Get a text from T-Mobile? Here’s why the Texas Universal Service Fund surcharge is going up

AUSTIN (KXAN) — You may have gotten a text from your service provider this week letting you know that the Texas Universal Service Fund assessment is being bumped from 3.3% to 24% for now. The Texas Public Utility Commission voted to implement that increase last month.

The reason? It will allow service providers to continue serving rural Texans who don’t have access to regular cell phone service.

In July, the Third Court of Appeals ruled in favor of telecommunication providers who said the state was not collecting enough money to provide services to rural Texans. The court agreed rural Texans should have access to coverage, pointing to the Texas Universal Service Fund — which was established in 1987 — to ensure all Texans had access to basic, affordable telecommunications services.

“We figured out that the big phone companies didn’t have the resources and the small communities didn’t have the resources to be able to pay for those connections that were expensive to run a 10 mile line. And sometimes, that’s the only person on that line, that doesn’t make a lot of business sense,” Mark Seale with the Texas Telephone Association explained.

The fund supplements phone companies in rural areas to make sure that rural customers paid the same amount for commensurate services as urban customers.

“The federal government caps the amount that a rural customer can pay at around $30. So if you have areas of the state, which we do that cost $600 per line per month just to operate, you have to make up that difference. And so the state decided that it was important to make up the difference. And they created a system by which every phone customer in the state that makes an in-state long-distance call pays a little bit of money into the Universal Service Fund,” Seale said.

The shift in assessment is temporary, only until the state generates enough money to “fully fund all outstanding obligations,” the PUC said on its website. “Once the outstanding obligations are fulfilled, the Commission anticipates lowering the rate to a level that maintains the fund balance going forward.”

They also noted telecommunications providers are not required to pass the cost of the TUSD to customers, but may choose to. Some companies, like T-Mobile, which sent an alert to their customers this week, is doing just that.

“Customers will see this change reflected in the T-Mobile Fees & Charges section of your bill starting August 1, 2022,” the alert said.

The charge to your bill will be dependent. It’s a relatively small amount you pay to the fund each month. This past month, on a roughly $160 bill, the charge from the state USD was roughly $0.50. That was when the rate was 3.3%.

Who does this benefit?

Dialtone Services, which spans 45 counties in Texas, provides a lifeline to rural Texans. One of those customers is Harold Vestal, a landowner in west Texas.

“I have to drive, just to get a cell phone signal where I can actually talk to my cell phone, it’s about two and a half hours,” Vestal explained.

Just a few years ago, I depended on it to call the county sheriff when his two grandchildren went missing on his property.

“When you’re lost in the desert, it’s not days for you to survive, it can be hours,” Vestal said. The sheriff’s office was able to locate the kids, 28 miles away from his cabin.

Phone companies were hoping the state would raise the current rate of 3.3% in 2018. But, it didn’t. Now, the company said the increase in funding will help “rural Texans who are dependent on satellite phone service for vital emergency services.”

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