Consumers' Research Petitions SCOTUS on New USF Challenge

Consumers' Research asked the U.S. Supreme Court to grant its cert petition challenging the FCC's method for determining the USF quarterly contribution factor, saying the case presents "an excellent vehicle for addressing the contours of nondelegation whose abuses highlight the dangers of delegated and politically unaccountable power." Docketed Friday (docket 23-743), the petition asked the court to review a Dec. 14 decision by the 11th U.S. Circuit Court of Appeals upholding the Q4 2022 contribution factor (see 2312140058). Responses to the new petition are due Feb. 8.

At issue is whether the FCC violated the nondelegation doctrine when it used the Universal Service Administrative Co.'s calculations to determine quarterly USF contribution factors. Communications Act Section 254 "delegates Congress’s revenue-raising and taxing powers to an unelected agency bureaucracy without clear and meaningful limitations," Consumers' Research said in its petition. "There is no dispute that Section 254 lacks any kind of objective limit," it said: "That alone renders it unconstitutional."

Consumers' also argued the contributions are a tax, violating the intelligible principle test, because it allows the FCC to "raise money based only on vague statutory phrases." The appellate court disagreed with Consumers' Research in its opinion, saying the FCC didn't violate the nondelegation doctrine because it "retains ultimate decision-making power" in the contribution factor determination and Section 254 "provides an intelligible principle."

The group filed a similar petition after the 6th U.S. Circuit Court of Appeals upheld the FCC's 2021 Q4 contribution factor (see 2307310061). The appellate court's opinion was similar to the 11th Circuit's, saying Congress gave the FCC a "detailed statutory framework regarding universal service" (see 2305040087).

Consumers' Research acknowledged in its petition that there's "no circuit split yet on these issues," but said the 5th U.S. Circuit Court of Appeals is "poised to create one." The court held an en banc hearing on the group's challenge of the Q1 2022 contribution factor in September (see 2309190072). A decision is pending. The group said the petition should be granted regardless because "numerous jurists have recognized that the USF scheme is unprecedented and violates core constitutional principles."

"The stakes couldn’t be higher," Consumers' Research said: "The USF is the poster child for the problems that result from the unconstitutional delegation of constitutionally vested authority."