On March 24, 2023, the 5th Circuit Court of Appeals held that § 254 of the Telecommunications Act of 1996 (the “Act”) did not violate the nondelegation doctrine or the private nondelegation doctrine, denying the Petitioners challenge to Congress’s delegation of administering the Universal Service Fund (“USF”) to the Federal Communications Commission (“FCC”) and the FCC’s reliance on a private entity to support its administration of the USF on constitutional grounds. Consumers’ Research v. Federal Communications Commission, No. 22-60008 at 2 (5th Cir. 2023). The Act established the USF and tasked the FCC with its administration for the purpose of ensuring “the facilitation of broad access to telecommunications services across the county,” which is accomplished by the USF raising funds that are then distributed across the country to further advancement of telecommunications services. Id. To assist in its administration of the USF, the FCC tasked a private entity, the Universal Service Administrative Company (“USAC”), with “certain ministerial responsibilities” which include collecting self-reported income information from telecommunication carriers, gathering data to put together a potential contribution rate for the USF, and proposing a quarterly budget to the FCC for the USF’s continued operation. Id.
The court found that “[c]ongress passed § 254 for the express purpose of preserving and advancing universal telecommunications services,” to be effectuated by policies which ensure that telecommunications services are:
(1) of decent quality and reasonably priced; (2) equally available in rural and urban areas; (3) supported by state and federal mechanisms; (4) funded in an equitable and nondiscriminatory manner; (5) established in important public spaces (schools, healthcare providers, and libraries; and (6) available broadly across all regions in the nation.