- The Supreme Court will rule on whether the FCC’s decision to fine AT&T and Verizon in 2024 was unconstitutional or not
- Such a ruling could give companies more negotiating power over the FCC, said NSR’s Blair Levin
- The FCC is also in the middle of a congressional oversight hearing
The Federal Communications Commission (FCC) now faces Supreme Court scrutiny over its power to issue fines, stemming from the agency’s decision to penalize the major carriers for location sharing.
In 2024, the FCC fined AT&T, T-Mobile and Verizon nearly $200 million for illegally sharing access to customers’ location information without consent. All three carriers sought review from the U.S. Court of Appeals, arguing the FCC’s procedure violated their Seventh Amendment right to a jury trial.
The Fifth Circuit agreed with AT&T that the FCC violated the constitution, whereas the Second Circuit and the District of Columbia Circuit (which reviewed Verizon’s and T-Mobile’s cases, respectively) sided with the FCC.
The Supreme Court will hear oral arguments for both the AT&T and Verizon cases, which in turn could impact the ruling against T-Mobile. A T-Mo spokesperson told Fierce in August it’s “currently reviewing the court’s action.”
No matter how the hearing shakes out, the FCC won’t lose its enforcement role, said New Street Research Policy Analyst Blair Levin in a note today. If the Court upholds the Fifth Circuit’s decision, the FCC would not be able to impose monetary penalties on defendants without a jury trial.
The carriers chose to pay the fines and then appeal them in the circuit courts. Interestingly, had they declined to pay, the Department of Justice could have brought a collection suit which would have resulted in a jury trial, Levin said.
The Commission “will retain authority to investigate, develop factual records, issue subpoenas and other actions necessary to investigate potential rule violations,” he said, as well as the ability to negotiate settlements based on its investigative findings.
Companies would also have a bigger say against FCC decisions. “All companies that are the target of FCC investigations will be in a stronger negotiating position,” Levin added.
FCC in hot water with Congress
The Supreme Court hearing looms as the FCC testifies before Congress on agency oversight.
Today’s congressional hearing comes as FCC Chair Brendan Carr boasts a massive telecom deregulatory initiative while increasing scrutiny over diversity, equity and inclusion (DEI), mergers and broadcast media.
Concerns about the FCC’s oversight further arose after Carr in December commented that the FCC "is not an independent agency, formally speaking." The word “independent” is no longer included in the FCC’s online mission statement.
In his opening remarks, Rep, Richard Hudson (R-N.C.) welcomed today’s hearing as “an opportunity to discuss the many important issues before the FCC.” He praised the agency’s deregulatory agenda but urged the FCC to be mindful of issues such as Universal Service Fund (USF) reform, spectrum policy and “modernizing outdated media ownership rules.”
On the other hand, Rep. Frank Pallone (D-N.J.) slammed Carr for overstepping the FCC’s bounds.
“Over the last year, Chairman Carr has grossly distorted the power and purpose of the FCC,” Pallone stated. “He has weaponized the agency to benefit Trump and punish anyone who challenges him. He has rubber-stamped shady deals between media conglomerates when those deals have included monetary and political benefits for the President.”