This edition of the ICORE Blog provides updates regarding two important issues presently being addressed in the Courts, the Constitutionality of the USF and the FCC’s Open Internet Order. We previously provided updates on these issues in the 3/6/25 edition of the ICORE Blog. Please note the following:
* On March 26, 2025, the U.S. Supreme Court (Supreme Court) heard oral arguments in the case of FCC v Consumers’ Research. In July 2024, the U.S. Court of Appeals for the 5th Circuit found that the FCC’s Universal Service Fund is unconstitutional as it is currently administered. The 5th Circuit found that contributions to the fund constitute a tax and that Congress improperly delegated its authority to the FCC to assess a tax without establishing limitations as to the size of the fund. Further, the 5th Circuit found that the FCC improperly delegated its authority to USAC for administration of the USF. The FCC subsequently filed a petition with the Supreme Court seeking review of the 5th Circuit ruling and the Petition was granted in November 2024.
Comments and statements from both liberal and conservative Supreme Court Justices during oral arguments indicate that the Supreme Court may be sympathetic to the FCC’s position in the case. Regarding the issue of limitations on the size of the USF, Justice Elena Kagan posited that the program is subject to limitations imposed by Congress because the program has to subsidize services essential to education, public health, and public safety. She also noted that the program is geared towards getting services to those who reside in rural areas and low-income consumers.
Several Justices expressed concern as to the impacts on rural customers if the USF program were deemed to be unconstitutional and Congress doesn’t act to address the issue. Justice Samuel Alito expressed concerns about what would happen to phone and internet service for consumers in rural areas. Justice Amy Coney Barrett agreed that the consequences could be devastating for the USF program and the consumers who rely on it for affordable service.
A decision from the Supreme Court is expected by the end of June.
* In the 3/6/25 edition of the ICORE Blog we reported on the FCC’s Open Internet Order (Order) which restored the FCC’s authority to regulate Broadband Internet Service as a telecommunications service under its Title II authority. The Order was set aside by the U.S. Court of Appeals for the 6th Circuit. A Petition for a Rehearing En Banc was filed by four Public Interest Groups seeking review of the 6th Circuit’s ruling setting aside the Order. On March 11, 2025, the 6th Circuit denied the Petition for a Rehearing En Banc finding that the issues raised in the Petition had already been fully considered and stated that no Judge had requested a vote for a rehearing en banc. The denial leaves the Supreme Court as the next venue for appeal if the Petitioners so decide.
We will continue to monitor these, and other important issues affecting the telecommunications industry and will provide updates as more information becomes available.
