AUSTIN (KXAN) — A satellite phone service provider serving nearly 3,200 Texans sent a letter to its customers, warning it will no longer be able to offer its services due to a lack of funding from the Texas Universal Service Fund.
Dialtone Services, which spans 45 counties in Texas, provides a lifeline to rural Texans, many of whom do not have access to cell service.
That includes customer Harold Vestal, a landowner out 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, he 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 can take, 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.
The Texas Universal Service Fund 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.
But, as fewer people make phone calls and depend on texts, funds have depleted, and phone companies were hoping the state would raise the current rate of 3.3% in 2018. But, it didn’t.
“In January of 2021, the state PUC, let all of the people who received USF know that they were going to cut the funding. And they were going to cut it to the tune of 70%,” Seale continued.
That has led to DTS shutting down its services completely.
“Because of the state of Texas not providing the funding that we’ve been counting on since 2005, when we were established, the state of Texas quit providing the full amount of funding to where now we’re only getting about 15% of what we normally received, which means that we’re losing money, and we cannot provide the services that we’ve been providing for the last 17 years,” Lee Watkins, DTS’ COO, said Wednesday.
That’s why DTS, along with other providers, are calling on the Governor to provide emergency funding for the services, so more Texans won’t lose their lifeline.
“What we’d really like to see is the governor, step in and fix the fund and issue an emergency order that would make the funds solvent again, that way we can continue to provide service, because people’s lives are at stake,” Watkins explained.
If the governor does not act, the Texas Telephone Association has lawsuit pending a verdict in Travis County that could force the state to foot its part of the bill.
“The state now owes these phone companies just a little bit north of $208 million that they’re behind. And by the time we get to the legislative session, it will be $300 million or more,” Seale explained.
If the state fails to pump money back into the fund, other providers could soon follow DTS’ move.
“In our service territories, we are obligated to provide service to anyone that asks for it. So we’re provider of last resort in exchange for us up. Well, the state walked away from that part of their contract year and a half ago and our companies are still honoring ours. We’re still providers of last resort, but several our companies are now saying well, we might just have to walk away from parts of the state that we just can’t afford to do this anymore,” Seale said.
If that happens, that could leave broadband expansion efforts also at risk, since that infrastructure depends on existing phone lines.
“You’re not going to be able to connect the new broadband stuff to the old stuff if these companies don’t exist,” Seale said.