Consumers' Research Asks for Supreme Court Review of Eleventh Circuit USF Ruling

WASHINGTON, January 17, 2024 – Conservative nonprofit Consumers’ Research is asking the Supreme Court to review an Eleventh Circuit Court of Appeals ruling that found the administration of the Universal Service Fund is constitutional.

The USF spends about $8 billion annually to fund four internet subsidy programs for rural infrastructure, low-income households, schools and libraries, and healthcare providers.

It has been funded since 1996 by fees on phone bills from voice providers, with the Federal Communications Commission’s Universal Service Administrative Company responsible for collecting and distributing the money.

The group alleged to the Eleventh Circuit – and in multiple other courts – that Congress did not put proper guardrails on the FCC’s authority to collect the fund and the commission abused what authority it does have by handing the responsibility to USAC. The court rejected that argument in a December 14 decision, which Consumers’ Research has asked the nation’s highest court on January 5 to review.

Eleventh Circuit judges found that Section 254 of the Telecommunications Act of 1996, which sets out the commission’s USF responsibilities, provides enough of an “intelligible principle” to pass legal muster. They also ruled that the FCC oversees USAC closely enough that the fund is still functionally under commission control.

Consumers’ Research has asked the Supreme Court to weigh in on this issue before – after a similar ruling from the Sixth Circuit in May 2023 – but the group said in its petition that this time the Fifth Circuit is “poised to create” a conflict in circuit court opinion, making the case “eminently worthy” of Supreme Court review.

The Fifth Circuit denied a similar petition in March, but then agreed in July to rehear the case with a full panel of judges. Oral arguments took place in September and a ruling has yet to be issued.

The U.S. Solicitor General’s motion for more time to file a response was granted, pushing the deadline to March 4.

Those who want to see the USF survive are also looking at ways to reform it. The fund’s contribution scheme is generally seen as unsustainable, with voice revenues declining each year. A Senate bill was introduced in September that would tap both broadband providers and some tech companies for future contributions.