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1 1 (January 18, 2023)

handle is hein.crs/govekgu0001 and id is 1 raw text is: \Congressional ______ R aesearch S rvice Fifth Circuit Considers Constitutionality of the Universal Service Fund January 18, 2023 In the case Consumers 'Research v. FCC, the U.S. Court of Appeals for the Fifth Circuit is considering whether the funding mechanisms for the Federal Communications Commission's (FCC's) Universal Service Fund (USF) are unconstitutional. The court, in particular, is assessing challengers' arguments that (1) the statutory framework governing the USF unconstitutionally delegates legislative or taxing authority to the FCC, and (2) the FCC's use of the Universal Service Administrative Company (USAC) is an impermissible delegation of regulatory authority to a private entity. The case is fully briefed and the court heard oral argument on December 5, 2022. The USF subsidizes voice and broadband service to high-cost areas and low-income households throughout the country, as well as to schools, libraries, and rural healthcare providers. This case thus could have a significant impact on both U.S. telecommunications policy and the current beneficiaries of USF subsidies. This Sidebar describes the USF and its statutory framework, explains the nondelegation doctrine, discusses the various legal arguments raised in the case, and identifies some considerations for Congress. The Universal Service Fund The USF is a fund administered by USAC, a non-profit entity, under the direction of the FCC. As detailed in a CRS Report, the USF subsidizes telecommunications service in rural and high-cost areas, as well as for schools, libraries, and rural health care providers. Telecommunications carriers-including wireline and wireless companies, and interconnected Voice over Internet Protocol (VoIP) providers-must contribute to the USF based on an assessment of their interstate and international end-user revenues. Eligible telecommunications carriers that serve high-cost areas are entitled to receive money from the fund. The FCC's USF authority is largely governed by Section 254 of the Communications Act of 1934, which was added by the Telecommunications Act of 1996. Section 254(d) requires interstate carriers to contribute to the advancement of universal service on an equitable and nondiscriminatory basis based on the mechanisms established by the Commission. The FCC has implemented this directive by adopting regulations requiring interstate carriers to pay a percentage of their revenue at a rate set on a quarterly Congressional Research Service https://crsreports.congress.gov LSB10904 CRS Legal Sidebar Prepared for Members and Committees of Congress

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