SECA - Supreme Court Upholds Constitutionality of E-Rate Funding in Major Victory

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Supreme Court Upholds Constitutionality of E-Rate Funding in Major Victory

Supreme Court Upholds Constitutionality of E-Rate Funding in Major Victory

Tuesday, July 01, 2025 8:00 AM | Anne Perloff (Administrator)

How E-Rate Works:
The Federal Communications Commission (FCC) sets E-Rate program rules and oversees the Universal Service Administrative Company (USAC), which in turn runs the day-to-day operation of the program. E-Rate receives its funding from fees that telecommunications carriers pay into the Universal Service Fund (USF).

The Legal Challenge:
Nearly a year ago, a Circuit Court ruled that the Universal Service Fund was unconstitutional, thereby putting the entirety of the E-Rate program at risk. The court found that Congress violated the "nondelegation doctrine" by giving the FCC and USAC too much power without clear guidelines. The doctrine requires Congress to provide specific direction when delegating authority to other agencies.

The Supreme Court Decision:
In a major victory for E-Rate and other Universal Service Fund programs, on June 27, 2025 the Supreme Court overturned the Circuit Court's decision in a 6-3 ruling. The Court determined that:

Congress properly delegated authority to the FCC
The FCC's use of USAC as program administrator is permissible
Neither delegation violated the nondelegation doctrine
USF is in fact constitutional

State E-Rate Coordinators' Alliance