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The U.S. Supreme Court declined Monday to review whether the country's fee-based telecom subsidy system unlawfully delegates taxing powers from Congress to the Federal Communications Commission and a privately run administrator.

High Court Won't Review FCC's Universal Service Fund : Justices Reject Petition

The justices rejected a free-market litigation group's petition to consider whether the Universal Service Fund (USF) violates the Constitution by transferring authority reserved for lawmakers. The decision, part of an order list, does not explain the court's reasoning.

Litigants Argue for Review

Consumers' Research and other litigants asked the high court to review the case due to a potential circuit split. The Sixth Circuit and Eleventh Circuit have sided with the FCC's position that Congress provided adequate direction to the agency when it created the universal service programs. The Fifth Circuit panel, like the other courts, also upheld the FCC's subsidy system. However, the full Fifth Circuit is currently reviewing that panel's decision and has not yet decided the issue.

The FCC manages the Universal Service Fund, but its day-to-day operations are handled by the Universal Service Administrative Co., a privately run company. This arrangement has fueled arguments that Congress has delegated too much authority.

Arguments from Both Sides

In a reply last month to an FCC brief urging the justices to dismiss the case as premature, Consumers' Research and another plaintiff, the Texas Public Policy Foundation, argued that there was no reason to throw out the challenge. They claimed the FCC "focuses primarily on the merits, again confirming there are no obstacles to review."

The FCC has contended that, since it is unclear when the full Fifth Circuit will issue its opinion, the Supreme Court should reject the challengers' petitions for review for now.

"Once it does so, the parties can determine whether to seek, and this court can determine whether to grant, certiorari to review that decision," the FCC stated in an earlier filing. "For now, however, the absence of any circuit conflict counsels in favor of denying the petitions for writs of certiorari."

High Court Won't Review FCC's Universal Service Fund : Legal Representation

Consumers' Research and the other challengers are represented by R. Trent McCotter, Jonathan Berry, Michael Buschbacher, Jared M. Kelson, and James R. Conde of Boyden Gray PLLC, as well as Robert Henneke and Chance Weldon of the Texas Public Policy Foundation.

The FCC is represented in-house by P. Michele Ellison, Jacob M. Lewis, Sarah E. Citrin, and James M. Carr, along with U.S. Solicitor General Elizabeth B. Prelogar.

Broadband expansion advocates are represented by Sean A. Lev, Jason Neal, and Helen Marie S. Berg of HWG LLP, Jennifer Tatel, Daniel H. Kahn, and Morgan O. Schick of Wilkinson Barker Knauer LLP, and Andrew Jay Schwartzman.