "In addition to the questions presented by the petitions, the parties are directed to brief and argue the following question: Whether this case is moot in light of the challengers' failure to seek preliminary relief before the Fifth Circuit."
The outcome of the case could have major ramifications for programs intended to defray the cost of phone and internet access in rural areas while ensuring connectivity for key public institutions like schools, libraries and hospitals.
NTCA–The Rural Broadband Association, the Competitive Carriers Association, and USTelecom–The Broadband Association welcome the decision.
“We are grateful that the Supreme Court has granted certiorari and will review the 5th Circuit’s finding that the universal service contribution mechanism is unconstitutional as currently structured. The 5th Circuit’s decision is contrary to Supreme Court precedent and the decision of several other circuit courts of appeals, and it threatens to undermine universal service programs that, for many decades, have served to promote the availability and affordability of critical communications services for millions of rural and low-income consumers, rural health care facilities, and schools and libraries across the nation."
Those groups and several others intervened in the appeals court and also petitioned the Supreme Court to review the Fifth Circuit decision,
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