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While campaigning in rural Texas, Beto O’Rourke accuses Gov. Greg Abbott of stifling efforts to improve high-speed internet access there, even after Abbott prioritized the issue during the ordinary legislative session earlier this year.
O’Rourke, a Democrat who announced his gubernatorial candidacy in November, began criticizing the Republican governor for vetoing a bill in June that would have helped replenish the Universal Service Fund, which supports telecommunications and Internet services for more than one million rural Texas households. Abbott argued that the bill “would have imposed new costs on millions of Texans.”
Biparty supporters of the legislation say it was badly needed to help shore up the revenue of the fund, which relies on a voice-call surtax in the state and has been bleeding money for years. The less revenue the fund has, the less money it has to reimburse suppliers, making the service more difficult to maintain and more expensive to provide in remote areas of the state.
“This is another example of how Greg Abbott is causing inflation, particularly for rural Texas communities who are already grappling with higher prescription drug prices, higher gasoline prices.” O’Rourke said during his campaign last week in Lubbock. “Greg Abbott is really hurting these rural communities. “
Abbott’s campaign responded to O’Rourke by touting progress in expanding broadband access after the governor made it an emergency item at the start of the regular session. Abbott spokeswoman Renae Eze said in a statement that the governor “has signed 6 broadband reform bills, including the allocation of more than $ 500 million, to significantly expand the broadband access throughout Texas, especially in rural areas. “
The main legislative text to be adopted was Bill House 5, which has set up a national broadband office to identify areas of need and coordinate their funding.
But these Abbott-championed bills are a separate matter from the Universal Service Fund, according to industry experts and the GOP author of the bill vetoed by Abbott.
“While [House Bill 5] was important… it’s a whole different subject from universal service, ”said Mark Seale, executive director of the Texas Telephone Association.
House Bill 5 funding may support upgrades or expansions, but the Universal Service Fund maintains the current telecommunications infrastructure, Seale said.
Texas has long maintained the Universal Service Fund to subsidize network telephone service in rural areas where it is more difficult to provide. It does this by charging an appraisal, or tax, of 3.3% on voice calls made within the state, landlines and mobiles, which providers pay and then pass on to consumers. However, the fund has run out as Texans make fewer voice calls and wireless carriers change their billing methods, allocating more costs to data and voice. This led to an estimated $ 10 million shortfall in the fund per month as of last January, according to vendors.
Although the fund does not directly subsidize broadband, Internet service often operates on the same telephone service network.
The bill Abbott vetoed sought to modernize the fund by redefining a “high-cost rural area,” a definition that supporters say has become obsolete and covers places that are no longer rural. The bill would also have broadened the fees to include Internet Protocol Voice Over – calls made online through programs like Skype or FaceTime. Seale said VOIP calls represent less than 10% of total connections in Texas, but applying the charge to them would mark a step forward in generating additional revenue for the fund.
Abbott objected to the latter part, saying in its veto message that the “only significant change” would have been “to increase the number of people paying fees.”
“I think the veto was unfortunate because it provided another opportunity for the Universal Service Fund to catch up, and it’s certainly a very big problem in rural Texas,” said the bill’s author. , Representative John Smithee, R-Amarillo. “But this is not one of those situations that I think is beyond help.”
Smithee and other rural lawmakers have argued that the Utilities Commission has the power to modernize the fund if it chooses, although it has so far refused to act. This despite a 2020 recommendation from PUC staff to increase the surcharge.
Smithee expressed hope that the utilities commission would reconsider appeals from lawmakers now that it has new members, following the fallout from the February power grid crisis.
The PUC’s inaction is the target of a lawsuit that a group of Texas telephone companies and co-ops filed earlier this year. A state appeals court heard oral arguments in the case earlier this month.
In the meantime, O’Rourke wants to force Abbott to take responsibility for the veto.
O’Rourke has long spoken of making rural areas more connected to the rest of the state, but his focus on the bill that Abbott has vetoed represents a more focused message as he seeks to keep Abbott in the hot seat . In his first few weeks as a gubernatorial candidate, O’Rourke waged a much more incumbent-centric campaign than against U.S. Senator Ted Cruz in 2018.
The question also gives O’Rourke a new way to appeal to rural voters, whom Texas Democrats say they desperately need to do better to win statewide.
Politically, allowing the Universal Service Fund bill to become law could have opened Abbott to attacks that he imposed a tax on more Texans, a dangerous charge especially in a Republican primary. And of course, one of Abbott’s main challengers – former State Senator Don Huffines of Dallas – has been a vocal opponent of the Universal Service Fund.
Huffines introduced a bill in 2017 that would have phased out the USF tax over five years.
“To be perfectly clear, residents of Dallas and our surrounding communities are taxed to provide landline service to rural Texans,” Huffines wrote to voters at the time. “While everyone should probably have access to some sort of basic phone service, this tax and redistribution of wealth is in the wrong way! “
A spokesperson for the Huffines gubernatorial campaign said that remained his position on the fund.