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).
A total of 68% of NTCA members said in a recent survey they would need to cancel deployment projects next year, equaling more than $1 billion, if the USF program goes away following the 5th U.S. Circuit Court of Appeals' recent ruling (see 2408140055), which found that the USF contribution factor is a "misbegotten tax.” Also, 71% said “they would need to cancel 2026 deployment projects, equaling nearly $900 million and representing nearly 83% of these companies’ planned investments for 2026,” without USF support, NTCA said. “If USF support were eliminated, there is substantial potential for default on outstanding network construction loans, including many held by the federal government,” the group said. NTCA members reported receiving an average of $72 monthly per broadband subscriber in USF support. The survey results were released last week. “As this survey highlights, without USF support, not only could consumers who currently have broadband see the cost of their bills skyrocket, but rural providers will find it harder or even impossible to make the further investments needed to connect those still waiting for service or to repay loans for deployments already made,” said NTCA CEO Shirley Bloomfield.
FCC Chairwoman Jessica Rosenworcel noted work the agency has done in recent months that addresses broadband for students following the loss of the emergency connectivity fund and affordable connectivity program in a Monday speech. Speaking to the Consortium of State School Boards Association, Rosenworcel mentioned a July FCC order that lets schools and libraries use E-rate support for off-premises Wi-Fi and an order from 2023 allowing use of E-rate to support school bus Wi-Fi, both of which have been challenged in court (see 2408300027). She also discussed a three-year, $200 million cybersecurity pilot program for schools and libraries that commissioners approved in June (see 2406060043). Republican commissioners dissented on all three items. “Every child needs internet access at home to really thrive,” Rosenworcel said: “This was not true when I was growing up. I didn’t need the internet for homework. All I needed was paper, a pencil, and my brother leaving me alone.” Rosenworcel warned that the 5th U.S. Circuit Court of Appeals' recent 9-7 en banc decision that found the USF contribution factor is a "misbegotten tax” that could undermine FCC education efforts (see 2408140055). The 5th Circuit decision “is misguided and wrong,” she said. “It reflects a lack of understanding of the statutory scheme that helped create the world’s best and most far-reaching communications network” and “that is why we are asking the Supreme Court to overturn” the decision.
With Congress back for a three-week sprint before Election Day, Competitive Carriers Association CEO Tim Donovan remains convinced lawmakers will fully fund a program that removes unsecure gear from U.S. networks. In an interview, Donovan also said he expects at least some groups will seek reconsideration of the FCC’s recent order creating a 5G Fund.
Maurine and Matthew Molak filed a petition Thursday seeking review of a July FCC order that lets schools and libraries use E-rate support for off-premises Wi-Fi hot spots and wireless internet services (see 2407180024), in the 5th U.S. Circuit Court of Appeals. The Molaks previously sought reconsideration of the July order, which three public interest groups and T-Mobile opposed last week (see 2408280029).
The 5th U.S. Circuit Court of Appeals granted the FCC's unopposed motion to stay its ruling in favor of Consumers' Research's USF contributions challenge pending the commission's petition for a writ of certiorari before the U.S. Supreme Court in an order Monday (docket 22-60008). The stay will expire Oct. 1, the order said. The FCC said in its motion that the Solicitor General "recently authorized the filing of a petition," adding that the decision "threatens to disrupt the operation of a multi-billion-dollar subsidy program."