On July 24, 2024, the U.S. Court of Appeals for the Fifth Circuit ruled in Consumers’ Research v. FCC that the annual $8 billion Universal Service Fund (USF) broadband subsidy program was unconstitutional. This decision contradicts rulings from the Sixth and Eleventh Circuits, which upheld the legality of the Federal Communications Commission’s (FCC) USF.
Funded by fees on telecommunications providers, the USF supports programs for broadband infrastructure, including the E-rate program, which helps schools and libraries obtain affordable internet and Wi-Fi.
Existing E-rate rules and USF-supported programs remain in effect. The court remanded the case to the FCC but did not vacate the USF funding mechanism, meaning the status quo continues indefinitely. The government is expected to request a stay on the decision, which is likely to be granted due to the split between the Fifth, Sixth, and Eleventh Circuits.
In response to the ruling, Funds For Learning issued the following statement from CEO John Harrington:
“The E-rate and other USF-supported programs are mission-critical and play an essential role in the telecommunications ecosystem of the United States. In our annual survey of E-rate applicants, 95% of respondents indicated that E-rate funding is vital to their organization’s internet access.
“It’s clear there is broad support for USF programs, such as the E-rate, and the flow of support to USF beneficiaries is likely to remain in place for the foreseeable future. We will continue to advocate on behalf of the schools and libraries for reliable financial support to keep their students and patrons connected.”
