Second Court Upholds FCC’s Broadband Subsidy Delegation
Says USAC is sufficiently subordinate to pass constitutional muster
A second U.S. Appeals Court has concluded the Federal Communications Commission is on sound constitutional footing when it comes to delegating oversight of the billions of dollars in government advanced telecommunications subsidy money it hands out annually with a big assist from the Universal Service Administrative Co. (USAC).
The 6th U.S. Circuit Court of Appeals, in a unanimous decision handed down Thursday (May 4), said, “USAC’s role in handling the administrative functions of billing the contributing carriers and disbursing the universal-service funds, is permissible ministerial support and, further, reflects its subordination to the FCC.”
Several groups had argued that Congress, and by extension the FCC, was barred by the nondelegation doctrine from ceding Universal Service Fund oversight to a private company, but the court said that was not the case here. “Because USAC is appropriately subordinated to the FCC and serves a fact-gathering and ministerial function without exercising decision-making power, there is no private-nondelegation doctrine violation,“ the court ruled.
The nondelegation clause generally holds that Congress cannot delegate legislative powers to other entities. The 6th Circuit said Congress had provided the FCC delineated discretion and the agency had used it properly.
Back in March, the 5th U.S. Circuit Court of Appeals also concluded that USAF was sufficiently subordinate to the FCC not to run afoul of the clause, which generally holds that the government can't delegate its powers to private entities.
The 5th Circuit pointed out that federal agencies are allowed to “reasonably condition” their actions on “determinations by outside parties.” In the case of the USF and USAC, the conditions were reasonable and thus USAC was properly subordinate to the FCC.
"Another unanimous court of appeals panel has reaffirmed the constitutional validity of the system Congress established to ensure that all Americans have affordable access to telecommunications service and advanced services like broadband," said Andrew Schwartzman, who represented the Benton Institute for Broadband & Society, which intervened in the cases on the FCC’s behalf. “Joining the 5th Circuit which issued a similar decision 6 weeks ago, the U.S. Court of Appeals for the 6th Circuit ruled that Congress properly gave the FCC authority to make sure that rural, educational, library and medical users have affordable access to broadband and other telecommunications services.”
“Today’s decision is a win for the millions of rural and urban consumers as well as anchor institutions that rely on the services supported by the federal Universal Service Fund,” the Competitive Carriers Association, NTCA–The Rural Broadband Association and USTelecom–The Broadband Association said in a joint statement. “As the court decision today confirms, Congress’ direction to the FCC — more than 25 years ago — to collect contributions in support of the universal service program is constitutional. We believe that other courts considering similar challenges should come to the same conclusion.”
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Contributing editor John Eggerton has been an editor and/or writer on media regulation, legislation and policy for over four decades, including covering the FCC, FTC, Congress, the major media trade associations, and the federal courts. In addition to Multichannel News and Broadcasting + Cable, his work has appeared in Radio World, TV Technology, TV Fax, This Week in Consumer Electronics, Variety and the Encyclopedia Britannica.