Here are Communications Litigation Today's top stories from last week, in case you missed them. Each can be found by searching on its title or by clicking on the hyperlinked reference number.
The USF contribution factor has “gone up really through the roof” and “led to a pretty vibrant debate right now about what the future of the universal service is going to be funded going forward,” said Keller and Heckman partner Casey Lide during a firm webinar Thursday. The telecom lawyer noted some groups sought direct congressional appropriations to fund USF, while others urged the FCC to include broadband internet access service revenue in the contribution base. Consumers’ Research’s challenge of the USF contribution factor in the 5th U.S. Circuit Court of Appeals based on the nondelegation doctrine could “force the hand on this kind of reform discussion,” he said (see 2301180054). If the court finds in favor of the petitioners, “it's undoubtedly going to go before the Supreme Court,” Lide said: "This Supreme Court could well uphold that [and] if that happens, then you're in a scenario where the universal service program is effectively gutted by judicial process.”
Challenges to the FCC’s USF program filed in three federal circuits by Consumers Research raise larger questions about the nondelegation doctrine and how the FCC interprets Section 254 of the Communications Act, lawyers said during an FCBA hybrid event Wednesday. The case could be headed to the Supreme Court, they said.
A coalition of industry groups and consumer advocacy organizations filed separate briefs Thursday in support of the FCC in the Consumers’ Research case challenging the USF contribution factor in the 11th U.S. Circuit Court of Appeals (docket 22-13315). USTelecom, NTCA, and the Competitive Carriers Association requested that the court hear oral argument. The groups said Consumers' Research "exaggerate[s] every aspect of this case," including the Universal Service Administrative Co.'s "role in determining quarterly contribution factors." The Schools, Health & Libraries Broadband Coalition, Benton Institute for Broadband & Society, National Digital Inclusion Alliance, and MediaJustice also filed a brief in support of the FCC. "Petitioners cannot circumvent their timeliness problem through a manufactured challenge to this ministerial public notice," the groups said, claiming the challenge is instead an "untimely review of the constitutionality of the entire Universal Service Fund."
The 6th U.S. Circuit Court of Appeals scheduled March 17 oral argument in Consumers’ Research’s legal challenge of the FCC’s Universal Service Fund’s Q4 2021 contribution factor, said a notice Tuesday (docket 21-3886). The time allotted for oral argument is 15 minutes per side, said the notice. Consumers’ Research’s various cases, including another filed last month in the 6th Circuit (see 2212280038), argue the USF contribution factor is an unconstitutional tax because it's imposed by the FCC rather than by Congress, and that the FCC has violated the Administrative Procedure Act.
Amicus briefs from NCTA and Robert Frieden, Penn State University law professor, were filed Wednesday in support of the FCC in the Consumers’ Research case challenging the USF in the 11th U.S. Circuit Court of Appeals (docket 22-13315). Consumers’ Research’s arguments are largely identical in all four of its USF challenges (see 2212280038). The amicus briefs from Frieden and NCTA appear largely the same as those they have filed in the other circuits (see 2212200073). Ending USF and the Rural Digital Opportunity Fund would upend the cable industry's ongoing operations and investments and threaten connectivity for millions of people and companies, NCTA argued. Frieden’s amicus brief focused on arguments that the independent funding structure of the USF is in line with common international practice.
Consumers’ Research filed another legal challenge to the FCC’s Universal Service Fund, this time against the Q1 2023 contribution factor, in the 6th U.S. Circuit Court of Appeals. The group has another challenge in the 6th Circuit against the Q4 2021 contribution factor, plus a case in the 5th Circuit against the Q1 2022 factor, and a challenge in the 11th against the Q4 2022 factor. Oral argument was held in the 5th Circuit case earlier this month (see 2212060070), and the FCC filed a response brief in the 11th Circuit last week (see 2212230007). The latest filing takes a similar tack to Consumers’ Research’s other cases, arguing that the USF contribution factor is an unconstitutional tax because it's imposed by the FCC rather than Congress, and that the FCC has violated the Administrative Procedure Act. The group is likely challenging the contribution factor in the same circuit as an ongoing challenge to provide a backstop if the other 6th Circuit case is dismissed or rejected for narrow procedural reasons, said Benton Institute for Broadband & Society Senior Counselor Andrew Schwartzman, who has filed in support of the FCC in other Consumers’ Research cases. Consumers’ Research didn’t comment. The new case likely won’t be briefed or move forward while the other 6th Circuit one is ongoing, Schwartzman said.
A court ruling striking down USF and the Rural Digital Opportunity Fund would significantly harm millions of people and businesses and threaten the operations and investments of cable operators, NCTA told the 6th U.S. Circuit Court of Appeals in an amicus brief Monday supporting the FCC in Consumer’s Research v. FCC (docket 21-3886). Consumers' Research argued the funding mechanism for the Universal Service Fund violates the U.S. Constitution by delegating tax responsibilities reserved for Congress (see 2212130069). “The tremendous real-world stakes of this case should give this Court pause before entertaining Petitioners’ unprecedented non-delegation theory,” NCTA said. Ending RDOF would threaten internet connectivity across the country and strand investments in broadband infrastructure expansion “without any ability to recover the considerable resources operators have poured into these projects,” NCTA said. “Petitioners fail to give the Court any compelling reason to cut off consumers from their services, upend cable operators’ customer relationships, and disrupt the major investments cable operators have already made in reliance on USF support,” said the filing. Creating a separate funding entity to manage universal access to telecommunications is a common practice internationally and in line with International Telecommunications Union best practices, said Penn State Law Professor Robert Frieden in a separate amicus brief. Having a separate organization, “promotes greater transparency, accountability, and efficiency in the collection and disbursements of funds,” Frieden said.
Here are Communications Litigation Today's top stories from last week, in case you missed them. Each can be found by searching on its title or by clicking on the hyperlinked reference number.
Senate Communications Subcommittee members from both parties targeted FCC and NTIA implementation of connectivity programs created in the Infrastructure Investment and Jobs Act and COVID-19 aid measures Tuesday, as expected (see 2212120064), including concerns about deficient data the commission used to develop its new broadband maps. Lawmakers also touched on other telecom policymaking matters they hope Capitol Hill can address during the lame-duck session or in the next Congress. Senate Commerce Committee leaders saw a potential one-week extension of their talks on one lame-duck priority, a compromise spectrum legislative package (see 2212070068), appear via a proposed continuing resolution to fund the federal government past Friday.