### Supreme Court to Review Case That May Endanger $8 Billion Broadband Expansion Initiative
The United States Supreme Court has opted to examine a significant case that could threaten the Federal Communications Commission’s (FCC) $8 billion Universal Service Fund (USF), a program aimed at enhancing broadband access nationwide. This follows a ruling in July from the 5th Circuit Court of Appeals, which deemed the USF unconstitutional, characterizing the fees gathered from phone bills to finance the program as an “illegal tax.”
The Supreme Court’s choice to review the case underscores the potential nationwide effects of the 5th Circuit’s decision, which contrasts with rulings from other federal appellate courts. The outcome may redefine how initiatives for broadband expansion and affordability are financed, potentially leaving millions of Americans in underserved regions without access to essential connectivity services.
—
### **What is the Universal Service Fund?**
The Universal Service Fund is a pivotal aspect of the FCC’s mission to close the digital gap in the United States. Financed through fees levied on telecommunications providers, typically passed onto consumers through their phone bills, the USF backs several crucial programs:
1. **Lifeline Program**: Provides reduced-cost phone and broadband services for low-income families.
2. **E-Rate Program**: Grants funding to schools and libraries to enhance internet access.
3. **Rural Health Care Program**: Aids broadband connectivity for healthcare providers in rural locales.
4. **High-Cost Program**: Subsidizes the development of telecom networks in rural and remote areas where service would otherwise be cost-prohibitive.
These programs have received bipartisan backing over the years, aiding in connecting underserved communities, educational institutions, libraries, and healthcare facilities to important communication services.
—
### **The 5th Circuit’s Ruling**
The 5th Circuit Court of Appeals decided 9–7 that the FCC’s management of the USF contravenes the U.S. Constitution. The primary concern of the court was the FCC’s delegation of the fund’s oversight to the Universal Service Administrative Company (USAC), a private entity. The court maintained that this arrangement constituted an unconstitutional “subdelegation” of Congress’s taxing powers.
The court argued that Congress had granted the FCC excessively broad authority to impose fees, which the FCC then misallocated to USAC. This, according to the court, breached the Legislative Vesting Clause of the Constitution, which allocates legislative powers exclusively to Congress.
The ruling stands in direct opposition to decisions from the 6th and 11th Circuit Courts of Appeals, which upheld the USF’s constitutionality. This division among the circuits likely influenced the Supreme Court’s determination to delve into the case.
—
### **Implications of the Supreme Court Case**
The implications are significant for the FCC and the millions of Americans who depend on USF-supported initiatives. Should the Supreme Court uphold the 5th Circuit’s ruling, the USF may be dismantled or necessitate considerable restructuring. This could hinder funding for broadband expansion efforts and affordability initiatives, especially in rural and low-income regions.
FCC Chairwoman Jessica Rosenworcel expressed hope that the Supreme Court will overturn the 5th Circuit’s ruling. “For decades, there has been broad, bipartisan support for the Universal Service Fund and the FCC programs that help communications reach the most rural and least-connected households in the United States,” she stated.
Nonetheless, the case also raises wider questions regarding the funding and administration of federal initiatives. Critics of the USF assert that its dependence on fees from phone bills is outdated and inequitable, particularly as traditional telecom revenues diminish. Some, including former FCC Chairman Ajit Pai, have recommended that Congress directly fund the program through appropriations rather than relying on fees.
—
### **Challenges to the FCC’s Authority**
This case is indicative of a broader pattern of legal challenges to the FCC’s regulatory powers. The plaintiffs, including Consumers’ Research—a nonprofit opposing “woke corporations”—and Cause Based Commerce, argue that the USF signifies an overreach of federal authority. They claim that the FCC’s assignment of administrative functions to USAC grants a private entity excessive influence over public finances.
The FCC and the Department of Justice contended that USAC merely executes administrative duties under the FCC’s guidance and does not wield independent regulatory authority. In their petition to the Supreme Court, they asserted that the 5th Circuit’s ruling misinterprets the nondelegation principle and could have extensive implications for other federal programs that depend on similar administrative setups.
—
### **Potential Outcomes**
The Supreme Court’s ruling could lead to multiple possible scenarios:
1. **Upholding the 5th Circuit’s Ruling**: This would likely nullify the current structure of the USF, compelling Congress and the FCC to develop alternative funding strategies or completely restructure the initiative.
2. **Overturning the 5th Circuit’s Ruling**: This would maintain the USF in its existing format, allowing the FCC to
