Internet and phone services in rural Texas threatened as state slashes subsidies for providers – By Neela Bohra (Texas Tribune) / January 25 2021
A state fund that subsidizes rural network service is bleeding money. Now the state is drastically cutting the amount of money that it typically pays out to these service providers.
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Some rural Texans are facing the threat of losing phone and internet service after the state recently slashed subsidies that help providers offer service in sparsely populated areas.
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 situation reached a head this month when the Public Utility Commission of Texas, which oversees the fund through a neutral third party, said it could only reimburse the telecommunication companies for 30% to 40% of their service costs.
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