Today, at Consumer Research v. FCCThe U.S. Court of Appeals for the Fifth Circuit ruled en banc that the so-called “universal service” fee imposed by the Federal Communications Commission was unconstitutional. Specifically, the Court concluded, 9-7, that the fee was a tax and that its authority was delegated to the FCC, which in turn delegated the authority to set the ex to a private entity (the Universal Service Management Corporation) ). Regardless of whether any of these steps created constitutional issues under the nondelegation doctrine, the Court concluded that the combination of the two delegations was unconstitutional.
Justice Oldham wrote for the court, joined by Justices Jones, Smith, Elrod, Willett, Hodunkin, Engelhardt and Wilson. His point begins this way:
In the Telecommunications Act of 1996, Congress delegated its taxing authority to
Powers of the Federal Communications Commission. The FCC then delegates
Taxing power of private corporations. In turn, the private company
relies on for-profit telecom companies to determine how much
US citizens will be forced to pay “universal service” tax
Showing up on cell phone bills across the country. We hold this undue tax
Violates Article 1, Section 1 of the Constitution.
After ruling out various preliminary issues, Mr Justice Oldham outlined the substantive claims.
The petitioners advocated a universal service contribution mechanism
Breach of legislative attribution clause. See U.S. Constitution. Art. I, § 1 (“all
The legislative power granted by this article shall be vested in the Congress of the United States
States, composed of a Senate and a House of Representatives.
agree. We (A) explain that the power to collect USF “contributions” is
The power to tax – essentially the power to legislate. Then we (B) explain
Congress may delegate legislative authority through 47 USC § 254
FCC because it claims to give the FCC the power to impose taxes without
Provides an easy-to-understand principle to guide the FCC’s discretion. Next, we
(C) Explain that the FCC may delegate taxing authority to
Private entity. Finally, we (D) explain that we do not need to answer explicitly
Any delegation raised doubts because even if Article 254 contained an easily understood
In principle, even if the FCC was allowed to recruit private entities to determine how much universal service tax revenue it should raise,
Broad Congressional Delegation to the FCC and FCC Portfolio
Sublicensing to private entities certainly amounts to constitutional
violation.
From a later perspective:
The FCC does not delegate trivial fact-gathering duties to private entities.
It has been authorized to determine the amount to be levied
From telecom operators (and U.S. consumers) to
Promote “universal service”. In other words, it has delegated taxing powers to
strength. The delegation is not even “an official or official body,
Presumed to have no interest”, but against private individuals without any rights
Government power and interests are ‘often opposed to these people’
Who do they tax. Carter Coal298 United States, 311; See also Ass’n of Am.
Railroads v. U.S. Department of Transportation. (“Amtrak III”), 821 F.3d 19, 29 (DC Cir.
2016) (“There is no harm in delegating legislative power to official bodies.
Because we assume that these institutions are altruistic and that their loyalty lies in
for the public good, not their private interests. But here, most producers
It can be, and often is, detrimental to the interests of others in the same industry.
(Citations and citations omitted)). So we’re in serious trouble
Make the FCC’s separation of powers consistent with Article I, Section 1 of the Constitution.
Please note that this is not a complete catalog of issues. Judge Oldham continued:
Even though the Constitution does not expressly prohibit the FCC
Delegation to USAC and private telecom operators, 47 USC
Section 254 is not authorized. and there is no precedent for this
In the absence of statutory provisions, federal agencies may delegate authority
Authorization. Instead, the only Supreme Court case that favored private
Authorization involves explicit statutory authority.
He concluded:
Even though the Constitution does not expressly prohibit the FCC
Delegation to USAC and private telecom operators, 47 USC
Article 254 does not authorize it. and there is no precedent for this
In the absence of statutory provisions, federal agencies may delegate authority
Authorization. Instead, the only Supreme Court case that favored private
Authorization involves explicit statutory authority. . . .We are highly skeptical of the contributing factors before us
Comply with the provisions authorized by the legislative power of Congress. and
We also doubt whether it is consistent with the general rules of the private sector
Entities may not exercise governmental power, especially without clear provision
and clear congressional authorization. But we don’t need to solve
In this case any question. This is because of the combination of Congress
FCC Full Authorization and FCC Unauthorized Subauthorization
USAC violated the legislative attribution clause of Article I, Section 1.
His conclusion is:
American telecom consumers face billions of dollars in taxes, but no one voted for them. The size of the tax has in fact been determined
A trade group made up of faceless industry insiders
Responsible to the public. And trading groups rely on forecasts
Manufactured by its private for-profit constituent companies, all of which are dedicated to
Profit from every tax increase. This kind of delegation combination,
Reauthorization and obfuscation of USF tax mechanism violates article
Article 1, Section 1 of the Constitution.
Judge Elrod wrote a concurring opinion, joined by Judges Ho and Engelhardt, and Judge Ho himself wrote a concurring opinion.
Judge Stewart wrote the lead dissent, joined by Judges Richman, Southwick, Haynes, Graves, Higginson, and Douglas. It starts with:
I disagree because the Universal Service Fund (“USF”) is not
Unconstitutional. Section 254 of the Telecommunications Act 1996
Provides an easy-to-understand principle and federation communications
Commission (“FCC”) maintains control of universal service
Administrative Corporation (“USAC”), a private entity entrusted with assisting in its administration
USF Administration. Most people’s detailed explanations of policies,
History and various doctrines do not obscure consistent claims
Three sister circuit courts have resolved the department’s constitutional challenges
254. Under the test of intelligible principles, everyone agreed that it was constitutional. this
Most people, divided within a wide range of opinions, believe that (1) creates an amorphous
Analyzing delegation’s new standards, (2) overthrow – without fanfare –
Circuit court precedent indicates that the program charges administrative fees and
Not a tax, (3) blurs the distinction between taxes and fees, (4) rejects
Established Administrative Law Principles and All Evidence to the Contrary
Violates the principle of private non-authorization.
Judge Higginson also wrote a separate dissent, joined by Justices Stewart, Southwick, Graves, and Douglas.
The federal government will almost certainly file a petition for certiorari, which will likely be granted.
