Supreme Court OKs fee that subsidizes phone, internet services in schools, libraries and rural areas

Key Points

• The Supreme Court in a 6-3 decision upheld the Universal Service Fund fee on phone bills, reversing a 5th U.S. Circuit Court ruling that had struck it down as unconstitutional.
• The fee, collected by the FCC and passed to customers for nearly 30 years, finances billions annually in subsidized phone and internet services for schools, libraries and rural areas.
• The 5th Circuit had invoked the nondelegation doctrine to challenge the program, marking the first time the Court considered reviving the doctrine since 1935.
• Both the Trump and Biden administrations defended the FCC’s funding mechanism, despite the conservative court’s recent trend of constraining federal agencies.

WASHINGTON (AP) — The Supreme Court on Friday upheld the fee that is added to phone bills to provide billions of dollars a year in subsidized phone and internet services in schools, libraries and rural areas.

The justices, by a 6-3 vote, reversed an appeals court ruling that had struck down as unconstitutional the Universal Service Fund, the charge that has been added to phone bills for nearly 30 years.

At arguments in March, liberal and conservative justices alike expressed concerns about the potentially devastating consequences of eliminating the fund, which has benefited tens of millions of Americans.

The Federal Communications Commission collects the money from telecommunications providers, which pass the cost on to their customers.

A Virginia-based conservative advocacy group, Consumers' Research, had challenged the practice. The justices had previously denied two appeals from Consumers' Research after federal appeals courts upheld the program. But the full 5th U.S. Circuit Court of Appeals, among the nation’s most conservative, ruled 9-7 that the method of funding is unconstitutional.

The 5th Circuit held that Congress had given too much authority to the FCC and the agency in turn had ceded too much power to a private entity, or administrator.

The last time the Supreme Court invoked what is known as the nondelegation doctrine to strike down a federal law was in 1935. But several conservative justices have suggested they are open to breathing new life into the legal doctrine.

The conservative-led court also has reined in federal agencies in high-profile rulings in recent years. Last year, the court reversed a 40-year-old case that had been used thousands of times to uphold federal regulations. In 2022, the court ruled Congress has to act with specificity before agencies can address “major questions,” in a ruling that limited the Environmental Protection Agency’s ability to combat climate change.

But the phone fee case turned out not to be the right one for finding yet another way to restrict federal regulators.

President Donald Trump's Republican administration, which has moved aggressively to curtail administrative agencies in other areas, defended the FCC program. The appeal was initially filed by President Joe Biden's Democratic administration.

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