The Fifth Circuit’s July 2024 decision in Consumers’ Research v. FCC,[1] which found the FCC’s Universal Service Fund (USF) unconstitutional, could seriously undermine rural broadband across the country—with outsized impact in Montana. The USF is an a $8 billion digital equity programs fund that seeks to support the expansion of access to affordable high-speed Internet for all consumers. But the Fifth Circuit’s decision is now being looked at by the U.S. Supreme Court on the constitutionality of the FCC’s delegation of the fund’s administration to the Universal Service Administrative Company (USAC). The following are some concerns going forward.
USF keeps rural broadband viable – Montana’s providers depend on USF’s High-Cost program to serve remote areas. Without it, many networks are financially unsustainable, especially in communities where deployment costs are highest.
Montana faces a unique challenge – Despite receiving significant federal BEAD[2] funding, Montana has fewer eligible broadband projects than expected—and is facing a surplus. Albeit, without USF support, even viable projects may now stall due to lack of long-term financial sustainability.
BEAD was designed to work with USF – BEAD grants assume private and public cost-sharing, often made feasible through USF subsidies. With USF in legal limbo, providers may struggle to meet BEAD match requirements or justify operations in hard-to-reach areas.
The risk: higher costs, fewer builds, and lost access – Providers may raise prices, cut service, or withdraw from rural projects entirely leaving some Montanans behind just as digital equity efforts gain momentum.
What’s next? – The Supreme Court’s pending review of the case. Meanwhile, Montana must consider state-level bridging strategies, policy action, or alternative subsidy models to avoid wasting this once-in-a-generation infrastructure opportunity.[3] The SCOTUS’s decision looms to currently threaten to turn Montana’s BEAD surplus into a missed opportunity.[4] Without USF, connectivity in our most rural communities could grind to a halt.
Lorenzo Law, LLC. All rights reserved, 2025.
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[1] This decision creates a circuit split, since both the Sixth and Eleventh Circuits previously found USF constitutional. The Supreme Court has agreed to review the matter during its 2024–25 term
[2] BEAD stands for Broadband Equity, Access, and Deployment—a $42.45 billion federal program created under the Infrastructure Investment and Jobs Act (IIJA) in 2021. It’s the largest-ever broadband investment in U.S. history.
[3] Montana currently has 48,124 unserved and 21,895 underserved BEAD-eligible BSLs.[BroadbandNow]
This contrasts with the over 100,000 unserved and underserved units initially reported on the FCC maps. [BroadbandNow]
[4] Increased funds by service location – With the decreased number of eligible locations after its BEAD challenge process, Montana’s $629 million BEAD allocation results in higher average amount for each eligible Broadband Serviceable Location (BSL). This means more funding is available per location to close the digital divide. [Connected Nation, Sept. 17, 2024]