FCC Universal Service Fund Tax Accused of Being Unconstitutional

The Federal Communications Commission’s universal service contribution factor is an illegal delegation of congressional taxing authority to a private company, petitioners alleged in the Fifth Circuit.

The lawsuit, filed Wednesday in the U.S. Court of Appeals for the Fifth Circuit, states the FCC’s approval of the universal service tax exceeds its statutory authority and violates the Constitution as well as other federal laws.

The tax, which changes each quarter, is the percentage of revenue telecommunication companies pay to the Universal Service Administrative Co. to support FCC programs. The FCC Office of Managing Director in a Dec. 13 announcement set ...