Supreme Court sides with Trump administration on federal regulation of telecom companies

The appeal from telecommunications giants Verizon and AT&T challenged a combined $100 million in penalties imposed after the agency determined that the companies had failed to safeguard customer location data.

The companies argued that the FCC's process was unconstitutional because it gave them little opportunity to tell their side of the story in front of a jury.

The administration defended the fines are an essential regulatory tool. But the government also said companies did not have to pay the penalties right away, a regulatory shift in the companies' favor.

The Supreme Court agreed, affirming the FCC's power to order fines when challenges are still available.

“The orders at issue did not settle the carriers’ legal obligations because, stated simply, they did not create an obligation to pay,” Chief Justice John Roberts wrote for the majority.

Justice Clarence Thomas, the lone dissenter, said he would have given the companies a clearer path to recouping the fines they already paid.

Other agencies use similar enforcement methods, so a sweeping victory for AT&T and Verizon could have had widespread effects, advocates said.

The environmental group Earthjustice applauded the ruling, saying it has direct implications for other agencies and a key energy-efficiency case.

“By rejecting this unsupported attack on agency authority, the Court’s decision safeguards the government’s ability to enforce laws that protect people, communities, and the environment," said Caroline Flynn, the group's Supreme Court counsel.

The libertarian-leaning New Civil Liberties Alliance was disappointed by the decision, but expected it to help other companies in the future. “In fact, it may even buttress their willingness to challenge future agency orders in federal court before paying any penalties,” said the alliance's president, Mark Chenoweth.

The Supreme Court’s conservative majority has sided against federal agencies and limited their power before. That includes overturning a decades-old decision that had given regulators an advantage in court and stripping another agency of a major tool in fighting securities fraud.