5th Circuit Denies Consumers' Research USF Challenge

The 5th U.S. Circuit Court of Appeals denied Consumers' Research's challenge of the FCC's method for funding the USF under the nondelegation doctrine, in a ruling Friday (see 2212060070). The FCC "has not violated the private nondelegation doctrine because it wholly subordinates" the Universal Service Administrative Co., the court said, noting Congress "supplied the FCC with intelligible principles when it tasked the agency with overseeing" USF.

The court disagreed with many of Consumers' Research's arguments. Section 254 of the Communications Act "provides limitations on the FCC’s revenue-raising ability" and doesn't contain "deficiencies," the court said, disagreeing with the group's argument that it "fail[s] to set objective limits" on the commission. The court said the FCC "only uses USAC’s proposals after independent consideration of the collected data and other relevant information," adding it has "expressly upheld" these types of arrangements.

“We’ll let the unanimous decision speak for itself," emailed an FCC spokesperson. "While we are disappointed that the three judge panel ruled against us, we are encouraged that they saw through the FCC's absurd preliminary arguments, including that our case was not timely," said Consumers' Research Executive Director Will Hild. "With the acknowledgement that our case is ripe and that we have standing, we will look forward to continuing the legal fight to defend consumers from the unconstitutional USF tax on their phone bills set by unelected bureaucrats," Hild said.

Consumer advocates welcomed the ruling. "Coming from one of the more conservative courts in the country, this decision is a ringing ratification of the system Congress established to ensure that all Americans have affordable access to telecommunications service and advanced services like broadband," said Benton Institute for Broadband & Society Senior Counselor Andrew Schwartzman. Incompas President Angie Kronenberg said the ruling is "a big win for the FCC and a big win for the millions of Americans who rely on this program."

Congress "provided the FCC with both specific guidance and flexibility to adjust the USF program over time to embrace changes in the marketplace,” said Schools, Health & Libraries Broadband Coalition Executive Director John Windhausen: “SHLB is extremely pleased that the court recognized the importance of the universal service program for the thousands of schools, libraries and health care providers" receiving support.