Tech policy analysts of a certain glamorous age may remember the “Gore Tax.” That’s the partisan moniker given to a program established by the Telecommunications Act of 1996 and implemented during the Clinton administration. It required telecom firms to pay into a small suite of “universal service” funds aimed at ensuring the availability of affordable telecommunications to everyone, certainly to sympathetic groups like schools, libraries, rural residents, and the poor. The US Court of Appeals for the Fifth Circuit recently found the program unconstitutional, and with other circuits going the other way, the program is set for review by the Supreme Court.

Being able to reach everyone is good. The value of a network is sometimes said to rise by the square of the number of users. But that doesn’t mean that stringing wire to the last poor sucker at the end of every dirt road is economically sound. So questions about who should get telecommunications services—and of what quality—have long been public policy issues in the subsidy category.

The 1996 act gave all these issues to the Federal Communications Commission (FCC), which was granted broad authority to determine what universal service is, in extent, quality, and affordability, and also how much money should go to funding universal service subsidies. The money comes from “contributions” set by the Universal Service Administrative Company (USAC) and approved—arguably rubber-stamped—by the FCC.

Now, when the government requires someone to pay money, that’s often called a tax. Bills to raise revenue are supposed to originate in the House of Representatives, according to the Constitution, and the objection to taxation by bodies other than Congress is strong: no taxation without representation. Supporters of the subsidy programs insist that the statutory contribution is really a fee, which has lesser constitutional and political implications.

Yours truly studied this question as a congressional staffer when the Gore Tax was being implemented. That research went into legislation requiring any tax established or set by an agency to undergo congressional review using procedures similar to those in the Congressional Review Act. There are more than a few of such taxes.

The Taxpayer’s Defense Act, introduced in both the House and Senate some years ago, defined a tax as “a non-penal, mandatory payment of money or its equivalent to the extent such payment does not compensate the Federal Government or other payee for a specific benefit conferred directly on the payer.” That stuff at the end, “specific benefit conferred directly on the payer,” makes clear that it is a tax when a business must pay for regulations or inspections that protect the public at large. Entry to national parks and such are fees because the person paying gets something they want in return. The universal service policy takes money out of telecoms’ coffers to pay for implementing public policy. It’s a tax.

The Fifth Circuit majority found not only that Congress delegated the power to tax without providing sufficient level-setting direction to the agency but that the FCC delegated that authority further to the USAC. The opinion is rich with evidence of what happens when lines of accountability are broken by such double delegation.

The nondelegation doctrine, long honored in the breach, requires Congress to give agencies an “intelligible principle” to follow, lest the power given be too broad. I don’t know that “intelligible principle” is an intelligible test. Along with the fee-or-tax distinction, the dissent in the Fifth Circuit argues that Congress provided the FCC with plentiful words that are intelligible; that is, they can be understood.

Maybe the better test would require “justiciable standards.” One should be able to tell whether the law has been followed or not. A delegation using standards like “affordable rates,” as in this case, or “public interest, convenience, and necessity,” a longtime communications policy incantation, are so question-begging that you can’t determine when the standards are met. That invites agencies to make broad, values-based, essentially legislative decisions that should be reserved for Congress.

As with the Supreme Court’s Loper Bright Enterprises v. Raimondo decision, which I recently extolled in democratic terms, refusing Congress’s delegations would restore accountability and strengthen our democracy various ways. One of the Fifth Circuit judges writing separately had good things to say on this score:

We devote significant energy and resources to securing the right to vote for every citizen. But that right matters only if our elected officials matter. There’s no point in voting if the real power rests in the hands of unelected bureaucrats—or their private delegates. If you believe in democracy, then you should oppose an administrative state that shields government action from accountability to the people. I concur.

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