Eric Fruits on the Universal Service Fund

Fierce Telecom – ICLE Senior Scholar Eric Fruits was quoted by Fierce Telecom in a story about a decision by the 11th U.S. Circuit Court of Appeals affirming the constitutionality of the FCC’s Universal Service Fund. You can read full piece here.

Eric Fruits, an adjunct professor of economics at Portland State University, said the grant of en banc review by the Fifth Circuit and subsequent oral arguments suggest that the court is “likely to find it violates the non-delegation doctrine.”

“This would set up a circuit split and strengthen the case for Supreme Court review,” Fruits told Fierce Telecom.

He noted that in the Eleventh Circuit opinion, there are concurrences by Judges Newsom and Lagoa that indicate potential grounds for the Supreme Court to reconsider precedents that the FCC relies upon, one which is related to the concept of an “intelligible principle.”

This refers to the legal requirement that when Congress delegates authority to an agency, it must provide clear guidelines and limits for the agency to follow.

Specifically, Judge Newsom’s concurrence suggests that the contribution scheme “could be characterized as a tax because it isn’t for the benefit of those contributing,” said Fruits. “This contrasts with a fee in which the fee-payer expects to receive a benefit for the fee paid.”

“Congress should pass USF reform that puts the program on an unquestionable constitutional footing by putting real limits on how much can be charged and how it can be collected,” he concluded.