Consumers’ Research Continues Legal Attacks on USF
Group calls on FCC to cut fees despite Supreme Court ruling.
WASHINGTON, August 12, 2025 – If you thought attacks on the constitutionality of the Universal Service Fund were over, think again.
Consumers’ Research, Cause Based Commerce, Inc., and several individuals filed a comment with the Federal Communications Commission on Friday, urging the agency to set the USF contribution factor to zero.
Despite the recent 6-3 Supreme Court ruling upholding the constitutionality of the USF’s funding mechanism, the groups argued that questions remain about other parts of the program.
“Several important arguments remain for why the USF, either in whole or in part, is unlawful, including in its application by the Commission,” the groups wrote.
Many of the groups’ objections stemmed from issues raised in Justice Neil Gorsuch’s dissent issued in June.
The most forceful of these concerned Sections 254(c)(3) and 254(h)(2) of the Telecommunications Act of 1996, which grant the FCC authority to provide, to the extent it is technically feasible and economically reasonable, “additional services” for schools, libraries, and health care providers. These sections form the basis for USF programs, including the Rural Health Care Support Fund and the E-Rate program.
Taking their cue from Gorsuch, who argued that “respondents remain free…to renew their attack on the constitutionality of [the USF] for its subsection (c)(3) and (h)(2) programs,” the groups, led by Boyden Gray partner Trent McCotter, asserted that these sections are unconstitutional because they violate the intelligible-principle test.
Established in 1928, that test permits Congress to delegate power to an executive agency only if it provides an “intelligible principle” to limit the agency’s discretion.
Consumers’ Research argued that Congress imposed virtually no limits on what the FCC could define as an “additional service,” thus violating the intelligible-principle test. They noted that the FCC had previously argued “there is no language restricting these ‘additional’ services to telecommunications services,” and that the FCC itself described the authority granted as “broad.”
Therefore, the groups contended, “the Commission should reduce the [USF] contribution factor by the amount represented by programs and revenue-raising purportedly authorized by those provisions,” reducing the contribution factor by the share tied to what they consider unlawful programs.
The groups also raised concerns beyond the intelligible-principle test.
They wrote that “the Supreme Court held that ‘each of the criteria’ in §§ 254(b) and (c) is ‘separately mandatory’ and ‘has to be met.’” This presents a problem for the FCC, they argued, because “the Commission has long contended and operated under its view that each § 254(b) criterion is ‘only a principle, not a statutory command,’ which the agency may ‘ignore’ in service of other principles found in the statute.”
As a result, the groups said, the FCC must acknowledge the change, explain how it has modified the USF to comply with the Court’s ruling, and respond to significant public comments about its changes, including those from the groups.
“We already know the Commission is not complying,” they asserted. “…the Commission assuredly is not magically in compliance with a binding Court opinion.”
Other complaints focused on the role of the Universal Service Administrative Company in managing the USF and the FCC’s decision not to publish USAC’s proposed contribution factors in the Federal Register or open a public comment period requiring a response to substantive feedback.
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