The We Don’t Want to Pay for Universal Telecommunications Access Litigants Finally Hit Paydirt

For several years now, a well-funded litigation group has sought an appellate court decision deeming the current method of funding the Federal Communications Commission's Universal Service Fund unconstitutional. The litigants finally hit paydirt in an enbanc appeal to the Fifth Circuit Court of Appeals that ruled in their favor on a 9-7 vote. The litigants ostensibly expressed concerns about constitutional rights, economic freedom, what constitutes a tax, how specific a congressional delegation of authority has to be, and the extent to which the FCC could lawfully delegate administration of the USF to the Universal Service Administrative Company. The Fifth Circuit decision reeks of partisan, doctrinal overreach. The majority, emboldened by recent Supreme Court decisions to eliminate reliance on regulatory agency expertise, blows up the USF subsidy mechanism that has achieved significant progress towards universal service. The irony is that telecommunications companies will regret losing a generous subsidy and I expect them to lobby for a resurrection of the program, with even more explicit, unambiguous language now required by the Supreme Court.