Industry and Public Interest Groups: SCOTUS Should Reject 5th Circuit's USF Decision
The telecom industry and public interest groups supported government arguments asking the U.S. Supreme Court to overturn the 5th U.S. Circuit Court of Appeals’ 9-7 en banc decision invalidating part of the USF program (see 2501090045). In a decision that sent shock waves through the telecom industry, judges on the conservative circuit agreed with Consumers' Research that USF violates the Constitution by improperly delegating Congress’ power to the FCC and the agency's power to a private company, the Universal Service Administrative Co. (see 2412100060).
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Section 254 of the Communications Act as amended “epitomizes the balance envisioned by the founders and this Court,” said the industry brief. Congress directed that the FCC “assess and collect contributions to preserve and advance universal service and lays out express guidance for the FCC to follow as it executes on this vision,” it added. Section 254 “prescribes far more detailed directions than other statutes that have been upheld repeatedly by this Court in response to nondelegation challenges.” The brief by the Competitive Carriers Association, NTCA and USTelecom was posted late Thursday at the court.
It argues that the decision is an outlier, with the 6th and 11th circuits and an initial three-judge panel at the 5th Circuit rejecting Consumers' Research’s arguments. The group also filed an appeal in the D.C. Circuit. “Across four circuits, Respondents have spent pages upon pages criticizing universal service,” industry groups said: “Their repeated one-sided story ignores the many benefits the USF provides and the disruption that would be caused by holding any portion of Section 254 unconstitutional or establishing a new nondelegation standard that may result in the same outcome.”
The 5th Circuit decision relies on “a novel ‘combination’ theory” to find that the contribution factor is unconstitutional. “Under this theory, even if Congress’s direction to an agency is constitutional and the agency’s use of support from a private actor is constitutional, when combined the two may be unconstitutional.” That theory “has no basis in the Constitution or case law.”
Industry also defended USAC's role. The corporation “makes no policy” but “performs mechanical calculations according to detailed FCC specifications,” the brief said: “The FCC supervises USAC’s work closely” and “sets detailed parameters for, and both the FCC and (at its direction) USAC closely control, the private data that informs USAC’s calculations.”
The brief elaborates on consumer harms if the decision is upheld. “Rural consumers would be forced to pay more for service and may lose access to planned deployments.” Some smaller carriers could fail “in the face of a loss of essential USF support.” USF Lifeline support serves more than seven million low-income consumers, the brief said, while students “could lose the connectivity they need for modern education, and rural patients … access to essential healthcare services.”
A brief by the Schools, Health & Libraries Broadband Coalition, the Benton Institute for Broadband & Society, the National Digital Inclusion Alliance and the Center for Media Justice makes similar arguments.
SCOTUS “has never applied the nondelegation rule to strike down a statute that provides intelligible principles as clear as those Congress provided here,” the public interest group brief said: “Congress made the key policy decisions, while instructing the FCC to engage in the kind of context-specific fact-finding that is not controversial under the nondelegation doctrine.” The groups said the 5th Circuit “significantly exaggerated” USAC's role. “In connection with the FCC’s adoption of the quarterly contribution factor, [USAC's role] is to collect data and make projections pursuant to detailed FCC rules.”
The groups noted that SCOTUS has approved delegations of authority “far more general than that at issue here.” In the Communications Act, “Congress provided guidance as to what kinds of services could be supported; which entities should be assessed to support those services; how those entities should be assessed; and how much support could be required, among many other things.”