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Congress in 1996 authorized FCC to operate the fund

*

Case involves the non-delegation legal doctrine

(Adds quote from FCC Chair in paragraphs 10-11)

By John Kruzel

WASHINGTON, Nov 22 (Reuters) - The U.S. Supreme Court

agreed on Friday to decide the legality of a congressionally

authorized fund operated by the Federal Communications

Commission to expand access to telecommunications services in a

challenge accusing Congress of unlawfully delegating its

authority to an independent federal agency.

The justices took up an appeal by the FCC and a coalition of

interest groups and telecommunications firms of a lower court's

decision that found Congress violated the U.S. Constitution by

empowering the FCC to manage the fund. The court is expected to

hear arguments in the case and issue a ruling by the end of

June.

Congress in a federal law called the Telecommunications Act

of 1996 authorized the FCC to operate the Universal Service Fund

to promote broad access to services such as phone and broadband

internet.

All telecommunications carriers contribute to the fund,

which draws around $9 billion annually. The fund helps to extend

service to people in rural areas, provides subsidies for

low-income Americans, expands service in Native American tribal

lands and assists schools and libraries.

A group of challengers including the conservative group

Consumers' Research filed lawsuits against the FCC and the U.S.

government, arguing that Congress delegated its revenue-raising

function to the FCC in violation of the Constitution. The

challengers also argued that the FCC unlawfully transferred its

authority to the Universal Service Administrative Company, a

private nonprofit that helps the agency administer the fund.

The case involves the non-delegation doctrine, a legal

concept that embraces the view that Congress cannot delegate the

legislative powers given to it under the Constitution to other

entities. The legality of the FCC's handoff of power involves a

similar concept known as the private non-delegation doctrine.

The FCC was established as an independent federal agency by

the Communications Act of 1934 and is overseen by Congress.

Federal appellate courts have reached different conclusions

on the legal question at issue in the case.

The Supreme Court on Friday agreed to review a ruling by

the New Orleans-based 5th U.S. Circuit Court of Appeals that

found the funding arrangement unconstitutional, granting an

appeal by the FCC and various interest groups.

FCC Chair Jessica Rosenworcel hailed the court's decision to

hear the agency's appeal.

"For decades, there has been broad, bipartisan support

for the Universal Service Fund and the FCC programs that help

communications reach the most rural and least-connected

households in the United States, as well as hospitals, schools,

and libraries nationwide," she said. "I am hopeful that the

Supreme Court will overturn the decision that put this vital

system at risk."

Three industry groups representing telecommunications

companies said in a joint statement they were pleased the high

court will review the lower court ruling.

"It threatens to undermine universal service programs that,

for many decades, have served to promote the availability and

affordability of critical communications services for millions

of rural and low-income consumers, rural health care facilities,

and schools and libraries across the nation," said the Rural

Broadband Association, Competitive Carriers Association and

USTelecom, which represent AT&T ( T ), Verizon, T-Mobile

and other major companies.

The justices have not acted on separate appeals by

Consumers' Research and other interested parties of lower court

rulings that found the funding arrangement constitutional.

The Supreme Court, which has a 6-3 conservative majority,

has reined in the actions of federal regulatory agencies in a

series of rulings in recent years, though those cases did not

involve the non-delegation doctrine.