The Universal Service Fund has survived a challenge to its constitutionality, with the United States Court of Appeals for the Fifth Circuit ruling that the Federal Communications Commission has the authority to operate the USF and that its current framework for management of the USF is within the bounds of the Constitution.
Consumer Research had challenged the constitutionality of the implementation of the USF, arguing that Congress had improperly delegated its authority to the FCC, and the FCC had then delegated USF administration to the Universal Service Fund Administrative Company (USAC). Consumer Research wanted the USF abolished as a result.
USAC is responsible for collecting self-reported income information from telecom carriers, figuring out the USF contribution rate and proposing a quarterly budget to the FCC that preserves the USF. The FCC then approves that budget. Consumer Research argued that Congress hadn’t provided specific enough guidance to the FCC on how to manage the USF, but the Circuit Court ruled that in the Telecommunications Act of 1996, which established the USF, that “Congress provided the FCC with numerous intelligible principles for its administration of the USF and those principles sufficiently limit the FCC’s revenue-raising activity.”
“I’m pleased that the Fifth Circuit agreed with what I and many others—including bipartisan members of Congress—have said about the Universal Service Fund. It is constitutional, both in concept and implementation,” said FCC Commissioner Geoffrey Starks in a statement. “The Universal Service Fund continues to connect rural communities, schools, libraries, healthcare providers, and low-income households all across the country. It is a vital program for bringing equal opportunity to all Americans and closing the digital divide.”
“In rejecting the petitioner’s specious arguments, the Fifth Circuit has once again affirmed the importance of our nation’s universal service mission and the FCC’s obligation to ensure it is achieved by placing the program on a sound financial footing,” said Greg Guice, director of government affairs at Public Knowledge, which filed an amicus brief in the case.
