The Supreme Court to Determine the Future of America’s Low-Income Broadband Initiative

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The Supreme Court has agreed to consider a significant case concerning the financing of a vital broadband subsidy initiative known as the Universal Service Fund (USF). The Court has consolidated two cases—Federal Communications Commission v. Consumers’ Research and Schools, Health & Libraries Broadband Coalition v. Consumers’ Research—to be argued together.

At the heart of this legal challenge is the question of whether Congress improperly delegated its legislative power to the Federal Communications Commission (FCC) by allowing the agency to determine the contribution rates that telecommunications firms must pay into the Universal Service Administration Company (USAC), the organization that oversees the USF. Additionally, the case examines whether the FCC excessively transferred authority to USAC by granting it control over the subsidy program.

The implications of this case could be far-reaching, potentially undermining the regulatory framework established earlier this year by the Supreme Court’s decision to weaken the Chevron deference, which traditionally allows courts to rely on agency expertise in interpreting ambiguous statutory provisions. A ruling that restricts the FCC’s power could pose risks to the USF itself, which plays a crucial role in providing financial assistance to low-income individuals and residents of rural areas, as well as facilitating internet access and equipment for schools.

The Supreme Court’s review follows a ruling from the Fifth Circuit Court of Appeals, which found that the USF’s funding structure is unconstitutional. Furthermore, the Supreme Court has requested that the parties involved submit additional briefs to address the possibility of the case being moot, as the plaintiffs did not seek preliminary relief in the lower court.

Industry organizations, including the NTCA, Competitive Carriers Association, and USTelecom, expressed support for the Supreme Court’s decision to take on this case. They argued that the Fifth Circuit’s ruling challenges established Supreme Court precedents and conflicts with decisions from other circuit courts. In a joint statement, they cautioned that the Fifth Circuit’s decision could jeopardize longstanding universal service programs that have effectively promoted access to essential telecommunications for millions, particularly among rural and low-income populations, rural healthcare providers, and educational institutions across the country.

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www.theverge.com