In a significant decision, the US Supreme Court has upheld a federal program designed to support telecommunications in rural areas, rejecting a challenge to its constitutionality. In a 6-3 ruling, the Court concluded that the universal-service contribution scheme does not infringe upon the nondelegation doctrine, which limits Congress’s ability to delegate its powers.
Justice Elena Kagan, writing for the majority, countered the interpretation of the Communications Act of 1934 proposed by Consumers’ Research. According to Justice Kagan, the delegation of authority to the Federal Communications Commission (FCC) by Congress is properly constrained and guided. She underlined that the FCC retains all decision-making authority and that the advisory role of the Universal Service Administrative Company is non-binding, thus upholding the arrangement under constitutional scrutiny.
The ruling reverses an earlier decision by the US Court of Appeals for the Fifth Circuit. Consumers’ Research, known for opposing certain corporate practices, argued against the constitutionality of Congress’s delegation of its “taxing” power to the FCC and a private organization managing the universal service program. This program, which promotes the availability of communication services at affordable prices to all Americans, especially low-income and rural populations, is mandated under the Communications Act and refined by the Telecommunications Act of 1996.
The program requires telecommunications carriers to pay a quarterly fee, which is then redistributed to carriers serving underserved demographics, including phone and internet services for rural and low-income areas, as well as schools, libraries, and hospitals. Such services are considered “essential” if they meet criteria related to public health, safety, and the residential customer base. Billions of dollars are allocated annually through this scheme.
Chief Justice John Roberts, along with Justices Sonia Sotomayor, Brett Kavanaugh, Amy Coney Barrett, and Ketanji Brown Jackson, joined the majority opinion, whereas Justices Neil Gorsuch, Clarence Thomas, and Samuel Alito dissented.
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