The U.S. Supreme Court announced Friday it will review the legality of the Universal Service Fund (USF), a Federal Communications Commission (FCC)-managed program aimed at improving phone and internet services nationwide. The decision comes in response to allegations that Congress improperly delegated its authority to the independent agency.
The FCC, along with a coalition of telecommunications companies and advocacy groups, is appealing a ruling from the 5th U.S. Circuit Court of Appeals that deemed the delegation of Congress’s revenue-raising powers to the FCC unconstitutional. The Supreme Court will hear the case and is expected to issue its decision by late June 2025.
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Established under the 1996 Telecommunications Act, the USF allocates approximately $9 billion annually to expand telecommunications services to underserved rural areas, subsidize low-income households, support Native American tribal lands, and aid schools and libraries.
The controversy stems from a lawsuit filed by the conservative group Consumers’ Research and others, which argues that the FCC’s control of the fund violates the Constitution’s nondelegation doctrine. This principle holds that Congress cannot transfer its legislative powers to other entities.
The lawsuit also questions the FCC’s decision to delegate the fund’s administration to the Universal Service Administrative Company, a private nonprofit organization. Critics claim this transfer of authority further undermines accountability.
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The Supreme Court’s decision to review the lower court’s ruling has been welcomed by major telecommunications groups, including representatives of AT&T, Verizon, and T-Mobile. These groups argue that the 5th Circuit’s decision, if upheld, would jeopardize vital programs providing essential communications services to millions of Americans.
“This ruling threatens to undermine universal service programs that, for decades, have ensured the availability and affordability of critical communications services for rural and low-income consumers, health care facilities, and schools and libraries across the nation,” the industry groups said, according to Reuters.
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The Supreme Court’s decision could have far-reaching implications for the USF and other federal programs relying on similar funding structures. A ruling in favor of the plaintiffs may require Congress to reassess how it delegates authority to federal agencies, potentially disrupting funding mechanisms for critical public services.
The case highlights ongoing tensions over the balance of power between Congress and federal agencies, with the outcome set to influence not only telecommunications policy but broader governance and regulatory practices in the U.S.
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