The Supreme Court delivers blow to conservatives with 6-3 ruling on FCC’s Universal Service Fund, allowing the agency to continue collecting billions from telecommunications providers without direct Congressional oversight.
Key Takeaways
- The Supreme Court ruled 6-3 to uphold the FCC’s authority to collect nearly $10 billion annually from telecommunications providers to fund programs for rural and low-income communities.
- The decision rejected arguments from Consumers’ Research that the Universal Service Fund violated the nondelegation doctrine, which limits Congress’s ability to delegate legislative powers.
- Justice Elena Kagan wrote the majority opinion, while conservative Justices Gorsuch, Thomas, and Alito dissented.
- The fund supports over 12,000 schools and libraries, 9,000 rural health care providers, and 8 million low-income households with telecommunications services.
- Both the Biden and Trump administrations defended the fund’s constitutionality during the legal challenge.
Supreme Court Preserves FCC’s Tax-Like Authority
In a significant victory for administrative agencies, the Supreme Court ruled 6-3 to uphold the Federal Communications Commission’s authority to collect fees from telecommunications providers to fund its Universal Service Fund. “The decision overturned a lower court ruling that had sided with Consumers’ Research, a conservative advocacy group that challenged the constitutionality of the program,” according to FCC. The ruling ensures the continuation of a program that collects nearly $10 billion annually without requiring direct Congressional appropriation, raising concerns about taxation without proper legislative oversight.
The Universal Service Fund Explained
The Universal Service Fund was established following the Telecommunications Act of 1996, with the stated goal of ensuring nationwide access to telecommunications services. The program subsidizes services for low-income customers, rural and high-cost areas, schools, libraries, and rural health care providers. Since 1997, the Universal Service Administrative Company, a non-governmental entity, has administered the fund and determined contribution rates for carriers. While supporters tout the program’s benefits, critics argue it represents an unconstitutional delegation of Congress’s taxing authority.
“For nearly three decades, the work of Congress and the Commission in establishing universal-service programs has led to a more fully connected country. And it has done so while leaving fully intact the separation of powers integral to our Constitution,” said Justice Elena Kagan, Supreme Court Justice.
Conservative Dissent and Constitutional Concerns
“The Supreme Court’s decision reveals a concerning split regarding executive agency power,” said Justices Neil Gorsuch, Clarence Thomas, and Samuel Alito dissented, likely arguing that the program violates the nondelegation doctrine, which restricts Congress from delegating its legislative powers to executive agencies. Their opposition highlights the ongoing tension between administrative convenience and constitutional principles. For conservative observers, this ruling represents another missed opportunity to rein in the administrative state and restore proper separation of powers.
Broad Impact on Rural and Low-Income Communities
Despite constitutional concerns, the program’s scope is undeniably significant. The Universal Service Fund currently benefits over 12,000 schools and libraries, 9,000 rural health care providers, and approximately 8 million low-income households. These subsidies help extend telecommunications services to areas that might otherwise remain disconnected from modern communication infrastructure. The ruling ensures these communities will continue receiving support, though questions remain about whether this benefit justifies the constitutional compromises involved in delegating such extensive funding authority.
Bipartisan Defense of the Program
Notably, both the Biden administration and the Trump administration defended the fund’s constitutionality during the legal challenge that began in 2022. This rare point of agreement between the two administrations suggests the program’s perceived practical value transcends partisan divisions. However, for many conservatives, the constitutional principles at stake should take precedence over pragmatic considerations, especially when alternative funding mechanisms could be established through proper legislative channels while preserving the separation of powers.
