Written by Aimee Hopkins
The Universal Service Fund (USF) is a program designed to ensure all residents in the US can access affordable phone and internet service, no matter their location or economic status. The USF program was created by the Federal Communications Commission (FCC) in response to the Telecommunications Act of 1996, a law attempting to modernize and expand internet and phone services throughout the US. Before this act, phone and internet companies focused their energies only where they would make money, such as profitable neighborhoods and commercial centers, leaving rural areas and low-income households behind.
To pay for these services, the USF requires telecommunication providers to make mandatory contributions to the fund. Each provider contributes about 35% of their interstate and international end-user telecommunications revenue. Many companies pass this cost on to customers, which is reflected as a line item in their bills and varies month-to-month based on their phone-related services.
What seems like a well-intended program is now facing legal challenges. A free marketing advocacy organization called Consumers’ Research began filing cases against the FCC in 2021, claiming that the USF violates the non-delegation doctrine. This doctrine prevents Congress from handing over too much of its lawmaking power to other entities. Consumers’ Research argues that the FCC operates the USF with too much discretion and too few constraints from Congress. Essentially, the organization claims that by deciding how much money should be collected and how it is spent, the FCC performs functions that should be reserved for Congress.
The Fifth Circuit Court of Appeals agreed with Consumers’ Research, viewing the FCC’s role in the USF as too powerful, too vague, and too detached from direct congressional control. The Schools, Health & Libraries Broadband Coalition (SHLB Coalition) then petitioned the United States Supreme Court, asking for the matter to be reconsidered. The oral arguments concluded in March 2025 and a decision is expected from the high court by the end of this summer.
What is at stake? If the Supreme Court rules in favor of Consumers’ Research, we could be seeing an end to the E-Rate Program, which helps schools and libraries in low-income areas afford internet and telecommunication services, the Rural Health Care Program, which helps rural hospitals and clinics pay for broadband, the Lifeline Program, which provides discounts on phone and internet bills for low-income households, and the Connect America Fund, which supports telecom providers in providing broadband infrastructure in high-cost, rural areas where there is little ROI.
Beyond having direct service impacts, if the Supreme Court finds the FCC to violate the non-delegation doctrine, federal programs like the Environmental Protection Agency, Social Security and Medicare, and the Department of Transportation may be subject to scrutiny. In essence, any federal program where Congress has granted an agency broad discretion over spending and rulemaking may invite future challengers.
The Supreme Court now faces a defining choice: rein in the FCC’s authority, or preserve the Universal Service Fund and the internet connection it provides to millions.