Supreme Court to Review Federal Subsidies for Phone and Internet Services
The Supreme Court has agreed to hear a significant legal challenge over the allocation of $8 billion annually by the federal government to subsidize phone and internet services. This funding supports schools, libraries, and rural areas, and the case introduces a fresh examination of federal regulatory authority.
A decision by an appellate court deemed the Universal Service Fund, which underpins these subsidies, unconstitutional. This fund’s financial resources are amassed by the Federal Communications Commission (FCC). The FCC collects fees from telecommunications firms, which often pass these costs onto consumers.
The challenge to this funding structure was brought by the conservative group Consumer Research. Previously, the Supreme Court declined to hear two appeals from Consumer Research after lower federal courts upheld the program. However, a full panel of the conservative-leaning 5th U.S. Circuit Court of Appeals ruled 9-7 against the funding mechanism’s constitutionality.
The Biden administration has appealed this ruling, though the case is not expected to be argued until late March. The timeline suggests that the Trump administration will be in office, leaving the future stance on this issue uncertain.
The 5th Circuit’s ruling focused on the non-delegation of congressional authority, arguing that Congress has given excessive power to the FCC, which has subsequently transferred too much control to a private entity. The last Supreme Court ruling applying the non-delegation doctrine to nullify a federal law occurred in 1935, though several conservative justices have indicated a willingness to revisit and potentially revive this legal principle.
