Supreme Court Hears Arguments on USF Constitutionality: Decision Expected This Summer

Supreme Court Hears Arguments on USF Constitutionality: Decision Expected This Summer

The U.S. Supreme Court heard oral arguments on March 26, 2025, in the case of Federal Communications Commission v. Consumers’ Research, which challenges the constitutionality of the Universal Service Fund’s (USF) contribution mechanism on nondelegation doctrine grounds. The challengers at Consumers’ Research argue that Congress improperly delegated its taxing authority to the FCC without meaningful limits, and that the FCC further subdelegated this authority to the Universal Service Administrative Company (USAC), creating what the Fifth Circuit previously called a “misbegotten tax.”

During arguments, several Justices questioned whether the USF structure truly lacks meaningful limitations as claimed. Justices across the ideological spectrum probed both sides about constitutional constraints, the nature of the contribution factor, and whether USAC merely performs ministerial duties under FCC oversight. While oral arguments cannot definitively predict outcomes, observers noted that key swing Justices appeared skeptical of the challengers’ position, with some questioning whether adding numerical caps would provide better constraints than the existing requirements.

The Court’s decision, expected in late June or early July 2025, could take several paths. The Court might uphold the current USF structure entirely, maintaining the status quo. Alternatively, it could invalidate parts of the system while preserving core functions, potentially requiring the FCC to modify its relationship with USAC or its contribution methodology. In a more consequential outcome, the Court could strike down part of or the entire USF framework, necessitating congressional action to establish a new funding mechanism. Even in scenarios where the USF is upheld, the Court may signal that Congress should provide additional clarity regarding the program’s funding structure.

Given these stakes, JSI strongly encourages all providers to continue their advocacy efforts by contacting their congressional representatives. Share specific examples of how USF support enables you to serve customers in high-cost areas, connect critical community institutions, or provide essential services to low-income consumers. Emphasize how your direct engagement with customers and communities differentiates your service and why preserving support for rural providers should remain a priority regardless of any structural changes to the USF.

Your voice is Critical and JSI’s powerhouse Advocacy Team is fully committed to providing you Breaking Updates on developing policy and supporting your advocacy efforts. If you need assistance developing effective advocacy strategies or materials, coordinating meetings with key officials, or understanding how potential outcomes might affect your operations, please contact Douglas Meredith or Brett Hallagan.