Consumers’ Research Lays Out Legal Argument for Overturning USF
Consumers’ Research and its allies outlined the legal reasoning behind their latest attack on the legality of the USF contribution factor, filing a brief Monday with the 5th U.S. Circuit Court of Appeals explaining why the conservative circuit should once again declare the factor unconstitutional.
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In a 9-7 en banc decision in 2024, the 5th Circuit sided with Consumers' Research and found that the USF contribution factor was a "misbegotten tax." The U.S. Supreme Court rejected that finding, but Consumers’ Research is now arguing that the court’s decision opens the door for additional scrutiny (see 2507150081). The group also cited arguments in the dissent to the 6-3 SCOTUS decision (see 2506270054).
Section 254 of the Communications Act “doesn’t specify precisely what ‘universal service’ is, but provides FCC six ‘principles’ and four factors to ‘consider’ when establishing the tax,” Monday's brief said. “For decades, FCC and lower courts construed these principles and factors as optional and ‘aspirational,’ allowing FCC virtually unfettered discretion to determine what services to fund and how much money to raise.” The brief said those days of unlimited discretion are over, noting that the dissent said challengers “remain free … in a future proceeding, to … attack … the constitutionality” of Section 254(c)(3) and (h)(2). “Petitioners take up that invitation here,” the brief said.