FCC asks the court to uphold constitutionality for nationwide rural phone and Internet subsidies
Petitions for the Week
This is not the first time that the justices have been asked to consider a constitutional challenge to the structure of the initiative, known as the Universal Service Fund. Consumers’ Research, an interest group, has filed several of these challenges before federal courts across the country. The group asked the justices for their opinion after the U.S. Courts of Appeals of the 6th and 11th Circuits rejected two of these challenges last year. The justices turned down both requests in June. That ruling created a divide among the federal courts of appeals, known as a circuit split.
Ensuring equal access to telecommunications has been a core mission of the FCC since its creation in 1934. The American Telephone and Telegraph Company, now AT&T, was the sole provider of telephone, telegraph and radio services in the United States for much of the 20th Century. To ensure connectivity in rural areas, the FCC required AT&T to charge rural customers less, allowing the company to recoup revenue by charging higher rates in cities.
AT&T’s monopoly came to an end during the 1980s. With the advent of internet and the FCC’s ability to pursue a flexible program to ensure rural telecommunications, Congress empowered the FCC in 1996. The fund provides access to not only rural households and hospitals, but also low-income families in cities, public schools and libraries. Today, the fund provides access not only to households and hospitals in rural areas, but also to low-income families in cities as well as public schools and libraries.
The latter program was at issue in last Monday’s oral arguments — specifically, whether Wisconsin Bell, a midwestern offspring of the former AT&T monopoly, can be sued under an anti-fraud statute for overcharging schools and libraries for phone and internet service.
To administer all of these various Universal Service Fund programs, Congress also authorized the FCC to set up a private nonprofit to collect fees from providers and hand out reimbursements to consumers. The FCC controls the Universal Service Administration Company, despite it being a formally independent company. The FCC chooses the board of directors of the Universal Service Administration Company, allocates the budget for the fund, and establishes guidelines to carry out the various programs. It argues, first, that Congress ceded its taxing authority to the FCC when it gave the agency discretion in setting the fees that telecommunications companies pour into the Universal Service Fund. This is in violation of nondelegation, the principle that Congress can’t delegate its legislative power to other branches. And second, it contends that the FCC delegated too much policymaking authority to the private company that administers the fund, in part because the agency relies on the company’s own projections when setting fees — which, the group says, violates the private nondelegation doctrine, the principle that the government cannot delegate its powers to private entities.
Initially, three-judge panels of the 5th, 6th, and 11th Circuits all disagreed with Consumers’ Research on both points in a series of rulings last year. The full 5th Circuit agreed to rehear this case and changed its course. By a vote of 9-7, the full court of appeals concluded that “the combination of Congress’s sweeping delegation to FCC and FCC’s unauthorized subdelegation to” the nonprofit violates the Constitution.
In Federal Communications Commission v. Consumers’ Research, the agency asks the justices to grant review of the 5th Circuit’s ruling and uphold the Universal Service Fund. The FCC argues the fund is a constitutional delegate of congressional power, because the relevant statute contains a number “intelligible principle” that guides the FCC when setting fees. In addition, it contends that the private company wields only administrative authority over the fund, not any policymaking power to set fees or subsidy rates, and in any event is subject to significant agency control.
In Schools, Health & Libraries Broadband Coalition v. Consumers’ Research, a number of trade associations representing groups that receive Universal Service funding similarly ask the justices to weigh in on the 5th Circuit’s ruling.
Consumers’ Research insists that the 5th Circuit’s decision is correct and that the fund is unconstitutional. But it agrees that the Supreme Court should take up the question, and it urges the justices to grant rehearing in both of its petitions seeking review of the 6th and 11th Circuit’s rulings and decide the issue either in those cases alone or consolidated with the government’s.
The FCC counters that the court should review only the 5th Circuit’s decision. But in the alternative, the FCC suggests, the justices could hold all four petitions for their forthcoming decision in the Wisconsin Bell case, and then send all four cases back in light of that ruling.
A list of this week’s featured petitions is below:
Consumers’ Research v. Federal Communications Commission
23-456
Issues
: (1) Whether 47 U.S.C. SS 254 violates the nondelegation doctrine by imposing no limit on the Federal Communications Commission’s power to raise revenue for the Universal Service Fund; and (2) whether the FCC violated the private nondelegation doctrine by transferring its revenue-raising power to a private company run by industry interest groups.
Consumers’ Research v. Federal Communications Commission
23-743
Issues
: (1) Whether 47 U.S.C. SS 254 violates the nondelegation doctrine by imposing no limit on the Federal Communications Commission’s power to raise revenue for the Universal Service Fund; and (2) whether the FCC violated the private nondelegation doctrine by transferring its revenue-raising power to a private company run by industry interest groups.
Little v. Hecox24-38
Issue
: Whether laws that seek to protect women’s and girls’ sports by limiting participation to women and girls based on sex violate the equal protection clause of the 14th Amendment.
West Virginia v. B.P.J.24-43
Issues
: (1) Whether Title IX of the Education Amendments of 1972 prevents a state from consistently designating girls’ and boys’ sports teams based on biological sex determined at birth; and (2) whether the equal protection clause of the 14th Amendment prevents a state from offering separate boys’ and girls’ sports teams based on biological sex determined at birth.
Federal Communications Commission v. Consumers’ Research24-354
Issues
: (1) Whether Congress violated the nondelegation doctrine by authorizing the Federal Communications Commission to determine, within the limits set forth in 47 U.S.C. SS 254, the amount that providers must contribute to the Universal Service Fund; (2) whether the FCC violated the nondelegation doctrine by using the financial projections of the private company appointed as the fund’s administrator in computing universal service contribution rates; and (3) whether the combination of Congress’s conferral of authority on the FCC and the FCC’s delegation of administrative responsibilities to the administrator violates the nondelegation doctrine.
Schools, Health & Libraries Broadband Coalition v. Consumers’ Research24-422
Issues
: (1) Whether Congress violated the nondelegation doctrine by authorizing the Federal Communications Commission to determine, within the limits set forth in 47 U.S.C. SS 254, which is the amount that providers are required to contribute to the Universal Service Fund. (2) Whether the FCC violated nondelegation by using the financial projections provided by the private company appointed to administer the fund in computing universal service contributions rates.
