The Federal Communications Commission (FCC) seal hangs inside a meeting room at the headquarters ahead of a open commission meeting in Washington, D.C.
Andrew Harrer | Bloomberg | Getty Images
The Supreme Court could further weaken the power of federal agencies by agreeing on Friday to hear a dispute over a Federal Communications Commission program that requires companies to subsidize telecommunications services in underserved areas.
The case marks the latest opportunity for business interests to hobble regulators at a court with a 6-3 conservative majority sympathetic to their arguments.
The court left open the possibility of sidestepping a ruling in the case by asking the lawyers to argue whether the legal dispute might be moot.
The broader legal principle at issue in the case is whether Congress delegated too much authority to the FCC to determine how much companies should pay in subsidies, a sum that is now in the billions of dollars. The court could embrace what is known as the “nondelegation doctrine.”
The theory — for which conservative justices have indicated support without fully embracing it — would restrict the ability of Congress to pass open-ended laws that give considerable leeway to agencies. If the court were to rule against the FCC, it could open up other long-standing practices to court review on a range of issues the federal government currently regulates, from banking to the environment.
The FCC case raises two interlinked issues, one of which concerns the broad question of whether Congress exceeded its powers. The other is whether the FCC could itself delegate the authority to set the payment amounts to a private company.
As a result of conflicting lower court rulings, both the FCC itself and a coalition led by a conservative group called Consumers’ Research that challenged the current system asked the Supreme Court to weigh in.
The 1996 law in question required the FCC to set up the Universal Service Fund, which requires telecommunications services to submit payments to subsidize what is called “universal service” in low-income and rural areas. The following year, the FCC set up a private corporation called the Universal Service Administrative Company to administer the fund.
The FCC turned to the Supreme Court after the New Orleans-based 5th U.S. Circuit Court of Appeals ruled against the agency.
Conservative Judge Andrew Oldham wrote for the majority that the program was a “misbegotten tax” that violates “bedrock constitutional principles.”
The Supreme Court earlier this year issued a series of rulings against federal agencies, including one overturning a 40-year-old precedent that gave leeway to agencies to interpret laws written ambiguously. All three rulings were decided 6-3 on ideological lines, with conservative justices in the majority and the liberal justices in dissent.
The rulings are the result of a long-term war against the administrative state that has been backed by business interests and conservative politicians. President-elect Donald Trump’s first administration selected judicial nominees in part because of their hostility to federal bureaucracy. Three of them serve on the Supreme Court. Oldham, on the appeals court, is another.
A ruling that limits the power of the executive branch’s agencies could, however, potentially raise roadblocks for Trump, who has indicated he will be aggressive in his use of executive power in his second term, including with his plan to impose broad tariffs.