Supreme Court to decide rural telecom connectivity fate

Health care access in rural areas could be severely disrupted if a Supreme Court case on a vital government-subsidized broadband services program is ruled unconstitutional.

After hearing oral arguments in March 2025, Supreme Court justices are expected in June to rule on the case brought by Consumers’ Research, a conservative advocacy group.

The case challenged whether the Federal Communications Commission overstepped its authority in allowing the Universal Service Fund to subsidize services for rural hospitals and other health care facilities, schools, libraries, and low-income individuals. In 2022, disbursements totaled $7.4 billion across all programs.

The high court agreed to review the case after the FCC appealed the Fifth Circuit Court of Appeals’ ruling last year, which sided with Consumers’ Research’s claim that the USF funding mechanism violates constitutional requirements.

The Ad Hoc Healthcare Group, a coalition of rural health care industry groups including Community Hospital Corporation, also filed an amicus or “friend of the court” brief with the Supreme Court to support the program’s preservation. Group members use USF subsidies to provide broadband connectivity for health care facilities in rural and underserved areas.

If the Supreme Court upholds the lower court’s decision, it would jeopardize and potentially abolish the USF program. This would result in restructuring the FCC’s oversight of the USF, requiring that USAC comply with the new rules for administering funds.

It will also shape future essential funding for universal broadband access in rural areas. The cost to install, maintain, and upgrade this technology can be staggering for rural hospitals, which would pay a larger share for broadband service than metro hospitals if not for the USF subsidies.

Without this program, many rural health care providers will face prohibitive connectivity costs, resulting in more challenges in providing quality patient care. Operations at many rural hospitals would be adversely impacted, limiting care and increasing health risks for their communities.

For example, Alaskan rural health facilities, major beneficiaries of USF funding, could be forced to resort to archaic two-way radios for communications if funding is eliminated. The inability of rural health care providers to offset connectivity costs would expand the digital divide.

FCC, USAC dispute tax argument

Consumers’ Research claims that telecommunications carrier USF’s contributions are a tax and that Congress delegated its taxing authority to the FCC without providing an “intelligible principle” for its implementation.

Consumers’ Research also asserts that the FCC‘s actions were unconstitutional because it gave this task to the Universal Service Administration Company without proper oversight and accountability. USAC is an independent, nonprofit corporation that administers the USF under the direction of the FCC. They don't set the rates but do provide the FCC with anticipated program demand and estimates. The FCC typically agrees with USAC's recommendations on the rate.

Consumers’ Research says that this agreement indicates that the FCC is delegating that responsibility.

However, the FCC and USAC maintain that the USF contributions are regulatory fees benefitting the industry by promoting greater access to these services. Additionally, the FCC’s oversight of the USF is consistent with congressionally delegated authority, encompassing parts of the Telecommunications Act of 1996 and the Communications Act of 1934.

Termination of USF program could spur service disruptions

The continuity of USF programs would hinge on Congress developing new, constitutionally sound funding legislation. This would likely be a complex and protracted process, potentially resulting in funding interruptions and significant uncertainty about the future financial stability of the RHC program.

USF funding has helped save countless lives in rural areas, as broadband connectivity has played a critical role in patient care. The program’s subsidies have enabled hospitals to use telehealth services to improve patient access to medical services, especially during the pandemic, which caused a dramatic increase in telehealth usage from pre-pandemic levels.

It also has allowed hospitals to implement remote patient monitoring and other new technologies, pay for specialist visits, and foster stronger ties with affiliate hospitals to improve care, among other benefits.

A potential path forward

While the outcome of the case remains uncertain, there are indications that the Supreme Court may be hesitant to end the USF program. This suggests that the court will hopefully be more inclined to uphold the program or issue a narrower ruling addressing constitutional concerns without completely disrupting its funding.

That may be the best path forward in deciding the program’s fate, as government subsidies are needed to fund the broadband connectivity that is essential for rural communities' health and growth.

NRHA adapted the above piece from Community Hospital Corporation, a trusted NRHA partner, for publication within the Association’s Rural Health Voices blog.

About the author: Whittney Walker works with rural health care providers to navigate government programs, secure funding, and deliver improved telecommunications services that increase access to health care. Her extensive telecommunications and IT background has enabled her to work with state and federal agencies to access telecommunications funding available for health care providers.