The Supreme Court has upheld the constitutionality of the Universal Service Fund program run by the Federal Communications Commission, which the telecom industry sees as essential to supporting the buildout of artificial intelligence infrastructure.
“This decision is massive for rural communities that deserve to be part of our digital economy -- particularly as we hurtle towards an AI-enabled future that must be built on fast, reliable fiber broadband to connect everything from scalable data centers to advanced manufacturing,” USTelecom president and CEO Jonathan Spalter said.
“We believe USF is central to building out the infrastructure necessary for rural America to be competitive for the AI-data center boom,” a telecom-sector source told Inside AI Policy.
The high court’s 6-3 decision in FCC v. Consumers’ Research, released June 27, rejected the conservative activist group’s argument that the USF funding scheme is unconstitutional.
House Energy and Commerce Chairman Brett Guthrie (R-KY) and communications and technology subcommittee Chair Richard Hudson (R-NC) said their committee “can now turn its attention to reforming the USF so it can continue to provide every American with access to the connectivity they need to participate in the 21st century economy.”
FCC Chairman Brendan Carr, who was named chair by President Trump, and Democratic Commissioner Anna Gomez both issued statements praising the decision.
“For years, the FCC’s universal service program has played a key role in expanding connectivity and Internet service to Americans in communities across the country,” Carr said. “In my time on the Commission, I have had the opportunity to see firsthand the benefits that have come with the connections powered by the agency’s USF program.“
Carr added, “I am glad to see the Court’s decision today and welcome it as an opportunity to turn the FCC’s focus towards the types of reforms necessary to ensure that all Americans have a fair shot at next-generation connectivity.”
Gomez said, “For decades, the Universal Service Fund has been a critical tool for expanding access to and ensuring consumers can afford to be connected. While we must remain clear-eyed about the need to reform the program to secure its long-term sustainability, completely dismantling it -- cutting off millions from essential broadband access and jeopardizing the economic stability of rural providers -- was never the right approach.”
She said, “I’m glad the Supreme Court has upheld the constitutionality of the USF, providing Congress with the clarity and confidence it needs to continue to pursue a bipartisan, bicameral solution to protect this vital program.”
Gomez emphasized, “Only Congress has the authority to reform the Universal Service Fund in a durable, forward-looking way that can withstand future legal challenges. I look forward to continued progress from the bipartisan, bicameral working group and remain committed to ensuring that broadband affordability remains a central pillar of any proposal moving forward.”
USTelecom’s Spalter said, “Today’s decision is a major victory for the millions of Americans who depend on affordable, reliable broadband, especially in rural communities. The Court’s ruling affirms what we’ve long known: the Universal Service Fund remains an essential tool to connect Americans.”
He said, “But our work is far from over. This decision gives Congress and the Administration the momentum they need to modernize the USF for the next generation. That starts by requiring the handful of trillion-dollar tech companies that have benefited the most from Americans’ connection to and use of the internet to get off the sidelines and join the telecom providers who fund this vital program.”
From the tech side, the Information Technology and Innovation Foundation’s Joe Kane, director of broadband and spectrum policy, also underlined the prospects for program reform.
Kane said, “The Supreme Court’s decision to uphold the basic structure of the Universal Service Fund heightens the need for Congress and the FCC to make it more targeted and sustainable. USF reform should start with distribution reform, rather than with seeking to pass through more taxes to consumers to prop up obsolete programs.”
“By sunsetting outdated rural infrastructure programs and focusing affordability support on those who need it,” Kane said, “the USF can be a better tool for closing the digital divide without runaway taxes.”
Alejandra Montoya-Boyer, senior director of The Leadership Conference’s Center for Civil Rights and Technology, supported the decision but added, “Even with this promising ruling, the future of the USF and the fight for digital equity wasn’t sealed today. Congress must ensure that funding for USF and its programs are predictable, sustainable, and long-term. The USF could also serve as a permanent home and funding source to revive the Affordable Connectivity Program. We’re committed to working with congressional champions to ensure everyone has equal access to the internet and the essentials it keeps us connected to.”