The Supreme Court on Wednesday hears another challenge to the way federal agencies operate. The issue basically boils down to this: Did Congress exceed its authority when it authorized the Federal Communications Commission to establish a program that provides accessible—and subsidized—internet service to rural and underserved areas?
At the center of the case is Article I, Section 1 of the Constitution, which has just 25 words: "All legislative Powers herein granted shall be vested in a Congress of the United States, which shall consist of a Senate and House of Representatives."
It's called the Vesting Clause because it vests the country's lawmaking power in Congress. But the clause says nothing either way about when or if Congress can delegate its power. Some conservatives have long argued that Congress may not delegate its powers. Others, like the late Justice Antonin Scalia, say it's a question of degree. But in any event, Wednesday's case could make it much more difficult for Congress to establish programs and authorize agencies to carry out congressional objectives.
Congress founded the FCC more than 90 years ago to ensure the availability of affordable and reliable communication services throughout the United States.
The agency initially established a system of implicit subsidies by requiring telephone companies to charge below-cost rates in rural areas, where it was harder and more expensive to build phone networks, while allowing the companies to charge more in cities where it was easier to build networks.
In other words, in order to create universal service available for all, city dwellers were subsidizing rural areas. By 1996, though, the world of telecommunications was bursting with innovations from the internet to broadband. And Congress overhauled the act, replacing the old system of implicit subsidies with explicit subsidies for customers and hospitals in rural areas, as well as schools and libraries.
Under the 1996 law, the FCC is charged with figuring out how much each telecommunications company must pay into the subsidy program, called the Universal Service Fund. For all practical purposes, the charges are passed on to customers on their telephone or internet bills as surcharges. The question before the Supreme Court is whether that system is an unconstitutional delegation of congressional power.
Challenging the law is Consumers' Research, an anti-regulatory conservative group, that targets what it considers "woke" policies.
Representing the group is lawyer Trent McCotter who argues that "the power here is the power to tax, which is a power that's very strictly legislative."
He argues that not only has Congress unconstitutionally given away its power over taxation, but it's done so twice over because the FCC created a private nonprofit to determine how much each telecommunications company must pay into the fund.
The FCC counters that the Universal Service Fund fees are not a tax, and that whatever one chooses to call them, they were authorized by Congress in order to ensure coverage for rural areas.
Indeed, providing universal service is "the core mission of the agency" and "Congress can't run the program after they set it up," says Richard Wiley, a Republican who served as chairman of the FCC during the Nixon Administration. Running the program, he notes "is what the FCC was established to do.
What's more, he says that the private non-profit company created by the FCC to calculate the universal fund charges has no power of its own. According to Wiley, the company is composed mainly of accountants who "really get into the nitty gritty of whether an E-Rate company has submitted the proper charges for their services or whether people have applied these particular programs properly."
And he says that the FCC, including him when he was on the Commission, does supervise the private company and, on occasion, reverses its findings.
Two federal appeals courts have sided with the FCC in this case, and one, the ultra-conservative Fifth Circuit, has ruled the other way, invalidating the FCCs Universal Service Fund as an unconstitutional delegation of congressional power.
Now the Supreme Court, with a 6-to-3 conservative majority, will have the final say. If it strikes down the FCC program, the implications across the regulatory spectrum could be profound.
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