In the August 3, 2024, edition of the ICORE Blog we reported that on July 24, 2024, the U.S. Court of Appeals for the Fifth Circuit issued a ruling finding that the FCC’s Universal Fund (USF), as it is currently administered, is unconstitutional. This ruling was in the case of Consumer Research et al v. the Federal Communications Commission. The Fifth Circuit found that:
*Contributions to the USF by telecommunications carriers which are then passed on to consumers constitute a tax, not a fee and that Congress impermissibly and unconstitutionally delegated authority to the FCC to impose a tax.
* Subsequently, the FCC impermissibly delegated its authority to the Universal Service Administrative Company which administers the USF. The Court opined that even if both delegations were permissible, the combination of both delegations exceeds constitutional limits.
As we expected, the FCC filed an unopposed Motion to Stay the Fifth Circuits July 24, 2024, Order. 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, Order will expire on October 1, 2024, unless the FCC files an appeal with the Supreme Court on or before September 30, 2024, in which case that the Stay will continue in effect until the Supreme Court renders a ruling.
We fully expect that the FCC will file an appeal with the Supreme Court. As mentioned in the August 3, 2024, ICORE Blog, the Fifth Circuit’s July 24,2024 Order conflicts with two other cases filed in recent months in other U.S. Courts of Appeals where almost identical challenges to the FCC’s USF processes were rejected. We believe that these inconsistent outcomes in the U.S. Courts of Appeal provide the basis for an appeal to the Supreme Court.
We will continue to monitor this extremely important issue and will provide update as more information becomes available.
