Fifth Circuit Strikes Down FCC’s $9 Billion Telecom Fund– legalinsurrection.com

The FCC has spent nearly three decades using a private nonprofit to collect and distribute billions in telecommunications subsidies. On Thursday, a federal appeals court found a rather basic problem with that arrangement: Congress never authorized the agency to create the company.

The U.S. Court of Appeals for the Fifth Circuit ruled unanimously in Consumers’ Research v. FCC that Congress never authorized the FCC to establish the Universal Service Administrative Company (USAC), which has managed the Universal Service Fund since the late 1990s. The three-judge panel vacated the contribution rate for the fourth quarter of 2025 and sent the matter back to the agency

Judge Edith Brown Clement didn’t have to look far to find the problem. The FCC created a corporation to carry out federal responsibilities without Congress’s permission.

Her opinion states:

“Because Congress never specifically authorized the FCC to establish USAC, we hold that the agency violated the Government Corporation Control Act (“GCCA”) by creating the corporation.”