For several years now, a well-funded litigation group has sought a federal appellate court decision deeming unconstitutional congressional legislation directing the FCC to establish a subsidy mechanism to achieve affordable and ubiquitous access to telecommunications and broadband. In three appellate court districts, the litigants filed the same claims and lost.
Even a panel in the nation’s most
conservative district, failed to buy the argument that the decades long FCC-created
subsidy mechanism constituted a tax, made worse by the Commission’s delegation
of administrative duties to a private company.
The litigants finally hit paydirt in an enbanc appeal to the Fifth Circuit Court of Appeals that ruled in their favor on a 9-7 vote. See https://www.law360.com/articles/1861779/attachments/0. The litigants finally have a conflict in appellate court rulings that eventually will result in a Supreme Court appeal and the opportunity for the conservative majority there to issue yet another order framed as rightsizing the administrative state.
The litigants ostensibly expressed concerns about constitutional rights, economic freedom, what constitutes a tax, how specific a congressional delegation of authority has to be, and the extent to which the FCC could lawfully delegate administration of the universal service program to a company. These arguments are creative rationales to support a basic mission: to find a way for a court to eliminate an increasingly expensive subsidy burden flowing from telecommunications carriers to qualifying subscribers based on their income. Reduced to its basic premise the litigation is funded by stakeholders who do not want to pay anything to support affordable Internet for everyone, including all those Republican voters in rural America.
Apparently jettisoning a successful, albeit expensive, subsidy program should be shut down as a unfair, and apparently unnecessary gravy train for undeserving beneficiaries, many of which happen to live in rural Red States!
Ever since the onset of telephone service telephone companies, the FCC, and even Congress have supported a universal service mission. For decades, no one objected to the basic premise that society benefits when as many people as possible have access to affordable telecommunications. In light of how right-wing conservatives currently rail against universal service, historically sparsely populated Red, Republican states receive the largest share of universal service funding. Now that universal surface funding has substantially increased to support broadband access, the right-wing rails against so-called Obama Phones and unconstitutional taxation.
The 5th Circuit En Banc decision reeks of partisan, doctrinal overreach. The majority, emboldened by recent Supreme Court decisions to eliminate reliance on regulatory agency expertise, blows up a subsidy mechanism that has significantly achieved progress, and funneled billions of dollars into the coffers of telephone companies.
The ultimate irony from this misguided mission will be a massive increase in employment at the FCC that no longer can off load administrative duties to a separate company. Telephone companies quite likely will regret losing a generous subsidy and I expect them to lobby for a resurrection of the program, with even more explicit, unambiguous language now required by the Supreme Court.
