NEW ORLEANS — Calling it a “misbegotten tax,” a federal appeals court in New Orleans ruled Wednesday that a method the Federal Communications Commission uses to fund telephone service for rural and low-income people and broadband services for schools and libraries is unconstitutional.
The immediate implications of the 9-7 ruling by the 5th U.S. Circuit Court of Appeals were unclear. Dissenting judges said it conflicts with three other circuit courts around the nation. The ruling by the full 5th Circuit reverses an earlier ruling by a three-judge panel of the same court and sends the matter back to the FCC for further consideration. A Supreme Court appeal was likely by advocates for media access.
“The majority’s hostility to the policies underlying the Universal Service Fund is palpable. That, plus the bipartisan group of seven dissenters, makes it almost certain that the Supreme Court will agree to hear the issue,” said Andrew Schwartzman, representing advocacy groups including the Benton Institute for Broadband & Society.
At issue in the case is the Universal Service Fund, which the FCC collects from telecommunications providers, who then pass the cost on to customers. Conservative advocacy group Consumer Research challenged the practice.
