More than a million Texas households are in rural areas where phone and internet customers are few and far between, making it an expensive endeavor to connect residents. According to The Texas Tribune, the state typically reimburses telecom companies for providing service in these areas through the Texas Universal Service Fund. However, that subsidy has all but disappeared, and some rural residents face the threat of losing service.
The Texas Universal Service Fund has been “bleeding money” for the past five years, reported the Tribune. Last year, the Public Utility Commission projected that money could run out by December 2020. This month, Texas’s Public Utility Commission, which oversees the fund, announced it could only provide 30-40 percent reimbursement for service costs.
The fund receives money through a 3.3 percent tax on voice calls, according to the Tribune. However, with the number of voice calls decreasing over the years, the fund has shrunk considerably.
According to Rusty Moore, president of the Texas Telephone Association and CEO of Big Bend Telephone Co., the ongoing funding issues have forced some companies to stop building out networks for new customers and affected their ability to maintain service lines. He added that other, smaller companies could go bankrupt without the subsidy funds.
“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.” The Tribune reported that Big Bend typically gets $300,000 per month from the state fund but recently only received $100,000.
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