Congress authorized the Federal Communications Commission (FCC) to establish and implement universal service subsidy programs to promote affordable and reliable nationwide communications services funded by mandatory contributions from telecommunications carriers. 47 U.S.C. § 254. As part of the regulatory scheme to implement its programs, the FCC appointed the Universal Service Administrative Company (USAC), a private company, to administer the programs. Among its tasks, the USAC calculates projections used in computing universal service contribution rates (a tax determined by a private entity according to the Fifth Circuit), which the FCC may adopt.

Under a principle known as the nondelegation doctrine, because Article I of the Constitution vests legislative authority in Congress, Congress may not delegate its legislative powers—its ability to make the law—to another branch of government or other entities. This case raises both facets of the doctrine, as federal administrative agencies, like the FCC, are arms of the Executive Branch, and USAC is a private, non-governmental entity.

In SHLB Coalition v. Consumers’ Research (consolidated with 24-354), the Supreme Court will address (1) whether Congress violated the nondelegation doctrine by authorizing the FCC to determine the mandatory contribution amount for telecommunications providers, (2) whether the FCC violated the nondelegation doctrine by using the financial projections of a private company administrator to determine contribution rates, (3) whether the combination of Congress’s delegation to the FCC and the FCC’s delegation of administrative responsibilities to the private company administrator violates the nondelegation doctrine, and (4) whether this case is moot considering the challengers’ failure to seek preliminary relief before the 5th Circuit.

For more information, please contact Chantel Febus, James Azadian, or Monika Harris.