Press Release

USF Constitutional Questions: Impact and Path Forward

The Fifth Circuit Court of Appeals ruled in July that the current funding mechanism for the Universal Service Fund (USF), which is used to provide broadband affordability and deployment subsidies, violates the Legislative Vesting Clause of the Constitution as an unlawful tax. In a new insight, Director of Technology and Innovation Policy Jeffrey Westling explains how the USF works, walks through the case, and considers possible next steps for Congress.

Key points:

  • While the decision will be appealed by the Federal Communications Commission (FCC), it could throw the existing USF programs into question, possibly affecting as many as 20 million Americans enrolled in the program and jeopardizing over 3 million USF deployment projects.
  • If Congress wants to continue the USF programs, it should more clearly delegate authority to the FCC to administer them, potentially with reforms to limit costs.
  • Alternatively, lawmakers may find that other programs and increased market competition could obviate the need for USF entirely.

Read the analysis

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