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More than a million Texas households are in rural areas where network phone service is more expensive to provide, with fewer customers and longer distances between them. Broadband internet service is not subsidized but is often provided on those same lines. Normally, the state reimburses telecommunication companies for providing service in these areas through the Texas Universal Service Fund. But for the past five years, the fund has been bleeding money.
The ongoing funding issues have forced some companies to stop building out networks for new customers. It’s also affected their ability to maintain service lines, said Rusty Moore, president of the Texas Telephone Association and CEO of Big Bend Telephone Co. Other, smaller companies could go bankrupt soon, Moore said.
“These are critical infrastructure networks,” Moore said. “911 could be threatened. All emergency services along the borders — for Big Bend, we serve quite a bit of border security — the mechanisms, the investments in the networks that we’re able to make are truly in jeopardy, immediately. And we are already seeing that reduction.”
Moore’s company usually receives around $300,000 a month from the state fund, but it only received $100,000 for the last monthly payment.
Last year, the Public Utility Commission projected that the Universal Service Fund could run out of money by December 2020. Money flows into the fund from a 3.3% assessment, or tax, on voice calls. But a shift to internet-based phones has decreased the number of voice calls, depleting the fund.
Relevant terms
broadband internet
telecommunications
public goods
social goods
rural Texas
subsidies
Texas Universal Service Fund
Public Utility Commission of Texas
Texas Telephone Association
Big Bend Telephone Company
assessment
tax
lawsuits
