On July 24, 2024, the U.S. Court of Appeals for the Fifth Circuit struck down the Federal Universal Service Fund (USF) in Consumers’ Research et al. v. FCC.  In a 9-7 en banc decision, the majority reversed an earlier decision by a three-judge panel and held that the program created by the Federal Communications Commission (FCC) based on provisions in the 1996 Telecommunications Act constitutes an unlawful delegation of taxing power from Congress and thus violates Article I, § 1 of the Constitution.

The USF is a system for subsidizing telecommunications service to low-income households and high-cost areas by assessing telecommunications carriers; it also provides support to schools and libraries as well as rural health care facilities.  USF accomplishes this through four main mechanisms: the High-Cost Program, which provides support to certain telephone companies that serve high-cost areas; the Low Income Support Program, which subsidizes monthly telephone and broadband service for low-income customers; the E-rate Program, which subsidizes the provision of broadband connectivity and Wi-Fi to schools and libraries; and the Rural Health Care Program, which subsidizes the provision of telecommunications services to rural healthcare providers.Continue Reading Fifth Circuit Holds Federal Universal Service Fund Program Unconstitutional, Creates Circuit Split