On June 27, 2025 the U.S. Supreme Court issued a ruling upholding the legality of the FCC’s Universal Service Fund (USF). This ruling reverses a July 2024 ruling by the U.S. Court of Appeals for the 5th Circuit that found that the USF was unconstitutional as 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 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’s ruling and the Petition was granted in November 2024.
In a 6-3 opinion, the Supreme Court ruled that the 5th Circuit erred when it found that USF fees represent an illegal tax and further found that the USF as currently administered does not violate the Non-Delegation Doctrine. The Supreme Court’s majority opinion, authored by Justice Elena Kagan, stated that the U.S. Congress “laid out the general policy to be achieved” when they amended the Communications Act of 1996. The majority opinion also found that the FCC’s use of an administrator is permissible since the FCC appoints USAC’s Board of Directors, approves its budget, and requires USAC to act consistent with its rules and directives.
Joining Justice Kagan in the majority opinion were Chief Justice John Roberts, Justice Sonia Sotomayor, Justice Brett Kavanaugh, Justice Amy Coney Barrett, and Justice Ketanji Brown Jackson. Justices Neil Gorsuch, Samuel Alito, and Clarence Thomas dissented.
