On October 15, 2026, the U.S. Court of Appeals for the Fifth Circuit dealt a fresh blow to the Federal Communications Commission’s (FCC) Universal Service Fund (USF), renewing uncertainty over the program’s future after the U.S. Supreme Court upheld its funding mechanism last year. In Consumers Research v. FCC, the latest ruling in a new round of challenges, the Fifth Circuit held that the FCC exceeded its statutory authority in creating the Fund’s administrator, the Universal Service Administrative Company (USAC). The Fifth Circuit also vacated the Fourth Quarter 2025 contribution factor and remanded the case to the FCC for further proceedings.

The U.S. Supreme Court’s 2025 ruling overturned a Fifth Circuit en banc decision that purported to invalidate the USF administration mechanism on the basis that Section 254 of the Communications Act, as amended, impermissibly delegated legislative power to the FCC, and may have impermissibly delegated taxing power to USAC as a private entity. The Supreme Court disagreed, finding no violation of the U.S. Constitution’s nondelegation doctrine and further opining that the FCC’s use of USAC for administering the Fund was constitutionally valid because the FCC retained ultimate decision-making authority over the Fund, while USAC performed administrative and advisory functions subject to the Commission’s control. The 6-3 decision resolved a circuit split and included a dissent that may have provided a roadmap for petitioners to take another bite at the apple.