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Summary: This legislation would revise eligibility requirements for support from the Universal Service Fund (USF). This bill would set up and perform a cost benefit analysis and a needs-based test in order to better evaluate resources and dedicate funds. This bill also sets out to establish plans that would reduce certain percentages of the level of support provided by the state. Additionally this bill would require the Public Utilities Commission (PUC) to set standards and criteria for companies to apply demonstrations to justify continued and expanding support. It would also provide for certain procedures in litigation so that companies may appeal cases that are denied.
Analysis: The Texas high cost Universal Service Fund was designed to aid telecommunications customers in rural areas where, due to sparse population density, rates are much higher than in urban areas. At its core, this is a subsidy paid to rural telecom users by urban telecom users. As infrastructure improvements, technology improvements, and demographic shifts have taken place over time, some subsidized rural areas have actually experienced lower rates than the urban areas that they are subsidized by. This has led some to question whether those rural areas still need the subsidy at all. By establishing a needs-based test for USF participation, the state can ensure that the very rural areas that still need the funding are able to get it but that areas no longer in need stop receiving the subsidy. This legislation has cost saving potential which would benefit the taxpayers who pay the subsidy. It is not necessarily a reduction in in the size or scope of government but rather a re-organization of certain functions in an area where more transparency is needed. TPPA will remain neutral on the issue.