What Happened?

The Supreme Court ruled in 2025 that the federal government can hand off day-to-day regulatory work to a private organization, as long as a government agency keeps final say over the decisions. The case, *Federal Communications Commission v. Consumers' Research*, centered on how the FCC, the federal agency that oversees broadcast and telecommunications, runs a program that helps make phone and internet service affordable across the country.

That program, called the Universal Service Fund, is administered not by the FCC itself but by a private nonprofit called the Universal Service Administrative Company (USAC). The court found that arrangement constitutional because the FCC appoints USAC's board, approves its budget, and reviews its work before setting the fees that phone and internet companies must pay into the fund.

Why Does it Matter to Me?

Telecommunications carriers are required by law to contribute to the Universal Service Fund, which helps keep phone and internet service available at reasonable rates for Americans, including those in rural areas and low-income households. The court's ruling means that the setup stays in place.

More broadly, the decision sets a rule for how much government oversight is enough when a private group exercises what amounts to government authority. The court reportedly indicated that an agency does not need to actively supervise every step, and that it just needs to retain the power to approve or reject the private group's decisions.

Both Sides, Now

Supporters of the court's approach say it gives agencies flexibility to use outside expertise without losing legal authority. Under the standard the court set, a private group's recommendations carry no weight until a government agency signs off.

Critics, including the judges on the Fifth Circuit federal appeals court who reviewed a separate but related case, say that standard is too loose. That case involves the Horseracing Integrity and Safety Authority, a private body authorized under the Horseracing Integrity and Safety Act (HISA) to write and enforce nationwide rules on doping and track safety in thoroughbred racing. The Fifth Circuit found that the Authority, not the Federal Trade Commission (FTC), the agency supposed to oversee it, effectively runs enforcement. It can open investigations, levy fines, and take regulated parties to federal court on its own. The Fifth Circuit said the FTC's ability to reverse sanctions after the fact was not enough oversight.

The Sixth Circuit federal appeals court reached the opposite conclusion in a separate challenge to HISA, finding the Authority sufficiently accountable to the FTC. Both sides have asked the Supreme Court to take up the conflict.

What Happens Next?

The Supreme Court has received petitions from both sides of the HISA circuit split and has not yet announced whether it will take the case. If the court agrees to hear it, the justices will decide whether the looser standard from the FCC case applies, or whether enforcement powers require tighter government control. Until the court rules, the Horseracing Integrity and Safety Authority's ability to police the industry remains legally uncertain.

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