The Supreme Court is leaning towards upholding an $8 billion program that supports high-speed internet and phone services for millions of Americans. The program has faced challenges claiming it is funded by an unconstitutional tax. The case raises concerns about how much authority Congress can delegate to a federal agency and whether the Supreme Court should tighten that standard.
Passed in 1996, a law requires telecommunications companies to charge a Universal Service Fund fee that is then passed on to customers. This fee helps improve phone and internet services for households, hospitals in rural areas, low-income families, and public schools and libraries. The funding is managed by a private administrator overseen by the Federal Communications Commission, which collects the fees and determines the amount needed each quarter. The FCC must approve the estimate before setting the fee for each carrier.
Challengers, including a conservative group, a carrier, and a group of consumers, argue that it should be Congress, not the FCC or a private entity, that sets the fee level. They claim that determining the amount of public revenue required should be a legislative decision, not a detail to be decided later.
Both liberal and conservative justices questioned the challengers’ argument, with concerns that simply setting an upper limit, such as $1 trillion, would lack substance. The discussion also focused on the constitutional requirement that Congress has the power to tax and how the law directs the FCC to raise only enough funds for universal service.
Under previous Supreme Court rulings, Congress can give agencies discretion as long as they provide an “intelligible principle” to guide them. Justices noted that the program must subsidize essential services related to education, public health, and public safety.
The challenge to the program is seen as part of a broader conservative effort to limit the authority of executive agencies, known as the “administrative state.”
During the hearing, the lawyer representing the government’s program argued against overturning previous Supreme Court decisions that established a lenient standard for the non-delegation rule. He emphasized the importance of a universal communications system, stating that everyone benefits from being able to make calls, even to remote areas like rural Alaska.
The Justice Department cautioned that ruling the funding scheme unconstitutional could have far-reaching consequences, posing a threat to numerous other programs. They highlighted the complexity of the telecommunications law and its alignment with Congress’s delegation framework in various regulatory areas.
Several justices expressed concern about the potential impact on other programs and the availability of phone and internet services in rural areas if Congress is required to have a more direct role but fails to act accordingly.
The lawyer representing the challenger countered that the significance of the program underscores the need for greater congressional involvement. A decision on the matter is expected to be reached by the end of June.
