Industry, Advocates Hail Preservation of USF, But Say Reforms are Still Needed
Reactions to the Supreme Court's Friday ruling that the Universal Service Fund is Constitutional
WASHINGTON, June 27, 2025 – The broadband industry and consumer advocates hailed the Supreme Court’s decision Friday upholding the Universal Service Fund. Many noted the ruling cleared the way for reforms that are still much-needed.
“It was a clean win,” Andrew Schwartzman, senior counselor for the Benton Institute for Broadband & Society said. “We’re very, very happy.”
Along with the Federal Communications Commission, Benton was one of the parties that asked the Supreme Court to overturn a Fifth Circuit decision that found the roughly $9 billion-per-year program illegally took taxing power from the legislature. The USF supports rural broadband networks and internet discounts for low-income households, schools and libraries, and rural healthcare centers.
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The high court ruled 6-3 for the FCC, rejecting arguments that the 1996 law standing up the fund didn’t put enough guardrails on the agency and that the agency improperly delegated accounting duties to a nonprofit that it oversees.
“The court was clear that both the delegation of authority from Congress to the FCC, and from FCC to USAC, is constitutional,” said Joey Wender, executive director of the Schools, Healthcare, and Libraries Broadband Coalition. “That question has been put to bed. It’s time that we now do the hard work of ensuring the fund is predictable and sustainable in the long run.”
SHLB was also a party to the case, arguing for preserving the fund.
The program is funded by fees on interstate voice revenue, a pool of cash that’s steadily shrinking while program expenditures remain relatively flat. Lawmakers have been working since the last Congress on legislation to modernize the fund, but their legislative proposal was stalled in part by the legal challenges.
“As welcome as this decision is, the underlying threat to the Universal Service Fund remains, with the program's funding shrinking by the day,” Gigi Sohn, executive Director of the American Association for Public Broadband, said in a statement. “This, along with the expiration of the extremely popular Affordable Connectivity Program, means that the promise of the USF program – to deliver affordable broadband directly to homes, schools and libraries, and rural communities – remains unfulfilled.”
A bipartisan group of lawmakers from both chambers of Congress restarted the USF working group earlier this month and are planning to take another round of input from stakeholders in the coming weeks. Broadband provider revenue has broadly been suggested as a potential funding source, with some, including ISPs, favoring adding big tech companies to the mix.
Greg Guice, president of the Affordable Broadband Campaign, said the decision gave legislators “broad leeway to go about doing reform on the contribution side to ensure that the program is actually able to provide sufficient support to achieve its mission.”
That doesn’t necessarily mean Congress will move quickly, although Guice said that the Supreme Court affirming the structure of the program meant much of the work done last Congress was likely still usable.
“Ironically the win, which we very much wanted, takes pressure off Congress to move sooner rather than later,” Schwartzman said. “This gives Congress breathing room to now fashion what are broadly agreed to be some needed changes.”
More reactions
Telecom industry groups and others were relieved to see the fund not upended and also emphasized the need for reform.
“Today’s decision is a major victory for the millions of Americans who depend on affordable, reliable broadband, especially in rural communities,” USTelecom CEO Jonathan Spalter said in a statement. “But our work is far from over. This decision gives Congress and the Administration the momentum they need to modernize the USF for the next generation.”
He pushed lawmakers to require big tech companies to contribute. Other industry groups like NCTA, INCOMPAS, ACA Connects, RWA, and CCA all said they were pleased with the ruling.
Reps. Brett Guthrie, R-Ky., and Richard Hudson, R-N.C., who respectively head the House Commerce Committee and Communications Subcommittee said they were glad to see the program upheld.
“The Committee on Energy and Commerce can now turn its attention to reforming the USF so it can continue to provide every American with access to the connectivity they need to participate in the 21st century economy,” they said in a joint statement.
FCC leaders were also happy.
“In my time on the Commission, I have had the opportunity to see firsthand the benefits that have come with the connections powered by the agency’s USF program,” FCC Chairman Brendan Carr said in a statement. “I am glad to see the Court’s decision today and welcome it as an opportunity to turn the FCC’s focus towards the types of reforms necessary to ensure that all Americans have a fair shot at next-generation connectivity.”
FCC Commissioner Anna Gomez also hailed the decision and emphasized that “only Congress has the authority to reform the Universal Service Fund in a durable, forward-looking way that can withstand future legal challenges.”
The agency has historically been reluctant to expand the contribution pool beyond voice services, preferring to leave that to Congress. When the FCC reinstituted net neutrality rules – which have since been struck down – the agency held off on assessing USF fees from ISPs, even though the rules would have made it legal to do so under the Communications Act. Then-FCC Chairwoman Jessica Rosenworcel cited a fear that it would drive up consumers’ bills and suggested to lawmakers that online advertiser revenue might be a good source of funding.
Will Hild, head of Consumers’ Research, the conservative nonprofit that challenged the fund, said the majority got the case wrong.
“Today's ruling failed to recognize that it's the job of Congress—not unelected, unaccountable bureaucrats—to decide taxes for the American people,” he said in a statement. “Leaders in Congress must now stand up and fight to reclaim their rightful authority on behalf of every tax-paying consumer."
