Statewide NewsRural Texas Satellite Phone Rates Spike Amid Telecom Dispute With State

A dispute between rural telecommunications providers and the state has led to rising costs for Texans reliant on remote service.
November 8, 2021
Texans in remote areas of the state are facing a choice between a massive increase in the cost of their satellite phone services or losing service entirely. At its root is the State of Texas’ alleged breaking of its statutory financial obligation to rural telecommunications providers.

The Texas Universal Service Fund (TUSF) is a pot of money collected from charges on telephone calls then remitted to service providers operating in rural areas of the state. It’s designed to defray the cost of providing service. Texas law requires every resident to have access to a phone connection and without the TUSF, the providers fulfilling that mandate could not break even on their operations.

Sparsely populated areas do not provide enough of a customer base to pay for the necessary infrastructure on their own. In June 2020, the Public Utility Commission (PUC), which directs the TUSF, declined to increase the fee from $0.50 per month to $0.95 to compensate for a change in the types of calls applicable to the fee — drastically reducing the amount of money coming in. The PUC did so during the pandemic when financial forecasts were bleak and worsening by the day.

This led to a lawsuit by over 50 telecom providers against the State of Texas for withholding $60 million in legally owed remittances.

Dial Tone Services (DTS), a satellite telecommunications provider used by Texans in the most remote areas of the state, sent a letter to its customers on September 30 warning of a 140 percent price increase coming in December — from $24.95 per line per month to $59.95.

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The price change, DTS said, was necessary to prevent its bankruptcy. 

“This January, the State of Texas support funding for providing your DTS phone service was reduced by 70 percent,” DTS’s letter reads.

“Imagine if your income suddenly went down 70 percent. Our company has been losing money all year and are being forced to move you to a higher rate service package in order to continue to provide service.”

DTS then said it will allow a set number of customers to remain at the current price, awarded based on “special circumstances.” DTS services 3,000 customers across Texas and a third of those are emergency service operators.

The company then received letters, obtained by The Texan, from customers appealing for the price hike reprieve. One came from a non-profit ambulance company that operates in Brewster County, the largest county in Texas within which Big Bend National Park sits. “In emergency situations, we rely on our satellite phones to keep us in contact with our medics, patients, and the local hospital 80 miles away in Alpine, TX,” the letter reads.

“We currently have 6 sat phones and at $59.95 each would be a significant blow to our already tight budget.”

One respondent wrote in on behalf of his grandparents, who at age 80 and 81 years old live 50 miles from the nearest town. The pair live off a set retirement fund and rely on the satellite phones for ranch work.

Another Brewster County resident and a disabled Vietnam veteran said that while hiking on his ranch near the Mexican border, “I from time to time come in contact with people illegally entering the country, who I report to the Border Patrol.”

A rancher in northwest Val Verde County told a similar story, saying he recently came across an illegal immigrant “in distress.” 

“He had been abandoned by the larger group with whom he was traveling…[and] was assaulted and left behind,” the respondent said. Border Patrol officials were contacted by satellite phone, and they were able to “prevent a difficult situation from becoming worse.”

“With our government turning a blind eye, the deep canyons on our property are being used by drug mules from Mexico,” a Terrell County resident says in his letter to DTS. “The only way to reach authorities in case of an altercation, weapons fire, etc — is by sat phone.”

Governor Greg Abbott vetoed legislation during the 2021 regular session aimed at fixing the solvency problem by stating explicitly in law that the TUSF fee should be applied to Voice over Internet Protocol (VoIP), too. Abbott vetoed the bill because “It would have imposed a new fee on millions of Texans.”

VoIP calls are already eligible for the fee but the enforcement by the PUC therein is lacking.

The Texas Telephone Association (TTA), the group that filed the lawsuit on behalf of the rural providers, says this problem has been years in the making, the consequences of which are now really beginning to sprout.

“This inaction has manifested into real world consequences,” TTA Executive Director Mark Seale told The Texan, “first, rural phone providers had to stop investing in new network infrastructure. Then, some had to consider deregulating parts of their rural territories, meaning not all their customers will be guaranteed service any longer. Now, the first rural provider has had to massively increase its customer rates.”

“The PUC must fix the crisis it created — and they can by simply meeting and adjusting the funding formula. Rural Texans need connectively to live, work, and go to school,” Seale concluded.

The telecom providers’ lawsuit against the PUC is in front of the 3rd Court of Appeals and is set for oral arguments in December. A group of 29 rural state legislators filed an amicus letter with the court voicing their support for the TTA’s case.

In the original petition, the companies pegged the amount owed to them at $60 million during 2020. The amount owed so far this year is $90 million. Without delivery of TUSF remittances, the providers expect to lose $11 million per month.

The current PUC board is entirely different from those who oversaw the agency in June of last year — each was removed and replaced by Governor Abbott after the fallout from February’s blackouts.

Neither the PUC nor the governor’s office return requests for comment by publishing.

Read the letters below.


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Brad Johnson

Brad Johnson is a senior reporter for The Texan and an Ohio native who graduated from the University of Cincinnati in 2017. He is an avid sports fan who most enjoys watching his favorite teams continue their title drought throughout his cognizant lifetime. In his free time, you may find Brad quoting Monty Python productions and trying to calculate the airspeed velocity of an unladen swallow.

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