The U.S. Supreme Court is set to deliberate on a case that could redefine the boundaries of federal agency power, as it hears arguments on a challenge to the federal E-rate program. This program crucially funds telecommunications and internet services for schools, libraries, rural regions, and low-income urban communities.
Centrally, the case raises questions about the nondelegation doctrine, a theory that examines whether Congress has improperly delegated legislative power to federal agencies without providing an “intelligible principle” to guide them. The case is brought forward by Consumers’ Research, a group funded in part by Leonard Leo, co-chair of the Federalist Society. They argue that the Federal Communications Commission (FCC) has overstepped its bounds by setting the financial obligations of telecom carriers without clear guidance from Congress, effectively delegating this authority to the private sector entity, the Universal Service Administrative Company (USAC).
The 5th Circuit Court previously ruled in favor of Consumers’ Research, with Judge Andrew Oldham asserting that the contributions mandated by the FCC constitute a “misbegotten tax.” The judgement questions the constitutionality of Congress’s delegation to the FCC and suggests that the agency, in turn, improperly subdelegated power to USAC.
The FCC, alongside various stakeholders defending the E-rate program, has brought the matter to the Supreme Court following the 5th Circuit’s decision. They argue that Congress did indeed provide the necessary guiding principles to the FCC, emphasizing past legal precedents where the Supreme Court upheld similar delegations of authority.
Supporting the continuation of the E-rate program, several amici curiae draw attention to its critical role, particularly in rural areas such as Alaska, which notes that its residents depend on program funding for essential services. Conversely, Consumers’ Research argues against the current mechanism of fund management, warning of a scenario where federal governance could become heavily reliant on improvised delegations of power to agencies and private actors.
As the Court prepares to hear oral arguments, various complex constitutional considerations loom, alongside substantial policy implications. The case tests not only the extent of agency authority but also the practicality and sustainability of the longstanding Universal Service Fund.
This article was originally published at SCOTUSblog.