Participants to Fifth Circuit: USF is Still Valid
The fund’s opponents are pursuing another lawsuit against the program.
WASHINGTON, March 23, 2026 – Groups representing fund participants and consumer advocates are again asking judges not to overturn the $8 billion-per-year Universal Service Fund.
After losing on the issue in a 6-3 Supreme Court decision, conservative nonprofit Consumers’ Research filed another lawsuit in October alleging parts of the Telecom Act of 1996 gave unfettered taxing power to the Federal Communications Commission. The group took up arguments from Supreme Court Justice Neil Gorsuch’s dissent.
“Indeed, Petitioners’ introduction section cites the dissent more than the majority opinion,” NTCA, which represents hundreds of rural ISPs that participate in USF, said in a Friday filing. “But the dissent is not the law, no matter how much Petitioners would prefer otherwise.”
Consumer’s Research is now targeting two provisions in the law that allow the FCC to fund “additional” and “advanced” services for schools, libraries, and healthcare centers with USF. The program is funded by fees on interstate and international voice revenue, and the fund’s opponents argued those sections were open-ended enough to give the FCC the ability to charge carriers as much as they want in quarterly fees and expand the program indefinitely.
Like the FCC and Justice Department, NTCA disagreed on the legal merit. The group also stressed that diminished USF support would have negative consequences for rural broadband.
“Abruptly disrupting USF support would imperil current network buildouts, which take long periods of time from start to finish and rely on future revenues to complete,” the group wrote. “Many of NTCA’s members have invested in network infrastructure, made business plans, and offered service plans to American consumers in reliance on future universal service payments.”
In addition to NTCA, the Schools, Health & Libraries Broadband Coalition, Benton Institute for Broadband & Society, National Digital Inclusion Alliance, and MediaJustice are also intervening on the FCC’s side and signed the filing. Consumers’ Research filed the case in the Fifth Circuit, which ruled in favor of the group in 2024.
“The FCC's implementation of USF falls well within longstanding Supreme Court precedent. Practically and legally, this is what we call a ‘no-brainer’ because no one is served by the demise of USF,” Revati Prasad, Benton’s executive director, said in a statement.
While the high court didn't upend the fund over the summer, industry experts argue that the USF needs to be reformed, as expenditures remain flat while voice revenue shrinks. The contribution factor for the second quarter of 2026 is set to be 37 percent.
Lawmakers from both parties on Capitol Hill are working on modernizing the fund, including the contribution base. Aides from the offices of Sens. Dan Sullivan, R-Alaska, and Ben Ray Luján, D-N.M., said in October they were planning on unveiling a new framework early this year.
Nondelegation doctrine
When the previous USF litigation reached the Supreme Court, Consumers’ Research and other conservative legal groups asked justices to take the opportunity to expand the nondelegation doctrine, the idea that Congress can’t hand its powers to other entities without limitations, which would make it harder for Congress to grant sweeping authority to federal agencies.
A majority of Supreme Court justices were not persuaded to go that route. The three dissenting justices were on board, though.
“The Constitution promises that our elected representatives in Congress, and they alone, will make the laws that bind us,” Gorsuch wrote. “Someday, soon, we should find our way back.”
Justice Brett Kavanaugh, also a conservative, said in a concurring opinion that other recent Supreme Court decisions curtailing federal agency power had in his mind “substantially mitigated” the broader concerns Consumers’ Research raised.
He noted that the court ended a decadeslong practice of deferring to most agency interpretations of laws and instituted a requirement that Congress give explicit authority for agencies to act on questions of “vast economic and political significance,” among other things.
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