Key Issues

Texas Universal Service Fund Reform

USF REFORM: THE FACTS

• Texas consumers pay the third highest telecom taxes in the nation (about 25% of each telephone bill).
• The Fund has taken in more than $3 billion since inception in 1999.
• Of the $650 million paid into the fund each year, over $400 million goes to just 3 companies.
• Cellular phone users pay the subsidies even though they get no apparent benefit from the fees.
• Only 19 states levy USF taxes. Texas distributes the most money to the phone companies, exceeding even California by about $72 million.
• Today, 74% of Texas telephone lines are deregulated, yet the Fund still uses 1997 data to calculate need.
• Unlike all other state programs, there is no real mechanism to show how the USF large-carrier fund dollars are being spent.
• The USF also includes the Rural Carrier Fund, which provides about $98 million to small rural phone companies and for services such as Lifeline, which aids the poor, and Relay Texas, which helps the hearing impaired communicate.
• TCTA supports both of these programs and is ONLY advocating reform of the $400 million large carrier fund.