Fees subsidizing phone, internet services are OK, Supreme Court rules

Published On: June 29, 2025

By The Associated Press’s Mark Sherman

Washington (AP) The levy added to phone bills to fund billions of dollars in subsidized phone and internet services in rural regions, schools, and libraries was upheld by the Supreme Court on Friday.

By a vote of 6-3, the justices overturned an appeals court decision that declared the Universal Service Fund, a fee that has been included on phone bills for almost 30 years, to be unconstitutional.

Both liberal and conservative justices voiced concerns during the March arguments about the potentially disastrous effects of closing the fund, which has helped tens of millions of Americans.

Telecommunications companies pay the Federal Communications Commission and then pass the expense on to their customers.

Consumers Research, a conservative advocacy group based in Virginia, had contested the practice. Prior to this, the program was sustained by federal appellate courts, and the justices rejected two challenges from Consumers Research. However, the 5th U.S. Circuit Court of Appeals, which is one of the most conservative courts in the country, decided 9–7 that the funding mechanism is unconstitutional.

The FCC gave too much power to a private organization, or administrator, after Congress gave it too much power, according to the Fifth Circuit.

The Supreme Court last applied the so-called delegation concept to overturn a federal legislation in 1935. However, a number of conservative judges have indicated that they are amenable to revitalizing the legal concept.

In recent years, the conservative-led court has also made high-profile decisions that have limited the power of government agencies. A 40-year-old case that had been referenced thousands of times to support federal restrictions was overturned by the court last year. In 2022, the court curtailed the Environmental Protection Agency’s capacity to fight climate change by declaring that Congress must act specifically before agencies can address important issues.

However, the issue involving the phone cost proved to be unsuitable for identifying yet another means of limiting federal regulators.

The FCC initiative was backed by the Republican administration of President Donald Trump, which has taken strong action to reduce administrative agencies in other areas. The Democratic administration of President Joe Biden was the first to file the appeal.