FCC v. Consumers' Research

In this case, the court considered this issue: Did Congress violate the Constitution in the way it delegated power to the FCC to collect Universal Service Fund money, and did the FCC violate the Constitution by letting a private, industry-controlled company make those collection decisions?The case was decided on June 27, 2025.The Supreme Court held that the statutory scheme that allows the FCC to collect “sufficient” contributions to fund universal-service programs does not violate the nondelegation doctrine. Justice Elena Kagan authored the 6-3 majority opinion of the Court.The Communications Act directs the FCC to collect contributions that are “sufficient” to support universal-service programs, which sets both a floor and a ceiling on the agency’s authority. The FCC cannot raise less than what is adequate to finance the programs, but also cannot raise more than that amount. Congress provided adequate guidance by specifying whom the programs must serve (rural and high-cost areas, low-income consumers, schools, and libraries) and defining which services qualify for subsidies. To receive funding, services must be subscribed to by a substantial majority of residential customers, be available at affordable rates, and be essential to education, public health, or safety. These conditions create determinate standards that meaningfully constrain the FCC's discretion.The FCC’s use of the Universal Service Administrative Company to help calculate contribution amounts also passes constitutional muster. The Administrator operates subordinately to the Commission, which appoints its Board of Directors, approves its budget, and retains final decision-making authority. While the Administrator produces initial projections of carrier revenues and Fund expenses, the Commission reviews, revises if needed, and approves these figures before setting the contribution factor. The arrangement mirrors the permissible structure approved in Sunshine Anthracite Coal Co. v. Adkins, where private parties could make recommendations to a government agency that retained ultimate authority.Justice Brett Kavanaugh authored a concurring opinion, agreeing with the outcome but emphasizing concerns about delegations to independent agencies.Justice Ketanji Brown Jackson authored a concurring opinion, expressing skepticism about the viability of the private nondelegation doctrine as an independent constitutional principle.Justice Neil Gorsuch authored a dissenting opinion, joined by Justices Clarence Thomas and Samuel Alito, arguing that Section 254 impermissibly delegates Congress’s taxing power by failing to set a tax rate or meaningful cap on collections.The opinion is presented here in its entirety, but with citations omitted. If you appreciate this episode, please subscribe. Thank you.