Conservatives target $8 billion internet and phone subsidy. Supreme Court weighs in.

WASHINGTON − When the pandemic prevented Arkansas River Valley residents from accessing the internet at their nearby local library, it didn't stop librarians from providing the critical service. They mounted antennas on rooftops to extend the signal.

“We still do it,” said Misty Hawkins, the regional library director.

The rural population with a median family income below $46,000 depends on the reliable internet connection that its seven libraries provide through a federal program.

“Lives are being changed through the distribution of a computer, through a connection, or a person being able to have résumé assistance, or being able to get their GED,” Hawkins said. “That’s life changing and that’s whether or not they’re going to be able to put food on the table.”

The Supreme Court on Wednesday will hear a challenge to the $8 billion Universal Service Fund program that could jeopardize the availability and affordability of high-speed internet and phone service for millions of Americans, including those served by the Arkansas River Valley Regional Library System.

The case could also have broad repercussions for how much power Congress can delegate to federal agencies to make decisions about implementing legislation.

The Supreme Court’s conservative supermajority has in recent years curtailed the authority of executive agencies.

And the latest challenge is part of that larger conservative effort to curb the “administrative state.”

Trump administration defends FCC's authority

But even though the Trump administration has been aggressively trying to shrink federal agencies, President Donald Trump has also been asserting broad executive authority.

And, in this case, the Justice Department argues Congress did not give away its legislative power when, in 1996, lawmakers formalized a process that allowed telecommunications providers to impose higher rates in cities to subsidize the greater cost of serving rural areas.

Telecommunications companies are charged a Universal Service Fund fee – passed on to customers – that boosts phone and internet service to households and hospitals in rural areas, to low-income families across the country, and to public schools and libraries.

The fund is run through the Universal Service Administrative Company, a private, nonprofit corporation overseen by the Federal Communications Commission.

The administrator distributes the funding, collects the fees and estimates how much needs to be raised each quarter. The FCC must approve the estimate before it’s used to determine the fee for each carrier.

Program challenged as `open-ended scheme'

Consumers’ Research, a conservative group, challenged this setup, as did a carrier and a group of consumers.

They argue it is Congress, not the FCC – and certainly not a private entity − that must determine the fee level.

The current “open-ended scheme” is a “bureaucrat’s dream,” lawyers for the challengers told the court.

They compared it to Congress giving the IRS the power to set tax rates at whatever level the agency thinks is needed to run the government.

“The entire federal government could be funded with a single, vague delegation to the IRS, which could then hand over that power to a private group,” they wrote.

5th US Circuit Court of Appeals sided with challengers

While appeals courts in Ohio and Georgia rejected those arguments, the Louisiana-based 5th U.S. Circuit Court of Appeals declared the universal service fee unconstitutional.

“American telecommunications consumers are subject to a multibillion-dollar tax nobody voted for,” the appeals court said in a 9-7 decision last year. “The size of that tax is de facto determined by a trade group staffed by industry insiders with no semblance of accountability to the public.”

The Justice Department says that’s not what’s happening.

“The FCC ultimately decides, within the limits and standards set by Congress, the amount of the fee,” the department’s attorneys said in a filing.

Justice Department: Delegation similar to other laws

Tax statutes – particularly those allowing a president to impose tariffs – have historically not included the specificity the challengers say should be required under the Constitution, according to the administration.

The telecommunications law, they add, follows the same delegation framework Congress has used in a range of areas, including to prevent unfair competition, oversee the securities industry, ensure the safety of food and drugs, regulate labor relations and set air-quality standards.

But it was an air pollution case – a challenge to former President Joe Biden’s effort to curb greenhouse gas emissions from power plants – that prompted the Supreme Court in 2022 to limit the authority of federal agencies.

The court said regulations that have a major impact on the economy or are a matter of great “political significance” must be backed by clear congressional approval.

And last year, the court overturned a 40-year precedent that courts should defer to an agency as long as their interpretation of a law is “reasonable.”

Tide turning on `non-delegation doctrine'?

But only twice – both times in 1935 in efforts to rein in President Franklin D. Roosevelt – has the court struck down a law for violating the “non-delegation doctrine.”

The last time the Supreme Court weighed in on the issue, a divided court in 2019 declined to tighten the test, which requires Congress merely provide an “intelligible principle” for agencies to follow.

That 5-3 decision came over the objections of Chief Justice John Roberts and Justices Neil Gorsuch and Clarence Thomas. Justice Samuel Alito sided with the liberals but said he would be open to reconsidering the issue in a future case. Justice Brett Kavanaugh did not vote because he joined the court after the case had been argued but before the decision was handed down.

Since that decision, another conservative – Justice Amy Coney Barrett – succeeded Justice Ruth Bader Ginsburg, one of the liberals who was in the 2019 majority.

Communities are at the other end of the funds

Hawkins, the regional library director in Arkansas, said she’s worried that the court could strike down the program, leaving a big hole in her budget.

In the past 10 years, her library system has received $381,395 from the program, which is nearly as much as her annual budget.

Without that funding, Hawkins said, the library wouldn’t be able to pay for equipment like the antennas that boost internet service and might have to cut back on other services, such as databases that provide online tutoring, legal resources, contract guides for small businesses, genealogical research and access to newspapers.

“There’s not a day that goes by that I don’t look at our budgets, saying `What could go if it has to?’” she said of her already tight resources that are also facing local funding threats. “There are real people, real families, real communities that are at the other end of these funds.”