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The Communications Act of 1934, ch. 652, 48 Stat. 1064, established the FCC and empowered it to regulate communications services. Congress in part charged the FCC with making communications services available, at affordable prices, to all Americans. This is known as “universal service.” In 1996, Congress created a new framework for achieving universal service. The amended Act discarded the subsidies embedded in ratemaking and substituted a plan for explicit transfer payments to ensure that basic communications services extend across the country. Section 254 of the amended statute requires every carrier providing interstate telecommunications services to “contribute,” in line with the statute and FCC rules, to a fund designed to “preserve and advance universal service.” §254(d). The FCC must use the money in that fund, now known as the Universal Service Fund, to pay for subsidy programs for designated populations and facilities needing improved access. The FCC is to provide assistance to rural hospitals, as well as to schools and libraries. The FCC expands communications access for consumers in “rural” and other “high cost areas.” The statute also provides detailed guidance for identifying the specific communications services to which the statute’s beneficiaries should have access. The Act specifies the relevant criteria in every period. In deciding which communications services the “definition” of universal service encompasses, the FCC “shall consider the extent to which” a service (1) is “essential to education, public health, or public safety”; (2) has, through market forces, “been subscribed to by a substantial majority of residential customers”; and (3) is in fact “being deployed in public telecommunications networks by telecommunications carriers.” The FCC must evaluate whether a service can be made available at an “affordable rate[ ].” §254(b)(1). The FCC was given latitude to adapt to technological developments, and to always determine whether services are essential, affordable, and widely used. Congress also listed six “principles” on which the FCC “shall base” all its universal-service policies. §254(b). First, “quality services should be available at just, reasonable, and affordable rates.” §254(b)(1). Second, “all regions of the Nation” should have access to those services. §254(b)(2). Third, all consumers, “including low-income consumers and those in rural, insular, and high cost areas,” should have access to services that are “reasonably comparable” in quality and price to those in urban areas. §254(b)(3). Fourth, every carrier should make “an equitable and nondiscriminatory contribution” to the achievement of universal service. §254(b)(4). Fifth, the subsidies given to advance that goal should be “specific, predictable[,] and sufficient.” §254(b)(5). And sixth, “schools,” “libraries,” and “health care providers” should have access to services. §254(b)(6). That list concludes with a provision enabling the FCC to add “other principles” found both “consistent with” the Act and “necessary and appropriate for the protection of the public interest, convenience, and necessity.” §254(b)(7). FCC operates 4 programs for which carriers must contribute. The formula, known as the “contribution factor,” is a fraction, expressed as a percentage, whose numerator is the Fund’s projected expenses for the upcoming quarter (the subsidy payments it will make plus overhead) and whose denominator is the total projected revenue of contributing carriers during that same period. A carrier must pay into the Fund an amount equal to its own projected revenue multiplied by the contribution factor. The carrier may then pass along to its customers the cost of its contributions. The contribution factor is updated every quarter. In 1998, the FCC appointed the Universal Service Administrative Company as the Fund’s “permanent Administrator.” The Universal Service Administrative Company is a private, not-for-profit corporation owned by an association of carriers. It plays a role each quarter in producing the financial projections that end up determining the contribution factor. It creates a forecast along with supporting documentation and sends it to the FCC for approval and eventual use in calculating required contributions. In December 2021, Ps filed comments requesting that the FCC set the contribution factor at 0% instead of the 25.2% that was recommended. Ps argued that the universal-service contribution scheme violates the Constitution’s nondelegation rule. The FCC took no action in response, so the 25.2% contribution factor went into effect. Ps petitioned for review in the Court of Appeals for the Fifth Circuit. The en banc court granted the petition, holding the universal-service contribution mechanism is unconstitutional because of its so-called “double-layered delegation.” It held that Congress “may have delegated legislative power” to the FCC by giving it “the power to tax” carriers “without supplying an intelligible principle to guide [its] discretion.” It held that Congress “may have impermissibly delegated the taxing power to private entities” by involving the Administrator in setting contribution amounts. It ruled that the FCC had “de facto abdicated” governmental responsibilities to the Administrator by giving it the “final say” on how much carriers pay into the Fund. It posited that Congress’s sweeping delegation to FCC and FCC’s unauthorized subdelegation” to the Administrator was unprecedented in history and when “two or more things that are not independently unconstitutional can combine to violate the Constitution’s separation of powers.” It then rules that “double-layered delegation,” “undermines democratic accountability” by obscuring whether Congress, the FCC, or the Administrator bears responsibility for the amount of contributions. The FCC appealed.

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