U.S. Supreme Court Ruling Upholds and Protects E-Rate Funding
On June 27, 2025, the U.S. Supreme Court ruled to uphold the constitutionality of the Universal Service Fund (USF) — which means the decades-long E-Rate program remains fully intact, along with the Rural Health Care, Lifeline, and High Cost programs.
The challenge, filed by a group called Consumers’ Research, questioned whether the USF - the funding engine behind E-Rate and these other programs - is a violation of the non-delegation doctrine. Their argument was that Congress had inappropriately delegated too much authority to the Federal Communications Commission (FCC), and the FCC therein to the Universal Service Administrative Company (USAC) - the nonprofit that administers these programs - in their implementation. However, in a 6-3 decision, the U.S. Supreme Court confirmed that the current structure is constitutional, ensuring funding stability for the future.
What Makes E-Rate Funding Special?
For decades, E-Rate has been the silent force powering internet access, infrastructure upgrades, and digital equity. Year after year, it has been a reliable funding stream for school and libraries. What has made E-Rate so successful, and its funding so reliable? Since E-Rate is technically funded by contributions from telecommunications carriers through the USF, not Congress or the government, its funding stream has historically been protected from Congress or changing Republican and Democratic administrations since 1996.
This ruling protects billions of dollars in annual funding that schools and libraries rely on for internet access, internal connections, and network upgrades - not only preserving the program, but cementing its legitimacy.
“For nearly three decades, the work of Congress and the Commission in establishing universal service programs has led to a more fully connected country. And it has done so while leaving fully intact the separation of powers integral to our Constitution,” wrote Justice Elena Kagan in the majority decision.
Click here to read the official U.S. Supreme Court ruling.
Interesting Political Takeaways
E-Rate remains an immensely popular bipartisan program. In fact, the Trump administration's Acting Solicitor General, Sarah Harris, argued on behalf of the federal government to protect the constitutionality of the USF, underscoring how much bipartisan support E-Rate has.
The 6-3 ruling reflects broad ideological and institutional support for the USF, with conservative justices like Chief Justice Roberts and Justices Kavanaugh and Barrett upholding the constitutionality of the USF alongside liberal justices Jackson, Sotomayor, and Kagan. Under constitutional scrutiny, E-Rate, as part of the USF, remains legally sound.
What About Hotspot Eligibility?
The SCOTUS ruling upheld the constitutionality of the E-Rate program, but unfortunately, hotspots as a specific eligible service under the E-Rate program still remain up for debate. In March, the Senate passed a resolution to overturn the 2024 rule by the FCC that allowed schools and libraries to use E-Rate funds for mobile Wi-Fi hotspots as part of their E-Rate FY2025 applications. The resolution is now in the House of Representatives for consideration. If the House also passes this resolution, and it becomes law, the FCC will have to reject currently pending FY2025 E-Rate requests for mobile hotspots. We will continue to monitor this case closely and provide updates as we learn more.
In the meantime, please reach out with any questions.