Earlier this month, the Senate passed S.J.Res.7. The resolution, sponsored by Senator Ted Cruz, would repeal a Biden-era Federal Communications Commission (FCC) rule allowing E-Rate funds to subsidize Wi-Fi hotspot lending programs for off-campus use. This well-intentioned but misguided rule violates clear statutory limits on agency power and threatens an increasingly unstable Universal Service Fund (USF). The House should follow the Senate’s lead to revoke this initiative before the estimated June 4 deadline for congressional action.
Established in 1996, the E-Rate program initially provided USF funding to bring broadband service to the nation’s schools and libraries—a buildout that was largely completed by 2006. Today it reimburses local governments for between 20 and 90 percent of the costs of serving these institutions, spending $2.68 billion in 2024 even though, as I’ve noted elsewhere, it is unclear whether this spending improves student learning outcomes. In 2024, the FCC expanded this program to subsidize Wi-Fi hotspots for off-premises use by students and library patrons. The agency’s Republican commissioners dissented—and their concerns about the rule’s legality and wisdom were echoed by Senator Cruz.
Cruz’s resolution leverages the Congressional Review Act (CRA), a powerful yet rarely-used legislative mechanism to check agency overreach. The CRA allows Congress to nullify major federal rules issued within a specific timeframe by a simple majority vote, bypassing the Senate filibuster. But success requires either presidential approval or a two-thirds vote of both the House and Senate to override a veto, which is rare given that agency leadership, appointed by the president, usually aligns with White House objectives. The exception is when the White House changes parties, creating a window within which Congress and the incoming president can strike regulations passed in the twilight of the previous administration. In both of his terms, President Trump has made unparalleled use of the CRA process to nullify midnight rules passed by his predecessors.
This seems a paradigmatic case for invoking the CRA, as the agency overstepped clear congressional boundaries. Section 254 established E-Rate as a facilities-based initiative: Its mission is to enhance broadband access specifically to “classrooms” and “libraries.” The FCC seeks to get around this limitation by asserting that “learning is no longer confined to the physical school or library building during regular operating hours” and that many students and patrons lack Internet access at home. But E-Rate does not have a mandate to facilitate learning wherever it may be accomplished, and the argument that in the digital era, everything is a classroom makes a mockery of Congressional intent, especially in the post‑Chevron era.
Admittedly, the FCC is correct that much learning occurs at home, and some students are disadvantaged by lack of home broadband connectivity. This was especially true during the COVID pandemic, when most schools and libraries were closed. Congress recognized this through the Emergency Connectivity Fund (ECF), which expressly included pandemic-era funding for schools and libraries to loan Wi-Fi hotspots for off-premises use. But Congress placed limits on this program: ECF was subject to a fixed budget from appropriations, and was available only until the pandemic emergency ended in May 2023.
The pandemic-era ECF program reinforces the notion that Congress did not intend the E-Rate program to generally fund hotspots for off-premises use. If E-Rate had pre-existing authority to fund hotspot lending programs, then Congress would not have needed to establish such a program as part of the ECF initiative. To the extent that there is any lingering ambiguity, the ECF program itself makes this distinction clear: While Congress funded its pandemic-era hotspot lending program through appropriations, it expressly stated that support for this initiative “shall be provided from amounts made available from the Emergency Connectivity Fund and not from contributions under Section 254(d).”
This limitation highlights the fiscal dangers of the FCC’s hotspot lending rule. Unlike ECF funding, the Universal Service Fund is funded through a surcharge on consumer telecommunications bills. This funding mechanism is already unsustainable: Rising program costs and a declining revenue base have driven the surcharge from three percent in 1998 to 36.6 percent today. Expanding a $2.6 billion program to include home Wi-Fi hotspots nationwide would increase this further and place a greater burden on consumers—which is precisely what the ECF bill sought to avoid.
Congress could simply wait for FCC Chairman Brendan Carr to repeal the rule. But CRA nullification is preferable, as it both repeals the existing rule and bars the agency from passing a substantially similar rule in the future. It would thus reinforce Congress’s intention that E-Rate is a facilities-based program. The House should take action on Representative Russ Fulcher’s companion resolution before the estimated June 4 deadline for CRA action, to repeal this agency overreach and clarify the limits on this program.
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