Supreme Court overturns 5th Circuit ruling that upended Universal Service Fund
The Supreme Court today reversed a ruling that threatened the future of the Federal Communications Commission’s Universal Service Fund. In a 6–3 opinion, the high court said the US Court of Appeals for the 5th Circuit erred when it found that Universal Service fees on phone bills are an illegal tax.
Universal Service is an $8 billion-a-year system that is used to expand telecom networks and make access more affordable through programs such as Lifeline discounts and deployment grants for Internet service providers. The program was challenged in multiple circuits by Consumers’ Research, a nonprofit that fights “woke corporations,” and a mobile virtual network operator called Cause Based Commerce.
The 5th Circuit ruling focused on Congress delegating its taxing power to the FCC and the FCC then subdelegating that taxing power to the Universal Service Administrative Company (USAC), a private organization that administers the fund. In a 9–7 en banc ruling, the 5th Circuit found that “the combination of Congress’s sweeping delegation to FCC and FCC’s unauthorized subdelegation to USAC violates the Legislative Vesting Clause in Article I, § 1.”
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