You have questions about an “unprecedented” rate hike. We have answers.
On the surface, the explanation is straightforward. In June,to pay rural telecom providers roughly $200 million in back payments they’re owed from the Texas Universal Service Fund; in July, the PUC voted to rustle up the money necessary by raising a fee charged on voice services, and typically passed along to consumers, from 3.3 percent to 24 percent.But that explanation raises more questions.
Since 1987, the fund has been financed by fee assessed on telecommunications providers’ receipts for voice services. PUC commissioners voted to increase that charge to 24 percent charge from 3.3 percent — an increase that most of the state’s telecoms pass the cost on to consumers in the form of a “Texas Universal Service” surcharge on voice services. The higher rate went into effect Aug. 1.Of course, 1987 was a different era when it came to basic household communications.
In May 2020, then-Commission Chair DeAnn Walker sent a memo to other PUC members, noting that receipts supporting the Universal Service Fund had dropped by $1 billion between 2018 and 2019, and that the fund itself could become unable to fully fund its programs by December of that year. She explained that staff were therefore proposing that the commissioners vote to increase the Universal Service Fund charge, then set at 3.3 percent, to 6.4 or even 6.9 percent at their next meeting.
Rusty Moore, chairman of the board of the Texas Telephone Association and general manager/COO of Alpine-based BBT Telephone Company, says that rural providers were left puzzled by PUC’s decision to stop making payments in full as required by law.
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