The Supreme Court will consider another important test of federal regulatory power.

A decision in the case, expected to argue next year, could reshape the boundaries of federal regulatory authority and reignite debate over the nondelegation doctrine, which limits Congress’s ability to delegate legislative power to federal agencies.

One of the cases was satisfied. Consumer Research vs. FCCwas previously decided 9-7 by the 5th U.S. Circuit Court of Appeals, which found USF’s funding mechanism to be unconstitutional. The legal issue focuses more specifically on the FCC’s authority to impose fees on telecommunications providers who pass on the costs to consumers to fund the program.

The Fifth Circuit, one of the most conservative in the country, ruled that Congress granted the FCC excessive powers and that the agency further delegated powers to a private entity, violating constitutional limits.

The cases decided Friday coincide with a broader trend of consideration of alleged abuses of federal regulation, as in the Supreme Court’s previous term, justices limited federal regulatory authority by striking down Chevron respect, limitation of administrative decisions in SEC vs Jarkisiand strengthening the core issues doctrine.

Conservative challenge to federal oversight

Consumers’ Research, a conservative advocacy group that opposes “woke” corporate frameworks such as environmental, social and governance principles, argued that the FCC’s funding structure unfairly burdens consumers and goes beyond its congressional mandate.

The Supreme Court previously declined to hear similar appeals by Consumers Research after federal appeals courts upheld the program in a case known as SHLB Coalition Against Consumer Research. However, the 5th Circuit’s en banc decision represented a split that deserved the justices’ attention.

The Biden administration quickly appealed the decision, saying dismantling the U.S. Navy would disrupt critical services that millions of people in the United States rely on.

The non-delegation doctrine is back.

The Supreme Court has not struck down a federal law on nondelegation grounds since 1935, but recent rulings by the conservative majority indicate a willingness to return to the doctrine. Republican-appointed Justices Neil Gorsuch and Clarence Thomas have publicly stated their interest in limiting what they see as the unfettered transfer of power to administrative agencies. Other members appointed by Republican presidents, including Chief Justice John Roberts and Judge Amy Coney Barrett, have also raised concerns about the constitutional limits of the agency’s authority.

Legal experts believe the case could serve as an important way for the court to clarify or expand the nondelegation doctrine.

Corbin Barthold, internet policy adviser to TechFreedom, predicted last month that the justices might be interested in taking up the case, writing on his Substack page: “The majority of sitting judges have expressed interest in ending this dry spell, and they are ready to get your chance.”

Possible impact on rural and underserved communities

The outcome of this case could have far-reaching consequences for communities that depend on the Universal Service Fund. Rural areas, where broadband access remains sparse, are among the program’s largest beneficiaries. Schools and libraries that rely on the fund to provide internet access to students could also face significant setbacks if the funding structure is dismantled.

USF supporters argue that eliminating it would create a digital divide, disproportionately harming low-income and rural communities. However, critics argue that the funding method is regressive because it effectively taxes consumers to subsidize services in a way that lacks transparency and accountability.

“American citizens and consumers alike deserve basic accountability in government and the marketplace,” Will Hield, executive director of Consumers’ Research, wrote in a statement Friday. “Americans are currently forced to pay a tax on every phone bill set by unelected bureaucrats on the advice of the same private corporation that receives the revenue.”

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The Supreme Court’s eventual decision in this case will likely have a ripple effect throughout the regulatory environment, possibly limiting the ability of federal agencies to make rules without explicit congressional authorization.

But the timing of the case adds a political challenge: With arguments expected in late March, the new Trump administration will have the opportunity to influence the trajectory of the trial. The administration’s position remains unclear, but it could signal a shift in federal regulatory priorities.