NACo Legal Advocacy: Federal Communications Commission, et al v. Consumers' Research, et al

County Nexus

Federal Communications Commission, et al. v. Consumers’ Research, et al. (FCC v. Consumers’ Research) could jeopardize what is known as the Universal Service Fund (USF). Through the USF, the FCC has provided billions of dollars to local governments and our residents, helping provide essential telecommunications and broadband services to unserved and underserved communities. FCC v. Consumers’ Research challenges the FCC’s legal authority behind the USF, putting multiple programs essential to equitable broadband deployment at risk. 

Background

In 1996, Congress instructed the FCC to establish and maintain a “universal service fund” with the goals of enhancing service to Americans and promoting competition in the telecommunications market. The USF established by the FCC supports four key broadband programs: the High-Cost Program, the Lifeline Program, the Schools and Libraries (E-Rate) Program and the Rural Health Care Program. These programs provide vital funding to local governments to support broadband deployment in sparsely populated areas, cost reductions for economically vulnerable Americans, fast broadband connectivity for students and bolstered telehealth capabilities. Together, these programs provide essential resources for equitable broadband deployment in some of our nation’s most underserviced communities. To learn more about the programs that make up the USF, click here.

To fund these programs, a private enterprise operated by the FCC determines the amount that telecom providers must pay into the USF based on their revenues. FCC v. Consumers’ Research questions whether Congress unconstitutionally delegated its legislative power to the FCC by authorizing the FCC to determine the amount that providers must contribute to the USF and if the FCC improperly delegated its authority to a private entity to manage the USF. 

Consumers’ Research claims that both Congress and the FCC violated the nondelegation clause, which when tried in court, was initially rejected by judges of the Fifth, Sixth and Eleventh Circuits. The Fifth Circuit, however, reheard the case and accepted Consumers’ Research’s argument. The FCC is now asking the Supreme Court to reverse the Fifth Circuit’s decision. 

NACo Advocacy

In a Local Government Legal Center Brief, filed in support of the Petitioners, NACo highlights the importance of USF programs to millions of our residents across the country and argues that the USF funding and disbursement structure meets the goals of Congress’ instructions in 1996 by promoting a competitive telecommunications market and improving service across America. 

Current Status

On June 27, the U.S. Supreme Court issued a 6-3 ruling upholding the FCC’s Universal Services Fund (USF) in a major win for counties nationwide. The ruling found that the FCC holds the authority to impose a fee to telecom providers to fund the Universal Service Fund (USF) and the imposition of this fee does not violate the “nondelegation doctrine” and is therefore constitutional. The ruling largely allows federal agencies to retain their regulatory authority absent explicit instructions from Congress and upholds the USF-funded programs that counties rely on to support broadband deployment in our most underserved areas.