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.
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.
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.
Consumers' Research's petition for review of the FCC's Q4 2021 USF contribution factor is untimely and its claims "lack merit," the commission told the 6th U.S. Circuit Court of Appeals in a brief posted Tuesday in case 21-3886. The commission's authority to delegate the Universal Service Administrative Co. with calculating the quarterly factor is "clearly constitutional" because USAC is "subordinate to the commission and assists only in performing the accounting, billing, disbursement, and related functions necessary to operate the program," it said. The FCC asked the court to "not reward petitioners’ disregard for Congress’s comprehensive framework for judicial review of FCC orders by entertaining this petition on the merits." A coalition of industry groups filed a joint brief in support of the FCC and asked the court to reject Consumers' Research's claim that the contributions are taxes rather than fees. Petitioners "exaggerate every aspect of this case" and USAC’s role in determining the quarterly factors, said USTelecom, NTCA, and the Competitive Carriers Association in a joint brief: "The FCC’s regulations demonstrate that USAC exercises no lawmaking authority." The Schools, Health, & Libraries Broadband Coalition, Benton Institute for Broadband & Society, National Digital Inclusion Alliance and Media Justice also asked the court to reject Consumers' Research's challenge, said the intervenors. "Petitioners cannot circumvent their timeliness problem through a manufactured challenge to this ministerial public notice," the groups said, citing the FCC's quarterly notice announcing each factor. Consumers' Research is seeking "untimely review of the constitutionality of the entire Universal Service Fund," the groups said, echoing arguments made by the industry coalition. The 5th Circuit held oral argument earlier this month on the group's challenge of the Q1 2022 contribution factor (see 2212060070).
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.
A three-judge panel on the 5th U.S. Circuit Court of Appeals in New Orleans questioned the procedure of Consumers’ Research’s challenge of the FCC’s method for funding the Universal Service Fund under the nondelegation doctrine, during oral argument Monday. Judges also pressed the FCC on whether Congress should be tasked with setting specific funding limitations and how the FCC reviews the quarterly contribution factor calculations made by the Universal Service Administrative Co.
Consumers’ Research's challenges to several of the FCC’s Universal Service Fund contribution factors may be an attempt to force a decision by the Supreme Court on the nondelegation doctrine, said academics and attorneys in interviews. Some said the group brought the exact same argument in multiple courts of appeals to forum shop and engineer a circuit split.
A Consumers' Research brief is due Dec. 27 at the 11th Circuit U.S. Court of Appeals in its Oct. 6 petition for review of the FCC's USF 2022 Q4 contribution factor on grounds that it's illegal and should be rejected, said a memorandum Thursday (docket 22-13315). The petition argued that the contribution factor exceeds the commission's statutory authority under the delegation doctrine and is considered a tax. Consumers' Research filed multiple objections with the FCC on its proposed quarterly contribution factors and previously filed petitions for review before the 5th and 6th U.S. Circuit courts on behalf of itself and several individuals.