Tough Path for Challenge to FCC Broadband Fee Revenue

The Federal Communications Commission's Universal Service Fund (USF) faces its third recent challenge June 14 in oral arguments before the Eleventh Circuit over Congress’ delegation authority. The lawsuits from Consumers’ Research seek to clarify limits on Congress’ authority to delegate power to executive agencies, and what powers agencies can leave to private actors. In 2022, the USF approved nearly $7.5 billion in non-COVID spending on accessible broadband service, funded by its increasing contribution factor. If it’s struck down as unconstitutional, that funding could be at risk. However, the Eleventh Circuit wrote in United States v. Ambert that “the Supreme Court has not struck down a single statute” as an improper delegation since 1935. Congress needs to reach a higher bar to delegate its revenue-raising authority, argues conservative non-profit Consumers’ Research. For it, the principles of universal service expressed in the Telecommunications Act of 1996 say nothing about how much money the FCC can raise from carriers, and giving the private non-profit Universal Service Administrative Company (USAC) the ability to set rates violates the private non-delegation doctrine. But in a bipartisan amici brief, members of Congress—including Sens. John Thune (R-SD) and Amy Klobuchar (D-MN)—said that “an evolving USF system is consistent with Congress’s explicit direction.” Supporters of the fund, like Andrew Jay Schwartzman, Senior Counselor for the Benton Institute for Broadband & Society, say that while the contribution factor isn’t a tax.