Summary
This Supreme Court decision addresses whether the Federal Communications Commission's universal-service contribution scheme violates the Constitution's nondelegation doctrine. The Court held that Congress provided an intelligible principle through the Communications Act, sufficiently guiding the FCC's discretion in collecting carrier contributions to subsidize telecommunications services for underserved populations. Additionally, the Court found that the FCC's reliance on a private administrator to calculate the contribution factor did not constitute an impermissible subdelegation of authority.
Topics
Practice areas
Questions Presented
- Whether Section 254's universal-service contribution scheme unconstitutionally delegates legislative power to the FCC under the nondelegation doctrine.
- Whether the FCC impermissibly delegated governmental authority to the private Universal Service Administrative Company.
- Whether the combination of Congress's delegation to the FCC and the FCC's use of the Administrator violates the Constitution even if neither delegation is independently unconstitutional.
- Whether the case was moot after respondents paid the challenged contribution amounts.
Holdings
- Section 254 supplies an intelligible principle and therefore does not unconstitutionally delegate legislative power to the FCC.
- The nondelegation inquiry does not require a numeric cap, fixed rate, or other objective monetary limit merely because a statute raises revenue or may involve taxation.
- The FCC's use of the private Administrator is constitutionally permissible because the Administrator provides recommendations and remains subordinate to the FCC, which retains final decision-making authority.
- The combination of Congress's delegation to the FCC and the FCC's reliance on the Administrator does not create an independent constitutional violation.
- The case was not moot because the challenged contribution factor presented a controversy capable of repetition yet evading review.
Key quotations
“We hold that no impermissible transfer of authority has occurred.” (606 U.S. at 664)
“But in fact the word “sufficient” sets a floor and a ceiling alike.” (606 U.S. at 681)
“So the Commission is, throughout, the final authority—just as the agency was in Sunshine Anthracite.” (606 U.S. at 694)
“A meritless public nondelegation challenge plus a meritless private nondelegation challenge cannot equal a meritorious “combination” claim.” (606 U.S. at 697-698)
Factual background
Section 254 of the Communications Act requires interstate telecommunications carriers to contribute to the Universal Service Fund, which finances subsidy programs for low-income consumers, rural and high-cost areas, schools, libraries, and rural health-care facilities. The FCC calculates a quarterly contribution factor based on projected Fund expenses and carrier revenues. The Universal Service Administrative Company, a private nonprofit corporation, prepares initial projections, but the FCC reviews, may revise, approves, and publishes the final contribution factor.
Procedural history
In December 2021, the FCC set a 25.2% contribution factor for the first quarter of 2022. Consumers' Research challenged the factor in the Fifth Circuit, arguing that the contribution scheme involved unconstitutional delegations of legislative authority. The Fifth Circuit initially upheld the scheme in a panel decision, but the en banc court replaced that decision and granted the petition for review. The Supreme Court reversed and remanded.
Remand instructions
Remanded to the Fifth Circuit for further proceedings consistent with the Supreme Court's opinion.