The Federal Communications Commission (FCC) asked the U.S. Supreme Court on Sept. 30 to review a lower court ruling that struck down an $8-billion-a-year broadband subsidy.
On July 24, the U.S. Court of Appeals for the Fifth Circuit found the Universal Service Fund was unconstitutional because it took taxing power away from Congress.
The fund was authorized by Congress in the Telecommunications Act of 1996 to provide subsidies for telecommunications services, including internet service, according to the FCC. Specifically, it subsidizes telephone companies serving high-cost regions, low-income customers, rural health care providers, schools, and libraries.
The program is funded by a tax on telephone service and is administered by the Universal Service Administrative Company (USAC), a private company created by the FCC. The tax is collected through line-item charges that appear on monthly telephone bills….