By Craig D’Agostini
Texas Cable Association
Thanks to a bill passed in the recent Texas legislative session, it didn’t take long for Texans to finally receive some relief from high phone taxes. For many consumers, these taxes add significantly to the overall monthly bills for home and business landlines and cell phones.
As a result of the passage of Senate Bill 583, the Public Utility Commission of Texas (PUC) recently continued its efforts to reduce costs for Texas phone customers by cutting the Texas Universal Service Fund (TUSF) tax rate – a win for consumers in the fight to stop paying unnecessary taxes used to provide millions of dollars in taxpayer subsidies to major phone companies.
Seemingly quick results from the new law were really a long time coming in the quest by the Texas Cable Association (TCA) and others to reform an antiquated phone tax that has changed little since it was created in the late 1990s primarily to subsidize basic landline telephone service for Texans living in rural areas that sometimes were more expensive to serve.
Almost every phone customer in the state, including cell phone customers, continues to pay this tax. But telecommunications technology has evolved rapidly since the TUSF was created. Alternative technologies such as VoIP and wireless, population growth, urban migration and increased telecom competition have changed the way Texans communicate. To live in rural Texas now no longer means total dependence on landline technology; in fact, many areas of Texas considered “rural” 15 years ago are now fully developed suburbs and exurbs.
Yet the TUSF continues to generate large subsidies – hundreds of millions of dollars – to some of the nation’s largest telecom providers. These subsidies are paid for by Texas phone customers.
TCA has worked for a number of years, as a member of the USF Reform Coalition, to limit subsidies from the TUSF and reduce the tax rate. With the reforms enacted by SB 583, these expenditures now will be more transparent to the public, and the PUC will be able to continue to decrease the tax rate as subsidies to telecom providers are reduced in the future.
A reformed TUSF also will ensure that other programs paid for by the Fund, such as Lifeline, will continue to be there for the Texans who need it.
Every Texan deserves access to an affordable dial tone. But in the 21st century, Texas phone customers should not have to pay an outdated tax to subsidize a 20th century technology, and TCA will continue to fight for tax reform and transparency for our state’s phone customers.
For additional information, visit the Texas Cable Association’s website at www.txcable.com.
Craig D’Agostini, senior director of government affairs, Comcast Houston, is chairman of the Board of Directors of the Texas Cable Association, (www.txcable.com), the primary trade organization for cable operators in Texas since 1960.
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Texas Cable Association
919 Congress Avenue, Suite 1350
Austin, Texas 78701