FCC Defends USAC to SCOTUS in Setting USF Contribution Factors

The Universal Service Administrative Co's. (USAC) role in administering the FCC's Universal Service Fund programs "is purely administrative," the FCC told the U.S. Supreme Court in response to Consumers' Research's challenge of how the commission determines quarterly contribution factors (see 2401100044). USAC "must comply with detailed regulations issued by the FCC" and "helps the FCC compute the amount of each quarterly payment" carriers must contribute, the agency said in an opposition brief filed in docket 23-456.

The agency dismissed Consumers' Research's claim that collecting USF contributions was an unlawful delegation of legislative power by Congress, noting the 6th U.S. Circuit Court of Appeals observed that Congress established an "intelligible principle" to "guide the agency's exercise of that authority" (see 2305040087). The commission also cited an 11th Circuit denial of the group's challenge of a separate contribution factor. Both courts "correctly rejected petitioners' claims," the FCC said, and "their decisions do not conflict with any decision of this Court or of another court of appeals."

The commission told the court that the nondelegation doctrine allows it to "rely on abstract, qualitative standards" and doesn't require that Congress adopts a "determinate criterion." The FCC instead must adopt principles that comply with an intelligible standard, it said. USAC doesn't exercise regulatory power, the FCC said, arguing it performs "ministerial and fact-gathering functions" under the commission's authority.

"The commission, not the administrator, fixes the amount of each quarterly universal-service contribution," the agency said: USAC "simply provides the FCC with financial projections that the commission may use in determining the appropriate amount." The FCC also rejected Consumers' Research's claim that it doesn't conduct "meaningful review" of USAC's calculations. For example, it departed from USAC's calculations for quarterly contribution factors twice in 2023, the FCC said.

In a joint brief supporting the FCC, a coalition of industry and consumer advocacy groups said every federal court of appeals that considered Consumers' Research's challenge has "determined that [USAC] satisfies established constitutional standards" (see 2310060069). The coalition -- USTelecom, NTCA, the Competitive Carriers Association, Schools, Health & Libraries Broadband Coalition, Benton Institute for Broadband & Society, National Digital Inclusion Alliance and MediaJustice -- said that Consumers' Research's challenges are "essentially disagreements with the government ... regarding the nature of USAC's role as a matter of fact."

The coalition argued there is no need for SCOTUS to intervene because there has yet to be a circuit split on the nondelegation doctrine challenge. The groups agreed that the lower courts were correct to conclude that the FCC's contribution methodology passed the intelligible principle test. Section 254 of the Communications Act, which governs USF contributions, "has been in force for more than a quarter century," the groups added.

There's "good reason for the Court to defer considering the nondelegation issue," the coalition said, noting the Court has "increasingly invoked the major questions doctrine to serve the same interest the petitioners claim to champion here." The groups urged that the Court "allow time for the lower courts to apply its most recent pronouncements on the major questions doctrine before undertaking the potentially unnecessary task of considering the abandonment of established constitutional precedents."