The extent to which the U.S. Supreme Court decides the USF challenge on theoretical rather than practical grounds could have major implications for whether the court issues a decision that overturns the program's funding mechanism. The court said last week it will hear a challenge to the 5th U.S. Circuit Court of Appeals' 9-7 en banc decision, which found the USF contribution factor is a "misbegotten tax.” Consumers' Research challenged the contribution factor in the 5th Circuit and other courts.
In an investors' note Monday, New Street’s Blair Levin discussed reasons why the U.S. Supreme Court may overturn the 5th U.S. Circuit Court of Appeals' 9-7 en banc decision, which found the USF contribution factor is a "misbegotten tax.” Consumers' Research, a conservative group, challenged the contribution factor in the 5th Circuit and other courts.
The U.S. Supreme Court granted the FCC's cert petition challenging the 5th U.S. Circuit Court of Appeals' ruling in favor of Consumers' Research's challenge of the USF contribution methodology (see 2410010024). In a docket 24-254 notation Friday, SCOTUS said that along with the questions raised in the petitions, it wanted the parties to brief and argue about whether the case is moot given the challengers' not seeking preliminary relief before the 5th Circuit. NTCA, Competitive Carriers Association and USTelecom in a statement said they were "grateful" SCOTUS was taking up the petition. "The Fifth Circuit’s decision is contrary to Supreme Court precedent and the decision of several other circuit courts of appeals, and it threatens to undermine universal service programs that, for many decades, have served to promote the availability and affordability of critical communications services for millions of rural and low-income consumers, rural health care facilities, and schools and libraries across the nation," they said. "We look forward to presenting arguments in defense of the USF contribution mechanism as the case moves forward, and ultimately to dispelling the uncertainty that these challenges have created in furthering our nation’s mission of universal service.” Also applauding the high court's move, the Schools, Health and Libraries Broadband Coalition said the 5th Circuit decision "has no precedent in prior Supreme Court jurisprudence." It said it's "further encouraged by the Supreme Court's request that parties brief the question whether the Consumers' Research challenge is moot."
ANAHEIM, Calif. -- The NARUC Telecom Committee on Monday cleared draft resolutions on phone number conservation, the Universal Service Fund and utility coordination on broadband deployment. A USF panel that day described how reform could happen with Republicans controlling the FCC and Congress next year. Also, the affordable connectivity program (ACP) could return in 2025 despite Washington’s partisan climate, said Sanford Williams, deputy chief of staff for FCC Chairwoman Jessica Rosenworcel, during a collocated National Association of State Utility Consumer Advocates (NASUCA) meeting. State utility regulators are holding their annual meeting here this week.
NARUC Telecom Committee Chair Tim Schram seeks better coordination and greater cost sharing related to digging amid an influx of government funding for broadband deployment, the Nebraska Republican said in an interview. NARUC circulated draft resolutions Tuesday for the state utility regulator association’s Nov. 10-13 meeting in Anaheim. In addition to a Schram proposal about coordination, the Telecom Committee plans to weigh drafts on optimizing phone number resources and defending the constitutionality of the federal universal service fund (USF) surcharge mechanism.
The FCC and a coalition of industry and consumer groups urged the U.S. Supreme Court to grant their pending petitions for a writ of certiorari regarding the 5th U.S. Circuit Court of Appeals' ruling in Consumers' Research's challenge of the Universal Service Fund contribution mechanism (No. 24-354). The FCC, in a reply brief Thursday, said the two pending petitions are "better vehicles for clarifying the law in this sphere" than Consumers' Research's petition of the 6th and 11th circuits' rulings (see 2410010024). The 5th Circuit addressed whether Congress delegated legislative power to the FCC, whether the agency delegated governmental power to a private entity, and whether the combination of the two violates the Constitution. The 6th and 11th circuits "did not specifically discuss whether the combination of the two alleged delegations violates the Constitution, and the petitions seeking review of those circuits’ decisions do not raise that question," the FCC said. The 5th Circuit is the only court to have found a nondelegation violation, the commission noted. "Granting certiorari in this case would allow the Court to directly review the 5th Circuit's reasoning," the FCC said. The agency also noted that SCOTUS has already denied petitions seeking review of the 6th and 11th Circuit decisions. Consumers' Research said in a reply brief to the coalition petition that there wasn't a reason to grant it "as their interests are adequately represented by the government" (No. 24-422). NTCA, the Competitive Carriers Association, USTelecom, the Benton Institute for Broadband & Society, the National Digital Inclusion Alliance, and Media Justice petitioned SCOTUS to review the 5th Circuit ruling. Consumers' Research noted the coalition didn't seek to intervene in subsequent challenges it filed since that ruling, "apparently confirming their interests are adequately represented by the government."
Universal service "has been an essential component" of federal telecom policy since the FCC's creation, the agency argued in a petition for writ of certiorari before the U.S. Supreme Court. Filed Monday (docket 24-354), the FCC's petition said the U.S. 5th Circuit Court of Appeals' ruling in favor of Consumers' Research's challenge of the Universal Service Fund contribution methodology was "incorrect." Moreover, the agency said it "did not delegate governmental power" when it designated the Universal Service Administrative Co. as USF administrator (see 2407240043).
Consumers' Research asked the 5th U.S. Circuit Court of Appeals to reverse the FCC's Universal Service Fund contribution factor for Q4 of FY 2024 (see 2409130054). In a filing posted Thursday (docket 24-60494), the group repeated its claim that USF contributions are illegal taxes that the Universal Service Administrative Co. collects and "should be rejected."
Industry experts expect the FCC will petition the U.S. Supreme Court for a writ of certiori following the split rulings between the 5th U.S. Circuit Court of Appeals and the 6th and 11th circuits on the Universal Service Fund contribution mechanism, they said during a Schools, Health, Libraries & Broadband Coalition webinar Wednesday. The 5th Circuit sided with Consumers' Research in its challenge of the contribution mechanism and agreed to stay its ruling pending the commission's petition (see 2408270030).
Consumers' Research objected again to the FCC's proposed quarterly USF contribution factor for Q4 2024. The group said in comments posted Friday in docket 96-45 that the FCC should reject the proposed 35.8% contribution factor and let Congress "fund universal service via a standard tax appropriation." The group challenged the USF contribution mechanism in the 5th U.S. Circuit Court of Appeals, which granted a stay of its ruling in favor of Consumers' Research pending the FCC's petition for a writ of certiorari before the U.S. Supreme Court last month (see 2408270030).