Consumers’ Research Drops USF Challenge, But Battle Likely Not Over

WASHINGTON, Sept. 18, 2025 – Consumers’ Research has dropped its pending effort to challenge the constitutionality of the Universal Service Fund, but is expected to keep its fight going.

The Supreme Court ruled against the group in June, finding the roughly $8 billion-per-year Federal Communications Commission program did not violate the constitution. Consumers’ Research had been trying to keep the case alive, asking the Fifth Circuit to rehear arguments rather than closing out the case. The Fifth Circuit ruled in favor of Consumers’ Research last year, diverging from other courts and promoting SCOTUS to weigh in.

Wednesday morning the group submitted a filing joined by the FCC and other parties to the case saying “the parties hereby stipulate to the dismissal of the petitions in the above proceedings” – the group had filed several suits against the fund – “with each side to bear its own costs and fees.”

The court’s clerk followed up later the same day with an order that “the appeal is dismissed as of September 17, 2025, pursuant to the joint motion of the parties.”

A person familiar with the matter said Consumers’ Research is expected to file a new suit now that the FCC has announced next quarter’s likely contribution factor, the percentage of interstate and international voice revenue that telecoms will have to contribute to the fund.

The contribution factor is set to hit a record 38.1 percent, as lawmakers work on finding a new source of cash that isn’t rapidly shrinking like voice revenue is.

Spokespeople for Consumers’ Research and the FCC did not respond to requests for comment. 

Joseph Wender, executive director of the Schools, Healthcare, and Libraries Broadband Coalition, which had intervened to defend the fund, said the group was confident any future legal battles would also go its way.

“In June, the Supreme Court reaffirmed the constitutionality of the Universal Service Fund, the nation’s most effective tool for ensuring that schools, libraries, and health clinics have the connectivity they need to serve their communities,” he said in an email. “While we cannot speak to the future plans of Consumers’ Research, SHLB remains committed to defending the USF and are confident that we would once again prevail in court."

The conservative nonprofit had been arguing in its efforts for a rehearing, and is expected to argue in a future suit, that two provisions of the Telecommunications Act of 1996, which stood up the USF, are still unlawful. The sections allow the agency to fund “advanced telecommunications and information services” and “additional” services through USF, which Consumers’ Research said gave the agency free reign to collect cash from telecom companies.

The majority Supreme Court opinion didn’t address the provisions because the group didn’t challenge them in its initial lawsuit. The decision said in a footnote that the group “does not argue” that they “are unconstitutional, and it does not advance any arguments that are specific to those provisions.”

On Monday, as it does each quarter, Consumers’ Research told the FCC it should set the fourth quarter contribution factor to zero.

This time the group cited the two sections. Justice Neil Gorsuch first laid the arguments out in his dissent, joined by fellow conservative Justices Clarence Thomas and Samuel Alito, and said he would have struck down the fund based on them.

“The dissenting Justices explained that those provisions are unconstitutional because they do not impose even qualitative restrictions on the Commission’s ability to raise money for covered programs,” the group wrote.