USF helps fund various programs’ efforts to reduce the digital divide in rural and underserved communities, including the Lifeline and High Cost subsidy programs, as well as the Rural Health Care Program and E-Rate, which subsidizes telecoms and other services for public schools and libraries. The amount of funding required for those programs is determined by the Universal Service Administrative Company, which assesses a contribution from each telecom service provider in the U.S. on the FCC’s behalf. Those assessments are then passed onto consumers via their monthly bills.

But the court held that this method, established under the Telecommunications Act of 1996, gave the FCC too much discretion in how it sets USF contribution rates, so the agency is making major policy decisions without congressional oversight. The court also found that the FCC’s delegation of certain functions to the USAC was not authorized under law.

The USF is something that states and localities have long seen as a key way of getting people connected. Were it to go away, it could jeopardize various federal assistance efforts and potentially put the onus on states to step up instead or leave those communities unconnected.