The U.S. Supreme Court on Monday scheduled oral argument for March 26 in the government’s challenge of the 5th U.S. Circuit Court of Appeals' 9-7 en banc decision last year that sided with Consumers' Research and found that the USF contribution factor is a "misbegotten tax.” SCOTUS agreed in November to hear what some see as the most consequential FCC case in years (see 2412100060). Members of Congress, former FCC commissioners, ISPs and public interest groups are among those urging SCOTUS to overturn the 5th Circuit decision.

USTelecom urged legislative action to shore up lawmakers’ mandate for the USF amid the “existential threat” posed by the 5th U.S. Circuit Court of Appeals’ 2024 en banc decision that the program’s contribution factor is unconstitutional (see 2407240043). The U.S. Supreme Court is reviewing the 5th Circuit’s ruling (see 2501170046). In an open letter Friday, USTelecom said Congress should “reaffirm” its bipartisan will to maintain USF “and reform how the program is funded.” It added, “Reform must begin by requiring Big Tech companies that benefit massively from universal connectivity to join in contributing to this vital national commitment.” Some lawmakers and other observers believe Senate Commerce Committee Chairman Ted Cruz, R-Texas, may move Congress’ USF revamp toward making the program subject to the federal appropriations process (see 2411270060). In addition, USTelecom said NTIA, under President Donald Trump, “should roll back rate regulation and other requirements” for the $42.5 billion BEAD program “that Congress never asked for, while retaining a significant role for fiber, the high-speed broadband gold standard.” Removing BEAD requirements Congress didn’t mandate in the 2021 Infrastructure Investment and Jobs Act “would shed the unwanted baggage and accelerate what matters most -- getting the work of connecting everyone done,” USTelecom said. “Restoring a tight focus on the mission -- broadband deployment – can dramatically accelerate efforts to fill gaps in high-speed service, helping unlock economic opportunities and access to innovation throughout” the country. USTelecom also urged lawmakers to “move again” on the American Broadband Deployment Act permitting package that the House Commerce Committee approved in 2023 (see 2305240069). The measure, which groups together more than 20 GOP-led connectivity permitting bills, drew unanimous opposition from House Commerce Democrats, and local government groups continued lobbying against it last year (see 2409180052). “Congress should green light speeding up approvals for more broadband projects on federal lands,” USTelecom said: “With a third of our nation’s land under federal control, federal permitting reform would provide an immediate adrenaline shot to the capacity, sophistication, reach and security of our nation’s information infrastructure.”

WTA and a group of healthcare entities filed amicus briefs at the U.S. Supreme Court urging the court to overturn the 5th U.S. Circuit Court of Appeals’ 9-7 en banc decision invalidating part of the USF program. The briefs supported arguments of the FCC (see 2501090045), the telecom industry and public interest groups (see 2501100057). Consumer group Public Citizen warned of negative effects beyond the FCC if SCOTUS upholds the 5th Circuit decision. Consumers' Research challenged the contribution factor in the 5th Circuit and other courts.

The telecom industry and public interest groups supported government arguments asking the U.S. Supreme Court to overturn the 5th U.S. Circuit Court of Appeals’ 9-7 en banc decision invalidating part of the USF program (see 2501090045). In a decision that sent shock waves through the telecom industry, judges on the conservative circuit agreed with Consumers' Research that USF violates the Constitution by improperly delegating Congress’ power to the FCC and the agency's power to a private company, the Universal Service Administrative Co. (see 2412100060).

Consumers’ Research asked the 5th U.S. Circuit Court of Appeals to vacate the FCC’s USF contribution factor for Q1 of this year, set by the agency last month. The group, and its allies, had already asked the FCC to zero out the contribution factor (see 2412130016), calling it “an unconstitutional tax raised and spent by an unaccountable federal agency.” The 5th Circuit earlier found in a 9-7 en banc decision that the contribution factor is a "misbegotten tax.” That decision is before the U.S. Supreme Court (see 2412100060). “Congress’s standardless delegation to the FCC of legislative authority to raise and spend nearly unlimited money via the Universal Service Fund violates Article I, section 1 of the U.S. Constitution,” said the filing with the court: USF charges “are taxes and therefore Congress’s standardless delegation to the FCC of authority to raise and spend nearly unlimited taxes violates Article I, section 8” of the Constitution.

Many questions remain about how the U.S. Supreme Court will decide FCC v. Consumers’ Research, lawyers involved in the case said Tuesday during an FCBA webinar. The USF case is expected to be heard in the spring. SCOTUS decided last month to 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.

Communications industry executives and former federal officials said during a Practising Law Institute event Tuesday they see a likely GOP-led budget reconciliation package next year as a potential vehicle for legislation that would reinstate the FCC’s lapsed spectrum auction authority. House Commerce Committee leaders and Senate Commerce Committee Chair Maria Cantwell, D-Wash., have repeatedly attempted to reinstate the authority during this Congress only to have their efforts stall (see 2409170066).

Senate Commerce Committee ranking member Ted Cruz, R-Texas, could shift the direction Congress’ USF revamp takes when he becomes the panel’s chairman in January, lawmakers and lobbyists told us. Observers believe his impact on what Congress decides will partially depend on how the U.S. Supreme Court rules when it reviews the FCC appeal of the 5th U.S. Circuit Court of Appeals' ruling in favor of Consumers' Research's challenge of the USF contribution methodology (see 2411220050). A high court ruling upholding the 5th Circuit could shift momentum in favor of Cruz’s proposal that Congress make USF funding part of the appropriations process, officials said.

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.

House Communications Subcommittee member Rep. John Joyce, R-Pa., said during a Wednesday USTelecom event he wants renewed pushes to restore the FCC’s lapsed spectrum auction authority and enact a broadband permitting revamp legislative package to be among the subpanel’s top priorities in the next Congress. Broadband executives likewise named Capitol Hill action on broadband permitting legislation as their top congressional priority once Republicans have control of both chambers in January. The officials also noted interest in lawmakers’ work on a potential USF revamp.