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January 03, 2024 Feature

III. Communications

Christian F. Binnig

A. Introduction

To the extent one can claim that quiet periods exist in developments in the field of communications law, the period covered by the report—roughly June 1, 2022 to June 1, 2023—might qualify as one of those periods. This twelve-month time period included no U.S. Supreme Court decisions directly involving the field of communications law and no especially controversial decisions from the Federal Communications Commission (FCC). Perhaps the most headline-grabbing activity involving the FCC was U.S. President Biden’s renomination in early January 2023 of Gigi Sohn to fill the vacant fifth FCC Commissioner’s seat. President Biden first nominated Ms. Sohn for the vacant FCC Commissioner seat in November 2021, but the Senate did not act on that nomination. As was the case with her initial nomination, after her renomination Ms. Sohn encountered stiff opposition to her confirmation from the Senate Commerce Committee. After Sen. Joe Manchin (D-W. Va) announced in early March 2023 that he would vote against Ms. Sohn’s confirmation, Ms. Sohn asked the Biden administration to withdraw her nomination. President Biden did so on March 30, 2023. On May 22, 2023, President Biden nominated Anna Gomez to the vacant seat, and renominated Brendan Carr and Geoffrey Starks to additional terms as FCC Commissioners. The Senate Commerce Committee voted in early July 2023 to move these three nominations to a full Senate vote, and, in September 2023, the Senate confirmed these nominations.

Although it was operating without a fifth Commissioner since President Biden took office, the FCC continued to actively address such important issues as (1) increasing the availability and efficient use of electromagnetic spectrum for wireless broadband, satellite, and other commercial uses through further spectrum auctions and spectrum-sharing initiatives (although its authority to conduct new spectrum auctions to the public lapsed in March 2023 when Congress failed, at least temporarily, to renew that authority); (2) combatting robocalls by (i) requiring all communications service providers, including Internet-based providers, to implement the STIR/SHAKEN protocol for identifying and blocking robocalls, (ii) increasing its enforcement activities against service providers who fail to properly block robocalls, and (iii) classifying “ringless voicemails” as telephone calls subject to the strictures of the Telephone Consumer Protection Act of 1991 (TCPA); (3) expanding the availability of broadband services to all Americans and reducing the so-called “digital divide” through (i) the continued implementation of its Affordable Broadband Program and other federal subsidy programs under its purview, (ii) the issuance of “Consumer Broadband Labeling” requirements for all broadband service providers, and (iii) the issuance of updated and improved broadband maps for service areas throughout the country, a critical step in the National Telecommunications and Information Administration’s (NTIA’s) release of approximately $43 billion in federal funds for broadband facilities and services deployment under the NTIA’s BEAD program; (4) taking steps to further protect the nation’s communications networks from cyberattacks, including (i) identifying additional foreign-owned or foreign-controlled commercial telecommunications entities posing a threat to U.S. national security, (ii) prohibiting the purchase of goods or services by U.S. service providers from those entities, and (iii) undertaking a formal inquiry into ways to better protect the Internet’s global routing system, known as the Border Gateway Protocol, from malicious actors; (5) addressing emerging communications and national security issues associated with the increasing use of extraterrestrial space for commercial purposes through the establishment of an FCC Space Bureau and Office of International Affairs, and the opening of an inquiry into Servicing, Assembly, and Manufacturing in Space; (6) eliminating the opportunities for certain service providers to engage in activities designed to arbitrage the FCC’s existing access service rules; and (7) working informally with the Federal Aviation Administration (FAA) and other federal agencies to address potential spectrum interference issues arising from conflicting uses of adjacent spectrum bands, as evidenced by the March 31, 2023, filing with the FCC of an agreement by AT&T, Verizon, T-Mobile, and the telecommunications industry trade association USTelecom to adhere to a set of voluntary commitments that go beyond the FCC’s existing rules regarding wireless carriers’ use of their “C-Band” spectrum licenses for terrestrial wireless services, due to the U.S. commercial airline industry’s continued expression of concern regarding the potential impact of those wireless services on the functioning of certain radio altimeters used by the commercial airline fleet.

On the subject of legislative developments, one notable event since our last annual report was the federal government’s enactment in late December 2022 of the No TikTok on Government Devices Act (S. 1143). In response to national security concerns stemming from TikTok’s affiliation with the government of the People’s Republic of China, that Act bans the downloading and use by individuals of TikTok or any successor application or service on any device issued by the United States or federal government corporations, with limited exceptions.

Turning to judicial developments, we summarize below three recent federal circuit court decisions of particular note to the communications industry, one by the Fifth Circuit involving the State of Texas’s legislative efforts to regulate the activities of social media platforms operating in Texas, and one each by the Fifth Circuit and Sixth Circuit involving challenges under the nondelegation and private nondelegation doctrines, brought by essentially the same group of plaintiffs, to the FCC’s legal authority to undertake various activities associated with its management of the federal Universal Service Fund (USF) to fulfill the statutory universal service mandate that Congress first issued in the Communications Act of 1934 and further elaborated upon in the Telecommunications Act of 1996 (1996 Act).

B. Judicial Developments

1. NetChoice v. Paxton, 49 F.4th 439 (5th Cir. Sept 16, 2022) (Paxton)

In our prior annual report, we discussed the Eleventh Circuit’s May 23, 2022 decision in NetChoice v. Attorney General of Florida (since retitled NetChoice v. Moody), No. 21-12355, in which a panel of the Eleventh Circuit affirmed a lower court decision preliminarily enjoining a Florida statute, S.B. 7072, that regulates the activities of social media platforms operating within Florida (Moody).

Less than four months after Moody, a panel of the Fifth Circuit issued Paxton. In stark contrast to the Eleventh Circuit’s decision in Moody, the Fifth Circuit panel upheld the constitutionality of Texas legislation that regulates certain practices of larger social media platform companies (whom the panel refers to as “Platforms”) that do business in Texas, in particular those companies’ censorship practices.

The Texas statute, known as House Bill 20 (H.B. 20), prohibits social media platforms with more than fifty million monthly active users that conduct business in Texas from censoring a user’s speech based on the user’s viewpoint (with exceptions for certain categories of restricted speech). In particular, Section 7 of H.B. 20 provides:

A social media platform may not censor a user, a user’s expression, or a user’s ability to receive the expression of another person based on:

(1) the viewpoint of the user or another person;

(2) the viewpoint represented in the user’s expression or another person’s expression; or

(3) a user’s geographic location in this state or any part of this state.1

Section 7 in turn defines “censor” to mean “to block, ban, remove, deplatform, demonetize, de-boost, restrict, deny equal access or visibility to, or otherwise discriminate against expression.” For Section 7 to apply, a user must reside in Texas, do business in Texas, or share or receive ideas and information in Texas. Section 7 also has a narrow remedial scheme. While censored users may sue for declaratory and injunctive relief (as may the Texas Attorney General), no damages actions are permitted.2

Similar to some of the provisions of the Florida statute that the Eleventh Circuit found to violate the First Amendment in Moody, Section 2 of H.B. 20 imposes certain disclosure and operational requirements on social media platform companies, including requirements to (1) publish an “acceptable use policy” that explains the type of content the platform allows, how the platform enforces the use policy, and how users can report violations of the use policy; (2) publish a “biannual transparency report” that provides various statistics related to the platform’s content moderation efforts; and (3) establish a complaint-and-appeal system for its users.3

As was the case with the Florida statute, NetChoice and another trade association representing computer and technology-based companies sought a preliminary injunction against H.B. 20 in federal district court (for the Western District of Texas). NetChoice asserted that H.B. 20 was facially unconstitutional, and could not be enforced against any person at any time, because it violated the platform company’s free speech rights under the First Amendment. The district court agreed with the trade association plaintiffs.4

The district court started its analysis with the premise that social media platforms are not common carriers, even though H.B. 20 expressly classified such platforms as common carriers. It then held that Section 7 was facially unconstitutional because the platform companies’ “editorial discretion” was protected from state regulation by the First Amendment, as established by many of the same Supreme Court cases that the Eleventh Circuit relied on in its Moody opinion—Tornillo, Pacific Gas & Electric, and Hurley.5 The district court also found that Section 2 of H.B. 20 was facially unconstitutional because the disclosure and operational requirements it imposed were inordinately burdensome and would chill the social media platforms’ speech by disincentivizing them from engaging in viewpoint-based censorship. The district court further found that H.B. 20 discriminated against speech based on the content and speaker because it permitted censorship of some content (in its exceptions to its anti-censorship provisions) and because it only applied to large social media platforms.6

In its 2–1 decision on the merits, the Fifth Circuit panel rejected all of the district court’s holdings (although Judge Southwick issued a separate opinion in which he dissented from the majority’s holding that Section 7 of H.B. 20 is constitutional but concurred with its holding that Section 2 of H.B. 20 is constitutional). Of particular note, the panel majority drew a sharp distinction between the types of speech protected by the First Amendment and the censorship activities of the social media platform companies that H.B. 20 sought to regulate.

The panel majority began its analysis by criticizing the district court’s reasoning—or according to the panel majority, lack thereof—for finding that H.B. 20 was facially invalid. After providing a refresher on the limits of the federal court’s authority under Article III of the Constitution, the panel majority concluded that the sole legal basis for the platform companies’ facial challenge to H.B. 20 was the First Amendment overbreadth doctrine, which serves as an exception to the general Article III bar against federal courts vetoing state statutes before those statutes are enforced. The panel majority concluded that the overbreadth doctrine does not apply to Section 7 of H.B. 20, for three reasons. First, Section 7 does not chill speech, which is the primary concern of the overbreadth doctrine; instead, it chills censorship. Second, the overbreadth doctrine is meant to protect third parties who cannot undertake the burden of as-applied litigation and therefore whose speech is likely to be chilled by an overbroad law; that chilled speech concern was inapplicable here because the plaintiff trade associations represent all of the platform companies affected by H.B. 20, those platform companies are large, well-heeled corporations with an armada of attorneys hired to protect their censorship rights, and H.B. 20 imposes no potential criminal sanctions or damages liability on those platform companies. Third, the platform companies’ principal challenges to the facial validity of H.B. 20 consist of “whataboutisms”—speculations about the most extreme hypothetical applications of H.B. 20. According to the panel majority, those hypothetical whataboutisms only reinforce the conclusion that Section 7 chills no speech whatsoever; it instead chills censorship, to the extent it chills anything.7 As the panel majority put it, “[W]e cannot find any cases, from any court, that suggest a would-be censor can bring a First Amendment overbreadth challenge because a regulation chills its efforts to prevent others from speaking.”8

The panel majority then analyzed the merits of the platform companies’ First Amendment claim. It provided an extensive historical analysis of the First Amendment and of the applicable Supreme Court case law, and held that H.B. 20, and the activities that H.B. 20 seeks to regulate, were more comparable to the state laws and activities addressed by the Supreme Court in the Pruneyard and Rumsfeld cases9 than to the laws and activities addressed in the Tornillo, Pacific Gas & Electric, and Hurley cases, each of which the panel majority distinguished.10

At bottom, the panel majority concluded that Section 7 of H.B. 20 does not regulate speech at all; it regulates the platform companies’ censorship activities, which the panel majority concluded are, in many ways, the antithesis of speech. As the panel explained:

Section 7 does nothing to prohibit the Platforms from saying whatever they want to say in whatever way they want to say it. Well, the Platforms contend, when a user says something using one of the Platforms, the act of hosting (or rejecting) that speech is the Platforms’ own protected speech. Thus, the Platforms contend, Supreme Court doctrine affords them a sort of constitutional privilege to eliminate speech that offends the Platforms’ censors.

We reject the Platforms’ efforts to reframe their censorship as speech. It is undisputed that the Platforms want to eliminate speech, not promote or protect it. And no amount of doctrinal gymnastics can turn the First Amendment’s protections for free speech into protections for free censorship.11

The panel majority further noted that Congress’s earlier enactment of the “Good Samaritan” provisions applicable to social media platform companies, codified at 47 U.S.C. § 230, eliminates any doubts that Section 7 of H.B. 20 is constitutional, because Congress provided in Section 230 that Platforms “shall [not] be treated as the publisher or speaker” of content developed by other users.12 As the panel majority put it, “Congress’s judgment in Section 230 that the Platforms do not operate like traditional publishers and are not ‘speak[ing]’ when they host user-submitted content reinforces our conclusion that the Platforms’ censorship is not speech under the First Amendment.”13 After examining the background and purpose of Section 230, the panel majority explained that, while a legislature cannot define what speech is or is not protected by the First Amendment, by creating an exemption to the defamation liability exception to the First Amendment protections for speech, Section 230 functions as a statutory patch for a gap in the First Amendment’s free-speech guarantee. It does so by defining the Platforms’ hosting activities as not constituting speech, to which the courts should give deference in their First Amendment analysis.14

Judge Oldham, the principal author of the panel’s decision, then turned to the district court’s threshold premise that social media platform companies are not common carriers, and he pointedly rejected the district court’s analysis for that premise. After conducting his own extensive analysis, Judge Oldham concluded both that social media platform companies fall within the common carrier definition established by a body of common law extending back before the country’s founding and that the Texas Legislature’s classification of Platforms as common carriers was permissible and easily justified based on the Platforms’ business activities, their role as enablers and hosts of the communications of third-party users, their importance in that role to American social and economic life, and other related factors.15

As Judge Oldham explained, the fact that social-media-platform companies qualify as common carriers further undermined their attempts to characterize their censorship activities as speech, and further buttressed the panel majority’s holding that H.B. 20 constitutes a valid exercise of a state’s regulatory authority.16

After Judge Oldham rejected the district court’s “no common carrier” premise, the panel majority then provided its analysis for its alternative holding that, even if Section 7 of H.B. 20 did implicate the Platforms’ First Amendment rights, the Platforms still would not be entitled to facial pre-enforcement relief because (1) Section 7 is a content-neutral and viewpoint-neutral law and is therefore subject to intermediate First Amendment scrutiny at most; and (2) Texas’s interests under Section 7 are sufficient to satisfy the intermediate scrutiny standard.17 The panel then similarly rejected the platform companies’ contentions that they are entitled to facial pre-enforcement relief against the disclosure and operational requirements imposed by Section 2 of H.B. 20.18

Importantly, the Paxton panel majority expressly acknowledged and examined the Eleventh Circuit’s Moody decision and declined to follow it for several reasons. First, and according to the Paxton panel majority, most fundamentally, the Florida statute (S.B. 7072) and the Texas statute (H.B. 20) are dissimilar laws in many legally relevant ways, such that much of the Eleventh Circuit’s reasoning in Moody is either consistent with, or irrelevant to, the Paxton panel majority’s analysis of H.B. 20.19 Second, the Paxton panel majority disagreed with the Eleventh Circuit’s reasoning in Moody at three critical junctures. As the Paxton panel majority explained:

We part ways with the Eleventh Circuit, however, on three key issues. Unlike the Eleventh Circuit, we (1) do not think the Supreme Court has recognized “editorial discretion” as an independent category of First-Amendment-protected expression. And even if it had, we (2) disagree with the Eleventh Circuit’s conclusion that the Platforms’ censorship is akin to the “editorial judgment” that’s been mentioned in Supreme Court doctrine. Finally, we (3) disagree with the Eleventh Circuit’s conclusion that the common carrier doctrine does not support the constitutionality of imposing nondiscrimination obligations on the Platforms.20

On September 29, 2023, the Supreme Court granted petitions for writs of certiorari in both Moody and Paxton.

2. Consumers’ Research v. FCC, 63 F.4th 441 (5th Cir. Mar. 24, 2023) (Consumers’ Research I)

In Consumers’ Research I, a Fifth Circuit panel rejected the plaintiffs’ challenge to the constitutionality of Congress’s delegation to the FCC in 1996 of administration of the federal Universal Service Fund (USF) and to the FCC’s subsequent reliance on a private entity for administrative, or in the panel’s words, ministerial, support in operating the USF.21 Among other administrative functions, the FCC has tasked this private entity, the Universal Service Administrative Company (USAC), with (1) collecting self-reported income information from telecommunications carriers; (2) compiling data to formulate the potential contribution rate by those carriers to the USF; and (3) proposing to the FCC each quarter a budget for the USF’s continued preservation.22

Plaintiffs challenged the constitutionality of these two activities—Congress’s delegation to the FCC in Section 254 of the 1996 Act of authority to administer the USF, and the FCC’s use of USAC to help administer the USF—in an FCC proceeding in late 2021 to consider USAC’s proposed budget and carrier contribution factors for the USF for the first quarter of 2022.23 After the FCC rejected plaintiffs’ arguments and approved USAC’s proposal, plaintiffs filed their constitutional challenge with the Fifth Circuit in January 2022 pursuant to the Hobbs Act, which provides that a party aggrieved by a rule, regulation, or final order of a federal agency must file a petition for judicial review within sixty days.24 Under Fifth Circuit law, an exception to this sixty-day jurisdictional period exists where a plaintiff’s claim is that the agency has exceeded its constitutional authority or statutory authority and the claimant can show a direct and final agency action involving the particular plaintiff within sixty days of filing suit. To be “direct and final,” the agency action (1) must be the consummation of the agency’s decision-making process, and (2) must be one by which right or obligations have been determined, or from which legal consequences flow.25 The Fifth Circuit refers to this exception as the Dunn-McCampbell exception, in reference to the Fifth Circuit’s decision that defines the exception’s contours.26

The FCC based its rejection of plaintiffs’ constitutional claims in part on its conclusion that the Hobbs Act barred those claims because (1) any challenge to Congress’ delegation of authority to the FCC under Section 254 of the 1996 Act should have been brought when Congress enacted the 1996 Act, and (2) the FCC’s December 2021 approval of USAC’s proposed quarterly budget and USF contribution factors for the first quarter of 2022 was not a final and appealable order. In their appeal to the Fifth Circuit, plaintiffs asserted that their challenge satisfied the requirements of the Dunn-McCampbell exception and therefore was not time-barred by the Hobbs Act.

On this threshold issue of whether plaintiffs’ constitutional claims were timely, the Fifth Circuit panel agreed with plaintiffs. The Fifth Circuit panel concluded that the FCC’s December 2021 order approving USAC’s proposed quarterly budget and USF contribution factors was “a direct and final order which consummates the FCC’s decision-making process” and “punishes telecommunications carriers for noncompliance” through the imposition of interest charges and other charges for delinquent contributions to the USF.27

The plaintiffs’ constitutional claims, however, did not fare as well, as the Fifth Circuit panel rejected those claims. In rejecting plaintiffs’ claim that Congress’s delegation of USF authority to the FCC under Section 254 of the 1996 Act was unconstitutional under the nondelegation doctrine (a court-made doctrine applying separation-of-powers principles to limit Congress’s ability to delegate its functions to other federal government branches), the Fifth Circuit panel applied the analytical framework set forth by the Supreme Court in Gundy v. United States (Gundy).28 The Fifth Circuit panel concluded that Congress’s delegation under Section 254 was within Congress’s power to “confer substantial discretion on executive agencies to implement and enforce the laws” and satisfied the Supreme Court’s “intelligible principle” standard for providing guidance to the executive agency receiving the delegation.29 The Fifth Circuit panel further held that the “intelligible principles” that Congress provided to the FCC in Section 254 for administrating the USF were more than “vague aspirations” and established meaningful objective limits on the FCC’s operation of the USF, in particular the FCC’s ability to raise revenues for the USF’s use.30

In rejecting plaintiffs’ claim that the FCC’s reliance on USAC for various USF administrative functions violated the private nondelegation doctrine (a court-made constitutional doctrine that prevents the federal government from delegating too much power to private persons and entities), the Fifth Circuit panel largely borrowed from the Fifth Circuit’s discussion and application of the doctrine in National Horsemen’s Benevolent Protective Association v. Black (National Horsemen).31 In National Horsemen, the Fifth Circuit struck down a regulatory scheme implemented by the FTC under the Horseracing Integrity and Safety Act (HISA) as violative of the private nondelegation doctrine, because that scheme provided sweeping government power to a private entity—HISA—without adequate supervision and oversight from the FTC. Among other constitutional defects, that regulatory scheme provided the private entity with broad rulemaking power and deprived the FTC of authority to review and revise the private entity’s policy choices and to have final say on the rules that the private entity promulgated. Contrasting the HISA set of facts with the FCC’s use of USAC for USF administrative functions, the Fifth Circuit panel found that the FCC “wholly subordinates” USAC, based both on the FCC’s rules (which prohibit USAC from making policy, from interpreting unclear provisions of federal statutes or FCC rules, and from interpreting Congress’s intent) and the FCC’s actual conduct in supervising USAC’s activities, including the FCC’s dictating how USAC calculates the quarterly USF contribution factors billed to carriers and reviewing USAC’s calculation methods.32 Accordingly, the Fifth Circuit panel held that, because the FCC properly subordinates USAC and only uses USAC’s proposals after independent consideration of those proposals’ underlying data and other relevant information, the FCC’s use of USAC for USF administrative support does not violate the private nondelegation doctrine.

In April 2023, Plaintiffs petitioned the Fifth Circuit for rehearing en banc. The Fifth Circuit granted that petition on June 29, 2023, almost a month after the Sixth Circuit chose not to grant rehearing en banc of Consumers Research II (which we discuss infra). Pursuant to its rehearing rules, the Fifth Circuit vacated the panel’s opinion in Consumers Research I. As of the writing of this report, the full Fifth Circuit had not issued its decision on rehearing.

3. Consumers’ Research v. FCC, 67 F.4th 773 (6th Cir. May 4, 2023) (Consumers’ Research II)

In Consumers’ Research II, plaintiffs, consisting of a telecommunications carrier, a non-profit organization, and a group of consumers (essentially the same plaintiffs as in Consumers’ Research I), challenged the FCC’s September 24, 2021 Order approving USAC’s proposed Fourth Quarter 2021 budget and USF contribution factor. Pursuant to the Hobbs Act, plaintiffs filed their challenge with the Sixth Circuit on September 30, 2021.33 Similar to the petition for review plaintiffs filed with the Fifth Circuit just over three months later challenging the FCC’s approval of USAC’s proposed First Quarter 2022 budget and USF contribution factor, plaintiffs asserted in their petition to the Sixth Circuit that Congress’s delegation of authority to the FCC under Section 254 of the 1996 Act violated the constitutional nondelegation doctrine, and the FCC’s reliance on USAC to perform USF administrative functions violated the constitutional private nondelegation doctrine.

As was the case with the FCC Order at issue in Consumers’ Research I, the FCC had rejected plaintiffs’ constitutional challenges in its September 24, 2021 Order at issue in Consumers’ Research II, in part because it considered those claims to be untimely.34 The FCC concluded that the Hobbs Act’s “within 60 days” jurisdictional filing deadline barred plaintiffs’ claims because plaintiffs had not challenged Section 254 when Congress first enacted it and because the FCC did not consider its September 24, 2021 Order to be final and appealable.35

The Sixth Circuit panel, like the Fifth Circuit panel six weeks earlier, rejected the FCC’s Hobbs Act analysis, concluding that the FCC’s September 24, 2021 Order was a final and appealable order as to plaintiffs.36 The Sixth Circuit panel further found that, even if the FCC’s September 24, 2021 Order was not a final order, it nevertheless started a new sixty-day filing clock under the Hobbs Act by reapplying prior final FCC actions.37 But just as the Fifth Circuit panel had done six weeks earlier, the Sixth Circuit panel rejected plaintiffs’ constitutional claims once it reached those claims’ merits.

With respect to the plaintiffs’ claim that Congress’s delegation of USF authority to the FCC under Section 254 of the 1996 Act violates the nondelegation doctrine, the Sixth Circuit panel expressly agreed with the Fifth Circuit panel’s conclusion, and the conclusion of the D.C. Circuit in Rural Cellular Association v. FCC,38 that Section 254 satisfies the “intelligible principle” standard established by the Supreme Court for Congress’s delegation of its authority to federal agencies. The Sixth Circuit panel then provided an arguably deeper dive than the Fifth Circuit panel into the specific provisions of Section 254 and how those provisions satisfy the Supreme Court’s precedent on nondelegation, including Gundy, Mistretta v. United States,39 Skinner v. Mid-American Pipeline Co.,40 Whitman v. American Trucking Associations, Inc.,41 Loving v. United States,42 American Power & Light Co. v. SEC,43 Panama Refining Co. v. Ryan,44 A.L.A. Schechter Poultry Corp. v. United States,45 and J.W. Hampton, Jr. & Co. v. United States.46

With respect to the plaintiffs’ claim that the FCC’s reliance on USAC to perform USF administrative functions violates the private nondelegation doctrine, the Sixth Circuit panel agreed with the Fifth Circuit panel that there is no such constitutional violation “because USAC is subordinate to the FCC and performs ministerial and fact-gathering functions . . . [t]he FCC has not afforded USAC any authority to make actual decisions or establish or define standards.”47 Rather, the Sixth Circuit panel found that USAC’s fact-gathering, billing, collecting, fund disbursement, fee and budget projections, and proposed USF contribution factor calculations are ministerial support functions that reflect USAC’s subordination to the FCC.48

On May 30, 2023, the Sixth Circuit denied plaintiffs’ petition for rehearing en banc. However, the ultimate denouement of these constitutional claims relating to the FCC’s USF authority remains to be seen. As noted above, the full Fifth Circuit has yet to issue its decision on rehearing in Consumers’ Research I, and plaintiffs also have a similar constitutional challenge to another FCC quarterly USF approval order pending in the Eleventh Circuit. Plaintiffs undoubtedly are pursuing a strategy of filing multiple successive constitutional challenges to FCC quarterly USF approval orders in different federal courts of appeal, with the aim of creating a Circuit split that would justify U.S. Supreme Court review.


1. NetChoice, L.L.C. v. Paxton, 49 F.4th 439, 445–46 (5th Cir. 2022).

2. Id. at 446.

3. Id. at 446.

4. See id. at 447 (summarizing district court ruling).

5. Id. at 451 (discussing Miami Herald Publ’g Co. v. Tornillo, 418 U.S. 241 (1974); Pac. Gas & Elec. Co. v. Pub. Utils. Comm. of California, 475 U.S. 1 (1986); Hurley v. Irish-American Gay, Lesbian, Bisexual Group of Boston, 515 U.S. 557 (1995)).

6. Id. at 447.

7. Id. at 448.

8. Id. at 452.

9. Pruneyard Shopping Center v. Robins, 447 U.S. 74 (1980); Rumsfeld v. Forum for Acad. & Inst. Rts., Inc. 547 U.S. 47 (2006).

10. Paxton, 49 F.4th at 455–58. Judge Southwick’s dissent disagrees with the panel’s analysis on this point, and instead finds, similar to the Eleventh Circuit panel in Moody, that the activities addressed by the Tornillo line of Supreme Court decisions is comparable to the social media platform companies’ activities that are the subject of H.B. 20. Paxton, 49 F.4th at 497 (Southwick, J., concurring in part and dissenting in part).

11. Id. at 454–55 (majority opinion) (emphasis in original).

12. Id. at 465.

13. Id. at 466.

14. Id. at 466–68.

15. Id. at 473–74. Judge Southwick’s dissent disagrees with Judge Oldham’s analysis of the common carrier issue. The third panel member, Judge Jones, also did not join in Judge Oldham’s analysis of the common carrier issue, but not because she disagreed with that analysis. Rather, Judge Jones concluded it was not necessary to address the common carrier issue in order to uphold the constitutionality of H.B. 20 against the Platforms’ facial challenge. Judge Jones further concluded that the panel majority’s holding that H.B. 20 passes the intermediate scrutiny First Amendment test is supported by the Supreme Court’s application of that test in its Turner Broadcasting Systems decision, a decision that the Eleventh Circuit relied on in striking down Florida’s statute regulating social media platform companies’ hosting and censorship activities. Id. at 495 (Jones, J., concurring).

16. Id. at 485 (majority opinion).

17. Id. at 480. Judge Southwick’s dissent finds that the provisions of H.B. 20 should be subject to intermediate First Amendment scrutiny and concludes that Section 7 fails to satisfy that standard. Id. at 507 (Southwick, J., concurring in part and dissenting in part).

18. Id. at 480 (majority opinion). Judge Southwick concurred in this part of the panel majority’s decision. Id. at 496–98 (Southwick, J., concurring in part and dissenting in part).

19. Id. at 490 (majority opinion).

20. Id.

21. Consumers’ Research v. FCC, 63 F.4th 441, 452 (5th Cir. 2023).

22. Id. at 445.

23. Id.

24. Id. at 446.

25. Id.

26. Id. (citing Dunn-McCampbell Royalty Int., Inc. v. Nat’l Park Serv., 112 F.3d 1283, 1287 (5th Cir. 1997)).

27. Id.

28. Gundy v. United States, 139 S. Ct. 2116 (2019).

29. Consumers’ Research I, 63 F.4th at 447.

30. Id. at 449.

31. Nat’l Horsemen’s Benevolent Protective Ass’n v. Black 53 F.4th 869 (5th Cir. 2022).

32. Consumers’ Research I, 63 F.4th at 452.

33. Although plaintiffs filed their petition with the Sixth Circuit three months before they filed their petition with the Fifth Circuit (the latter of which challenged the FCC’s December 2021 Order approving USAC’s proposed First Quarter 2022 USF Contribution Factor), the Sixth Circuit did not issue its Consumers’ Research II decision until six weeks after the Fifth Circuit panel decided Consumers’ Research I. Consumers’ Research v. FCC (Consumers’ Research II), 67 F.4th 773 (2023).

34. Id. at 784.

35. Id.

36. Id.

37. Id. at 786.

38. Rural Cellular Ass’n v. FCC, 685 F.3d 1083 (D.C. Cir. 2012).

39. Gundy, Mistretta v. United States 488 U.S. 361 (1989).

40. Skinner v. Mid-Am. Pipeline Co., 490 U.S. 212 (1989).

41. Whitman v. Am. Trucking Ass’ns, Inc., 531 U.S. 457 (2001).

42. Loving v. United States, 517 U.S. 748 (1996).

43. Am. Power & Light Co. v. SEC, 329 U.S. 90 (1946).

44. Panama Refin. Co. v. Ryan, 293 U.S. 495 (1935).

45. A.L.A. Schechter Poultry Corp. v. United States, 295 U.S. 495 (1935).

46. J.W. Hampton, Jr. & Co. v. United States, 276 U.S. 394 (1928); Consumers’ Research v. FCC (Consumers’ Research II), 67 F.4th 773, 787 (2023).

47. Consumers’ Research II, 67 F.4th at 795.

48. Id. at 797.

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Christian F. Binnig

This report was prepared and edited by Christian F. Binnig. Mr. Binnig is a former partner (now retired) of Mayer Brown LLP. Mr. Binnig is chair of the IRIS Communications Law Committee.