Supreme Court saves $8 billion rural broadband fund in 6-3 ruling

On Jun. 27, 2025, the Supreme Court ruled 6–3 to uphold the Universal Service Fund’s contribution mechanism against a nondelegation challenge.

The Fund distributes $8 billion each year across four programs: high-cost rural broadband and phone service, Lifeline for low-income households, E-rate for schools and libraries, and Rural Health Care support.

About 21 million rural Americans receive broadband service, 9 million low-income households get discounted internet, and 100,000 schools and libraries are connected—serving roughly 30 million people total.

The Fund is financed by quarterly FCC-determined contributions from telecommunications companies (shown as line-item charges on consumer bills), not by direct congressional appropriations.

A three-way circuit split prompted Supreme Court review: the Fifth Circuit invalidated the Fund in a 9–7 decision, while the Sixth and Eleventh Circuits had upheld it.

The Rural Health Care program alone provides $468.2 million for telemedicine, electronic health records and connectivity in rural hospitals and clinics.

The Universal Service Administrative Company (USAC), a private nonprofit operating under FCC oversight, administers the Fund’s day-to-day operations.

This case was the first serious nondelegation challenge since 1935; the Court found that Congress’s statutory guidelines for the Fund satisfied the “intelligible principle” standard.