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Welcome to another episode of Womble Perspectives and thank you for joining us today.
Today we’re talking about a potentially pivotal juncture in the litigation of the FCC’s universal service support mechanisms.
Telecommunications serves as the backbone of our contemporary society, and the FCC’s universal service programs providing, in the aggregate, about 10 billion dollars in support for the cost of voice, broadband, and related services used by those living in high-cost areas, low-income consumers, schools and libraries, and rural health care providers, respectively. Those programs were created under the Telecommunications Act of 1996 and, today, they represent a central pillar supporting important national policies favoring universal access to affordable telecommunications and broadband services.
The Universal Service Administrative Company, an independent, not-for-profit entity designated by the FCC, collects funding for the annual cost of federal universal service programs through mandatory assessments on the revenues of certain service providers. Those service providers, in turn, almost invariably pass the cost along to consumers and other end-user customers via line-item surcharges on individual bills.
Starting in 2022, Consumers' Research, a non-profit research and advocacy company, challenged the Universal Service Administrative Company’s method of fund collection with the heart of the matter revolving around the question of tax authority and the definition of universal service with Consumers' Research highlighting what they perceive as an overextension of authority.
Should Consumers’ Research prevails, it would still be difficult for a court, as part of this litigation, to order “refunds” to those that have historically paid into the universal service fund. Universal service payors are not parties to these cases and questions of liability for individual damages for thousands of payors would be difficult to assess on the current record by any of these appellate courts. Depending on the specific outcome, however, it will be interesting to see how payors assess their own potential future opportunities to seek damages against the Universal Service Administrative Company or the FCC itself.
A summary of the arguments from Consumer’s Research and a deeper exploration of the issue at hand - including the potential implications - is available at the link in our show notes.
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