Telecom Subsidy Ruled Unconstitutional, May Go to Supreme Court

A monthly charge on American phone bills that subsidizes telecom services for poor and rural users may be reviewed by the U.S. Supreme Court after a federal appeals court said the charge is unconstitutional.

The 5th U.S. Circuit Court of Appeals in New Orleans announced that ruling Wednesday (July 24), saying the charge is “a multibillion-dollar tax nobody voted for,” Bloomberg reported Wednesday.

The ruling came in one of three cases filed by Consumers’ Research, according to the report.

In earlier decisions, two other courts — the 6th Circuit in Cincinnati and the 11th Circuit in Atlanta — upheld the program, the report said.

The U.S. Supreme Court declined to review those decisions but could decide to do so now that the 5th Circuit in New Orleans delivered a different decision, per the report.

The program, the Universal Service Fund, is funded by charges levied by the Federal Communications Commission (FCC) and the Universal Service Administrative Co., a nonprofit organization that administers the fund, according to the report.

It disbursed $8.1 billion in 2023, helping 8 million people afford phone and internet service and helping to build telecommunications infrastructure in remote areas, per the report.

“Incredible win for telecom consumers, American citizens, and the Constitution,” Will Hild said in a post on X that was reposted by Consumers’ Research.

“This is a significant victory that could set the stage for an even bigger one to come at SCOTUS,” Casey Mattox said in another post on X that was reposted by the advocacy group.

FCC Chairwoman Jessica Rosenwercel said in a statement on the ruling that the FCC will “pursue all available avenues for review.”

“This decision is misguided and wrong,” Rosenwercel said. “It upends decades of bipartisan support for FCC programs that help communications reach the most rural and least-connected households in our country, as well as hospitals, schools and libraries nationwide. The opinion reflects a lack of understanding of the statutory scheme that helped create the world’s best and most far-reaching communications network.”

It was reported in June that AT&T CEO John Stankey said during a telecom industry forum that Congress should empower the FCC to mandate financial contributions from major technology firms towards the Universal Service Fund.

Under current legislation, the fund is sustained by fees levied on subscribers of cellphone and landline services.

Amazon to Shut Down ‘Prime Try Before You Buy’ Service

Amazon Prime Try Before You Buy

Amazon will shut down its “Prime Try Before You Buy” service on Jan. 31, according to a notice on the company’s website.

The Information reported the ending of the service Friday (Jan. 10), saying Amazon launched the service in 2017, allowing Prime members to order clothing, try it on and decide whether to keep it before being charged for it.

CNBC reported Friday that the move is the latest example of Amazon’s efforts to reduce costs across the company.

After the service is wound down, Prime members will still be able to order clothing, make normal returns and receive a refund, according to the report from The Information.

An Amazon spokesperson told The Information that the company offers other features for clothes shoppers like personalized size recommendations, improved size charts and a virtual try-on tool.

Amazon touted its virtual try-on capabilities in a March blog post, saying the option is available for products from popular brands.

“Amazon’s Virtual Try-On feature brings the in-store experience to your mobile device by using augmented reality to help you visualize a new pair of sneakers or sunglasses yourself, as well as lip colors and eyeshadow in real time, wherever you are,” the post said.

Many clothing brands and retailers are turning to artificial intelligence to manage the costly problem of returns by helping consumers buy products they will actually want to keep when they arrive, PYMNTS reported in June.

A practice called “bracketing,” in which consumers buy items in multiple sizes or colors, intending to return some of them later, is reportedly one of the contributors to rising return ratesHappy Returns reports that nearly two-thirds of consumers engage in bracketing.

Increased return volumes pose logistical and financial challenges for retailers, Loop Returns CEO Hannah Bravo told PYMNTS in an interview posted Monday (Jan. 6).

“For online retailers, handling returns is far more complex than shipping orders,” Bravo said. “Each return must be manually unpacked, checked and restocked, requiring extra staff and warehouse space. This costly process has pushed retailers to seek new technologies that can both reduce returns and keep customers satisfied.”