Supreme Court upholds $8 billion fund for internet and phone service

Washington Post

10 hours ago

The Supreme Court on Friday ruled an $8 billion fund that provides telephone and internet service in rural and low-income communities is constitutional, a break from a string of major rulings by the high court that have sharply curtailed the power of federal agencies.
In a 6-3 ruling, the justices found Congress properly granted the Federal Communications Commission discretion to collect fees from telecommunications companies to pay for the Universal Service Fund, which helps ensure equal access to critical communication services.
It was one of six decisions expected Friday, the final day of the Supreme Court term.
The ruling is a blow to conservatives who had hoped the high court would — for the first time since 1935 — find that Congress had violated a constitutional provision that bars it from delegating too much of its legislative authority to other branches of the government, namely the executive and federal agencies.
Conservatives have long sought to revive the 'nondelegation doctrine' as a means to check a federal bureaucracy they feel has grown too large and powerful. A decision striking down the fund could have opened the door to a host of legal challenges against other powers Congress has granted to agencies.
The decision comes almost exactly a year after the high court dramatically reshaped the regulatory landscape, striking down a 40-year-old precedent that held judges must grant broad leeway to agency's interpretation of ambiguous laws as long as those interpretations are reasonable. The Chevron doctrine formed the basis of thousands of regulations dealing with drugs, workplace safety and the environment.
The conservative supermajority on the court has steadily rolled back regulation in recent terms, curbing the power of the Environmental Protection Agency to limit greenhouse gases, runoff in wetlands and air pollution that drifts across state lines. The justices also struck down in-house tribunals at the Securities and Exchange Commission that target securities fraud.
The Universal Service Fund was created under the 1996 Telecommunications Act to provide phone and web connections to remote communities, rural hospitals, libraries and schools, and those who couldn't otherwise afford it. Telecom companies tack fees onto customers' bills to make payments to the fund. Critics contend the fund collects too much money and is inefficient and wasteful.
Consumers Research, a conservative group, challenged the Universal Service Fund, along with consumers and a carrier. The petitioners argued Congress did not have the authority to give the FCC what is essentially the power to levy a tax.
They said the nondelegation issue was compounded because the FCC had created a non-profit company to administer the fund. The company remains under the oversight and control of the FCC and has no independent regulatory authority.
'In essence, a private company is taxing Americans in amounts that total billions of dollars every year, under penalty of law, without true governmental accountability," the groups wrote in their filing with the high court.
A panel of the Fifth Circuit Court of Appeals in New Orleans ruled against the groups, before the full appeals court reversed that decision. The full court held the combination of Congress giving the FCC 'sweeping' powers and the FCC, in turn, granting some of that authority to a private company insulated the fund from accountability to voters.
The Biden administration appealed that decision to the Supreme Court last year, and the Trump administration has continued to defend the government's position.
The courts have long given Congress broad leeway to delegate quasi-judicial and quasi-legislative tasks to federal agencies if Congress articulates an 'intelligible principle' to constrain the use of the delegation. In a filing last year on the United Fund case, then-Solicitor General Elizabeth Prelogar argued that standard was more than satisfied, citing rules Congress had enacted that dictate the fund's operation.
'The Act, in short, provides comprehensive guidance to the FCC on how to implement Congress's universal service policy,' Prelogar wrote.
This is a developing story. It will be updated.