Appeals Court Grants FCC Request to Pause USF Challenge

WASHINGTON, November 5, 2025 – The Fifth Circuit Court of Appeals on Tuesday paused proceedings in the latest case targeting the federal Universal Service Fund. 

The court granted a request filed Friday by the Federal Communications Commission to stay proceedings in Consumers’ Research v. FCC while the Justice Department and the FCC remain unfunded during the ongoing federal government shutdown.

The government shutdown “has effectively eliminated the ability of counsel who have worked on and are familiar with this case to handle the litigation while the lapse in appropriations continues,” wrote FCC counsel Jacob Lewis in the agency’s Oct. 31 motion.

The Fifth Circuit’s order, signed by Judge Stuart Kyle Duncan, freezes further activity in the case until 14 days after Congress restores government appropriations.

Consumers’ Research and other petitioners are asking the Fifth Circuit to review the FCC’s proposed fourth quarter 2025 USF contribution factor, set at 38.1 percent.

The rate determines how much of telecom providers’ interstate and international revenues must be contributed to the USF to finance broadband and phone programs for schools, libraries, rural health clinics, and low-income households.

The case marks a continuation of efforts by Consumers’ Research to dismantle the $8.6-billion USF after the Supreme Court in June upheld the fund’s constitutionality in a 6-3 decision.

Since Consumers’ Research refreshed its challenge on Oct. 1, at least three sets of stakeholders have sought to intervene in support of the FCC, framing the case as a direct threat to broadband access and rural connectivity. All three motions were opposed by Consumers’ Research. 

On Oct. 30, the National Telecommunications Cooperative Association said in its motion that a ruling against the FCC could derail billions of dollars in planned rural network investments.

“A 2024 survey of NTCA members indicated that, without USF support, these businesses could be compelled to cancel almost two billion dollars’ worth of rural broadband deployment projects in 2025 and 2026 alone,” wrote NTCA counsel Jennifer Tatel.

A day earlier, on Oct. 29, the Benton Institute for Broadband & Society, the National Digital Inclusion Alliance, and Media Justice, jointly moved to intervene, emphasizing that dismantling the fund would widen the digital divide by cutting off support for schools, libraries, and low-income households.

That same day, the Schools, Health & Libraries Broadband Coalition, a longtime defender of USF, also filed a motion to intervene, arguing that USF funds “vitally important programs that support affordable telecommunications and internet access.”

With the case now stayed, the FCC’s Nov. 10 deadline to file the administrative record was suspended until 14 days after the government reopens.