UPDATE, October 16: NTCA–The Rural Broadband Association has joined in a petition for a writ of certiorari to the Supreme Court seeking it to accept the appeal of a decision by the U.S. Court of Appeals for the Fifth Circuit that found the mechanism by which the federal Universal Service Fund (USF) is funded to be unconstitutional.
In doing so, the association joins the Schools, Health, & Libraries Broadband Coalition, the Benton Institute for Broadband & Society, National Digital Inclusion Alliance and Center for Media Justice in asking for the appeal.
“Our focus [in the petition] will be on providers and consumers and what happens if [the] Universal Service Fund goes away,” NTCA CEO Shirley Bloomfield told Telecompetitor. “Filing the [petition] will allow us to — when the time is right, if the Supreme Court chooses to take this case — have the ability to submit a brief laying out the perspective from the carrier industry. This is what it means, and these are the consequences if you declare this unconstitutional and there’s no path forward.”
A similar writ was filed following by the U.S. Department of Justice and the FCC.
Original Story Follows
Earlier today, the Fifth Circuit Court of Appeals in New Orleans ruled that the framework through which the Federal Communications Commission (FCC) established the Universal Service Fund (USF) is unconstitutional.
The ruling stated that the USF is essentially a tax paid by consumers via telecommunications companies. While Congress gave the FCC authority to levy taxes — in Section 254 of the U.S. Code — the court believes such delegation of power does not meet the Supreme Court’s precedents.
In short, the court says, “We therefore have grave concerns about § 254’s constitutionality under the Supreme Court’s nondelegation precedents.”
The court went on to take the FCC to task for misused USF funds: “Many of the billions injected into the USF have undoubtedly been deployed to support the important goal of universal service. But waste and fraud have also contributed to the USF’s astronomical growth.”
Response to the decision was swift.
FCC Chairwoman Jessica Rosenworcel issued a statement that said, “This decision is misguided and wrong. It upends decades of bipartisan support for FCC programs that help communications reach the most rural and least-connected households in our country, as well as hospitals, schools, and libraries nationwide.
“The opinion reflects a lack of understanding of the statutory scheme that helped create the world’s best and most far-reaching communications network. We will pursue all available avenues for review.”
NTCA–The Rural Broadband Association, the Competitive Carriers Association, and USTelecom–The Broadband Association put out a joint statement following the ruling: “The Universal Service Fund has been, and continues to be, a critical tool to narrow the digital divide and help address connectivity gaps.
“The court’s decision today deals a severe blow to these efforts and could put at risk the availability and affordability of essential communications services for millions of rural Americans, low-income consumers, and community anchor institutions. We steadfastly believe that the Universal Service Fund is constitutional, and we will continue to fight for universal connectivity.”
The ruling is the next in a series of many challenges facing the FCC, which has been in the news due to the termination of the Affordable Connectivity Program (ACP) and recent challenges to its net neutrality rules.
