Amicus Curiae Brief — Federal Communications Commission, et al., Petitioners v. Consumers' Research, et al.
Supreme Court briefJan 16, 2025
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In the Supreme Court of the United States
No. 24-354 and 24-422
FEDERAL COMMUNICATIONS COMMISSION, ET AL.,
PETITIONERS,
v.
CONSUMERS’ RESEARCH, ET AL.,
RESPONDENTS.
___________
SHLB COALITION, ET AL.,
PETITIONERS,
v.
CONSUMERS’ RESEARCH, ET AL.,
RESPONDENTS.
___________
ON WRITS OF CERTIORARI
TO THE UNITED STATES COURTS OF APPEALS
FOR THE FIFTH CIRCUIT
___________
BRIEF OF PUBLIC KNOWLEDGE, AFFORDABLE
BROADBAND CAMPAIGN, CHAMBER OF PROGRESS,
COMMON SENSE MEDIA, AND COMMUNICATIONS
WORKERS OF AMERICA AS AMICI CURIAE IN
SUPPORT OF PETITIONERS
___________
JOHN BERGMAYER
Counsel of Record
PUBLIC KNOWLEDGE
1818 N St. NW, Suite 410
Washington, DC 20036
(202) 861-0020
john@publicknowledge.org
(additional counsel listed on next page)
January 16, 2025
GREG GUICE
AFFORDABLE BROADBAND
CAMPAIGN
3706 N. Pershing Dr.
Arlington VA 22203
MATTHEW HOLDER
CEILIDH GAO
COMMUNICATIONS
WORKERS OF AMERICA
501 Third St. NW
Washington DC 20001
KERRY MAEVE SHEEHAN
CHAMBER OF PROGRESS
1390 Chain Bridge Road
#A108
McLean, VA 22101
i
TABLE OF CONTENTS
TABLE OF AUTHORITIES ................................................ii
INTEREST OF AMICI CURIAE.......................................... 2
SUMMARY OF ARGUMENT .............................................. 4
ARGUMENT ................................................................... 4
I.
Congress Codified Clear Universal Service
Principles Through the 1996
Telecommunications Act ..................................... 6
II.
Congress’s Delegation to the FCC Satisfies
Constitutional Requirements.............................. 9
III. The Administration of USF by the FCC and
USAC Demonstrates that the FCC Retains
Control Over USF and USAC Acts in a
Ministerial Capacity .......................................... 11
IV. The Fifth Circuit’s Decision Would Have FarReaching Harmful Consequences ..................... 16
A.
Termination of Universal Service Support
Threatens Access to Communications Services
for Millions of Americans ............................... 16
B.
Termination of Universal Service Support
Would Have Far-Reaching Negative Effects on
the National Economy .................................... 21
C.
The Fifth Circuit’s Ruling Threatens
Numerous Government Activities ................. 22
CONCLUSION ............................................................... 26
ii
TABLE OF AUTHORITIES
Cases
Am. Power & Light Co. v. SEC, 329 U.S. 90 (1946) 10
Carter v. Carter Coal, 298 U.S. 238 (1936).............. 15
Consumers’ Research v. Fed. Commc’ns Comm’n , 88
F.4th 917 (11th Cir. 2023) ..................................... 12
Consumers’ Research v. Fed. Commc’ns Comm’n,
109 F.4th 743 (5th Cir. 2024) ............................ 4, 11
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
Lichter v. United States, 334 U.S. 742 (1948) ......... 10
Nat’l Broad. Co. v. United States, 319 U.S. 190
(1943) ...................................................................... 10
Payne v. Tennessee, 501 U.S. 808, 828 (1991) ........ 21
Rural Tel. Coalition v. Fed. Commc’ns Comm’n, 838
F.2d 1307 (D.C. Cir. 1988) ....................................... 7
Sunshine Anthracite Coal v. Adkins, 310 U.S. 381
(1940) ................................................................ 15, 16
Whitman v. Am. Trucking Ass’ns, 531 U.S. 457
(2001) ...................................................................... 10
Yakus v. United States, 321 U.S. 414 (1944) .......... 10
Statutes
47 U.S.C. § 151 ............................................................ 7
47 U.S.C. § 254(c)(1).................................................... 8
47 U.S.C. § 254(c)(1)-(3) .............................................. 8
47 U.S.C. § 254(d)........................................................ 8
47 U.S.C. § 254(j)......................................................... 9
47 U.S.C. §§ 254(h)(1)(A)-(B) ...................................... 9
Telecommunications Act of 1996, Pub. L. No. 104104, 110 Stat. 56 (1996) ........................................... 8
Other Authorities
Alexander Hamilton, The Federalist No. 42 (1788) . 6
Andrew Lopez, What alerts should I sign up for
during L.A.’s fires?, Boyle Heights Beat (Jan. 13,
iii
2025), https://boyleheightsbeat.com/los-angeleswildfire-alerts-cell-phone....................................... 19
Centers for Medicare & Medicaid Services,
https://www.cms.gov/medicare/codingbilling/medicare-administrative-contractorsmacs/whats-mac ..................................................... 23
Christina Tsou et al., Effectiveness of Telehealth in
Rural and Remote Emergency Departments:
Systematic Review, 23 J. MED. INTERNET RSCH.,
e30632 (2021), https://doi.org/10.2196/30632 ....... 18
Congressional Research Service, Universal Service
Fund: Background and Options for Reform (2011).
.................................................................................. 7
Environmental Protection Agency, Superfund
Contract Laboratory Program,
https://www.epa.gov/clp ......................................... 24
FCC, Wireless Emergency Alerts (WEA),
https://www.fcc.gov/consumers/guides/wirelessemergency-alerts-wea ............................................ 18
Federal Student Aid, Federal Student Aid Posts New
Quarterly Reports to FSA Data Center, Federal
Student Aid Posts New Quarterly Reports to FSA
Data Center, https://fsapartners.ed.gov/knowledgecenter/library/electronic-announcements/2023-0830/federal-student-aid-posts-new-quarterlyreports-fsa-data-center .......................................... 23
George Karagiannis, Effective public warning
systems: Saving lives and mitigating disaster amid
a changing climate, Prevention Web (Jun. 4 2024),
https://www.preventionweb.net/news/effectivepublic-warning-systems-saving-lives-andmitigating-disaster-amid-changing-climate ......... 19
HHS, Telehealth for chronic conditions,
https://telehealth.hhs.gov/providers/best-practiceguides/telehealth-for-chronic-conditions/managingchronic-conditions-through-telehealth ................. 18
Investopedia, Federal Reserve System: What It Is
and How It Works,
iv
https://www.investopedia.com/terms/f/federalreser
vebank.asp.............................................................. 23
Memorandum of Understanding Between the
Federal.................................................................... 12
NCES Data Show Public School Enrollment Held
Steady Overall From Fall 2022 to Fall 2023,
National Center for Education Statistics (Dec. 5,
2024),
https://nces.ed.gov/whatsnew/press_releases/12_5_
2024.asp.................................................................. 17
Paul Starr, The Creation of the Media: Political
Origins of Modern Communications (2004). .......... 6
Private School Enrollment, National Center for
Education Statistics,
https://nces.ed.gov/programs/coe/indicator/cgc/priv
ate-school-enrollment (May 2024)......................... 17
Rahul Tongia & Ernest J. Wilson III, The Flip Side
of Metcalfe’s Law: Multiple and Growing Costs of
Network Exclusion, 5 INT’L J. COMM. 665 (2011) ... 7
Rhea Kelly, Report: 90% of Schools Depend on ERate Funding Every Year, The Journal (Oct. 29,
2024),
https://thejournal.com/articles/2024/10/29/report90-of-schools-depend-on-e-rate-funding-everyyear.aspx ................................................................ 17
Richard John, Spreading the News: The American
Postal System from Franklin to Morse (1995) ....... 6
U.S. Department of Agriculture, Food Safety
Agencies & Partners,
https://www.fsis.usda.gov/about-fsis/food-safetyagency-partners ..................................................... 24
U.S. Food and Drug Administration, FSMA Final
Rule on Accredited Third-Party Certification,
https://www.fda.gov/food/food-safetymodernization-act-fsma/fsma-final-rule-accreditedthird-party-certification......................................... 24
Universal Service Administrative Company, Lifeline
Disbursements Tool,
v
https://opendata.usac.org/Lifeline/LifelineDisbursements-Tool/rink-mije .............................. 17
Universal Service Administrative Company, RHC
Application Status Report,
https://opendata.usac.org/stories/s/9853-5sfz ....... 17
Regulations
47 C.F.R. § 54.702(b) ................................................. 12
47 C.F.R. § 54.702(c) ................................................. 12
Lifeline & Link Up Reform & Modernization, Report
and Order and Further Notice of Proposed
Rulemaking, 27 FCC Rcd. 6656, 6665 (2012). ...... 22
Proposed Fourth Quarter 2023 Universal Service
Contribution Factor, CC Docket No. 96-45, DA 23843 (rel. Sep. 13, 2023) .......................................... 13
Proposed Third Quarter 2024 Universal Service
Contribution Factor, CC Docket No. 96-45, DA 23557 (rel. June 12, 2024) ......................................... 14
Universal Service Contribution Methodology, 21
FCC Rcd. 7518 (2006) .............................................. 8
In the Supreme Court of the United States
No. 24-354 and 24-422
FEDERAL COMMUNICATIONS COMMISSION, ET AL.,
PETITIONERS,
v.
CONSUMERS’ RESEARCH, ET AL.,
RESPONDENTS.
___________
SHLB COALITION, ET AL.,
PETITIONERS,
v.
CONSUMERS’ RESEARCH, ET AL.,
RESPONDENTS.
___________
ON WRITS OF CERTIORARI
TO THE UNITED STATES COURTS OF APPEALS
FOR THE FIFTH CIRCUIT
___________
BRIEF OF PUBLIC KNOWLEDGE, AFFORDABLE
BROADBAND CAMPAIGN, CHAMBER OF PROGRESS,
COMMON SENSE MEDIA, AND COMMUNICATIONS
WORKERS OF AMERICA AS AMICI CURIAE IN
SUPPORT OF PETITIONERS
2
INTEREST OF AMICI CURIAE1
Public Knowledge is a consumer rights organization dedicated to promoting freedom of expression, an
open internet, and access to affordable communications tools and creative works. For many years, it has
worked to defend universal service principles and ensure that all Americans have access to essential communications services regardless of income or
geography. Public Knowledge has been deeply involved in universal service policy through regulatory
proceedings, court filings, and public advocacy, with
particular focus on how these programs serve marginalized and underserved communities. The organization has extensive expertise in both the practical
operation of the Universal Service Fund and the
broader telecommunications regulatory frameworks
that enable universal access to communications services in America.
The Affordable Broadband Campaign is a 501(c)(4)
dedicated to helping secure long-term funding for lowincome families so they can afford to get and stay connected to broadband service.
Chamber of Progress is a tech-industry coalition
devoted to a progressive society, economy, workforce,
and consumer climate. Chamber of Progress backs
public policies that build a fairer, more inclusive country in which the tech industry operates responsibly
and fairly, and in which all people benefit from technological leaps. Chamber of Progress seeks to protect
1 Pursuant to S. Ct. Rule 37.6, Amici state that no counsel for a
party authored this brief in whole or in part and no person or
entity made a monetary contribution to its preparation or
submission.
3
internet freedom and free speech, to promote innovation and economic growth, and to empower technology
customers and users. Chamber of Progress’s work is
supported by its corporate partners, but its partners
do not sit on its board of directors and do not have a
vote on, or veto over, its positions. Chamber of Progress does not speak for individual partner companies, and it remains true to its stated principles even
when its partners disagree.
Common Sense Media is a nonpartisan, nonprofit
organization dedicated to improving digital access
and literacy for families and students. Through research, education, and advocacy, Common Sense
works to ensure safe and meaningful access to communications technology, with particular focus on addressing the digital divide in education. The
organization has extensive experience engaging with
Universal Service Fund programs, particularly ERate and Lifeline, through regulatory proceedings
and research. Common Sense's digital literacy curriculum reaches more than 1.2 million educators in over
85,000 schools nationwide, including 74% of Title I
schools, giving it unique insight into how universal
service programs impact education and student success.
The Communications Workers of America (CWA)
is the largest communications and media labor union
in the United States. Its membership consists of
workers in the communications and broadband industries, as well as the news media, airlines, broadcast
and cable television, public service, higher education,
health care, manufacturing, video games, and high
tech. CWA takes an active role advocating for its
4
members, which includes participating in litigation as
a party or amicus.
SUMMARY OF ARGUMENT
1. The Fifth Circuit’s decision invalidating the Universal Service Fund fundamentally misunderstands both
law and precedent. While acknowledging that either
Congressional delegation to the FCC or FCC delegation to USAC might be constitutional in isolation, its
ruling that the combination of these delegations is unconstitutional has no basis in law and threatens a program that has successfully connected millions of
Americans to essential communications services.
2. The Fifth Circuit’s novel “combination theory” fails
because both delegations are proper and lawful.
Congress provided clear direction to the FCC through
Section 254’s detailed framework, easily satisfying
the intelligible principle test. Meanwhile, USAC acts
in a purely ministerial capacity under comprehensive
FCC oversight and control, not as a private regulator.
Two constitutional actions cannot combine to create
an unconstitutional result.
3. The practical consequences of the Fifth Circuit’s ruling would be severe, disrupting vital telecommunications access for millions of Americans, undermining
rural economic development, and threatening numerous other federal programs that rely on similar administrative structures where agencies work with
private entities under careful government oversight.
ARGUMENT
The Fifth Circuit’s decision invalidating the Universal Service Fund’s structure, Consumers’ Research
v. Fed. Commc’ns Comm’n, 109 F.4th 743 (5th Cir.
2024), rests on serious misunderstandings of both law
5
and reality. The ruling not only conflicts with decisions from other circuits, but threatens to destroy a
program that has successfully connected millions of
Americans to essential communications services for
over 25 years.
The court’s core theory—that the combination of
Congress’s delegation to the FCC and the FCC’s delegation to USAC creates an unconstitutional structure—falls apart under light scrutiny, and directly
contravenes numerous of this Court’s precedents. Indeed, while the Fifth Circuit panel seemed inclined to
find the structure of USF and USAC unconstitutional
on the grounds that either Congress or the FCC improperly delegated its authority, it was bound by this
Court’s precedents to the contrary. But its newly-invented combination theory violates those same precedents, and the idea that somehow these two proper
delegations become improper when combined makes
no legal sense. The Supreme Court has never suggested that two constitutional actions somehow
merge into an unconstitutional one. The Fifth Circuit’s theory fails because there is no improper private
delegation to USAC. It also fails because there was no
improper delegation to the FCC. It necessarily also
fails when neither improper delegation has taken
place. Zero plus zero equals zero.
The Fifth Circuit’s ruling appears to reflect policy
concerns about the structure of the universal service
program rather than constitutional infirmities. While
reasonable minds may differ on the optimal design of
universal service funding mechanisms, such policy
judgments are properly addressed to Congress, not
the courts. If changes to this structure are warranted,
they should come through legislative action, not
through novel constitutional interpretations that
would upset decades of settled administrative practice. The Fifth Circuit’s ruling strays beyond judicial
6
review into questions of policy best left to the political
branches.
I.
Congress Codified Clear Universal Service Principles Through the 1996 Telecommunications Act
Universal service principles have been a key element of American communications policy since the
nation’s founding. As James Madison wrote in 1788
in The Federalist No. 42, “Nothing which tends to facilitate the intercourse between the states, can be
deemed unworthy of the public care.”2 The Post Office
Act of 1792 established the precedent of universal
communications access by subsidizing newspaper delivery to remote areas, creating a communications infrastructure that prioritized public access and the
dissemination of information over profit maximization.3 This commitment to universal access continued
through the telegraph era, where states, courts, and
eventually Congress required operators to serve all
customers without discrimination, establishing patterns that would shape later telecommunications regulation.4
Each generation has understood that communications networks—from voice, to data processing, to
modern wireline and wireless broadband networks—
are essential services for participation in our economy.5 Universal service is not simply about ensuring
2 Available at Library of Congress, Federalist Papers: Primary
Documents in American History, https://guides.loc.gov/
federalist-papers/text-41-50.
3 Richard John, Spreading the News: The American Postal
System from Franklin to Morse 7, 25-63 (1995).
4 Paul Starr, The Creation of the Media: Political Origins of
Modern Communications 188 (2004).
5 See Rahul Tongia & Ernest J. Wilson III, The Flip Side of
Metcalfe’s Law: Multiple and Growing Costs of Network
7
telecommunications access, though this remains vital. As federal policy, universal service advances
broader economic and educational benefits that communications access provides. See infra Part IV.B.
The Communications Act of 1934 formally codified
universal service as a national policy goal, declaring
the FCC’s mission to make communication services
available “to all the people of the United States.” 47
U.S.C. § 151. Initially, this was accomplished through
an implicit system of cross-subsidies, with profits
from densely populated urban areas subsidizing service in higher-cost rural regions.6 However, increasing competition in long-distance service made this
cross-subsidization structure unsustainable.
The FCC took initial steps to preserve universal
service, including creating both the Lifeline program
for low-income consumers and a predecessor to today’s high-cost fund following AT&T’s dissolution. See
Rural Tel. Coalition v. FCC, 838 F.2d 1307, 1312 (D.C.
Cir. 1988) (upholding the FCC’s creation of a “Federal
Universal Service Fund” to “ensure that telephone
rates are within the means of the average subscriber
in all areas of the country”) (citing Amendment of
Part 67 of the Commission’s Rules and Establishment
of a Joint Board, 96 F.C.C.2d 781, 795 (1984)).
Congress ultimately stepped in through the Telecommunications Act of 1996, creating an explicit support
mechanism
in
Section
254.
See
Telecommunications Act of 1996, Pub. L. No. 104-104,
Exclusion, 5 INT’L J. COMM. 665 (2011) (explaining that as more
people gain access to broadband internet service and participate
in the digital side of society, everyone benefits, while “as a
network grows in size and value, those outside the network face
growing disparities.”).
6 Congressional Research Service, Universal Service Fund:
Background and Options for Reform, 2 (2011).
8
110 Stat. 56 (1996). The Act defined universal service
as “an evolving level of telecommunications services”
that the FCC would periodically update based on
technological advances. 47 U.S.C. § 254(c)(1). Congress directed the FCC to consider specific factors in
this evolution, including whether services are “essential to education, public health, or public safety” and
have “been subscribed to by a substantial majority of
residential customers.” Id. The statute enumerates
additional criteria for the FCC to consider as it
evolves the definition over time. 47 U.S.C. § 254(c)(1)(3).
To fund these programs through a “specific, predictable, and sufficient mechanism,” Congress mandated contributions from telecommunications carriers
and empowered the FCC to require contributions
from other providers as the public interest requires.
47 U.S.C. § 254(d). The FCC has occasionally expanded the contribution base, such as requiring certain VoIP providers to contribute based on their
benefit from interconnection with the public switched
telephone network. See Universal Service Contribution Methodology, 21 FCC Rcd. 7518 (2006). These
“interconnected VoIP services” are defined as those
that “(1) enable real-time, two-way voice communications; (2) require a broadband connection from the
user’s location; (3) require IP-compatible customer
premises equipment; and (4) permit users to receive
calls from and terminate calls to the PSTN.” 47 C.F.R.
§ 8.1.
This statutory scheme, viewed in context, demonstrates Congressional recognition that communications networks continually evolve. Congress thus
empowered the FCC, as the expert agency, to oversee
and advance universal service policy to keep pace
with that evolution. The resulting framework sup-
9
ports not just networks in rural areas, but also programs for schools, libraries, and rural healthcare providers, 47 U.S.C. §§ 254(h)(1)(A)-(B), 254(h)(2)(A),
while preserving the FCC’s existing Lifeline program,
47 U.S.C. § 254(j).
II.
Congress’s Delegation to the FCC Satisfies Constitutional Requirements
Congress didn’t hand the FCC a blank check and
its delegation provides the agency ample guidance. As
this Court held, “If Congress shall lay down by legislative act an intelligible principle to which the person
or body authorized to fix such rates is directed to conform, such legislative action is not a forbidden delegation of legislative power.” J.W. Hampton, Jr., & Co. v.
United States, 276 U.S. 394, 409 (1928). The Court
more recently explained that “The standards for that
principle are not demanding.” Gundy v. United
States., 139 S. Ct. 2116, 2120 (2019). Section 254 easily satisfies this undemanding test by providing detailed, specific guidance:
•
It requires the FCC to follow six clear principles, from ensuring affordable rates to
providing comparable urban and rural service
•
It specifies who must contribute (telecommunications carriers) and who can receive
10
support (eligible carriers, schools, libraries,
rural healthcare providers)
•
It defines what services can be funded (telecommunications services essential for education, health, and safety)
•
It includes guardrails on costs, requiring
support to be “sufficient” while keeping services “affordable”
This is more detailed direction than the Supreme
Court has required when upholding other delegations
of authority. See Nat’l Broad. Co. v. United States,
319 U.S. 190 (1943) (upholding delegation to the FCC
to regulate broadcast licensing in the “public interest”); Yakus v. United States, 321 U.S. 414 (1944) (upholding delegation of authority to fix “fair and
equitable” commodity prices during wartime); Am.
Power & Light Co. v. SEC, 329 U.S. 90 (1946) (upholding delegation to SEC to prevent “unfair or inequitable” distribution of voting power among security
holders); Lichter v. United States, 334 U.S. 742 (1948)
(upholding delegation to determine “excessive profits”
during wartime); Whitman v. Am. Trucking Ass’ns,
531 U.S. 457 (2001) (upholding delegation to EPA to
set air quality standards “requisite to protect the public health” with “an adequate margin of safety”);
Gundy v. United States, 139 S. Ct. 2116 (2019) (upholding delegation to Attorney General to determine
when it is “feasible” to apply registration requirements for pre-Act offenders under sex offender registration law).
III.
11
The Administration of USF by the FCC
and USAC Demonstrates that the FCC
Retains Control Over USF and USAC
Acts in a Ministerial Capacity
The Fifth Circuit fundamentally mischaracterizes
the relationship between the FCC and USAC, erroneously concluding that the FCC has “de facto abdicat[ed],” 109 F.4th at 771, its authority by rarely
rejecting USAC’s proposed contribution factors. This
ignores both the comprehensive regulatory framework governing USAC’s operations and the practical
reality that USAC’s calculations merely implement
FCC-established formulas and procedures. USAC is
not a private shadow regulator but rather an entity
designated by the FCC to gather and process information, operating under the FCC’s authority and surveillance. As the 11th Circuit found,
[T]he FCC maintains deep and meaningful control
over the USAC. In addition to the ways the FCC
maintains final decision-making authority regarding the universal service fund, the FCC always
maintains control of the USAC as an entity. It sets
requirements for selection and selects each of the
USAC’s nineteen directors, id. § 54.703(b)-(c), and
the Chairman of the FCC must approve or appoint
the USAC’s Chief Executive Officer, id. §
54.704(b). A review of the USAC’s involvement
with calculating the contribution factor process reveals no unconstitutional delegation of legislative
authority. The USAC submits proposed projections of the fund’s needs, and the FCC reviews the
USAC’s proposal. If the FCC approves the projection, it is then used in the FCC’s calculation of the
contribution factor. The USAC collects and disburses the funds but must do so according to statutory and administrative directions. Parties can
appeal any USAC action to the FCC, and the
12
FCC’s decisions in these cases bind USAC. In sum,
under § 254, the USAC is subordinate to and remains subject to the authority of the FCC.
Consumers’ Research v. Fed. Commc’ns Comm’n, 88
F.4th 917, 928 (11th Cir. 2023). The comprehensive
regulatory framework governing USAC’s operations,
coupled with the FCC’s pervasive oversight and control, establishes precisely the type of constitutionally
permissible administrative arrangement this Court
has upheld.
By regulation, USAC is expressly prohibited from
any policymaking role: 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).
This prohibition is reinforced through a detailed regulatory structure that confines USAC to purely ministerial functions. As described by the current version
FCC and USAC’s Memorandum of Understanding,7
USAC’s role is strictly limited to administrative
tasks: collecting and processing carrier data, calculating contribution factors using FCC-established formulas, and performing billing and collection
functions. 47 C.F.R. § 54.702(b).
The FCC maintains complete control over all substantive aspects of the universal service program.
Through notice-and-comment rulemaking, the Commission establishes all policies and rules governing
universal service support, sets budgets for the four
disbursement programs, reviews and must approve
USAC’s proposed quarterly contribution factor, and
maintains ongoing oversight of USAC’s activities. The
7 Memorandum of Understanding Between the Federal
Communications Commission and the Universal Service
Administrative Company (2024), https://www.fcc.gov/sites/
default/files/usac-mou.pdf
13
FCC can modify or reject any USAC decision, handles
all policy interpretations and waiver requests, and reviews appeals of USAC decisions. Even the forms
USAC uses to collect revenue data must be developed
by the FCC and approved by the Office of Management and Budget.
Congress established clear statutory parameters
by enacting key definitions that set guardrails on eligible recipients and beneficiaries. Only “eligible telecommunications carriers” (ETCs)—carriers licensed
by states to provide services to eligible beneficiaries—
can receive support. Congress also established definitions for “schools,” “libraries,” and “health care providers” as potential beneficiaries, mirroring other
federal programs where Congress defines eligible
classes rather than naming specific recipients.
The Fifth Circuit’s emphasis on the FCC’s routine
approval of USAC’s contribution factor calculations
misconstrues the nature of the relationship. Far from
evidencing abdication, this pattern of approval reflects the fact that USAC operates entirely within the
confines of FCC direction and control. USAC’s contribution calculations are the product of inputs that the
FCC regulates at every turn—from the detailed worksheets that carriers must submit, to the caps that the
FCC imposes on projected expenses. Why would the
FCC disapprove of USAC following its direction?
The FCC’s control over the contribution factor is
further demonstrated by its active management of reserve funds to adjust quarterly contributions. For example, in 2023 and 2024, the Commission directed
USAC to apply unused funds to reduce the contribution factor.8 USAC lacks any independent authority
8 Proposed Fourth Quarter 2023 Universal Service Contribution
Factor, CC Docket No. 96-45, DA 23-843 (rel. Sep. 13, 2023);
14
to make such adjustments, underscoring that it
serves purely as the Commission’s administrative
agent. This direct control over contribution levels
through reserve fund management further demonstrates that the FCC, not USAC, exercises ultimate
authority over the universal service program’s funding mechanisms.
The FCC’s control extends to USAC’s basic structure and operations. The Commission sets requirements for and selects all nineteen USAC directors,
and the Chairman of the FCC must approve or appoint USAC’s Chief Executive Officer. USAC must file
annual reports with the FCC and Congress detailing
its operations, activities, accomplishments, and administrative actions intended to prevent waste, fraud,
and abuse. The FCC maintains processes to ensure
proper administration of the universal service support mechanisms, and telecommunications carriers
may challenge USAC proposals directly to the agency,
which regularly grants relief when appropriate.
When USAC requires interpretation of any rule or
policy, it must seek guidance from the FCC. USAC’s
projections for the contribution factor are merely proposals, which the FCC has authority to adjust, replace, or reject. The contribution factor cannot be
applied to fund contributors until it has received FCC
approval. These constraints ensure that USAC’s role
remains purely administrative, with all substantive
decision-making authority firmly lodged with the
Commission.
This comprehensive framework of agency control
far exceeds what this Court has required in upholding
Proposed Third Quarter 2024 Universal Service Contribution
Factor, CC Docket No. 96-45, DA 23-557 (rel. June 12, 2024).
15
other arrangements involving private entities. The
Fifth Circuit’s conclusion that the FCC has abdicated
authority to USAC cannot be reconciled with either
the regulatory restrictions on USAC’s role or the practical reality of how the universal service program operates. USAC’s limited administrative function,
performed under comprehensive FCC oversight and
control, readily satisfies constitutional requirements.
The relationship between FCC and USAC is fundamentally different from the unconstitutional private delegation found in Carter v. Carter Coal, 298
U.S. 238 (1936), where private coal producers had the
power to directly regulate the wages and hours of
their competitors without any governmental oversight. In that case, the Court found that the statute
violated the Constitution by delegating to “private
persons” the unchecked “power to regulate the affairs
of an unwilling minority.” Id. at 311. The private entity in Carter Coal was able to set prices, which the
court called “delegation in its most obnoxious form.”
Id.
Instead, the arrangement between the FCC and
USAC is more analogous to the situation in Sunshine
Anthracite Coal v. Adkins, 310 U.S. 381 (1940), where
private entities, such as local boards of coal producers,
proposed minimum prices for coal. However, those
prices were subject to the approval, disapproval, or
modification by the National Bituminous Coal Commission, a governmental body. The Supreme Court
upheld the scheme because the private boards “function[ed] subordinately” to a federal agency. The Court
emphasized that the agency, not the boards, ultimately “determine[d] the prices” and that the agency
“ha[d] authority and surveillance over the [private
boards’] activities.” Id. at 399. In Sunshine Anthra-
16
cite, the code authorities only had the power to recommend minimum coal prices, which were cabined by a
clear rule set by Congress.
In Sunshine Anthracite, the private entities were
subject to “pervasive surveillance and authority” by
the government agency, and the agency, not the private entities, made the final decisions. Similarly,
USAC operates under the FCC’s authority and surveillance. The FCC maintains control over USAC and
holds final decision-making authority regarding the
USF and its programs. The Fifth Circuit’s conclusions
otherwise were incorrect, and this Court should reverse.
IV.
The Fifth Circuit’s Decision Would Have
Far-Reaching Harmful Consequences
A.
Termination of Universal Service
Support Threatens Access to
Communications Services for
Millions of Americans
The Fifth Circuit’s decision threatens vital telecommunications programs that millions of Americans
rely upon daily. The Universal Service Fund supports
four programs that would face disruption: the HighCost Program, which enabled broadband deployment
to 1.65 million rural locations in 2023 alone, totaling
deployment to over 10.7 million locations;9 the E-Rate
9 Universal Service Administrative Company, CAF
Disbursements and Locations Search,
https://opendata.usac.org/stories/s/nzbc-zgrs (last visited
Jan. 14, 2025) (Filter “filing year” and tabulate total
sums of “Locations Deployed in Filing Year” and “Total
Location Obligation” columns to obtain specific numbers).
17
Program, which 90% of U.S. schools and libraries depend on for internet access,10 serving nearly 49 million students;11 the Rural Healthcare Program,
supporting over 9,500 unique rural healthcare providers since inception;12 and the Lifeline Program, ensuring affordable communications services for over 7
million low-income households per month in 2023.13
The impact would be particularly severe in rural areas, where the High-Cost Program subsidizes telecommunications service where the cost per household
can exceed $2,000 annually–an amount that would
make service unaffordable for most rural residents
without support. The E-Rate Program has been essential for 26 years, with schools and libraries having
10 Rhea Kelly, Report: 90% of Schools Depend on E-Rate
Funding Every Year, The Journal (Oct. 29, 2024),
https://thejournal.com/articles/2024/10/29/report-90-ofschools-depend-on-e-rate-funding-every-year.aspx.
11 NCES Data Show Public School Enrollment Held
Steady Overall From Fall 2022 to Fall 2023, National
Center for Education Statistics (Dec. 5, 2024),
https://nces.ed.gov/whatsnew/press_releases/12_5_2024.a
sp; Private School Enrollment, National Center for
Education Statistics, https://nces.ed.gov/programs/
coe/indicator/cgc/private-school-enrollment (May 2024).
12 Universal Service Administrative Company, RHC
Application Status Report, https://opendata.usac.org/
stories/s/9853-5sfz (last visited Jan. 14, 2025) (Tabulate
the total number of unique healthcare provider (or
“hcp_id”) numbers with “external status” equaling
“approved for funding” to obtain specific numbers.)
13 Universal Service Administrative Company, Lifeline
Disbursements Tool, https://opendata.usac.org/
Lifeline/Lifeline-Disbursements-Tool/rink-mije (last
visited Jan. 14, 2025).
18
built their entire technological infrastructure around
this support.
The termination of universal service support
would create severe public safety and healthcare
risks, particularly in rural and low-income communities. Rural healthcare providers depend on telecommunications subsidies for their operations,14 which
includes providing telemedicine services, which have
become essential for managing chronic conditions15
and providing emergency care in areas far from hospitals.16
The loss of Lifeline support would be especially
dangerous, as it would disconnect millions of Americans, including homeless individuals, from emergency
alert systems. Local, state, and federal authorities
rely on these mobile connections to issue targeted
evacuation orders, provide real-time emergency updates, and coordinate disaster response.17 The granularity of these mobile alerts—allowing authorities to
target specific neighborhoods or streets with critical
safety information—cannot be replicated through traditional broadcast emergency systems. During recent
natural disasters, these targeted mobile alerts have
proven crucial for coordinating evacuations and emergency response.18 The loss of universal service support would thus create dangerous gaps in our public
14 https://www.fcc.gov/general/rural-health-care-program
HHS, Telehealth for chronic conditions, https://telehealth
.hhs.gov/providers/best-practice-guides/telehealth-for-chronicconditions/managing-chronic-conditions-through-telehealth.
16 Christina Tsou et al., Effectiveness of Telehealth in Rural
and Remote Emergency Departments: Systematic Review, 23 J.
MED. INTERNET RSCH., e30632 (2021),
https://doi.org/10.2196/30632.
17 FCC, Wireless Emergency Alerts (WEA), https://www.fcc.gov/
consumers/guides/wireless-emergency-alerts-wea.
18 Andrew Lopez, What alerts should I sign up for during L.A.’s
fires?,
Boyle
Heights
Beat
(Jan.
13,
2025),
15
19
safety infrastructure, leaving millions of vulnerable
Americans without access to emergency communications precisely when they need them most.
Beyond the numbers, the disruption of universal
service programs would inflict profound harms on the
people who depend on them. Lacking reliable telecommunications access means being cut off from fundamental aspects of modern American life. Rural and
low-income Americans could face increasing isolation
from family and friends, as video calls and social media have become primary means of maintaining relationships across distances. Senior citizens would lose
vital connections to children and grandchildren.
These harms are difficult to quantize, but they are
real, and damaging.
The professional consequences could be equally severe. Remote work opportunities—which have become essential to rural economic development—
would vanish for many Americans without reliable
broadband. Job seekers would lose access to online job
boards and application systems that are now standard across industries. Workers would be cut off from
training and skills development programs that typically require reliable internet access.
Educational opportunities would contract. Students would lose access to online educational resources, research databases, and distance learning
programs that have become part to modern education.
Rural schools would be unable to offer advanced
https://boyleheightsbeat.com/los-angeles-wildfire-alerts-cellphone; George Karagiannis, Effective public warning systems:
Saving lives and mitigating disaster amid a changing climate,
Prevention Web (Jun. 4 2024), https://www.preventionweb.net/
news/effective-public-warning-systems-saving-lives-andmitigating-disaster-amid-changing-climate.
20
courses that rely on remote instruction. Adult learners would be cut off from online degree programs and
professional certifications that provide paths to career advancement.
Cultural participation depends on reliable and affordable telecommunications as well. Without universal service, many rural and low-income Americans
would lose access to streaming services that have become primary channels for entertainment and cultural engagement. They would be cut off from
participating in online communities and forums that
connect people with shared interests across geographic divides. Local cultural institutions like rural
libraries and community centers would lose the connectivity that allows them to offer digital programs
and resources to their communities.
The loss of universal service support would also
undermine democratic participation and civic engagement in affected communities. The internet has become the primary source of information about
elections, candidates, and policy issues. Voters research ballot measures, watch candidate debates, and
engage with campaign materials through online platforms. News about community issues and public services is shared through municipal websites and social
media. Without reliable telecommunications access,
rural Americans would lose these channels for civic
engagement. The loss of broadband access would
make it harder to file public comments on proposed
regulations, participate in online town halls, or engage with elected officials through digital constituent
21
services platforms. In short, universal service is necessary for a properly functioning democracy.
B.
Termination of Universal Service
Support Would Have Far-Reaching
Negative Effects on the National
Economy
The Fifth Circuit’s ruling threatens not just the
immediate beneficiaries of universal service support,
but would inflict broader damage across the American
economy. As this Court has recognized, reliance interests are “at their acme in cases involving property and
contract rights.” Payne v. Tennessee, 501 U.S. 808,
828 (1991). The universal service framework has fostered extensive private investment and economic development that would be imperiled by the
invalidation of Section 254. The impact would be particularly severe in rural America, where providers
have made infrastructure investments based on the
reasonable expectation of continued universal service
support. A recent survey revealed that 67% of rural
carriers have outstanding debt for broadband network deployments. Without USF support, 61% of
those providers indicated they would likely default on
these loans within three years. Pet. Br. 53. Such defaults would not only harm local economies but would
have ripple effects throughout the financial system
and chill future infrastructure investment nationwide.
Beyond direct telecommunications investment,
USF enables broader economic activity by supporting
the network effects that make modern commerce possible. As the FCC has explained, universal service
provides value to “all consumers, not just low-income
consumers, [through] the network effects of widespread voice and broadband subscribership.” Lifeline
& Link Up Reform & Modernization, Report and Order and Further Notice of Proposed Rulemaking, 27
22
FCC Rcd. 6656, 6665 (2012). When more Americans
can access communications services, it increases the
value and economic potential of the network for everyone.
The economic consequences extend far beyond rural areas. Urban businesses rely on being able to serve
and communicate with customers nationwide.
Healthcare providers depend on reliable telecommunications to deliver telemedicine services. Educational institutions require connectivity to offer
distance learning opportunities. A disruption of universal service support would thus impair economic activity and growth across every sector of the economy.
C.
The Fifth Circuit’s Ruling
Threatens Numerous Government
Activities
The Fifth Circuit's novel “combination theory” creates troubling uncertainty that extends beyond universal service programs. Its reasoning raises
questions about the constitutional status of numerous
administrative structures where agencies work with
private entities under government oversight. The
scope and implications of the court’s theory—that two
independently constitutional delegations might combine to create an unconstitutional result—remain unclear. This ambiguity leaves regulated entities,
agencies, and courts without clear guidance on how to
evaluate similar arrangements, potentially casting a
shadow over long-established administrative frameworks that have functioned effectively for decades under careful government supervision.
Consider Medicare and Medicaid administration.
Like USAC, private Medicare Administrative Contractors (MACs) process claims and make payments
according to formulas and rules established by the
Centers for Medicare & Medicaid Services (CMS).
23
These contractors handle over 1.1 billion Medicare
claims annually, processing more than $430 billion in
payments. 19 Under the Fifth Circuit’s logic, this entire structure could be constitutionally suspect as an
improper delegation from Congress to CMS to private
contractors, despite the contractors performing
purely administrative functions under comprehensive
federal oversight—just like USAC.
The Department of Education’s federal student
loan servicing system faces similar risks. Congress
authorized the Department to administer student
loan programs; the Department contracts with private loan servicers to collect payments and manage
borrower accounts according to detailed federal guidelines. These servicers handle over $1.6 trillion in federal student loans.20 Yet the Fifth Circuit’s theory
might suggest this arrangement improperly combines
Congressional delegation to the Department with the
Department’s delegation to private servicers, despite
the Department maintaining ultimate control and
oversight.
Federal banking regulation could also be imperiled. The Federal Reserve System operates through
private member banks that implement monetary policy and follow Federal Reserve rules and guidelines.21
Centers
for
Medicare
&
Medicaid
Services,
https://www.cms.gov/medicare/coding-billing/medicareadministrative-contractors-macs/whats-mac.
20 Federal Student Aid, Federal Student Aid Posts New
Quarterly Reports to FSA Data Center, Federal Student Aid
Posts New Quarterly Reports to FSA Data Center,
https://fsapartners.ed.gov/knowledge-center/library/electronicannouncements/2023-08-30/federal-student-aid-posts-newquarterly-reports-fsa-data-center.
21 Investopedia, Federal Reserve System: What It Is and How It
Works,
https://www.investopedia.com/terms/f/federalreservebank.asp.
19
24
This structure, which has underpinned U.S. monetary policy for over a century, could be questioned as
an improper delegation from Congress to the Federal
Reserve to private banks, even though the Federal
Reserve maintains strict oversight of member bank
activities.
Similar questions may arise for programs where
agencies rely on private entities for oversight functions. The Environmental Protection Agency works
with private laboratories and monitoring stations to
collect environmental data.22 The FDA and USDA collaborate with private certification bodies for food
safety inspections.23 In each case, private entities perform administrative functions according to detailed
agency specifications while remaining under agency
supervision—just like USAC’s relationship with the
FCC.
The common theme in these arrangements is that
Congress delegates authority to an agency, which
then works with private entities in a purely administrative capacity, with those entities following agency
rules and formulas while remaining under agency
oversight and control. This structure has proven both
efficient and effective, allowing agencies to leverage
private sector capabilities while maintaining government control over policy decisions. The Fifth Circuit’s
ruling threatens to disrupt these long-standing arrangements by suggesting that two independently
Environmental Protection Agency, Superfund Contract
Laboratory Program, https://www.epa.gov/clp.
23 U.S. Food and Drug Administration, FSMA Final Rule on
Accredited Third-Party Certification, https://www.fda.gov/
food/food-safety-modernization-act-fsma/fsma-final-ruleaccredited-third-party-certification;
U.S.
Department
of
Agriculture, Food Safety Agencies & Partners, https://www.fsis.
usda.gov/about-fsis/food-safety-agency-partners.
22
25
constitutional delegations somehow become unconstitutional when combined.
This Court has never endorsed such a theory, and
with good reason. Federal agencies often lack the internal capacity to directly perform all administrative
functions. Forcing everything in-house would massively increase costs while reducing efficiency. Moreover, many federal programs benefit from private
sector expertise and established infrastructure while
maintaining appropriate government oversight—the
same balance struck by the USF program.
The practical consequences of affirming the Fifth
Circuit’s theory may therefore extend far beyond universal service programs. This potential sweeping disruption of established administrative practices is
neither required by the Constitution nor consistent
with this Court’s precedents.
The Fifth Circuit’s ruling reflects neither constitutional necessity nor sound policy. Instead, it threatens
to undermine numerous effective federal programs
that responsibly balance public oversight with private
sector capabilities. This Court should reject the Fifth
Circuit’s novel “combination theory” and reaffirm that
26
agencies may work with private entities in administrative roles while maintaining appropriate government control.
CONCLUSION
For the above reasons, the Court should reverse
the Fifth Circuit.
Respectfully submitted,
JOHN BERGMAYER
Counsel of Record
PUBLIC KNOWLEDGE
1818 N St. NW, Suite 410
Washington, DC 20036
(202) 861-0020
john@publicknowledge.org
Counsel for Amici Curiae
This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.