Amicus Brief: FCC v. Consumers Research

The Federal Communications Commission raises revenue through its Universal Service Fund (USF), the legislation for which provides no formula or limits and seems to allow the FCC to pick any rate it wishes. Worse still, the FCC doesn’t administer the fund directly. Instead, the FCC redelegated administering the USF to a private entity, the Universal Service Administrative Company (USAC), whose monthly “proposals” of how many billions of dollars should be raised in taxes become binding if the FCC itself does nothing. In effect, nearly $10 billion is raised every year under penalty of law for a welfare program, at the say-so of a private group of self-interested telecom insiders, with (at best) passive acquiescence of the FCC, based on statutes that impose no real limits.

The Fifth Circuit concluded that the statute and the private transfer to USAC both raised grave nondelegation concerns but ultimately issued a narrow holding: the combination of the two was clearly unconstitutional, as the accountability between the taxpayers and the legislative function is broken at two different levels. The Supreme Court granted review. Given MI’s longstanding advocacy for limiting congressional delegation of authority, we joined the Cato Institute to develop a brief that emphasizes Congress’s unique authority to tax and the concerning implications of this double delegation.

Ilya Shapiro is a senior fellow and director of Constitutional Studies at the Manhattan Institute. Follow him on Twitter here.

Tim Rosenberger is a legal fellow at the Manhattan Institute.

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