A divided U.S. Court of Appeals for the Fifth Circuit on Wednesday struck down as unconstitutional the Federal Communications Commission’s telecommunications subsidy program for schools, low-income and rural users is unconstitutional.
In an en banc 9-7 decision, the Fifth Circuit said Congress violated the Constitution by allowing the FCC to subdelegate the collection of funds to a private entity, the Universal Service Administrative Company. The Court rejected the FCC’s argument that the Universal Service Fund is not a tax but a fee.
