The U.S. Supreme Court will hear oral arguments on March 26 in the case of FCC v. Consumers’ Research regarding the constitutionality of the Universal Service Fund. The Court will be reviewing a ruling by the U.S. Court of Appeals for the Fifth Circuit that said that the USF is unconstitutional. That ruling conflicted with rulings from two other appeal courts that largely blessed the FCC and USF.

The case that drove this to the Supreme Court was filed by Consumers’ Research, a nonprofit activist group. The 11^th Circuit ruled that the method used to fund the USF is an illegal tax that didn’t have any specific direction or approval from Congress. Consumers’ Research also argues that Congress neglected its legislative responsibility by giving the collection process to the FCC. They argue that rather than specifying a budget for the USF, Congress gave the FCC the power to decide how big the fund will be.

The case might more aptly be renamed as The Telecom Industry v Consumers’ Research because parties from across the industry have filed amicus briefs supporting the FCC and the Universal Service Fund. For example, a brief was filed jointly by NTCA – The Rural Broadband Association, USTelecom, and the Competitive Carriers Association. That brief argues that the FCC has the authority to operate the USF, including the ability to oversee USAC, the day-to-day administrator of the fund.

Another brief filed jointly by NRTC, NRECA, CFC, and many other organizations focuses on the benefits of the Universal Service Fund and the impact on the public if the fund is eliminated. They also argue that the way the FCC administers the fund is constitutional.

Like almost every topic these days, the USF question has become political. A group of fifteen GOP Attorneys General filed a brief in the case that asks the Court to rule that the USF is unconstitutional. They acknowledge that a lot of good comes from the USF, but argue that it is more important to stop Congress from delegating powers to agencies.

As is usual with Supreme Court cases, the press and public will try to decipher the temperature of the justices on the issue. It’s likely that a decision won’t be rendered until this summer.

If SCOTUS scuttles the current USF, it will be up to Congress to decide if it values the functions being done by the fund. Congress could probably authorize the current USF and the FCC’s role in a law with only a few paragraphs of language. Congress could also preempt this challenge at any time before the ruling. The whole industry recognizes that the USF needs reform, particularly in the way it is funded. That’s likely to be the sticky point for finding a Congressional solution because the funding question pits a lot of powerful lobbies against each other.