Supreme Court steps into fight over FCC’s $8 billion subsidies for internet and phone services

The Supreme Court has stepped into a major legal fight over the $8 billion a year the federal government spends to subsidize phone and internet services in schools, libraries and rural areas, in a new test of federal regulatory power

WASHINGTON — The Supreme Court on Friday stepped into a major legal fight over the $8 billion a year the federal government spends to subsidize phone and internet services in schools, libraries and rural areas, in a new test of federal regulatory power.

The justices will review an appellate ruling that struck down as unconstitutional the Universal Service Fund. The Federal Communications Commission collects money from telecommunications providers, who then pass the cost on to their customers.

A conservative advocacy group, Consumer Research, challenged the practice. The justices had previously denied two appeals from Consumer 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 Biden administration appealed that ruling, but the case probably won’t be argued until late March. At that point, the Trump administration will be in place and it not clear whether it will take a different view of the issue.

The 5th Circuit held that the funding method is unconstitutional because Congress has given too much authority to the FCC and the agency in turn has ceded too much power to a private entity.

The last time the Supreme Court invoked what is known as the non-delegation 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.

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