Fifth Circuit panel weighs challenge that could slash billions in rural broadband aid

A panel of the Fifth Circuit heard a case that could compel the Federal Communications Commission to dramatically reduce subsidies provided through the Universal Service Fund for rural broadband, schools, libraries and health clinics. Petitioners, led by Consumers’ Research and represented by Laura Ruppalt of Boyden Gray PLLC, claim the FCC’s fourth-quarter 2025 contribution factor overcharges carriers because certain funded programs do not satisfy the Supreme Court’s recent reading of Section 254.

They assert the agency ignored timely comments highlighting the legal shift. The FCC, defended by James Carr, argues that all funding decisions remain with the commission and that the Universal Service Administrative Company merely carries out administrative duties under FCC oversight. Judges Jennifer Walker Elrod, Andrew S. Oldham and Edith Brown Clement probed the statutory authority of the fund’s administrator and whether the contribution rate is justified given technological advances and cost considerations.

Intervenors such as the Schools, Health & Libraries Broadband Coalition emphasized the essential role of these subsidies for maintaining network infrastructure in rural institutions. The panel took the matter under submission, leaving the contribution factor in place pending a ruling.