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Boyden Gray & Associates Completes Briefing in Challenge of FCC’s Universal Service Fund

Boyden Gray & Associates has filed opening and reply briefs in Consumers’ Research and Cause Based Commerce’s challenge of the FCC’s Universal Service Fund.

Section 254 of the Telecommunications Act of 1996 established the Universal Service Fund and delegated its operation to the FCC. As its name indicates, the Universal Service Fund is designed to facilitate broad access to telecommunications services. But, as the opening brief explains,

Rather than pay for this general welfare program with an appropriation from federal revenues, Congress requires telecommunications carriers to contribute to the Universal Service Fund, with those extra costs passed along to consumers via line items in their monthly phone bills. The Universal Service Fund then redistributes that money—amounting to nearly $10 billion annually—to entities and projects that ostensibly will expand telecommunications services.

Complicating matters further, the FCC re-delegates these operations to the Universal Service Administrative Company (USAC), “a private entity comprising industry insiders.” The opening brief explains that each quarter, “USAC announces its desired budget for the Universal Service Fund, which is ministerially converted into a tax rate on certain telecommunications revenues, and then “deemed approved” by the FCC 14 days later. This entire process happens only days before the new quarter begins, giving the FCC no option but to accept whatever numbers USAC demands. USAC then collects the forced contributions and chooses how to disburse the funds to subsidize the general welfare.”

The briefs argue that such a delegation violates the original understanding of nondelegation, violates the modern “intelligible-principle” test, and violates the private non-delegation doctrine.

The Framers understood “that it would frustrate ‘the system of government ordained by the Constitution’ if Congress could merely announce vague aspirations and then assign others the responsibility of adopting legislation to realize its goals.” Gundy v. United States, 139 S. Ct. 2116, 2133 (2019) (Gorsuch, J., joined by Roberts, C.J. and Thomas, J., dissenting) (emphasis added). . . . Although the Supreme Court has found that test satisfied by relatively open-ended statutory delegations in the context of variegated technical matters, the Court has found an intelligible principle in delegations of revenue-raising powers only in cases where Congress laid down restrictions like a ceiling on the amount raised, or formulas with objective variables that the Executive can calculate based on fact-finding.

If Congress believes these programs are worthy of funding, it should have to endure the public scrutiny and beneficial debate of raising money and proposing an appropriation for them. But “[b]y shifting responsibility to a less accountable branch, Congress protects itself from political censure—and deprives the people of the say the framers intended them to have.” Tiger Lily, LLC v. U.S. Dep’t of Hous. & Urb. Dev., 5 F.4th 666, 675 (6th Cir. 2021) (Thapar, J., concurring).

Consumers’ Research is an independent educational 501(c)(3) nonprofit organization whose mission is to increase the knowledge and understanding of issues, policies, products, and services of concern to consumers and to promote the freedom to act on that knowledge and understanding.

Boyden Gray & Associates is a boutique litigation and public policy firm, continuing C. Boyden Gray’s decades of service as counselor to presidents, business leaders, legislators, and regulators on matters of constitutional law, regulatory policy, and international affairs.

 

Boyden Gray Staff

Author Boyden Gray Staff

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