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

Nos. 24-354 and 24-422

In the

Supreme Court of the United States

_________________

FEDERAL COMMUNICATIONS COMMISSION, et al.,

Petitioners,

v.

CONSUMERS’ RESEARCH, et al.,

Respondents.

_________________

SHLB COALITION, et al.,

Petitioners,

v.

CONSUMERS’ RESEARCH, et al.,

Respondents.

_________________

On Writ of Certiorari to the United States

Court of Appeals for the Fifth Circuit

_______________________

REPLY BRIEF FOR PETITIONERS

COMPETITIVE CARRIERS ASSOCIATION,

NTCA, AND USTELECOM–THE BROADBAND

ASSOCIATION

______________________

JENNIFER TATEL

DANIEL H. KAHN

TYLER D. DILLON

WILKINSON BARKER

KNAUER LLP

1800 M St. NW

Suite 800N

Washington, DC 20036

PAUL D. CLEMENT

Counsel of Record

C. HARKER RHODES IV

KEVIN WYNOSKY

CLEMENT & MURPHY, PLLC

706 Duke Street

Alexandria, VA 22314

(202) 742-8900

paul.clement@clementmurphy.com

Counsel for CCA, NTCA, and USTelecom

March 13, 2025

TABLE OF CONTENTS

TABLE OF AUTHORITIES ....................................... ii

REPLY BRIEF ............................................................ 1

ARGUMENT ............................................................... 2

I.

Section 254 Is Constitutional. ............................. 2

A. Section 254 Accords With Historical

Tradition and Current Doctrine .................. 2

B. Section 254 Satisfies the Test Articulated

in the Gundy Dissent ................................. 11

II. The Executive’s Decision To Enlist USAC To

Perform

Ministerial

Functions

Is

Constitutional .................................................... 14

A. The FCC’s Decision to Seek Assistance

From USAC Does Not Implicate Article I

Nondelegation Constraints, Let Alone

Violate Them .............................................. 14

B. Respondents’ Contrary Arguments Are

Unavailing .................................................. 17

III. The Combination Of Congressional Action

That Complies With Article I And Executive

Action That Complies With Article II Does

Not Somehow Become Unconstitutional .......... 20

IV. Affirming The Decision Below Would Be A

Practical Disaster .............................................. 23

CONCLUSION ......................................................... 26

ii

TABLE OF AUTHORITIES

Cases

A.L.A. Schechter Poultry Corp.

v. United States,

295 U.S. 495 (1935) .................................................. 8

AT&T, Inc. v. FCC,

886 F.3d 1236 (D.C. Cir. 2018) ................................ 5

CFPB v. Cmty. Fin. Servs. Ass’n of Am., Ltd,

601 U.S. 416 (2024) ............................................ 3, 23

Consumers’ Rsch. v. FCC,

88 F.4th 917 (11th Cir. 2023) .......................... 15, 16

Free Enter. Fund

v. Pub. Co. Acct. Oversight Bd.,

561 U.S. 477 (2010) .......................................... 22, 23

Gundy v. United States,

588 U.S. 128 (2019) .................................... 12, 13, 14

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

276 U.S. 394 (1928) ........................................ 4, 8, 10

Mistretta v. United States,

488 U.S. 361 (1989) .................................................. 7

N.Y. Cent. Sec. Corp. v. United States,

287 U.S. 12 (1932) .................................................... 4

Nat’l Broad. Co. v. United States,

319 U.S. 190 (1943) .................................................. 4

Panama Refining Co. v. Ryan,

293 U.S. 388 (1935) .................................................. 8

PennEast Pipeline Co., LLC v. New Jersey,

594 U.S. 482 (2021) ................................................ 15

Pensacola Tel. Co. v. W. Union Tel. Co.,

96 U.S. 1 (1877) ...................................................... 11

iii

Skinner v. Mid-America Pipeline Co.,

490 U.S. 212 (1989) ............................................ 7, 10

Sunshine Anthracite Coal Co. v. Adkins,

310 U.S. 381 (1940) ...................................... 4, 16, 22

United States v. Lopez,

514 U.S. 549 (1995) ................................................ 11

United States v. Morrison,

529 U.S. 598 (2000) ................................................ 11

United States v. Sineneng-Smith,

590 U.S. 371 (2020) ................................................ 21

Watson v. Philip Morris Co.,

551 U.S. 142 (2007) ................................................ 15

Wayman v. Southard,

23 U.S. (10 Wheat.) 1 (1825) ............................. 7, 12

Whitman v. Am. Trucking Ass’ns,

531 U.S. 457 (2001) ............................................ 9, 15

Yakus v. United States,

321 U.S. 414 (1944) ................................................ 12

Constitutional Provisions

U.S. Const. art. I, §1 ................................................. 10

U.S. Const. art. I, §8, cl.1 ..................................... 9, 11

U.S. Const. art. I, §8, cl.3 ......................................... 11

U.S. Const. art. II, §1, cl.1 ........................................ 15

Statutes

5 U.S.C. §706(2)(A) ................................................... 17

47 U.S.C. §151 ............................................................ 5

47 U.S.C. §254 ............................................................ 6

47 U.S.C. §254(b) ............................................ 6, 12, 13

47 U.S.C. §254(c) ............................................ 6, 12, 13

iv

47 U.S.C. §254(d) ............................................ 6, 12, 13

47 U.S.C. §254(e) ............................................ 6, 12, 13

Act of Apr. 10, 1790, ch.7, 1 Stat. 109........................ 3

Act of Feb. 20, 1792, ch.7, 1 Stat. 234........................ 3

Customs Act of 1815, ch.31, 3 Stat. 198 .................. 15

Pub. L. No.104-104, 110 Stat. 56 (1996) .................... 5

Regulations

47 C.F.R. §1.41.......................................................... 17

47 C.F.R. §1.106........................................................ 17

47 C.F.R. §1.115........................................................ 17

47 C.F.R. §1.401........................................................ 17

47 C.F.R. §54.308(a) ................................................. 19

47 C.F.R. §54.308(g) ................................................. 20

47 C.F.R. §54.308(h) ................................................. 20

47 C.F.R. §54.309...................................................... 20

47 C.F.R. §54.309(a) ................................................. 19

47 C.F.R. §54.322(g) ................................................. 19

47 C.F.R. §54.322(h)(3) ............................................. 20

47 C.F.R. §54.322(j) .................................................. 20

47 C.F.R. §54.709(a)(2) ....................................... 16, 17

47 C.F.R. §54.709(a)(3) ....................................... 16, 17

47 C.F.R. §54.803 et seq............................................ 20

47 C.F.R. §54.805...................................................... 20

47 C.F.R. §54.805(a) ................................................. 19

v

Other Authorities

In re Federal-State Joint Bd. on

Universal Serv.,

12 FCC Rcd. 8776 (May 8, 1997) ............................. 5

Memorandum of Understanding Between

FCC and USAC (Oct. 17, 2024),

https://www.fcc.gov/sites/default/files/usacmou.pdf................................................................... 18

Eric A. Posner & Adrian Vermeule,

Interring the Nondelegation Doctrine,

69 U.Chi.L.Rev. 1721 (2002) ................................... 3

REPLY BRIEF

The “nightmare for the Constitution” that

respondents imagine, Resp.Br.1, is nothing but a fever

dream. Section 254 does not delegate legislative

power to the Executive; instead, Congress took the

universal-service subsidy long implicit in monopoly

rate regulation and made the subsidy—and Congress’

responsibility for it—explicit while deregulating many

aspects of the communications industry. Congress left

the implementation details to the Executive, but to a

lesser degree than under the prior regime. That

legislative change was a win for both consumers and

nondelegation principles and has made the promise of

broadband a reality for tens of millions of Americans.

Under both historical tradition and settled precedent,

§254 is entirely constitutional.

The Executive’s implementation of that statutory

scheme is equally constitutional. The FCC has not

delegated its executive authority to a private actor; it

has simply assigned ministerial tasks to a private

entity that remains fully subordinate and subject to

FCC oversight and control in the contribution-factor

process, and whose actions have no legal effect unless

and until the FCC determines and publishes the

quarterly contribution factor. Respondents’ strained

efforts to depict the Universal Service Administrative

Company (“USAC”) as a rogue private lawmaker or

executive with no meaningful federal oversight are

belied by the record.

The combination of Congress’ constitutional

action in enacting §254 and the FCC’s constitutional

action in enlisting USAC to help administer it does not

add up to a constitutional violation—which is

2

presumably why respondents devote less than two

pages of their 98-page brief to defending the Fifth

Circuit’s “combination” theory, even though it was the

sole basis for the judgment below. This is not a case

where one branch has imposed multi-layered

restrictions on another, and the Executive’s decision

to enlist private help cannot convert Congress’

enactment of §254 into a delegation problem. This

Court should reverse.

ARGUMENT

I.

Section 254 Is Constitutional.

A. Section 254 Accords With Historical

Tradition and Current Doctrine.

More than two centuries of historical practice and

settled doctrine confirm that Congress did not

impermissibly delegate away its legislative powers by

enacting §254. Indeed, monopoly rate regulation is a

context where this Court has routinely approved

broad congressional authorization for agencydetermined rates that include implicit subsidies for

universal service. In the course of substantially

deregulating communications in 1996, Congress

expressly authorized the maintenance and expansion

of universal service and provided far more explicit

direction than anything that preceded the 1996 Act.

That move from implied to express subsidies reduced

delegation

concerns,

increased

congressional

accountability for universal-service contributions, and

fully comports with the constitutional design.

1. From the First Congress to today, Congress

has regularly granted broad discretionary powers to

the Executive to carry out federal objectives. See

U.S.Br.21-23 (describing numerous Founding-era

3

statutes); accord Mortenson.Br.11-23 (describing even

more). The First Congress, for instance, left it to the

Patent Board to decide which inventions were

“sufficiently useful and important” to warrant

patents, without further guidance. Act of Apr. 10,

1790, ch.7, §1, 1 Stat. 109-10. The Second Congress

likewise left it to the Postmaster General to “provide

for carrying the mail of the United States … as he may

judge most expedient,” and “to prescribe such

regulations” for the postal service “as may be found

necessary.” Act of Feb. 20, 1792, ch.7, §3, 1 Stat. 234.

See also CFPB v. Cmty. Fin. Servs. Ass’n of Am., Ltd,

601 U.S. 416, 434 (2024) (noting “open-ended funding

scheme” in same Act).

As those provisions and numerous other examples

illustrate, it was clearly understood at the Founding

that Congress could afford the Executive broad

discretion to pursue goals that Congress set, and was

not required to micromanage the means that the

Executive might use to achieve those objectives. See

U.S.Br.21-24; Mortenson.Br.1-23; Eric A. Posner &

Adrian Vermeule, Interring the Nondelegation

Doctrine, 69 U.Chi.L.Rev. 1721, 1732-36 (2002); see

also Cmty. Fin. Servs. Ass’n, 601 U.S. at 432 (“The

practice of the First Congress … ‘provides

contemporaneous and weighty evidence of the

Constitution’s meaning.’”). Respondents’ invocation of

counterexamples where early Congresses provided

greater direction do not advance the ball. No one

doubts that Congress can provide direction to the

Executive—the more, the better—but the practice of

granting substantial discretion from the earliest days

of the Republic speaks volumes about the

permissibility of that practice.

4

Rate setting is an area where Congress has long

deemed a degree of executive discretion particularly

useful, and this Court has repeatedly endorsed

Congress’ approach. As private monopolies and

oligopolies began to rise in prominence, trustbusting—or alternatively trust-regulating—became a

national priority. Congress repeatedly tasked the

Executive with regulating national markets in the

public interest. And time and again, this Court

confirmed that Congress could do so without violating

Article I, even when Congress’ instructions were

expressed in necessarily expansive terms. See, e.g.,

J.W. Hampton, Jr., & Co. v. United States, 276 U.S.

394, 407-08 (1928) (Taft, C.J.) (“If Congress were to be

required to fix every rate, it would be impossible to

exercise the power at all. Therefore, common sense

requires that in the fixing of such rates Congress may

provide [the agency] to fix those rates … in accord with

a general rule that Congress first lays down that rates

shall be just and reasonable[.]”); N.Y. Cent. Sec. Corp.

v. United States, 287 U.S. 12, 20-21 & n.1, 24 (1932)

(statute authorizing agency to approve railroad

acquisitions “in the public interest” on “just and

reasonable” terms afforded a sufficient “standard to

guide determinations”); Sunshine Anthracite Coal Co.

v. Adkins, 310 U.S. 381, 397-98 (1940) (same for

statute authorizing agency to fix maximum coal prices

“in the public interest” to protect consumers against

“unreasonably high prices”); Nat’l Broad. Co. v. United

States, 319 U.S. 190, 214-19, 225-26 (1943) (same for

statute authorizing FCC to regulate broadcast

licensing “as public convenience, interest, or necessity

requires”).

5

The regulation of communications services and

rates fit this familiar pattern.

When Congress

established the FCC in 1934, it tasked the agency with

(among other things) making communications

services “available, so far as possible, to all the people

of the United States.” 47 U.S.C. §151. Before the

1990s, the FCC’s primary mechanism for achieving

that goal was by “authorizing rates to monopoly

providers sufficient to enable revenue from easy-toreach customers, such as city dwellers, to implicitly

subsidize service to those in areas that were hard to

reach.” AT&T, Inc. v. FCC, 886 F.3d 1236, 1242 (D.C.

Cir. 2018); see In re Federal-State Joint Bd. on

Universal Serv., 12 FCC Rcd. 8776, 8786-87 (May 8,

1997) (“Implicit subsidies were sustainable in the

monopoly environment because some consumers (such

as urban business customers) could be charged rates

… significantly exceed[ing] the cost of providing

service[.]”). In other words, urban consumers were

subsidizing rural consumers all along, but both the

precise amounts of the subsidies and Congress’

responsibility for them were relatively obscure.

The Telecommunications Act of 1996 changed

that by making both the universal-service subsidy and

Congress’ responsibility for it explicit. The Act was

designed “to promote competition and reduce

regulation” in the telecommunications industry. Pub.

L. No.104-104, 110 Stat. 56. But competition would

make maintaining above-cost rates untenable and so

a Congress that favored both deregulation and

universal service made the subsidy for universal

service explicit and directed the FCC to implement

that subsidy in accordance with explicit statutory

directions. See 47 U.S.C. §254; see CCA.Br.3-5.

6

Section 254 thus represents a significant advance in

terms of delegation principles, as both the universalservice subsidies and Congress’ responsibility for

them became more explicit. Moreover, in charging the

FCC with maintaining and expanding universal

service, Congress provided far more direction than in

typical rate-regulation legislation routinely upheld as

constitutional by this Court. See 47 U.S.C. §254(b)

(setting specific principles for universal service); id.

§254(c) (setting characteristics to consider in

determining services to be supported); id. §254(d)

(setting who must pay contributions); id. §254(e)

(setting who may receive support and terms of its use).

And since 1996, Congress has revisited the subject and

provided additional guidance in multiple amendments

and revisions to §254, as a remarkably bipartisan

amicus brief details. Members.of.Congress.Br.15-18.

In short, there is no mistaking the judgment

Congress made in §254: in moving away from

monopoly-style rate regulation and implicit subsidies,

the federal government would maintain its national

commitment to universal service, which would now be

funded by an explicit subsidy determined in light of

principles set by Congress. That legislative direction

passes muster under any test for impermissible

delegations of legislative authority.

2. Section 254 comfortably satisfies this Court’s

settled nondelegation test.

See CCA.Br.19-31.

Indeed, respondents all but concede as much,

spending most of their brief discussing first principles

while giving short shrift to “modern” cases without

ever asking that they be overruled or even mentioning

stare decisis let alone explaining why overturning a

7

century of precedent is justified. Compare Resp.Br.2965 (36 pages advocating the Court “realign its

nondelegation framework”), with Resp.Br.65-73 (just

9 pages arguing §254 violates “modern” nondelegation

doctrine).

That is understandable: Respondents

cannot dispute that §254 provides substantially more

direction to the Executive than economic and rateregulation legislation that this Court has upheld. See

CCA.Br.19-24; U.S.Br.19-21, 24-30; supra p.4; accord

Skinner v. Mid-America Pipeline Co., 490 U.S. 212,

219 (1989) (rejecting nondelegation challenge to

statute directing executive discretion “with much

greater specificity than in delegations that [this Court

has] upheld in the past”).

Nor is it surprising that this Court’s precedent

affords Congress wide latitude in deciding to what

extent to empower or constrain the Executive in its

implementation of federal statutes. As Chief Justice

Marshall explained, the “precise boundary” of

Congress’ power to “commit something to the

discretion of the other departments … is a subject of

delicate and difficult inquiry, into which a Court will

not enter unnecessarily.” Wayman v. Southard, 23

U.S. (10 Wheat.) 1, 46 (1825). Or as Justice Scalia—

hardly a laggard in defending the Constitution’s

structural guarantees—put it, this Court has “almost

never felt qualified to second-guess Congress

regarding the permissible degree of policy judgment

that can be left to those executing or applying the law,”

as that is “not an element readily enforceable by the

courts.” Mistretta v. United States, 488 U.S. 361, 41516 (1989) (Scalia, J., dissenting); see id. at 416 (“In

short, I fully agree with the Court’s rejection of

petitioner’s” intelligible-principles challenge).

8

Congress’ long tradition of legislating in ways that

give the Executive a key role in effectuating Congress’

own policy judgments, and the basic reality that the

boundaries on legislative authority “must be fixed

according to common sense and the inherent

necessities of the governmental coordination,” J.W.

Hampton, 276 U.S. at 406, all underscore that this

Court has a limited role to play in deciding whether

Congress has granted the Executive too much

discretion to implement federal policy. Once the Court

has confirmed that Congress is accountable for the

basic policy judgment, there is no constitutional

infirmity in giving the Executive discretion to execute

the details—let alone a judicially administrable test

for determining how much discretion is too much.

Here, Congress is plainly accountable for making

universal-service subsidies explicit and expanding the

scope of universal service, and has given the FCC

substantial guidance in implementing those

directives.

Respondents’ brief effort to analogize this case to

Schechter Poultry and Panama Refining accordingly

falls flat, as both statutory text and context provide far

more guidance to the Executive here.

Contra

Resp.Br.59-61 (citing A.L.A. Schechter Poultry Corp. v.

United States, 295 U.S. 495 (1935), and Panama

Refining Co. v. Ryan, 293 U.S. 388 (1935)). As this

Court has explained, the statutory provision at issue

in Schechter Poultry “conferred authority to regulate

the entire economy on the basis of no more precise a

standard than stimulating the economy by assuring

‘fair competition,’” while the provision at issue in

Panama Refining “provided literally no guidance for

the exercise of discretion.” Whitman v. Am. Trucking

9

Ass’ns, 531 U.S. 457, 474 (2001) (Scalia, J.). Section

254, by contrast, is focused on a specific aspect of

telecommunications policy—long subsumed within

general (and constitutional) statutory charges to go

forth and regulate in the public interest.

By

preserving that specific policy preference while

broadly deregulating the sector, Congress made its

embrace of universal service explicit and provided

specific directions for how to implement that

legislative choice. Section 254 thus looks nothing like

the standardless economy-wide directions in the

National Industrial Recovery Act and falls “well

within the outer limits of [this Court’s] nondelegation

precedents.” Id. at 474.

3. Apparently recognizing that more than a

century of settled doctrine makes their nondelegation

challenge a very steep climb, respondents start their

argument not with that doctrine, but with a red

herring: an extended discussion (exceeding their

discussion of “modern” nondelegation caselaw) of the

uncontested proposition that taxation is a legislative

power. See Resp.Br.19-29. That is both entirely true

and entirely irrelevant (for multiple reasons, not least

that §254 is not an exercise of the taxing power at all,

see infra p.11). No one disputes that Congress’ power

to “lay and collect Taxes” is a legislative power. U.S.

Const. art. I, §8, cl.1.

Indeed, respondents

acknowledge that petitioners “have never disputed”

that point, Resp.Br.19, but nonetheless spend ten

pages establishing a proposition the Framers put

beyond reasonable debate with just nine words.

The fact that taxation is a legislative power says

nothing about whether Congress impermissibly

10

delegated legislative power here. After all, every

nondelegation case starts with the premise that some

legislative power is involved; the question is simply

whether Congress has properly exercised that

legislative power or impermissibly delegated it

elsewhere. Moreover, in analyzing that question, this

Court has already wisely rejected the notion that some

“different and stricter nondelegation doctrine” applies

“where Congress delegates discretionary authority to

the Executive under its taxing power.” Skinner, 490

U.S. at 222-23; see J.W. Hampton, 276 U.S. at 409-10

(nondelegation

doctrine

“make[s]

no

such

distinction”). That sound judgment was no doubt

fortified by the notorious difficulties in trying to

differentiate taxation from ordinary regulatory

legislation.

See Skinner, 490 U.S. at 220, 223

(rejecting respondents’ “two-tiered theory of nondelegation” allowed Court to bypass the “threshold

issue which so exercised the District Court”).

Article I vests “[a]ll legislative Powers herein

granted” in Congress, U.S. Const. art. I, §1, and makes

no distinction among those enumerated powers “in

terms of the scope and degree of discretionary

authority that Congress may delegate to the

Executive,” Skinner, 490 U.S. at 220-21. On the

contrary, “[f]rom its earliest days to the present,

Congress, when enacting tax legislation, has varied

the degree of specificity and the consequent degree of

discretionary authority delegated to the Executive in

such enactments.” Id. at 221-22.

Indeed, the

apportionment requirement for direct taxes all but

demanded substantial executive-branch assistance.

See U.S.Br.23. Moreover, respondents recognize that

there is a historically rich and contemporaneously

11

relevant tradition of granting discretion to the

Executive when it comes to tariffs and other duties

and imposts. See Resp.Br.39-41. There is no basis for

treating foreign and domestic taxation differently

when the Framers authorized them both in the same

clause, U.S. Const. art. I, §8, cl.1, and Skinner

unanimously rejected a nondelegation challenge to a

domestic assessment.

Even if there were some kind of heightened

nondelegation scrutiny for taxation, it would not apply

here, because §254 is a valid exercise of Congress’

power “[t]o regulate Commerce … among the several

States.” U.S. Const. art. I, §8, cl.3. The subsidy for

universal service implicit in Congress’ charge to the

FCC to regulate telecommunications in the public

interest was plainly an exercise of the commerce

power. And the explicit authorization to maintain and

expand that subsidy in §254, while deregulating much

of the industry, was equally a classic example of

Congress’ undoubted authority to regulate interstate

commerce and its channels and instrumentalities. See

United States v. Morrison, 529 U.S. 598, 608-09

(2000); United States v. Lopez, 514 U.S. 549, 558-59

(1995); see also Pensacola Tel. Co. v. W. Union Tel. Co.,

96 U.S. 1, 9-10 (1877) (explaining that “it cannot for a

moment be doubted that this powerful agency of

commerce and intercommunication”—the telegraph—

“comes within the controlling power of Congress”).

B. Section

254

Satisfies

the

Articulated in the Gundy Dissent.

Test

Section 254 equally passes muster under the

Gundy dissent’s test, which provides that “as long as

Congress makes the policy decisions when regulating

12

private conduct, it may authorize another branch to

‘fill up the details.’” Gundy v. United States, 588 U.S.

128, 157 (2019) (Gorsuch, J., dissenting) (quoting

Wayman, 23 U.S. (10 Wheat.) at 43); see id. at 166

(“[M]ost importantly, did Congress, and not the

Executive Branch, make the policy judgments?”). The

key question is thus whether Congress has “set forth

standards ‘sufficiently definite and precise to enable

Congress, the courts, and the public to ascertain’

whether Congress’s guidance has been followed.” Id.

at 158 (quoting Yakus v. United States, 321 U.S. 414,

426 (1944)).

That standard is readily met here. Section 254

looks nothing like the bare authorization in 34 U.S.C.

§20913(d) for the Attorney General to deal with preAct offenders (or not) as he saw fit. Here, there is no

mistaking that in adopting §254, it was Congress and

not the Executive that made the policy decision to

preserve universal service, and to do so by requiring

industry members to make contributions specifically

designated to support universal-service programs. See

47 U.S.C. §254(b)-(e). In contrast to §20913(d), the

Executive was not free to do nothing or discontinue

universal-service subsidies. Expressly continuing

those subsidies was the raison d’être for §254 and

Congress took ownership of that policy choice.

Congress likewise set forth guidance “sufficiently

definite and precise” about how to accomplish its

goals, including the principles on which “policies for

the preservation and advancement of universal

service” must be based, id. §254(b); the factors to

consider in defining universal service, id. §254(c); who

must contribute, id. §254(d); and who may receive

support, id. §254(e). That guidance was informed by

13

decades of pre-existing universal-service efforts. Cf.

Gundy, 588 U.S. at 160 (Gorsuch, J., dissenting)

(favorably contrasting Sherman Act’s reference to preexisting common-law concepts with the novel

unguided authorization in Schechter Poultry). Section

254 unquestionably leaves the FCC substantial

discretion to implement Congress’ statutory

mandate—but it also unquestionably resolves the

central policy questions of whether and how support

for universal service should continue. In short, there

is no doubt that Congress has owned the judgment to

continue and expand universal service and to require

contributions from specified industry participants.

Contrary to what respondents suggest, the

principles set out in §254 are not merely “aspirational”

or “precatory,” Resp.Br.47-48; instead, they impose

real limits on FCC authority. The statute mandates

that the FCC “shall” base its universal-service policies

on those principles, 47 U.S.C. §254(b), and in fact

courts have struck down FCC actions for failing to

comply with the statute, see U.S.Br.33-34.

Respondents’ assertions that those decisions show

only that §254 is not “impossible to transgress,” and

involved only “procedural safeguards,” Resp.Br.51-53

(emphasis added), miss the point: By setting out both

the broad objectives that the FCC must pursue and

specific requirements that the FCC must follow in

supporting universal service, Congress properly made

the key “policy decisions” in this area, with sufficient

direction to the Executive to allow courts and the

public to identify “whether Congress’s guidance has

been followed.” Gundy, 588 U.S. at 157, 158 (Gorsuch,

J., dissenting).

14

II. The Executive’s Decision To Enlist USAC To

Perform

Ministerial

Functions

Is

Constitutional.

Just as Congress did not violate the Constitution

in enacting §254, the FCC has not violated the

Constitution in implementing it.

The agency’s

decision to enlist a not-for-profit corporation to help

gather the information the agency needs to carry out

its statutory mandate does not implicate Article I

nondelegation constraints at all, let alone violate some

heretofore unknown restriction in Article II. Agencies

are free to recruit private entities to further their

regulatory objectives, as long as the final authority to

exercise executive discretion remains in agency hands.

Because the FCC retained that final authority here,

its implementation of §254 fully comports with the

Constitution.

A. The FCC’s Decision to Seek Assistance

From USAC Does Not Implicate Article I

Nondelegation Constraints, Let Alone

Violate Them.

There is no precedent for treating executive action

as violating the limits on Congress’ ability to delegate

legislative power. Whatever issues it might raise

under Article II or the Administrative Procedure Act

(APA), the FCC’s decision to seek assistance from

USAC in implementing universal-service programs

does not even implicate Article I constraints on the

delegation of legislative authority. The Legislative

Vesting Clause of Article I prevents Congress from

delegating its legislative power; it does not speak to

whether the Executive can partner with private actors

in implementing statutes that Congress has enacted.

15

See Whitman, 531 U.S. at 472 (“[i]n a delegation

challenge,” focus is on the statute, not executive

implementation). Any limit on Executive cooperation

with private actors in exercising its executive

functions would instead come from the Executive

Vesting Clause of Article II. U.S. Const. art. II, §1,

cl.1; accord Consumers’ Rsch. v. FCC, 88 F.4th 917,

933-38 (11th Cir. 2023) (Newsom, J., concurring)

(agreeing that USAC is not exercising legislative

power and that the relevant question is whether it is

exercising executive power, but that Consumer

Research had not teed up that issue).

As in the Eleventh Circuit, respondents have not

teed up an Article II argument, see Resp.Br.xii, but

there is no Article II violation here. There is nothing

unusual or constitutionally suspect about the

Executive enlisting private support to take care that

the laws be faithfully executed. Congress and this

Court have endorsed the practice both generally, see

28 U.S.C. §1442(a) (extending federal-officer removal

to private parties “acting under” federal officers), and

specifically with regard to tax collection, see Customs

Act of 1815, ch.31, §8, 3 Stat. 198 (extending early

removal statute to “any other person aiding or

assisting” federal customs officials); Watson v. Philip

Morris Co., 551 U.S. 142, 147-48 (2007) (discussing

same), and other distinctly sovereign functions, see

PennEast Pipeline Co., LLC v. New Jersey, 594 U.S.

482, 495-96 (2021) (endorsing the longstanding

practice of delegating eminent domain authority to

private parties).

As decades of settled precedents confirm, federal

agencies may properly enlist private entities to aid

16

them in carrying out their executive functions, as long

as the private entities “function subordinately to” the

agency” and the agency retains “authority and

surveillance over” those private actors. Sunshine

Anthracite, 310 U.S. at 399; see also Consumers’ Rsch.,

88 F.4th at 925-26 (collecting cases). The FCC has not

transgressed those limits here:

It directed the

creation of USAC as a subordinate entity to assist in

implementing the statutory objectives of §254, and it

retains ongoing authority and oversight over USAC.

See U.S.Br.4-5. Nothing in Article II—let alone

Article I—prohibits that sensible regulatory approach.

The FCC’s control over USAC’s ministerial role

here is extensive. USAC must mechanically apply

FCC rules and orders; it cannot make policy, and its

work is subject to independent auditing and FCC

oversight.

See CCA.Br.6-7, 37-39; U.S.Br.41-44;

SHLB.Br.40-47.

USAC’s role is confined to

ministerially collecting data and calculating

projections in strict accordance with FCC rules and

policies. USAC calculates “projections of demand” for

USF programs (and associated administrative

expenses) and the contribution base by aggregating

the information it collects in accordance with FCC

rules and orders. It is the FCC that sets forth and

adopts the contribution factor.

47 C.F.R.

§54.709(a)(2)-(3); see U.S.Br.5-7.

Indeed, respondents implicitly concede that

USAC is subject to the FCC’s authority and control in

this context by focusing on how the FCC carries out

that control. See Resp.Br.79-83 (not disputing that

the FCC has “final decision-making authority” over

USAC). As both the parties and amici have explained,

17

the FCC exercises detailed oversight of USAC’s

ministerial contribution-factor role. See SHLB.Br.4243; FCC.Comm’rs.Br.10-14 (explaining three “levers of

control”); USAC.Leadership.Br.17-24. Regardless, if

respondents believe that the FCC exercises

insufficient supervision over USAC or there is

something arbitrary and capricious about the manner

in which the FCC uses USAC, their remedy lies in the

APA or agency procedures, not a constitutional

challenge to the entire §254 scheme. See 5 U.S.C.

§706(2)(A) (review of “arbitrary [or] capricious” agency

action); 47 C.F.R. §§1.41, 1.106, 1.115, 1.401 (various

methods of seeking relief from the FCC).

B. Respondents’ Contrary Arguments Are

Unavailing.

None of respondents’ contrary arguments is

persuasive. As their primary argument, respondents

assert that USAC improperly exercises government

power by setting contribution rates that are legally

binding unless the FCC affirmatively intervenes to

alter them. Resp.Br.79-80. That assertion is flat

wrong. Instead, as the governing regulations make

clear, only the FCC has the authority to set the

contribution factor; if the FCC never issues a public

notice announcing the contribution factor, no legally

binding contribution rate is ever set. See 47 C.F.R.

§54.709(a)(2) (contribution factor “shall be determined

by the Commission” (emphasis added)); see also id.

§54.709(a)(3) (projected expenses “must be approved

by the Commission,” and “projections of demand and

administrative expenses and the contribution factor

shall be announced by the Commission in a public

notice” (emphases added)). That eliminates any

18

argument that the FCC has abdicated its regulatory

authority and allowed USAC to set binding

contribution rates.

Respondents invoke an FCC-USAC memorandum

of understanding (“MOU”) as “proof” that USAC acts

beyond FCC authority. Resp.Br.81. According to

respondents, that MOU gives the game away by

referring to the projections in the FCC’s public notice

as “USAC’s projections” rather than “FCC’s

projections.” Id. In reality, shorthand aside, the MOU

confirms that the FCC exercises a firm hand over

USAC throughout this process, requiring USAC to

“adhere to the FCC’s requirements for projecting

demand and calculating the contribution base” and

“take account of and comply with the Commission’s

universal service rules,” and explaining that the FCC

“shall review USAC’s demand filing and provide any

necessary feedback to USAC before USAC publicly

files the demand with the FCC” and “provide USAC

with guidance on the use of carryover funds each

quarter if such funds exist.”

Memorandum of

Understanding Between FCC and USAC at 7 (Oct. 17,

2024),

https://www.fcc.gov/sites/default/files/usacmou.pdf. More important, the MOU confirms that it

is the FCC, not USAC, that “propos[es] a contribution

factor” based on the projections—which is the critical

step that leads to a legally binding contribution rate.

Id. Calling the projections “USAC’s projections” does

not change the fact that they are not legally binding

on anyone unless and until the FCC acts.

Respondents complain that the FCC does not

exercise adequate oversight of USAC in practice,

pointing to the fact that the FCC typically uses

19

USAC’s calculations without substantial modification

to set the contribution factor. Resp.Br.82-83. But that

at most seems like fodder for an APA challenge, and

in reality simply underscores the ministerial nature of

USAC’s task here and that it is good at following the

clear directions provided by the FCC. There is no need

for the FCC to intervene when USAC has properly

followed the FCC’s directions. See CCA.Br.42.

Respondents repeatedly exaggerate USAC’s role

in gathering the relevant information for the FCC.

For instance, respondents assert that USAC “makes

dozens of determinations based on discretion-inhering

terms like ‘reasonable’ or ‘suitable.’” Resp.Br.78. That

is highly misleading. The FCC rules that respondents

cite themselves establish criteria to receive funding,

such as by requiring rural rates that are “reasonably

comparable” to those offered in urban areas. See id.

(citing 47 C.F.R. §§54.308(a), 54.309(a), 54.322(g),

54.805(a)). But they do not stand alone. The FCC has

further elaborated on the meaning of the relevant

terms in other rules, orders, and publications, such as

by providing that recipients of various forms of highcost support are presumed to comply with the

“reasonably comparable” rates requirement if they

offer rates at or below specific values announced by

the FCC’s Wireline Competition Bureau based on

collected data. 47 C.F.R. §§54.308(a), 54.309(a),

54.805(a). Nothing in those rules gives USAC any

substantial discretion; instead, USAC is limited to

following specific FCC directives, such as collecting

FCC-mandated reports to confirm compliance with

FCC-set metrics or withholding from support

recipients an FCC-specified percentage of support due

20

to noncompliance. See, e.g., 47 C.F.R. §§54.308(g), (h);

54.309; 54.322(h)(3), (j); 54.805.

Respondents incorrectly assert that USAC

“makes findings as to individual carriers’ eligibility.”

Resp.Br.77. Not so. Carrier eligibility is a function of

(i) eligible telecommunications carrier status, which is

determined by state public utility commissions or the

FCC, as directed by Congress in 47 U.S.C. §214(e); and

(ii) FCC decisions about program rules and awards of

support to specific carriers. See, e.g., 47 C.F.R.

§54.803 et seq.

In sum, despite respondents’ efforts to suggest

otherwise, the record is clear that the FCC has neither

violated some Article II limit on enlisting private

support nor simply handed over the keys to USAC.

The FCC retains supervisory authority and exercises

substantial oversight over USAC, and no binding

contribution factor goes into effect unless and until the

FCC publishes it. Nothing in the Constitution—or

even the APA—requires anything more.

III. The Combination Of Congressional Action

That Complies With Article I And Executive

Action That Complies With Article II Does

Not Somehow Become Unconstitutional.

To its credit, even the Fifth Circuit majority was

unwilling to hold that either §254 alone or FCC’s

reliance on USAC alone violated the nondelegation

doctrine. See Pet.App.64a (declining to “resolve either

question in this case”). Instead, it adopted an entirely

new theory—one that respondents themselves never

advanced below, but cf. United States v. SinenengSmith, 590 U.S. 371, 375-76 (2020) (explaining that

“[i]n our adversarial system of adjudication,” courts

21

should “rely on the parties to frame the issues for

decision”)—and held that “the combination” of

Congress’ decision to afford FCC discretion and the

FCC’s reliance on USAC to perform ministerial

functions “violates the Constitution even if neither of

th[e]se features does so independently.” Pet.App.64a.

That novel “combination” theory is the sole basis

on which the Fifth Circuit majority ruled for

respondents. See Pet.App.64a. It is thus exceptionally

telling that—after declining to raise that

“combination” theory below—respondents barely

defend it in this Court, dedicating less than two pages

of their near-hundred-page brief to the ratio decidendi

of the opinion that brought them here.

See

Resp.Br.88-89.

That extreme reticence is

understandable, as the Fifth Circuit’s “combination”

theory is not just wrong, but mixes and matches

distinct congressional and executive actions that even

together do not amount to either congressional laxity

or executive overreach. This is not a situation like

Carter Coal, where Congress itself tried to cut out the

Executive by delegating authority to private entities.

Instead, the FCC itself opted to enlist USAC in a

subordinate role, a decision respondents do not

independently challenge under the APA. But having

not challenged that executive decision, respondents

cannot coherently deem it the straw that makes

Congress’ actions unconstitutional, which perhaps

explains why respondents did not advance this

“combination” theory themselves below and remain

decidedly lukewarm about it here.

The Fifth Circuit majority’s “combination” theory

jumps the separation-of-powers tracks.

The

22

restrictions that the Constitution imposes to prevent

Congress from delegating legislative power to the

Executive are entirely distinct from the restrictions

that limit the Executive’s ability to authorize private

parties to exercise independent executive discretion.

Compare, e.g., Sunshine Anthracite, 310 U.S. at 39798 (no nondelegation problem where Congress

supplied statutory criteria “wholly adequate for

carrying out [its] general policy and purpose”), with id.

at 399 (no private nondelegation problem where the

Executive “has authority and surveillance over”

industry members who “function subordinately to [it]”

in implementing the statute).

Those distinct

limitations (on separate branches and emanating from

different constitutional articles) cannot combine to

turn

two

constitutional

actions

into

an

unconstitutional one. CCA.Br.44. Contra Resp.Br.8889. And if the FCC’s action really had introduced a

constitutional problem, it would logically be the

regulations, and not the statute (which the Fifth

Circuit viewed as not even authorizing USAC’s role),

that would be unlawful.

Like the Fifth Circuit majority, respondents

invoke Free Enterprise Fund v. Public Company

Accounting Oversight Board, 561 U.S. 477 (2010), as

their model, claiming that it stands for the proposition

that “multi-layer schemes dilute accountability.”

Resp.Br.89. But in Free Enterprise Fund, Congress

was the source of both layers of the multi-layer

removal restriction. Under those circumstances, this

Court concluded that each additional layer of removal

protection exacerbated Congress’ intrusion on the

prerogatives of the Executive. 561 U.S. at 483-84, 49598. Here, by contrast, Congress’ grant of discretion to

23

the Executive and the Executive’s use of private

assistance involve different branches taking different

actions. It makes little sense to conclude that the

Executive’s decision to enlist private support is what

put Congress’ actions over the constitutional line. If

anything, the closer model for this case is not Free

Enterprise Fund but Community Financial Services

Association, where this Court rejected the argument

that a novel combination of multiple constitutional

features could create a constitutional problem,

although at least there Congress was the source of all

the features. See 601 U.S. at 435-38. The Fifth Circuit

majority erred by taking the opposite approach here.

IV. Affirming The Decision Below Would Be A

Practical Disaster.

The Fifth Circuit majority’s decision is not only

wrong as a matter of law, but also threatens serious

practical consequences. Not only has the universalservice arrangement not spread to the IRS or spawned

copycat arrangements in its nearly 30 years of

existence, but it has benefited tens of millions of rural

and/or low-income customers.

Eliminating the

universal-service fund would cause severe disruptions

for

consumers,

rural

communities,

anchor

institutions, and enterprises. See CCA.Br.49-53.

Rural consumers could lose planned broadband

deployments; low-income customers could lose phone

service; students could lose much needed connectivity;

rural patients could lose access to essential telehealth

services; and everyone could lose the benefits of

having communication services that extend to the

most rural or economically challenged individuals, as

24

even wealthy city dwellers benefit from a truly

comprehensive network. CCA.Br.50.

The widespread benefits of a widespread network

explain the diverse chorus of amici singing the praises

of universal service:



Universal-service programs have “assisted

millions of Americans, schools, libraries, and

health care providers,” but affirming would

“arrest

this

forward

momentum.”

Members.of.Congress.Br.21-22;

accord

Software.Industry.Br.11-17 (detailing adverse

consequences for E-rate beneficiaries).



The fund’s “sudden loss” “would mean cuts in …

services, diminished access to the technology

Congress wanted to be made universally

available, and in some instances, bankruptcies

and job losses.” Colorado.Br.4.



Affirming “will impact the safety of rural

Alaskan communities” because “rural residents

will lack a reliable way to call 911” and rural

troopers will be unable “to use cell service

during investigations.” Alaska.Br.8; accord

Tribal.Organizations.Br.14-30

(noting

disastrous impacts on tribal communities).



“Congress deliberately chose to vest the

Commission with authority to respond nimbly

to new developments in technology”; affirming

“would eliminate that flexibility and throw

federal efforts to support access to vital

communications services into disarray.”

FCC.Comm’rs.Br.5.

25

Respondents’ contrary depiction of the universalservice fund as ineffective, by contrast, is based

primarily on a single, near-decade-old report.

Resp.Br.12-13, 62. That depiction is outmoded and

short-sighted, and focuses upon concerns with a single

component of the larger fund.

In reality, the

universal-service fund enabled broadband deployment

to 1.65 million rural locations in 2023 alone,

Public.Knowledge.Br.16-17; supported services for

approximately 106,000 schools and over 12,500

libraries in just the past two years, AASA.Br.22; and

aided schools, libraries, hospitals, and low-income

households on tribal reservations across the country,

see Oglala.Sioux.Br.9-12.

In short, affirming the decision below would be

unjustified as a doctrinal matter and disastrous as a

practical matter. Section 254 does not raise any

Article I problem; it is well within the range of

permissible delegations routinely upheld by this

Court.

Indeed, compared to the monopoly rate

regulation regime it replaced, §254 makes both

universal-service

subsidies

and

Congress’

responsibility for them far clearer. The FCC’s use of

USAC does not raise any Article II problem. And the

“combination” of a statutory regime that complies with

Article I and a regulatory arrangement that complies

with Article II does not add up to a constitutional

problem.

26

CONCLUSION

This Court should reverse.

Respectfully submitted,

JENNIFER TATEL

PAUL D. CLEMENT

DANIEL H. KAHN

Counsel of Record

TYLER D. DILLON

C. HARKER RHODES IV

WILKINSON

KEVIN WYNOSKY

BARKER

CLEMENT & MURPHY, PLLC

706 Duke Street

KNAUER LLP

1800 M St. NW

Alexandria, VA 22314

(202) 742-8900

Suite 800N

Washington, DC 20036 paul.clement@clementmurphy.com

Counsel for CCA, NTCA, and USTelecom

March 13, 2025