A conservative advocacy group is trying to shut down the three decade old practice of making U.S. telecommunications companies pay to build out broadband access in remote regions of the country. The Supreme Court heard the group’s arguments and, despite its conservative leanings, seems poised to uphold the rural-focused subsidy.
For 30 years the Federal Communications Commission has collected cash from U.S. telecoms as part of the Universal Service Fund. The FCC runs the fund but it was established after Congress passed the Telecommunications Act of 1996. The FCC levies the fees from telecoms and the companies pass those fees on to consumers.
A conservative advocacy group called Consumer Research decried the practice, called it unconstitutional, and has argued the case all the way to the highest court in the land. Despite the court being a 6-3 majority, judges on both sides of the political spectrum seemed skeptical of the arguments put forth by Consumer Research’s lawyer.
Trent McCotter, one of the group’s lawyers, argued that one of the issues with the program is that it has no set cap. “There is no clear boundary for the FCC’s ability to set the amount to be raised,” McCotter said.
Conservative justice Brett Kavanaugh and Amy Coney Barrett balked at the idea. “Your position would say, I think, that a solution to the problem you identify could be a trillion dollar cap or a $100 billion cap. And that makes the position seem…what exactly are you trying to accomplish?” Kavanaugh asked.
“That just seems a little bit hollow,” Barrett said. “Kind of seems like a meaningless exercise.”
The justices also argued about whether the FCC’s practice was technically a fee or a tax and what the implications might be. “This is just a straight-up tax without any numerical limit, any cap, any rate. And we’ve never had something like that before,” Judge Neil Gorscuh said. “I’m not saying taxes are special. I’m just saying what’s unique about this case is we have a tax that’s unlike any other tax that this court’s ever approved. It’s not a fee related to costs, and it’s not rate setting of a monopolist.”
Most of the judges worried about what the consequences of ending the program might be. Those consequences are very real. The amount levied has changed over the three years, but right now the FCC gets about $8 billion a year from the practice and uses the cash to improve the internet in hospitals, schools, and libraries in rural areas of the U.S.
“You don’t see the risk that we judges would be overriding popular—and I know you don’t care that it’s popular, but popular in the sense that Congress has enacted it—programs?” Justice Ketanji Brown Jackson asked towards the end of the proceeding.
The arguments for this case are concluded and the judges are expected to issue a ruling sometime in June.
