U.S. Supreme Court looks poised to allow $8 billion for rural and low-income broadband and phone services

The Supreme Court building in Washington, D.C.
(Adobe Stock photo)

The U.S. Supreme Court seems likely to approve continued funding for an $8 billion program for broadband and phone service maintenance and expansion in rural and poor parts of the U.S., reports Mark Sherman of The Associated Press. In what is considered a "new test of federal regulatory power," justices are "reviewing an appellate ruling that struck down as unconstitutional the Universal Service Fund, the tax that has been added to phone bills for nearly 30 years."

John Fritze of CNN reports, "A conservative 'consumer awareness group' challenged [USF] as an unconstitutional 'delegation' of the power of Congress to levy taxes. What’s worse, the group argues, a private entity calculates the amount of money that must be contributed. . . . .The Supreme Court has not invoked the non-delegation doctrine – or the idea that Congress cannot delegate its authority – since the 1930s. It has, for decades, permitted delegations under certain conditions."

The court seem sympathetic to communities that receive USF dollars. Sherman reports, "Liberal and conservative justices alike said they were concerned about the potentially devastating consequences of eliminating the fund that has benefited tens of millions of Americans."

Should the conservative-led court uphold USF funding, the ruling will be a departure from its ongoing efforts to "rein in" federal agencies, Sherman writes. "The Trump administration, which has moved aggressively to curtail administrative agencies in other areas, is defending the FCC program."

Consumer Research calls USF "a 'nightmare scenario' in which Congress has set no limits on how much the FCC can raise to fund the program," Sherman reports. “'Predictably, the USF tax rate has skyrocketed. It was under 4% in 1998 but now approaches 37%,' lawyers for the group wrote."

Congress established the Universal Service Fund in 1996. Fritze explains, "Telecommunications companies contribute billions to that fund – a cost that is passed on to consumers – to pay for programs like E-Rate, which lowers the cost of high-speed internet for libraries and schools."

The court's decision is expected in June.