FCC Moves to End USF Litigation

WASHINGTON, June 17, 2024 – The Federal Communications Commission took steps in court Monday that could remove the legal cloud over the Universal Service Fund.

Since last January, the FCC has fought to protect the legality of the $8.1 billion USF, which Congress established in 1996 to support broadband Internet in high-cost rural areas and connect schools and libraries across the country.

FCC lawyers Monday asked the U.S. Court of Appeals for the Fifth Circuit to dismiss the litigation launched by Consumers’ Research, a non-profit that argued the USF is an unconstitutional subsidy mechanism that has usurped the spending power of Congress. The USF is funded by a 34.4 percent assessment on interstate and international phone charges of telecommunications service and VoIP providers.

Consumers’ Research lost in both the Sixth Circuit and the Eleventh Circuit. Last Monday, the Supreme Court declined to review those decisions.

“Those decisions are thus final and not subject to further review, and petitioners are precluded from raising the same claims [in the Fifth Circuit] that they presented to the Sixth and Eleventh Circuits,” said FCC Deputy General Counsel Jacob Lewis in a seven-page motion with the Fifth Circuit.

Consumers’ Research plans to oppose the FCC’s motion evidently because it has been awaiting a ruling by the full Fifth Circuit after losing to a Fifth Circuit panel in March, 2023. The FCC’s motion was clear in stating the case in the Fifth Circuit has been mooted.

Also on Monday, the FCC and Consumers’ Research filed a stipulation with the U.S. Court of Appeals for the D.C. Circuit to dismiss the USF case in that judicial venue.

Consumers’ Research’s decision to keep fighting in the Fifth Circuit while yielding in the D.C. Circuit was not explained in the court filings.

Assuming the Fifth Circuit grants the FCC's motion, it would appear that the litigation battle over how to fund the USF has come to a close.