The Supreme Court Upholds the Universal Service Fund

The Supreme Court recently issued a 6–3 decision in FCC v. Consumers’ Research, a case that threatened the legal foundation of the Universal Service Fund (USF). The USF is one of the most important tools we have for connecting schools, libraries, rural clinics, and low-income households to essential broadband services.

Fortunately, the Court affirmed that the USF is constitutional, marking a significant victory for communities across the nation.

For those who didn’t make it through all 96 pages of the decision, here’s what you need to know.  

What Was at Stake?

The USF collects contributions from telecom companies to support broadband and telecommunications access in underserved areas. It helps fund programs like E-Rate for schools and libraries and rural healthcare connectivity.

Consumers’ Research, a conservative advocacy group, challenged the USF, arguing that:

• Congress gave too much power to the FCC without meaningful limits (a public non-delegation argument); and

• The FCC violated the private non-delegation rules, relying on a private nonprofit organization, the Universal Service Administrative Company (USAC), to administer the fund.

Simply put, Consumers’ Research claimed the USF was unconstitutional and should be dismantled.

How the Court Ruled

The Court rejected those arguments! Justice Elena Kagan, writing for the majority, upheld the USF and reaffirmed the FCC’s authority to administer it.

• On public delegation: The Court said Congress gave the FCC an “intelligible principle”—which allows agencies to carry out complex laws as long as Congress sets clear goals and limits. 

• On private delegation: The Court ruled that USAC’s role is advisory, not binding. The FCC retains full control and makes the final decisions, so there’s no constitutional problem.

SHLB’s Legal Role in Defending the USF

Here at SHLB, we have been in this fight since day one. SHLB served as an intervenor in multiple circuit courts, winning in the 5th, 6th, and 11th Circuits and losing on rehearing in the 5th Circuit—the decision that ultimately brought the case to the Supreme Court.

As the legal battle progressed, SHLB was granted full party status in a consolidated case with FCC v. Consumers’ Research (No. 24-422 consolidated with No. 24-354). 

SHLB’s legal team filed both an opening and reply brief with the Court earlier this year, arguing that dismantling the USF would unravel decades of progress on broadband access and harm the most vulnerable populations.

Why This Ruling Matters

This decision reaffirms that Congress can task agencies like the FCC with carrying out policy goals so long as it provides the agency with clear goals. 

In practical terms, it means that:

• The USF will continue to fund broadband for schools, libraries, rural healthcare clinics, and rural communities.

• Programs like E-Rate and the Rural Health Care Program remain legally sound.

• The FCC retains the authority to update and manage the USF in response to evolving broadband needs, including efforts to expand access in underserved areas.

Resources for Further Analysis

SHLB hosted a public webinar to break down what this decision means for broadband policy, universal service programs, and the future of USF beneficiaries.

Watch the full webinar recording and check out SHLB’s Policy Bytes for a short video explainer.

For additional analysis, read the Benton Institute’s coverage here.

As Justice Kagan writes, “For nearly three decades, the work of Congress and the Commission in establishing universal service programs has led to a more fully connected country. And it has done so while leaving fully intact the separation of powers integral to our Constitution.” This decision is a major victory for schools, libraries, rural healthcare clinics, and communities nationwide, but the work is far from over. The fight does not end here. 

Now, the focus will shift to the work of the Congressional working group to ensure the Universal Service Fund is not only preserved by a sustainable, predictable funding source, but that its programs are modernized and streamlined to meet the demands of a changing digital landscape.

Watch the webinar recording where experts breakdown the decision.

Come explore what’s ahead for the USF and digital opportunity nationwide at AnchorNets, our annual conference where broadband policy meets real-world action: https://www.shlb.org/anchornets-2025

To stay informed or get involved, visit shlb.org and follow our updates on LinkedIn, Facebook, YouTube, or X.

For any questions related to this blog, please reach out to: sdinesh@shlb.org