Supreme Court Supports Subsidy Program for Phone and Internet Access in Underserved Communities

The Supreme Court has declined to challenge a program from the Federal Communications Commission (FCC) that provides subsidies for phone and internet services in underserved areas across the United States. In a ruling authored by Justice Elena Kagan, the court determined that Congress acted within its authority when it established the Universal Service Fund through a law in 1996. This fund requires telecommunications companies to contribute fees aimed at ensuring “universal service.” The court further upheld that the FCC is permitted to delegate its responsibilities to a private entity known as the Universal Service Administrative Company, which manages the fund.

Kagan noted that none of these arrangements infringe on constitutional principles. The decision was split 6-3, with three conservative justices expressing dissent. The fees in question are typically passed on to consumers, generating billions annually that are utilized to enhance phone and internet access for institutions, including schools, libraries, and hospitals. Critics of the program argue that it violates the “nondelegation doctrine,” which restricts Congress’s ability to transfer its legislative power to the executive branch.

Disagreements among lower courts led both the FCC and a coalition led by a conservative group, Consumers’ Research, to seek the Supreme Court’s judgment on the matter. Detractors label the Universal Service Fund fee as a tax, asserting that only elected officials should have the authority to impose such charges. There is significant contention regarding the 1996 law, primarily because it does not set a cap on the funds the FCC can raise. Although the current Supreme Court has a conservative majority that has previously limited the authority of government agencies, it has not fully embraced the nondelegation doctrine.

Such a shift could impose new constraints on agency powers regarding the enforcement of broad Congressional laws. Interestingly, the Trump administration’s legal team defended the FCC in this case, maintaining a stance that aligns with President Trump’s broader efforts to enhance presidential authority at the expense of Congressional and judicial powers.