Respondents Brief — Consumers' Research, et al., Petitioners v. Federal Communications Commission, et al.

Nos. 23-456 and 23-743

In the Supreme Court of the United States

CONSUMERS’ RESEARCH, ET AL., PETITIONERS

v.

FEDERAL COMMUNICATIONS COMMISSION, ET AL.

CONSUMERS’ RESEARCH, ET AL., PETITIONERS

v.

FEDERAL COMMUNICATIONS COMMISSION, ET AL.

ON PETITIONS FOR WRITS OF CERTIORARI

TO THE UNITED STATES COURTS OF APPEALS

FOR THE SIXTH AND ELEVENTH CIRCUITS

BRIEF FOR THE FEDERAL RESPONDENTS

IN OPPOSITION

P. MICHELE ELLISON

General Counsel

JACOB M. LEWIS

Deputy General Counsel

SARAH E. CITRIN

Deputy Associate General

Counsel

JAMES M. CARR

Counsel

Federal Communications

Commission

Washington, D.C. 20554

ELIZABETH B. PRELOGAR

Solicitor General

Counsel of Record

Department of Justice

Washington, D.C. 20530-0001

SupremeCtBriefs@usdoj.gov

(202) 514-2217

QUESTIONS PRESENTED

1. Whether 47 U.S.C. 254(d), which requires telecommunications providers to contribute to a universalservice fund, violates the nondelegation doctrine.

2. Whether the Federal Communications Commission violated the Constitution by appointing a private

entity to provide billing, accounting, and related administrative services for the universal-service program.

(I)

TABLE OF CONTENTS

Page

Opinions below .............................................................................. 1

Jurisdiction .................................................................................... 2

Statement:

A. Legal background ............................................................ 2

B. No. 23-456 ......................................................................... 5

C. No. 23-743 ......................................................................... 7

Argument....................................................................................... 9

Conclusion ................................................................................... 18

TABLE OF AUTHORITIES

Cases:

Alenco Commc’ns, Inc. v. FCC,

201 F.3d 608 (5th Cir. 2000) ............................................... 12

AT&T, Inc. v. FCC,

886 F.3d 1236 (D.C. Cir. 2018) ............................................. 2

Carter v. Carter Coal Co., 298 U.S. 238 (1936) ................... 15

Federal Energy Admin. v. Algonquin SNG, Inc.,

426 U.S. 548 (1976).............................................................. 14

Gundy v. United States, 139 S. Ct. 2116 (2019).............. 9, 10

J.W. Hampton, Jr., & Co. v. United States,

276 U.S. 394 (1928).......................................................... 9, 14

National Broadcasting Co. v. United States,

319 U.S. 190 (1943).............................................................. 13

Qwest Commc’ns Int’l Inc. v. FCC,

398 F.3d 1222 (10th Cir. 2005) ........................................... 13

Qwest Corp. v. FCC, 258 F.3d 1191 (10th Cir. 2001) .......... 13

Rural Cellular Ass’n v. FCC,

588 F.3d 1095 (D.C. Cir. 2009) ........................................... 12

Skinner v. Mid-America Pipeline Co.,

490 U.S. 212 (1989)........................................................ 14, 15

(III)

IV

Cases—Continued:

Page

Sunshine Anthracite Coal Co. v. Adkins,

310 U.S. 381 (1940)........................................................ 15, 16

United States v. Arthrex, Inc.,

594 U.S. 1 (2021) ................................................................. 16

Universal Service Contribution Methodology,

In re, 31 FCC Rcd 13220 (2016) ........................................ 17

Whitman v. American Trucking Ass’ns,

531 U.S. 457 (2001).............................................................. 13

Yakus v. United States, 321 U.S. 414 (1944) ....................... 13

Constitution, statutes, and regulations:

U.S. Const.:

Art. I ................................................................................. 14

Art. II ................................................................................. 8

Communications Act of 1934, 47 U.S.C. 151 et seq............... 2

47 U.S.C. 153(53) ............................................................. 11

47 U.S.C. 214(e) ............................................................... 11

47 U.S.C. 254 ....................................................... 2, 9, 12-14

47 U.S.C. 254(b) ................................................. 3, 8, 10, 13

47 U.S.C. 254(b)(1) .......................................................... 10

47 U.S.C. 254(b)(1)(A) ..................................................... 12

47 U.S.C. 254(b)(2) .......................................................... 10

47 U.S.C. 254(b)(3) ...................................................... 3, 10

47 U.S.C. 254(b)(4) .......................................................... 10

47 U.S.C. 254(b)(5) .......................................................... 10

47 U.S.C. 254(b)(6) .......................................................... 10

47 U.S.C. 254(b)(7) .......................................................... 14

47 U.S.C. 254(c) ............................................................... 11

47 U.S.C. 254(c)(1) ............................................... 2, 3, 6, 11

47 U.S.C. 254(c)(1)(A) ....................................................... 3

47 U.S.C. 254(d) ................................................... 3, 8, 9, 11

V

Statutes and regulations—Continued:

Page

47 U.S.C. 254(e) ......................................................... 11, 12

47 U.S.C. 254(h) ......................................................... 11, 12

47 C.F.R.:

Section 54.101 .................................................................... 3

Sections 54.302-54.321....................................................... 3

Sections 54.400-54.423....................................................... 3

Sections 54.500-54.523....................................................... 3

Section 54.502(a) ................................................................ 3

Sections 54.600-54.633....................................................... 3

Sections 54.701-54.717....................................................... 4

Section 54.701(a) ................................................................ 3

Section 54.702(b).......................................................... 4, 15

Section 54.702(c) .......................................................... 4, 15

Section 54.703(b)................................................................ 4

Section 54.703(c) ................................................................ 4

Section 54.709 .................................................................... 4

Section 54.709(a)(2) ........................................................... 4

Section 54.709(a)(3) ................................................. 4, 5, 16

Section 54.712(a) ................................................................ 5

Section 54.717 .................................................................. 16

Sections 54.719-54.725....................................................... 4

Section 54.719(b).............................................................. 16

Sections 54.801-54.1515..................................................... 3

Miscellaneous:

FCC:

Proposed Fourth Quarter 2023 Universal Service

Contribution Factor, DA 23-843,

2023 WL 6036237 (released Sept. 13, 2023) ............ 17

VI

Miscellaneous—Continued:

Page

Proposed Third Quarter 2023 Universal

Service Contribution Factor, DA 23-507,

2023 WL 4012359 (released June 14, 2023) ............. 17

Revised Second Quarter 2003 Universal

Service Contribution Factor,

18 FCC Rcd 5097 (released Mar. 21, 2003) ............. 17

In the Supreme Court of the United States

No. 23-456

CONSUMERS’ RESEARCH, ET AL., PETITIONERS

v.

FEDERAL COMMUNICATIONS COMMISSION, ET AL.

No. 23-743

CONSUMERS’ RESEARCH, ET AL., PETITIONERS

v.

FEDERAL COMMUNICATIONS COMMISSION, ET AL.

ON PETITIONS FOR WRITS OF CERTIORARI

TO THE UNITED STATES COURTS OF APPEALS

FOR THE SIXTH AND ELEVENTH CIRCUITS

BRIEF FOR THE FEDERAL RESPONDENTS

IN OPPOSITION

OPINIONS BELOW

In No. 23-456, the opinion of the court of appeals

(Pet. App. 1a-46a*) is reported at 67 F.4th 773. In No.

23-743, the opinion of the court of appeals (23-743 Pet.

App. 1a-43a) is reported at 88 F.4th 917.

* We use “Pet.” and “Pet. App.” to refer to filings in No. 23-456,

and “23-743 Pet.” and “23-743 Pet. App.” to refer to filings in No.

23-743.

(1)

2

JURISDICTION

In No. 23-456, the judgment of the court of appeals

was entered on May 4, 2023. A petition for rehearing

was denied on May 30, 2023 (Pet. App. 56a-57a). On August 1, 2023, Justice Kavanaugh extended the time

within which to file a petition for a writ of certiorari to

and including October 27, 2023, and the petition was

filed on that date. The jurisdiction of this Court is invoked under 28 U.S.C. 1254(1).

In No. 23-743, the judgment of the court of appeals

was entered on December 14, 2023. The petition for a

writ of certiorari was filed on January 5, 2024. The jurisdiction of this Court is invoked under 28 U.S.C.

1254(1).

STATEMENT

A. Legal Background

1. The Communications Act of 1934 (Act), 47 U.S.C.

151 et seq., establishes the Federal Communications

Commission (FCC or Commission) and empowers it to

regulate telecommunications carriers. The Commission’s mission includes achieving “universal service,”

see 47 U.S.C. 254—i.e., ensuring that “everyone in the

United States has access to critical telecommunications

services,” AT&T, Inc. v. FCC, 886 F.3d 1236, 1239 (D.C.

Cir. 2018).

The Act defines “universal service” as “an evolving

level of telecommunications services that the Commission shall establish periodically,” “taking into account

advances in telecommunications and information technologies and services.” 47 U.S.C. 254(c)(1). It directs

the FCC to promote universal service through subsidy

programs known as “universal service support mechanisms.” Ibid. The Act requires “[e]very telecommunications carrier that provides interstate telecommunica-

3

tions services [to] contribute, on an equitable and nondiscriminatory basis, to the * * * mechanisms established by the Commission to preserve and advance universal service.” 47 U.S.C. 254(d).

The Act’s provisions guide and limit the FCC’s exercise of that authority. The Act requires the Commission

to “base policies for the preservation and advancement

of universal service” on a series of specific “principles”

—for example, the principle that consumers in rural areas “should have access to telecommunications and information services * * * that are reasonably comparable to those services provided in urban areas.” 47

U.S.C. 254(b)(3); see 47 U.S.C. 254(b). The Act also requires the agency, when deciding whether to support a

service through “universal service support mechanisms,” to consider certain factors—for example, the

extent to which the service in question is “essential to

education, public health, or public safety.” 47 U.S.C.

254(c)(1)(A); see 47 U.S.C. 254(c)(1).

2. In accordance with the Act, the FCC has created

four universal-service programs, which assist (1) deployment in remote areas, (2) low-income consumers,

(3) schools and libraries, and (4) rural healthcare providers. See 47 C.F.R. 54.302-54.321, 54.400-54.423,

54.500-54.523, 54.600-54.633, 54.801-54.1515. All four

programs subsidize telephone and broadband services,

see 47 C.F.R. 54.101, and the program for schools and

libraries subsidizes internal connections as well, see 47

C.F.R. 54.502(a).

The FCC has appointed the Universal Service Administrative Company (Company) as the Administrator

of those four programs. See 47 C.F.R. 54.701(a). The

Company is an independent, not-for-profit, private corporation whose directors include representatives of in-

4

dustry groups, consumer groups, tribal communities,

and recipients of universal-service funding. See 47

C.F.R. 54.703(b). The directors are nominated by the

groups they represent and are appointed by the Chair

of the Commission. See 47 C.F.R. 54.703(c).

As its title suggests, the Administrator’s role is

purely administrative. It is responsible for “billing contributors, collecting contributions to the universal service support mechanisms, and disbursing universal service support funds.” 47 C.F.R. 54.702(b). The Administrator “may not make policy, interpret unclear provisions of the statute or rules, or interpret the intent of

Congress.” 47 C.F.R. 54.702(c). “Where the Act or the

Commission’s rules are unclear, or do not address a particular situation,” the Administrator must “seek guidance from the Commission.” Ibid. The Administrator

must comply with detailed regulations issued by the

FCC, see 47 C.F.R. 54.701-54.717, and any party that is

aggrieved by its decisions may request de novo review

by the Commission, see 47 C.F.R. 54.719-54.725.

The Administrator helps the FCC compute the

amount of each quarterly payment that telecommunications carriers must contribute toward universal service.

See 47 C.F.R. 54.709. Before each quarter, the Administrator submits to the Commission its projections of

the expenses that the four universal-service programs

will incur and the revenues that telecommunications

carriers will earn through interstate and international

telecommunications services. See 47 C.F.R. 54.709(a)(3).

The Commission uses those projections to compute a

“contribution factor”—a number that is based on the ratio of the projected expenses to the projected revenues.

47 C.F.R. 54.709(a)(2).

5

The FCC then announces to the public the projections and the proposed contribution factor. See 47

C.F.R. 54.709(a)(3). The Commission may revise the

projections (and thus the contribution factor) and may

set them “at amounts that the Commission determines

will serve the public interest.” Ibid. If the FCC takes

no action within 14 days after the announcement of the

proposed contribution factor, however, the factor is

“deemed approved.” Ibid. Once the Commission approves the contribution factor, the Administrator calculates each carrier’s contribution by applying the factor

to that carrier’s “contribution base” (generally, the carrier’s projected interstate and international telecommunications revenues). Ibid. Carriers may pass on to customers the cost of their contributions. See 47 C.F.R.

54.712(a).

B. No. 23-456

1. In August and September 2021, the Administrator submitted its projections of expenses and revenues

for the fourth quarter of 2021. See Pet. App. 48a & n.5.

Based on those projections, the Commission proposed a

contribution factor of 29.1%. See id. at 47a.

In response, petitioners—a nonprofit organization, a

carrier, and a group of consumers—filed a comment requesting that the FCC set the contribution factor at 0%

instead. See Pet. App. 3a, 15a. Petitioners did not object to the Administrator’s projections or to the Commission’s computation of the contribution factor based

on those projections. Petitioners instead argued that

the universal-service program was itself unlawful. See

id. at 15a. As relevant here, they argued that Congress

had unconstitutionally delegated legislative power to

the FCC and that the Commission had unconstitutionally redelegated power to the Administrator. See ibid.

6

The Commission took no further action within 14

days after publishing the proposed contribution factor.

See 21-3886 Gov’t C.A. Br. 18. As a result, the factor

was deemed approved. See Pet. App. 15a.

2. Petitioners filed a petition for review in the Sixth

Circuit. See Pet. App. 3a. The court denied the petition.

See id. at 1a-46a.

The court of appeals first held that Congress had not

unlawfully delegated legislative power to the FCC by

empowering it to collect contributions to the universalservice program. See Pet. App. 23a-42a. The court observed that Congress’s grant of authority to an executive agency does not amount to a delegation of legislative power if Congress has established an “intelligible

principle” to guide the agency’s exercise of that authority. Id. at 24a (citation omitted). The court concluded

that the Act’s universal-service provisions satisfy that

test. See id. at 31a-42a. It emphasized that the statute

sets forth several “fairly detailed” principles to which

universal-service policies must conform. Id. at 31a-32a;

see 47 U.S.C. 254(c)(1). And it explained that other provisions of the Act, read in light of the statute’s purpose

and history, “sufficiently limit the FCC’s discretion.”

Pet. App. 41a-42a; see id. at 37a-42a.

The court of appeals also held that the FCC had not

unconstitutionally delegated governmental power to a

private entity by utilizing the Company as the universalservice programs’ Administrator. See Pet. App. 42a46a. The court emphasized that the Administrator performs “ministerial” functions such as “billing the contributing carriers” and “disbursing the universalservice funds.” Id. at 45a-46a. It noted that the Administrator exercises no “decision-making power” and that

7

the Commission “is not bound by [the Administrator’s]

projections.” Id. at 44a, 46a.

C. No. 23-743

1. In August and September 2022, the Administrator submitted its projections of expenses and revenues

for the fourth quarter of 2022. See 23-743 Pet. App. 45a

& n.5. Based on those projections, the Commission proposed a contribution factor of 28.9%. See id. at 44a.

In response, petitioners—the same nonprofit organization and carrier as in No. 23-456, joined by an overlapping but different group of consumers—filed comments requesting that the FCC set the contribution factor at 0% instead. See 23-743 Pet. App. 3a; 22-13315

Gov’t C.A. Br. 17-19. As in No. 23-456, petitioners did

not object to the Administrator’s projections or to the

Commission’s computation of the contribution factor

based on those projections. Petitioners instead argued,

once more, that the universal-service program was itself unlawful—in particular, that Congress had unconstitutionally delegated legislative power to the FCC and

that the Commission had unconstitutionally redelegated power to the Administrator. See 22-13315 Gov’t

C.A. Br. 19.

The FCC took no further action within 14 days after

publishing the proposed contribution factor. See 2213315 Gov’t C.A. Br. 19. As a result, the factor was

deemed approved. See ibid.

2. Petitioners filed a petition for review in the Eleventh Circuit. See 23-743 Pet. App. 3a. The court denied

the petition. See id. at 1a-43a.

The court of appeals first held that Congress had not

unlawfully delegated legislative power to the FCC by

empowering it to collect contributions to the universalservice program. See 23-743 Pet. App. 7a-10a. The court

8

observed that Congress’s grant of authority to an executive agency does not amount to a delegation of legislative power if Congress has established an “intelligible

principle” to guide the agency’s exercise of that authority. Id. at 7a (citation omitted). It concluded that the

Act’s universal-service provisions satisfy that test. See

id. at 8a-10a. The court emphasized that the statute sets

forth several “general principles” to which universalservice policies must conform. Id. at 9a; see 47 U.S.C.

254(b). It stated that, “[b]ecause Congress is afforded

wide latitude to delegate authority to executive agencies, these limits suffice.” 23-743 Pet. App. 10a.

The court of appeals also held that the FCC had not

unconstitutionally delegated governmental power to a

private entity by utilizing the Company as the universalservice programs’ Administrator. See 23-743 Pet. App.

10a-18a. The court emphasized that the Administrator

performs “ministerial” functions such as “billing contributors” and “disbursing universal service support

funds.” Id. at 14a (citations omitted). It also noted that

the Commission “maintains deep and meaningful control” over the Administrator’s actions. Id. at 17a.

Judge Newsom issued an opinion concurring in the

judgment. See 23-743 Pet. App. 20a-42a. He agreed

that Section 254(d) satisfies the nondelegation doctrine

“under existing precedent,” id. at 28a, but he questioned that precedent as a matter of “constitutional first

principles,” id. at 20a. He also agreed with the court of

appeals’ rejection of petitioners’ private nondelegation

challenge to the Administrator’s role, see id. at 29a, but

suggested that petitioners could have challenged the

Administrator’s activities on statutory or Article II

grounds, see id. at 30a-41a.

9

Judge Lagoa issued a concurring opinion. See 23743 Pet. App. 43a. She stated that she shared many of

Judge Newsom’s concerns about “the current nondelegation doctrine,” but she agreed that petitioners’ claim

failed under “the intelligible principle test as set forth

by Supreme Court precedent.” Ibid.

ARGUMENT

Petitioners contend (Pet. 19-29; 23-743 Pet. 21-34)

that 47 U.S.C. 254(d) violates the nondelegation doctrine by empowering the FCC to collect universalservice contributions. They also contend (Pet. 30-33;

23-743 Pet. 34-38) that the Commission violated the

Constitution by utilizing a private entity to provide billing, accounting, and related administrative services for

the universal-service program. The Sixth and Eleventh

Circuits correctly rejected petitioners’ claims, and their

decisions do not conflict with any decision of this Court

or of another court of appeals. The petitions for writs

of certiorari should be denied.

1. Petitioners’ challenge to Section 254 does not

warrant this Court’s review.

a. Although Congress may not delegate legislative

power to the executive, it may seek the executive’s “assistance” “by vesting discretion in [executive] officers

to make public regulations interpreting a statute and

directing the details of its execution.” J.W. Hampton,

Jr., & Co. v. United States, 276 U.S. 394, 406 (1928). If

a statute sets forth an “intelligible principle to which the

person or body authorized to [act] is directed to conform,” the statute effects a permissible grant of discretion, not a “forbidden delegation of legislative power.”

Id. at 409. “Only twice in this country’s history” has the

Court “found a delegation excessive.” Gundy v. United

States, 139 S. Ct. 2116, 2129 (2019) (plurality opinion).

10

The Court has “over and over upheld even very broad

delegations.” Ibid.

The courts of appeals correctly held that the Act sets

forth intelligible principles that guide and limit the

FCC’s exercise of discretion in collecting universalservice contributions. First, the Act requires the Commission to “base policies for the preservation and advancement of universal service” on six specific “principles,” 47 U.S.C. 254(b):

• “Quality services should be available at just, reason-

able, and affordable rates.” 47 U.S.C. 254(b)(1).

• “Access to advanced telecommunications and infor-

mation services should be provided in all regions of

the Nation.” 47 U.S.C. 254(b)(2).

• “Consumers in all regions of the Nation * * * should

have access to telecommunications and information

services * * * that are reasonably comparable to

those services provided in urban areas and that are

available at rates that are reasonably comparable to

rates charged for similar services in urban areas.”

47 U.S.C. 254(b)(3).

• “All providers of telecommunications services should

make an equitable and nondiscriminatory contribution to the preservation and advancement of universal service.” 47 U.S.C. 254(b)(4).

• “There should be specific, predictable, and sufficient

Federal and State mechanisms to preserve and advance universal service.” 47 U.S.C. 254(b)(5).

• “Elementary and secondary schools and classrooms,

health care providers, and libraries should have access to advanced telecommunications services.” 47

U.S.C. 254(b)(6).

11

Second, the Act specifies the entities that must pay

universal-service contributions and the terms on which

they must do so. See 47 U.S.C. 254(d). “Every telecommunications carrier that provides interstate telecommunications services” must contribute toward universal

service. Ibid. Those contributions must be made “on an

equitable and nondiscriminatory basis.” Ibid.

Third, the Act specifies the types of services that the

FCC may fund. See 47 U.S.C. 254(c). Generally, only

“telecommunications services” may receive universalservice support. 47 U.S.C. 254(c)(1); see 47 U.S.C.

153(53) (defining “telecommunications service”). And

in determining which telecommunications services to

fund, the Commission must consider the extent to which

particular services “are essential to education, public

health, or public safety”; have “been subscribed to by a

substantial majority of residential customers”; “are being deployed in public telecommunications networks by

telecommunications carriers”; and “are consistent with

the public interest, convenience, and necessity.” 47

U.S.C. 254(c)(1).

Fourth, the Act identifies the beneficiaries that may

receive subsidies and the ways in which the subsidies

may be used. See 47 U.S.C. 254(e) and (h). “[O]nly an

eligible telecommunications carrier designated under

[47 U.S.C. 214(e)] shall be eligible to receive specific

Federal universal service support.” 47 U.S.C. 254(e);

see 47 U.S.C. 214(e) (specifying criteria for designating

telecommunications carriers eligible to receive universal-service funding). A carrier may use the funds “only

for the provision, maintenance, and upgrading of facilities and services for which the support is intended.” 47

U.S.C. 254(e). The Act also includes detailed provisions

12

governing subsidies for rural healthcare providers,

schools, and libraries. See 47 U.S.C. 254(h).

Finally, the Act requires universal-service support

to be “sufficient to achieve the purposes” of Section 254,

47 U.S.C. 254(e), and it specifies that services should be

“affordable,” 47 U.S.C. 254(b)(1)(A). Those provisions

constrain the overall “size and budget” of the program.

Pet. App. 39a. The sufficiency requirement precludes

the FCC from expanding the program beyond “what is

‘sufficient to achieve the purposes of ’ universal service.”

Ibid. (citation omitted); see Alenco Commc’ns, Inc. v.

FCC, 201 F.3d 608, 620 (5th Cir. 2000) (“[E]xcessive

funding may itself violate the sufficiency requirements

of the Act.”). And the affordability principle precludes

the Commission from allowing the universal-service

contribution to become “so large it actually makes telecommunications services less ‘affordable.’ ” Rural Cellular Ass’n v. FCC, 588 F.3d 1095, 1103 (D.C. Cir. 2009);

see Alenco, 201 F.3d at 620 (“Because universal service

is funded by a general pool subsidized by all telecommunications providers—and thus indirectly by the

customers—excess subsidization in some cases may detract from universal service by causing rates unnecessarily to rise, thereby pricing some consumers out of the

market.”).

The Act, in short, provides “comprehensive and substantial guidance” to the FCC “on how to implement

Congress’s universal-service policy.” Pet. App. 33a.

The Act’s provisions “sufficiently limit the [Commission’s] discretion” to satisfy the nondelegation doctrine.

Id. at 42a; see 23-743 Pet. App. 10a.

b. Petitioners’ contrary arguments lack merit. Petitioners contend (Pet. 24-25; 23-743 Pet. 28) that Section

254 violates the nondelegation doctrine because it im-

13

poses “vague” standards and lacks “objective” limits.

But the nondelegation doctrine permits Congress to

rely on abstract, qualitative standards; it does not require Congress to adopt a “determinate criterion.”

Whitman v. American Trucking Ass’ns, 531 U.S. 457,

475 (2001) (citation omitted). This Court has upheld

statutes that empowered executive agencies to regulate

in the “public interest,” see National Broadcasting Co.

v. United States, 319 U.S. 190, 225-226 (1943); to set

prices that are “fair and equitable,” see Yakus v. United

States, 321 U.S. 414, 422 (1944); and to establish airquality standards to “protect the public health,” see

American Trucking Ass’ns, 531 U.S. at 472-476. Section 254’s detailed provisions fit “comfortably within the

scope of discretion permitted by [this Court’s] precedent.” Id. at 476.

Petitioners also contend (Pet. 25; 23-743 Pet. 3) that

the universal-service principles in Section 254(b) do not

constrain the FCC because they are merely “precatory.” That is incorrect. The Act provides that “the

Commission shall base policies for the preservation and

advancement of universal service on [those] principles.”

47 U.S.C. 254(b) (emphasis added). And while the Commission may “balance the principles against one another

when they conflict,” it “may not depart from them altogether to achieve some other goal.” Qwest Corp. v. FCC,

258 F.3d 1191, 1200 (10th Cir. 2001). Courts have set

aside universal-service policies when the Commission

has failed to adhere to the statutory principles. See,

e.g., Qwest Commc’ns Int’l Inc. v. FCC, 398 F.3d 1222,

1232-1238 (10th Cir. 2005); Qwest, 258 F.3d at 11991200.

Petitioners further argue (Pet. 27-28; 23-743 Pet. 2728) that Section 254 improperly authorizes the FCC to

14

adopt additional universal-service principles beyond

those listed in the Act. See 47 U.S.C. 254(b)(7). But the

Commission’s power to adopt such principles is itself

constrained by an intelligible standard: the additional

principles must be “necessary and appropriate for the

protection of the public interest, convenience, and necessity,” and must be “consistent with” the Act. Ibid.

And in any event, no question concerning the scope of

that authority is presented in these cases, since the specific FCC orders that petitioners challenge do not adopt

any such additional principles. See Pet. App. 47a-55a;

23-743 Pet. App. 44a-52a.

Petitioners also argue (e.g., Pet. 20-22; 23-743 Pet.

21) that this Court should review Section 254 under an

especially demanding nondelegation standard because

the Act empowers the FCC to raise revenue. But the

Court has specifically rejected “the application of a different and stricter nondelegation doctrine in cases

where Congress delegates discretionary authority to

the Executive under its taxing power.” Skinner v. MidAmerica Pipeline Co., 490 U.S. 212, 222-223 (1989).

Nothing in Article I’s text “distinguish[es] Congress’

power to tax from its other enumerated powers * * * in

terms of the scope and degree of discretionary authority that Congress may delegate to the Executive.” Id.

at 220-221. “From its earliest days to the present,” Congress “has varied the degree of specificity and the consequent degree of discretionary authority delegated to

the Executive” in tax statutes. Id. at 221. And the

Court has repeatedly applied ordinary nondelegation

principles even in reviewing revenue-raising measures.

See, e.g., Federal Energy Administration v. Algonquin

SNG, Inc., 426 U.S. 548, 558-560 (1976); J.W. Hampton,

276 U.S. at 409. In short, petitioners’ “two-tiered the-

15

ory of nondelegation” is inconsistent with relevant constitutional text, practice, and precedent. Skinner, 490

U.S. at 220.

2. Petitioners’ challenge to the functions performed

by the Administrator likewise do not warrant review.

The Constitution limits the government’s ability to

empower a private entity “to regulate the affairs” of

other private parties. Carter v. Carter Coal Co., 298

U.S. 238, 311 (1936). The Constitution permits such an

assignment of authority only if the entity “function[s]

subordinately” to a federal agency and is subject to the

agency’s “authority and surveillance.” Sunshine Anthracite Coal Co. v. Adkins, 310 U.S. 381, 399 (1940).

The Commission’s assignment of administrative functions to a private Administrator complies with those

constitutional requirements.

As an initial matter, the Administrator does not exercise any regulatory power over other private parties.

The Administrator instead performs “ministerial and

fact-gathering functions” for the FCC. Pet. App. 43a.

The Administrator is responsible for “billing contributors, collecting contributions to the universal service

support mechanisms, and disbursing universal service

support funds.” 47 C.F.R. 54.702(b). It “may not make

policy, interpret unclear provisions of the statute or

rules, or interpret the intent of Congress.” 47 C.F.R.

54.702(c). “Where the Act or the Commission’s rules

are unclear,” the Administrator must “seek guidance

from the Commission.” Ibid. The Administrator, in

short, has no independent “decision-making power.”

Pet. App. 46a.

The Administrator, in any event, “function[s] subordinately” to the FCC and is subject to its “authority and

surveillance.” Sunshine Anthracite Coal, 310 U.S. at

16

399. The Commission, not the Administrator, fixes the

amount of each quarterly universal-service contribution. The Administrator simply provides the FCC with

financial projections that the Commission may use in

determining the appropriate amount. See 47 C.F.R.

54.709(a)(3). The Administrator makes those projections in accordance with detailed instructions contained

in FCC regulations. See Pet. App. 44a. The Administrator must submit the projections to the Commission

at least 60 days before the relevant quarter begins, giving the Commission enough time to review them before

adopting a new contribution factor. See 47 C.F.R.

54.709(a)(3). The FCC “is not bound by [the] projections” but instead may reject or modify them if it concludes that such action is in the public interest. Pet.

App. 44a.

The Administrator is subject to the FCC’s “authority

and surveillance” in other ways as well. Sunshine Anthracite Coal, 310 U.S. at 399. A “party aggrieved by

an action taken by the Administrator” may seek review

from the Commission. 47 C.F.R. 54.719(b). The Administrator also is subject to regular audits, which help ensure that it “is properly administering the universal service support mechanisms to prevent fraud, waste, and

abuse.” 47 C.F.R. 54.717.

Petitioners argue (Pet. 32; 23-743 Pet. 7) that, in

practice, the FCC does not “meaningfully” review the

Administrator’s actions. The relevant constitutional

question, however, is whether the Commission has the

“authority” to reject or modify the Administrator’s determinations, not how often the FCC exercises that authority. Sunshine Anthracite Coal, 310 U.S. at 399; cf.

United States v. Arthrex, Inc., 594 U.S. 1, 27 (2021) (plurality opinion) (“[A principal officer] need not review

17

every decision of the [inferior officer]. What matters is

that the [principal officer] have the discretion to review

decisions rendered by [inferior officers].”). Petitioners

do not deny that the Commission retains plenary authority to review the Administrator’s actions.

In any event, the FCC does conduct meaningful review of the Administrator’s determinations. On several

occasions, including twice in 2023, the Commission has

departed from the Administrator’s calculations in setting the quarterly contribution factor. See, e.g., FCC,

Proposed Fourth Quarter 2023 Universal Service Contribution Factor, DA 23-843, 2023 WL 6036237, at *1

(released Sept. 13, 2023); FCC, Proposed Third Quarter

2023 Universal Service Contribution Factor, DA 23507, 2023 WL 4012359, at *1 (released June 14, 2023);

FCC, Revised Second Quarter 2003 Universal Service

Contribution Factor, 18 FCC Rcd 5097, 5097 (released

Mar. 21, 2003). The FCC also has awarded relief when

it has disagreed with the Administrator’s calculation of

the contribution owed by particular carriers. See, e.g.,

In re Universal Service Contribution Methodology, 31

FCC Rcd 13220, 13220 (2016). The relative infrequency

with which the FCC revises the Administrator’s decisions reflects the Administrator’s limited role, the detailed regulations constraining the Administrator’s actions, and the Commission’s general oversight of the

Administrator’s activities.

3. Petitioners concede (Pet. 34; 23-743 Pet. 38) that

“there is no circuit split yet” on the questions presented,

but they assert that the en banc Fifth Circuit “is poised

to create one” in Consumers’ Research v. FCC, No. 2260008 (argued Sept. 19, 2023). But the en banc Fifth

Circuit has not yet issued its decision in that case. Once

it does so, the parties can determine whether to seek,

18

and this Court can determine whether to grant, certiorari to review that decision. For now, however, the absence of any circuit conflict counsels in favor of denying

the petitions for writs of certiorari.

CONCLUSION

The petitions for writs of certiorari should be denied.

Respectfully submitted.

P. MICHELE ELLISON

General Counsel

JACOB M. LEWIS

Deputy General Counsel

SARAH E. CITRIN

Deputy Associate General

Counsel

JAMES M. CARR

Counsel

Federal Communications

Commission

MAY 2024

ELIZABETH B. PRELOGAR

Solicitor General