Texas USF Revamp Gains Steam
Texas legislators' attempt to stabilize state USF is nearing the finish. The Senate Rural Affairs Committee voted 8-0 Tuesday for HB-2667 to expand the TUSF contribution base to include VoIP providers, while redefining high-cost areas. RLECs had sued the Public Utility Commission for not acting to prevent insolvency (see 2103290060).
Sign up for a free preview to unlock the rest of this article
Timely, relevant coverage of court proceedings and agency rulings involving tariffs, classification, valuation, origin and antidumping and countervailing duties. Each day, Trade Law Daily subscribers receive a daily headline email, in-depth PDF edition and access to all relevant documents via our trade law source document library and website.
The committee recommended HB-2667 for the Senate's uncontested calendar. The Texas Statewide Telephone Cooperative expects the bill to hit the Senate floor by Monday, TSTC attorney Daniel Gibson told us. Floor action within a week is likely, Texas Telephone Association (TTA) Executive Director Mark Seale said. The House, which passed HB-2667 earlier this month (see 2105040038), would have to concur with Senate amendments. The legislative session ends May 31.
Texas won’t meet its broadband goals if TUSF is jeopardized, said Perry at the livestreamed hearing. Former PUC commissioners -- who all resigned earlier this year amid controversy over their response to power outages during a winter storm -- brought small RLECs “to the brink of financial failure” after they ignored staff’s recommendation to increase the TUSF surcharge last year, said Perry. Assessing VoIP would add about $10 million to the fund, while redefining high-cost area would remove some places that have become more urban over the years, he said.
The two new commissioners were briefed on the problem, said Executive Director Thomas Gleeson. A third seat remains vacant. The bill’s current version doesn’t direct the PUC to change to a connections-based contribution method from the existing revenue-based scheme, but the PUC could do so under its jurisdiction without the statute changing, agreed Gleeson in response to Perry’s questions. The PUC welcomes clarification on what constitutes a high-cost area, saying it would help the commission better identify what places should get support.
Telco witnesses supported the bill. Without enough USF support, some TSTC members are operating on lines of credit and others have shut down construction, said Gibson. The PUC could revamp contribution without a new law, but the agency is hesitating to proceed without legislative guidance, he said. HB-2667 “provides important clarifications to the law,” agreed TTA President Rusty Moore, representing other rural LECs. “While it will not solve our current USF shortfall, it will give the PUC important tools to address the fund's viability.”
Windstream agrees USF support shouldn't go to its territory in Sugar Land, Texas, said Vice President-State Government Affairs Mike Hunsucker. The city would stop getting funding under the proposed high-cost area definition. The telco will work with the PUC on the definition’s specifics, he said. The House addressed Verizon concerns with the initial bill, removing language directing the PUC adopt a connections-based contribution method, said Vice President-Government Affairs Richard Lawson.
Sen. Larry Taylor (R) raised concern about asking VoIP users to pay into the fund, and asked why it's important to fund decreasingly popular landlines. Rural telcos use TUSF support to roll out fiber, so customers will get broadband on top of basic phone service, replied Gibson.