FCC v. Consumers' Research

606 U.S. 656
CourtSupreme Court of the United States
DecidedJune 27, 2025
Docket24-354
StatusPublished
Cited by4 cases

This text of 606 U.S. 656 (FCC v. Consumers' Research) is published on Counsel Stack Legal Research, covering Supreme Court of the United States primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
FCC v. Consumers' Research, 606 U.S. 656 (2025).

Opinion

PRELIMINARY PRINT

Volume 606 U. S. Part 2 Pages 656–747

OFFICIAL REPORTS OF

THE SUPREME COURT June 27, 2025

REBECCA A. WOMELDORF reporter of decisions

NOTICE: This preliminary print is subject to formal revision before the bound volume is published. Users are requested to notify the Reporter of Decisions, Supreme Court of the United States, Washington, D. C. 20543, pio@supremecourt.gov, of any typographical or other formal errors. 656 OCTOBER TERM, 2024

Syllabus

FEDERAL COMMUNICATIONS COMMISSION et al. v. CONSUMERS' RESEARCH et al. certiorari to the united states court of appeals for the fth circuit No. 24–354. Argued March 26, 2025—Decided June 27, 2025* The Communications Act of 1934 established the Federal Communications Commission (FCC or Commission) and instructed it to make available to “all the people of the United States” reliable communications services “at reasonable charges.” 47 U. S. C. § 151. That objective is today known as “universal service.” The universal-service project arose from the concern that pure market mechanisms would leave some population segments—such as the poor and those in rural areas—without access to needed communications services. Under the 1934 Act, the FCC pur- sued universal service primarily through implicit subsidies, using its rate-regulation authority to lower costs for some consumers at the ex- pense of others. In 1996, Congress amended the Act and created a new framework for

achieving universal service. Section 254 of the amended statute re- quires every carrier providing interstate telecommunications services to “contribute” to a fund, known as the Universal Service Fund. See § 254(d). The FCC must use the money in the Fund to pay for universal-service subsidy programs. See §§ 254(a), (d), (e). The stat- ute designates the benefciaries of universal-service subsidies—low- income consumers, those in rural areas, schools and libraries, and rural hospitals. §§ 254(b)(3), (h)(1), ( j). And it provides detailed guidance regarding the communications services to which those benefciaries should have access. In deciding what services to subsidize, the FCC “shall consider the extent to which” a service is “essential to education, public health, or public safety” and has “been subscribed to by a sub- stantial majority of residential customers.” §§ 254(c)(1)(A)–(B). So too, the Commission must evaluate whether a service can be made avail- able at an “affordable rate[ ].” § 254(b)(1). Section 254 also sets forth “principles” on which the FCC “shall base” its universal-service policies. § 254(b). Among other things, those principles direct that all consum- ers, “including low-income consumers” and those in “rural” areas, should

*Together with No. 24–422, Schools, Health, & Libraries Broadband Coalition et al. v. Consumers' Research et al., also on certiorari to the same court. Cite as: 606 U. S. 656 (2025) 657

have access to quality services at affordable prices. See ibid. The FCC also may add “other principles” found both “consistent with” the Act and “necessary and appropriate for the protection of the public in- terest, convenience, and necessity.” § 254(b)(7). To calculate how much carriers must contribute to the Fund, the FCC has devised a formula, known as the “contribution factor.” 47 CFR § 54.709(a). That factor is a fraction, expressed as a percentage, whose numerator is the Fund's projected quarterly expenses (the subsidy pay- ments it will make plus overhead) and whose denominator is contribut- ing carriers' total projected quarterly revenue. § 54.709(a)(2). A car- rier must pay into the Fund an amount equal to its own projected revenue multiplied by the contribution factor. § 54.709(a)(3). The FCC has appointed the Universal Service Administrative Com- pany, a private, not-for-proft corporation, as the Fund's “permanent Administrator.” § 54.701(a). The Administrator manages the Fund's day-to-day operations and also plays a role in producing the fnancial projections that end up determining the contribution factor. See §§ 54.702, 54.709(a)(2)–(3). Each quarter, the Administrator projects the Fund's expenses, adds up revenue estimates it receives from carri- ers, and submits those fgures to the Commission for approval and even-

tual use in calculating the contribution factor. See §§ 54.709(a)(2)–(3). In December 2021, the FCC set a 25.2% contribution factor for the frst quarter of 2022. Consumers' Research petitioned for review in the Fifth Circuit, contending that the universal-service contribution scheme violates the nondelegation doctrine. The en banc court granted the pe- tition, replacing a panel decision to the contrary. See 109 F. 4th 743; 63 F. 4th 441. In the full Fifth Circuit's view, the combination of Con- gress's delegation to the FCC and the FCC's “subdelegation” to the Administrator violated the Constitution, even if neither delegation did so independently. 109 F. 4th, at 778. Held: The universal-service contribution scheme does not violate the non- delegation doctrine. Pp. 672–698. (a) Article I of the Constitution provides that “[a]ll legislative Powers herein granted shall be vested in a Congress of the United States.” § 1. Accompanying that assignment of power to Congress is a bar on its further delegation. At the same time, this Court has recognized that Congress may “seek[ ] assistance” from its coordinate branches and “vest[ ] discretion” in executive agencies to implement the laws it has enacted. J. W. Hampton, Jr., & Co. v. United States, 276 U. S. 394, 406. To distinguish between the permissible and the impermissible in this sphere, this Court asks whether Congress has set out an “intelligible principle” to guide what it has given the agency to do. Id., at 409. 658 FCC v. CONSUMERS' RESEARCH

Under that test, Congress must make clear both “the general policy” the agency must pursue and “the boundaries of [its] delegated authority.” American Power & Light Co. v. SEC, 329 U. S. 90, 105. Pp. 672–673. (b) Although the intelligible-principle standard has long guided this Court's nondelegation doctrine, Consumers' Research insists that a dif- ferent test applies here. According to Consumers' Research, universal- service contributions are taxes. And tax statutes, Consumers' Re- search argues, must satisfy a special nondelegation rule. For those statutes, Congress must set a defnite or objective limit on how much money an agency can collect—a numeric cap, a fxed tax rate, or the equivalent. Section 254 contains no such limit, so, in Consumers' Re- search's view, it is unconstitutional. The Court rejects that argument. To begin with, precedent fore- closes it: In both J. W. Hampton, 276 U. S., at 409, and Skinner v. Mid- America Pipeline Co., 490 U. S. 212, 220–221, the Court declined requests to create a special nondelegation rule for revenue-raising legis- lation. The test Consumers' Research proposes also would throw a host of federal statutes into doubt, as Congress has often empowered agencies to raise revenue without specifying a numeric cap or tax rate. See, e. g., 12 U. S. C. §§ 16, 243, 1815(d)(1). Consumers' Research re-

sponds that those other statutes can be distinguished as imposing fees, rather than taxes, and thus be exempted from its numeric-limit require- ment. But Skinner made clear that whether a charge is a tax or a fee is irrelevant to the nondelegation inquiry. See 490 U. S., at 223.

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606 U.S. 656, Counsel Stack Legal Research, https://law.counselstack.com/opinion/fcc-v-consumers-research-scotus-2025.