SCOTUS: FCC v. Consumers’ Research; Digital Equity Gets A Win

The Supreme Court (SCOTUS) ruled on the constitutionality of the Federal Communications Commission’s (FCC) Universal Service Fund (USF), a key federal program that funds broadband access and communications services for low-income and rural communities. In a 6–3 decision on June 27, 2025, the Court upheld the program in FCC v. Consumers’ Research, preserving one of the federal government’s largest tools for advancing digital equity and closing the internet access gap.

What We Know:

• On June 27, 2025, SCOTUS ruled that the FCC’s USF, which collects fees from telecom companies to subsidize communications infrastructure and services, does not violate the Constitution.
• The challenge was brought by conservative and libertarian groups, including Consumers’ Research, arguing that the USF violates the Constitution’s nondelegation doctrine and improperly delegates taxing authority to a private entity.
• The Court upheld the USF’s legality under the Communications Act of 1934 and the Telecommunications Act of 1996, affirming that the FCC can delegate technical functions to the Universal Service Administrative Company (USAC) without violating constitutional principles.
• Justice Neil Gorsuch wrote the dissent, joined by Justices Thomas and Alito, arguing that Congress improperly delegated fiscal authority to a private entity and that this decision expands unchecked administrative power.

Deeper Dive:

The Communications Act of 1934 created the FCC and tasked it with ensuring that communication services are available to all Americans at reasonable rates — a goal known as universal service. In 1996, Congress amended the Act, requiring telecommunications carriers to contribute to the Universal Service Fund (USF), which subsidizes services for low-income consumers, rural areas, schools, libraries, and hospitals. The Universal Service Administrative Company (USAC), a private nonprofit, helps administer the fund.

The FCC’s USF supports four major programs: Lifeline (for low-income households), E-Rate (for schools and libraries), the Rural Health Care Program, and the High-Cost Program (for rural infrastructure). The FCC uses a contribution factor (a percentage of carrier revenues) to determine how much each carrier must pay. The USF is funded by fees levied on telecommunications providers, who then often pass the costs to consumers.

Challengers argued that this system is unconstitutional because the FCC delegates rulemaking and fiscal power to a private nonprofit — the USAC — with little oversight from Congress, which ultimately has the Power of the Purse. They claimed this violates the nondelegation doctrine, a constitutional principle barring Congress from transferring legislative authority to non-governmental bodies.

In a 6-3 decision, the FCC’s system was deemed constitutional. Justice Elena Kagan wrote the majority opinion, joined by Justices Roberts, Sotomayor, Kavanaugh, Barrett, and Jackson. The dissenting opinion was authored by Justice Neil Gorsuch, joined by Justices Thomas and Alito.

Justice Kagan’s majority opinion argued that Congress provided intelligible principles to guide the FCC, and that the agency maintains direct oversight over USAC’s implementation. She emphasized the success of the programs mentioned in the case and how they have benefited Americans.

When Congress amended the Communications Act in 1996, it provided the Commission with clear guidance on how to promote universal service using carrier contributions. Congress laid out the ‘general policy’ to be achieved, the ‘principle[s]’ and standards the FCC must use in pursuing that policy, and the ‘boundaries’ the FCC may not cross.

For nearly three decades, the work of Congress and the Commission in establishing universal-service programs has led to a more fully connected country. And it has done so while leaving fully intact the separation of powers integral to our Constitution.

– Justice Sotomayor

Why This Matters:

This decision ensures the continued operation of broadband subsidy programs that millions of Americans — particularly those in rural, Black, Indigenous, and low-income communities — rely on for basic access to education, telehealth, employment, and civic participation. For example, during the COVID-19 pandemic, the USF played a crucial role in supporting connectivity for marginalized communities. Under the Lifeline Program, the FCC temporarily waived certain rules and expanded eligibility to ensure more people could stay connected during lockdowns, while their E-Rate program allowed greater flexibility in how funds could be used, including for off-campus connectivity like Wi-Fi hotspots and home internet for students.

A 2023 FCC report emphasized that the pandemic exposed and deepened the digital divide but also spurred innovation and investment in broadband infrastructure. Public-private partnerships and targeted outreach helped bring connectivity to “opportunity communities”—those historically excluded from digital access.

The FCC v. Consumers’ Research decision is a significant victory for digital equity. It protects the infrastructure behind internet access for underserved communities and preserves programs that provide affordable service to schools, libraries, and low-income households.

Had the Court ruled against the FCC, it could have dismantled critical programs like E-Rate and Lifeline, disproportionately harming Black, Brown, rural, and Indigenous communities that still face barriers to reliable broadband. In upholding the USF, the Court signaled its support for federal efforts to continue to bridge the digital divide.