US Appeals Court Ruling Regarding USF (incl E-rate)
August 1, 2024
On July 24, 2024, the U.S. Circuit Court of Appeals for the 5th Circuit ruled that the current Universal Service Fund mechanism is unconstitutional. This decision creates a split amount the courts because the 6th and 11th Circuit Courts previously deemed USF is constitutional in nearly identical cases brought by the same petitioners last year. E-rate is one of four Universal Service Fund programs, in addition to the High Cost, Rural Health, and Low-Income programs.
Although this decision sounds ominous, I do not believe there is reason to worry about your E-rate funding at this time. The FCC has stated they will “pursue all available avenues for review” which means they will request a stay on the decision and likely will appeal to the U.S. Supreme Court – a process that could take more than a year. Should the Supreme Court take the case and ultimately side with the 5th Circuit over the other two appellate court decisions, legal analysts believe the Court would likely give the FCC or Congress time to modify the USF mechanism to comply with their decision.
For now, the existing E-rate program remains in effect and the flow of E-rate reimbursements is not impacted.
I will keep you updated as there are developments in this case. Should you want to read more on this decision, see:
- 5th Circuit Decision: https://www.ca5.uscourts.gov/opinions/pub/22/22-60008-CV2.pdf
- FCC Chairwoman’s Statement: https://www.fcc.gov/document/chairwoman-statement-5th-circuit-ruling-against-usf
- Wiley Law Firm Article (includes good background on USF): https://www.wiley.law/alert-Fifth-Circuit-Declares-Universal-Service-Fund-Unconstitutional-Issue-Likely-Headed-for-US-Supreme-Court
— Julie
Julie Tritt Schell
Pennsylvania E-rate Coordinator
717-730-7133 – o
jtschell@comcast.net
www.e-ratepa.org