Digital Divide Deepens? Supreme Court Ruling Looms Over Rural Health Care Telecom Program

A pending U.S. Supreme Court decision could determine the fate of a key federal program that subsidizes broadband for rural hospitals and health care providers. If overturned, the ruling could widen the digital divide in underserved communities across the country.

June 3, 2025 | | Written by Whittney Walker

A vital broadband services program for rural health care providers could be at risk if the Supreme Court decides it violates constitutional requirements.

Supreme Court justices are expected to issue its ruling in June of this year on whether the Federal Communications Commission overstepped its authority in allowing the Universal Service Fund (USF) to subsidize these services for rural hospitals and other health care facilities, schools, libraries, and low-income individuals. From 2021 to 2023, the USF funded over $1.6 billion in broadband access for all states.

The outcome of the case, which was presented to the high court for oral arguments in March, will shape future essential funding for universal broadband access in rural areas. Without this program, many rural health care providers will face prohibitive connectivity costs, resulting in more challenges in providing quality patient care.

The case was placed on the court’s docket after the FCC appealed the Fifth Circuit Court of Appeals’ ruling last year that sided with conservative advocacy group Consumers’ Research’s claim that the USF funding mechanism is unconstitutional.

The Ad Hoc Healthcare Group, a coalition of rural health care industry groups, including Community Hospital Corporation, filed an amicus or “friend of the court” brief with the Supreme Court in support of the program’s preservation. Group members use USF subsidies to provide broadband connectivity for their health care facilities in rural and underserved areas.

Without the program, it would severely disrupt operations at many rural hospitals, limiting care and increasing health risks for their communities. For example, Alaskan rural health facilities, major beneficiaries of USF funding, could be forced to resort to archaic two-way radios for communications if funding is eliminated. Also, the inability of rural health care providers to offset connectivity costs would expand the digital divide.

FCC, USAC Dispute Consumers’ Research’s Tax Argument

In the case, Consumers’ Research claims that telecommunications carriers’ USF contributions are a tax, and that Congress delegated its taxing authority to the FCC without providing an “intelligible principle” for its implementation.

The group also asserts that the FCC‘s actions were unconstitutional because it gave this task to the Universal Service Administration Company without proper oversight and accountability. The USAC is a private, non-profit organization designated by the FCC to collect and disburse these funds.

However, the FCC and USAC contend that the USF contributions are regulatory fees benefitting the industry by promoting greater access to these services.

Additionally, the FCC’s oversight of the USF is consistent with Congressionally delegated authority, which encompasses parts of the Telecommunications Act of 1996 and the Communications Act of 1934.

Elimination of USF Program Could Spur Service Disruptions, Higher Costs

If the Supreme Court upholds the lower court’s decision, it would jeopardize and potentially abolish the USF program, resulting in restructuring the FCC’s oversight of the USF, requiring that USAC complies with the new rules for administering funds.

Continuity of the USF programs would hinge on Congress developing new, constitutionally sound funding legislation. This would likely be a complex and protracted process, potentially resulting in funding interruptions and significant uncertainty about the future financial stability of the RHC program.

USF funding has helped save countless lives in rural areas, as broadband connectivity has played a critical role in patient care. The program’s subsidies have enabled hospitals to use telehealth services to improve patient access to medical services, especially during the pandemic. It also has allowed hospitals to implement remote patient monitoring and other new technologies, pay for specialists’ visits, and foster stronger ties with affiliate hospitals to improve care, among other benefits.

A Potential Path Forward to Address Case’s Constitutional Concerns

While the outcome of the case remains uncertain, there are indications that the Supreme Court may be hesitant to end the USF program. This suggests that the court will hopefully be more inclined to uphold the program or issue a narrower ruling addressing constitutional concerns without completely disrupting its funding.

That may be the best path forward in deciding the program’s fate, as government subsidies are needed to fund broadband connectivity that is essential for the health and growth of our rural communities.

This article is sponsored by Community Hospital Corporation.

About CHC
Community Hospital Corporation owns, manages and consults with hospitals through three organizations: CHC Hospitals, CHC Consulting and CHC ContinueCARE.