In the August 3, 2024, and September 3, 2024, editions of the ICORE Blog we discussed a July 24, 2024, ruling by the U.S. Court of Appeals for the Fifth Circuit finding that the FCC’s Universal Service Fund, as it is currently administered is unconstitutional. This ruling was in the case of Consumer Research et al v. the Federal Communications Commission. In its July 24, 2024 ruling the Fifth Circuit found that contributions to the USF constitute a tax and that Congress impermissibly and unconstitutionally delegated its authority to the FCC to impose a tax. Additionally, the Fifth Circuit found that the FCC impermissibly delegated its authority to the Universal Service Administrative Company which administers the USF, and the combination of both delegations exceeds constitutional limits.
On August 23, 2024, the FCC filed a Motion for a Stay of the ruling with the Fifth Circuit. On August 26, 2024, the Fifth Circuit granted the FCC’s Motion for a Stay. The Court stipulated that the Stay of its July 24, 2024, Ruling would expire on October 1, 2024, unless the FCC filed an appeal with the U.S. Supreme Court on or before September 30, 2024 in which case the Stay would remain in effect pending a ruling in the case by the U.S. Supreme Court.
On September 30, 2024, the FCC filed a petition for a writ of certiorari with the U.S. Supreme Court seeking review of the Fifth Circuit’s July 24, 2024 ruling. The FCC’s filing addresses the following main issues:
* Whether Congress violated the nondelegation doctrine by authorizing the FCC to determine the amount that providers must contribute to the USF per Section 254.
* Whether the Commission violated the nondelegation doctrine by using USAC’s financial projections in computing USF contribution rates.
* Whether the combination of Congress’s conferral of administrative and collection authority to the FCC and the FCC’s delegation of duties to USAC violates the nondelegation doctrine.
In regard to the main issues listed above, in its petition the FCC argues that Congress did not delegate legislative power to the FCC. Further, the FCC did not delegate governmental power to USAC. Finally, the FCC argues that the combination of Congress’s conferral of authority to the FCC and the FCC’s delegation of responsibility to USAC does not create a constitutional violation. The FCC’s filing requests that the Supreme Court grant its petition and agree to review the case, but the petition offers an alternative to place the case on hold pending the resolution of another case currently before the Court. The other case in question involves a petition filed by Wisconsin Bell seeking review of a decision by the U.S. Court of Appeals for the Seventh Circuit involving fraudulent reimbursement requests made to USAC. The FCC believes that the resolution of that case could shed light on the relationship between the FCC and USAC and therefore could affect the nondelegation analysis in the FCC’s September 30, 2024, petition.
We will continue to closely monitor this extremely important issue and will provide updates as more information becomes available.
