Consumers’ Research Challenges Latest USF Contribution Factor in 5th Circuit
Consumers’ Research has filed another challenge to the legality of the FCC’s USF contribution factor, this time for Q2 of this year, at the 5th U.S. Circuit Court of Appeals. The group chose what's likely the friendliest circuit for an appeal; the U.S. Supreme Court is currently considering an appeal of a 5th Circuit en banc decision last summer, which found that the USF contribution factor is a "misbegotten tax.” Justices heard oral arguments in that case last week (see 2503260061).
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The FCC Office of Managing Director announced last month a proposed Q2 USF contribution factor of 36.6%, a record high (see 2503130044). The latest petition notes that Consumers’ Research challenged the factor twice, when it was unveiled by the Universal Service Administrative Co. and later by the FCC. Since the FCC took no additional action, it was "deemed approved" by the commission.
“Petitioners seek review of the Approval and the Proposed USF Tax Factor on the grounds that they exceed the FCC’s statutory authority and violate the Constitution and other federal laws,” Consumers’ Research said. “Congress’s standardless delegation to the FCC of legislative authority to raise and spend nearly unlimited money via the Universal Service Fund violates Article I, section 1 of the U.S. Constitution.” Congress also “unconstitutionally delegated its legislative power to a private entity,” USAC, which reviews data and proposes the contribution factor.
The revenues raised in support of the USF are also “taxes and therefore Congress’s standardless delegation to the FCC of authority to raise and spend nearly unlimited taxes violates Article I, section 8” of the Constitution, the petition said.
Among those endorsing the petition was Edward Blum, president of Students for Fair Admissions, which won a SCOTUS case that effectively ended race-based affirmative action policies in American college admissions, as well as additional respondents listed on other Consumers’ Research pleadings. The lead lawyer on the petition is Trent McCotter, who argued the case before SCOTUS.