Federal Appeals Court Rules FCC’s Funding Method for Rural and Low-Income Telephone Services Unconstitutional
Background
The Federal Communications Commission (FCC) uses a method to fund telephone service for rural and low-income people and broadband services for schools and libraries. This method is known as the Universal Service Fund (USF). However, a federal appeals court in New Orleans has ruled that this method is unconstitutional.
The Ruling
On Wednesday, the 5th U.S. Circuit Court of Appeals issued a 9-7 ruling, stating that the USF is unconstitutional. The majority opinion, written by Judge Andrew Oldham, argued that the USF funding method unconstitutionally delegates congressional taxing authority to the FCC and a private entity, the Universal Service Administrative Company (USAC), to determine how much to charge telecommunications companies.
Implications
The immediate implications of the ruling are unclear. Dissenting judges said that it conflicts with three other circuit courts around the nation. The ruling reverses an earlier ruling by a three-judge panel of the same court and sends the matter back to the FCC for further consideration. It is likely that advocates for media access will appeal to the Supreme Court.
The Universal Service Fund
The USF provides phone service to low-income users and rural healthcare providers, as well as broadband service to schools and libraries. The fund is collected from telecommunications providers, who then pass the cost on to their customers. A conservative advocacy group, Consumer Research, challenged the practice.
Judge’s Opinion
Judge Oldham wrote that each program funded through the USF has a laudable objective. However, he also stated that the USF funding method unconstitutionally delegates congressional taxing authority to the FCC and USAC. He wrote that "the combination of Congress’s broad delegation to FCC and FCC’s subdelegation to private entities certainly amounts to a constitutional violation."
Dissenting Opinions
Five judges dissented from the majority opinion, including Judge Carl Stewart, who was nominated to the court by former President Bill Clinton. Judge Stewart wrote that the opinion conflicts with three other circuit courts, rejects precedents, "blurs the distinction between taxes and fees," and creates new doctrine.
Impact on Rural and Low-Income Communities
The ruling could have significant implications for rural and low-income communities that rely on the USF for essential services such as phone and internet access. The USF helps to bridge the digital divide by providing these communities with access to critical communication services.
Conclusion
The 5th U.S. Circuit Court of Appeals has ruled that the FCC’s method of funding rural and low-income telephone services and broadband services for schools and libraries is unconstitutional. The ruling is likely to be appealed to the Supreme Court, and its implications for rural and low-income communities are unclear. The Universal Service Fund provides essential services to these communities, and it is important that a solution is found to ensure continued access to these services.
FAQs
Q: What is the Universal Service Fund?
A: The Universal Service Fund (USF) is a program that provides phone service to low-income users and rural healthcare providers, as well as broadband service to schools and libraries.
Q: How is the USF funded?
A: The USF is funded by telecommunications providers, who then pass the cost on to their customers.
Q: What is the impact of the ruling on rural and low-income communities?
A: The ruling could have significant implications for rural and low-income communities that rely on the USF for essential services such as phone and internet access.
Q: What is the likelihood of the ruling being appealed to the Supreme Court?
A: It is likely that advocates for media access will appeal the ruling to the Supreme Court.
Q: What is the current status of the USF?
A: The USF is still in operation, but the ruling sends the matter back to the FCC for further consideration.
Q: What is the potential outcome of the appeal to the Supreme Court?
A: The potential outcome of the appeal to the Supreme Court is uncertain, but it could have significant implications for the future of the USF and the services it provides to rural and low-income communities.
Author: fortune.com
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