On June 27, 2025, the United States Supreme Court ruled in FCC v. Consumers' Research that the Universal Service Fund's funding mechanism is constitutional.
The Court's 6-3 majority opinion, authored by Justice Kagan and joined by Chief Justice Roberts and Justices Sonia Sotomayor, Brett Kavanaugh, Amy Coney Barrett and Ketanji Brown Jackson, reversed the decision of the Fifth Circuit and held that the Universal Service Fund's funding mechanism is constitutional, rejecting challenges that it involved unconstitutional public and private delegations (to the Federal Communications Commission and to Universal Service Administrative Company, respectively).
Concurring opinions were issued by Justices Kavanaugh and Jackson. Justice Kavanaugh wrote to highlight his concerns over congressional delegations to independent agencies. Justice Brown wrote to highlight her skepticism with respect to judicially imposed limitations on private delegation.
A dissenting opinion written by Justice Gorsuch and joined by Justices Thomas and Alito argued that "universal service" taxes are an unconstitutional delegation of Congress's taxation authority. Citing Loper Bright, the dissenting opinion expresses hope that the majority's opinion will not stand the test of time.
Key Takeaways
- The SCOTUS decision removes the threat that the USF will face a near term shut-down that could have threatened connectivity for millions of low-income households, rural hospitals, schools, libraries and rural communities.
- The decision clears the way for the FCC to begin to pursue common sense reforms to modernize USF programs and to make them more effective.
- The decision also clears the path for Congress to enact legislation to set the USF on more stable financial footing while protecting it from legal challenges going forward.
- While the immediate threat has lifted, Justice Kavanaugh's concurring opinion and Justice Gorsuch's dissenting opinion suggest strongly that new court challenges will come and that those may become increasingly hard to defend.
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