Consumers’ Research Likes Its Odds Against USF at Supreme Court

WASHINGTON, Oct. 2, 2024 – The Federal Communications Commission asked the Supreme Court Monday to review a July ruling that found the agency’s main broadband subsidy unconstitutional. The conservative nonprofit that challenged the fund isn’t necessarily opposed to that.

The nonprofit, Consumers’ Research, has been challenging the $8 billion Universal Service Fund in court for years.

The group has claimed Congress didn’t put enough guardrails on the program when it established the USF, which is funded by fees levied on telecom providers, and that the FCC improperly delegated authority to the nonprofit it set up to manage the fund.

Consumers’ Research evidently likes its odds at the Supreme Court, where a conservative majority has pared back federal agency power in recent years. The group has already asked justices to review two cases from the Sixth and Eleventh circuits that found the fund passed legal muster.

“Given their own pending requests for this Court’s review of those adverse rulings, the Challengers agree the constitutionality of the USF funding mechanism warrants this Court’s review,” the group wrote in a response to the FCC’s Monday petition. “There is also now a circuit split on whether that funding mechanism violates nondelegation principles.”

The group asked justices to grant its existing petitions. If the court grants the FCC’s petition, Consumers’ Research asked that it consolidate the case with the other two or resolve them first.

The Supreme Court had initially denied to weigh in on the Sixth and Eleventh Circuit cases, but a full panel of Fifth Circuit judges reversed a previous ruling and found the USF unconstitutional in July. The decision is on hold until the high court weighs in.

The Fifth Circuit declined to rule on separate elements of the challenge – the agency’s ability to collect fees from telecoms and its delegation of management to the Universal Service Administrative Company – but instead found the combination of those elements illegally took taxing power away from the legislature.