Many residents of rural Texas will see a spike in their telephone and internet bills beginning Aug. 1.
A ruling last month by the Third Court of Appeals forced the state Public Utility Commission to restore over $200 million in past-due payments to rural telephone providers from the Texas Universal Service Fund, according to a post on the Texas Telephone Association website.
The utility commission voted to increase service fund subsidies from 3.3% to 24%, ensuring cellular telephone service will continue for many rural Texans, according to KXAN television of Austin.
“For two years, rural Texans have faced the uncertainty of whether their local phone companies would be able to ride out the financial storm created when the Public Utility Commission stopped funding universal communications services for rural areas of the state — and whether they might face dramatic increases in their phone bills or lose service altogether as a result,” Rusty Moore, COO of BBT Telecom, told the TTA website. “Today we are thrilled the court has agreed with us — USF is a fundamental building block of a connected rural Texas.”
And customers in rural towns will foot the bill.
What is the Texas Universal Service Fund?
The Texas Universal Service Fund was created to help primarily rural residents in getting basic telephone services, according to the state Public Utility Commission website. The program helps providers pay for the infrastructure needed to connect rural households.
The program is paid for through subsidies and fees provided by the Universal Service Fund, which the Federal Communications Commission manages. The Telecommunications Act of 1996 — the first time that the internet was included in telecommunications law — prescribed a way to pay for telecommunications infrastructure and “let anyone enter any communications business — to let any communications business compete in any market against any other,” according to the FCC.
Essentially it connects high-cost rural areas to the internet.
Who pays for all this?
Telephone and internet providers assess fees in the in-state portion of bills they send to customers. The telecommunications companies are allowed to pass on the cost of providing local, long distance, pager, wireless and other services to their customers.
Who and what is exempt?
There are some exemptions to the fee assessment, including:
• Texas state agencies
• Non-profit schools (tax-exempt entities)
• Long-distance telecom services that are not both originated from and billed to a telephone number or billing or service address within Texas
• Lifeline, Link-Up America, and Tel-Assistance services.