The 5th U.S. Circuit Court of Appeals ruled Thursday that the Federal Communications Commission's Universal Service Fund is unconstitutional, essentially a "misbegotten tax". The Court said that when Congress passed the Telecommunications Act in 1996, it gave too much discretion to the FCC to determine the “universal service” tax that appears on cell phone bills, a move outside of its taxing authority.
Maine gets about $7.4 million from the fund each year to subsidize phone service to low-income and rural residents.
Maine Public Advocate William Harwood called the ruling disappointing and said if the USF is discontinued vulnerable Maine residents will see their phone rates increase.
"The program is important to Maine. It helps a lot of rural and low-income telephone customers. We are hopeful this isn't the last word and somehow this program can be allowed to continue," Harwood said.
Harwood wants Maine's congressional delegation to address the situation. He believes a solution is possible without dismantling the USF program.
"Have Congress look at the enabling statute. If Congress gave more direction to the FCC so they had less discretion, would that address the concern of the majority," Harwood said.
Rulings in three other circuit courts upheld the fund, so an appeal of the ruling could be headed to the U.S. Supreme Court.