The United States Supreme Court will hear appeals of a 5th Circuit judgment that called Universal Service costs on phone costs a prohibited tax.

The United States Court of Appeals for the 5th Circuit ruled in July that the Federal Communications Commission’s Universal Service Fund is unconstitutional which the costs on phone costs are a “misbegotten tax.” The FCC and a number of non-government groups challenged the judgment, and the Supreme Court consented to use up the case on Friday.

The Universal Service Fund is an $8 billion-a-year system that funds the growth of telecom networks with grants to Internet service suppliers and makes gain access to more inexpensive through programs such as Lifeline discount rates. The FCC program has actually dealt with numerous court obstacles submitted by Consumers’ Research, a not-for-profit that battles “woke corporations,” and a mobile virtual network operator called Cause Based Commerce.

The conservative 5th Circuit’s judgment contravened choices by the 5th and 11th Circuit appeals courts, which both declined claims that the Universal Service Fund is unconstitutional. In a 9– 7 judgment, the 5th Circuit challenged the FCC’s choice to let the Universal Service Fund be administered by a personal company called the Universal Service Administrative Company (USAC). The 5th Circuit stated the FCC “subdelegated the taxing power to a private corporation,” which “the combination of Congress’s sweeping delegation to FCC and FCC’s unauthorized subdelegation to USAC violates the Legislative Vesting Clause in Article I, § 1.”

FCC Chairwoman Jessica Rosenworcel stated on Friday, “I am pleased that the Supreme Court will review the 5th Circuit’s misguided decision. For decades, there has been broad, bipartisan support for the Universal Service Fund and the FCC programs that help communications reach the most rural and least-connected households in the United States, as well as hospitals, schools, and libraries nationwide. I am hopeful that the Supreme Court will overturn the decision that put this vital system at risk.”

FCC difficulty

The FCC and Department of Justice sent a petition for Supreme Court evaluation, stating the court must choose “whether the combination of Congress’s conferral of authority on the Commission and the Commission’s delegation of administrative responsibilities to the Administrator violates the nondelegation doctrine.”

The United States petition stated the USAC “performs administrative tasks on the FCC’s behalf” “exercises no independent regulatory power.” The FCC computes a contribution element that identifies what telephone company will need to pay, and the USAC “calculates each carrier’s contribution by applying the factor to that carrier’s ‘contribution base’ (generally, the carrier’s interstate and international telecommunications revenues),” the petition stated.