FCC’s Universal Service Fund Survives Constitutional Challenge

The Federal Communications Commission can continue relying on a private entity to determine how to charge fees to telecommunications companies, after the Fifth Circuit dismissed a constitutional challenge Friday.

Consumers’ Research and Cause-Based Commerce argued that the Universal Service Fund—the fee the FCC charges and distributes to support broadband and internet access across the country—was an unconstitutional fundraising scheme illegally delegated to a private entity, the Universal Service Administrative Company.

The Fifth Circuit disagreed, finding that when Congress established the USF in the 1996 Telecommunications Act, the legislation provided sufficient “intelligible principles” to the FCC to avoid impermissible delegation.

The ...