The fate of an $8 billion program that funds internet services in rural areas and schools is now formally before the Supreme Court, which seemed inclined to uphold its constitutionality after arguments Wednesday.

Attorneys for the federal government and affected schools and libraries fared better before the justices than the lawyer representing Consumers’ Research, who said the operation of the Federal Communication Commission’s Universal Service Fund violates the “non-delegation doctrine.”

In short, the group alleges that the FCC and Universal Service Administrative Company, which collects the funds, have been improperly delegated the authority to raise money for the USF. That authority rightly belongs to Congress, the group says.

Justice Neil Gorsuch was critical of the way the USF operates, implying that under the 1996 law establishing the fund, there is no limit to the amount of money that can be collected, or the type of service that can be provided.

“How about everybody gets a Starlink account?” he asked hypothetically.  

At least two other conservative justices, however, Amy Coney Barrett and Brett Kavanaugh, evinced skepticism toward arguments advanced by Consumers' Research lawyer Trent McCotter. He suggested Congress could simply put a cap on the program, but Kavanaugh said that wouldn't address the delegation issue McCotter was raising.

“Congress would have an opportunity to take the reins and decide, what do we really want universal service to be?” he said.

But Kavanaugh said the cap “could be very high. And then the question is, what exactly are we accomplishing?” he asked.

Barrett raised the doctrine of "constitutional avoidance," the idea that where possible, courts should rule on non-constitutional grounds first.

"Don't we have constitutional avoidance as a principle?" she asked McCotter, suggesting that it might be better to challenge the USF under the Administrative Procedure Act's "arbitrary and capricious" standard.

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"Shouldn't we be doing that, rather than striking the statute down as unconstitutional?" she asked. 

Acting Solicitor General Sarah Harris said the government was “not arguing for a no-limits-at-all approach where you can just raise whatever revenue you feel like.”

“There are qualitative limits” in the law that prevent FCC from raising as much as it wants, she said.

USAC, she said, makes recommendations on proposed fees for telecom carriers and passes those on to the FCC. “FCC itself reviews, publishes and adopts a fee for it to take effect,” she said. “That is a basic delegation of accounting tasks.”

Justice Elena Kagan said the program has guardrails. “The FCC can't do anything by way of this program that is not basically geared towards getting those who live in very rural areas or who are very low-income … access to services that all the rest of us have. That's the nature of the program, and that's the limit of the program.”

Justice Sonia Sotomayor told McCotter he was essentially saying that “in a time in which the federal budget is being slashed dramatically, that … we should ask Congress to appropriate something that taxpayers know they're already paying and have agreed to.”

Sotomayor noted that “in terms of accountability,” customers’ phone and cable bills state clearly the amount of the USF fee.

Backing the government are a wide range of rural groups, including NTCA - The Rural Broadband Association, which separately petitioned the court seeking to overturn the 5th Circuit ruling in the case.

Some other ag-related entities who joined the case to support the USF as currently structured include CoBank, National Cooperative Services Corporation, Farm Credit Council, National Association Of Rural Health Clinics, National Cooperative Business Association, National Rural Electric Cooperative Association, National Rural Education Association, and National Rural Health Association.

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