Rural Texas is in jeopardy as satellite phone services disappear amid state funding cuts

AUSTIN (KXAN) – A satellite phone provider serving nearly 3,200 Texans sent a letter to its customers warning that they would no longer be able to offer their services due to lack of funding from 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 mobile services.

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 was addicted to calling the county sheriff when his two grandchildren disappeared on his property.

“When you are 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 children, 28 miles away from his cabin.

The Texas Universal Service Fund was established in 1987 to ensure that all Texans had access to basic, affordable telecommunications services.

“We found that the large telephone companies did not have the resources and the small communities did not have the resources to be able to pay for the connections that were expensive to run a 10 mile line. And sometimes it is the only person on that line it does not make much business sense, “explained Mark Seale of the Texas Telephone Association.

The fund complements telephone companies in rural areas to ensure that rural customers paid the same amount for similar services as urban customers.

“The federal government limits the amount a farmer can pay to about $ 30. So if you have areas in the state that we do that cost $ 600 per line per month just to operate, you have to make up that difference. And “so the state decided it was important to make up the difference. And they created a system whereby every telephone customer in the state who makes an internal long distance call pays a little bit of money to the Universal Service Fund,” Seale said.

However, as fewer people make phone calls and are dependent on texts, the funds have been exhausted and the telephone companies hoped that the state would raise the current rate of 3.3% in 2018. But it did not.

“In January 2021, the state of the PUC let all the people who received the USF know that they would cut funding. And they would cut it down to 70%,” Seale continued.

As a result, DTS has shut down its services completely.

“Because the state of Texas did not provide the funding that we have been counting on since 2005 when we were established, the state of Texas stopped providing the full amount, where we now only get about 15% of what we normally received, “that means we’re losing money and we can not provide the services we’ve been providing for the last 17 years,” said Lee Watkins, DTS ‘COO, on Wednesday.

That is why DTS, along with other providers, is urging the governor to provide emergency funding for the services so that more Texans do not lose their lifeline.

“What we really want to see is the governor, stepping in and arranging the fund and issuing an emergency order that will 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 a lawsuit pending a Travis County ruling that could force the state to pay its share of the bill.

“The state now owes these phone companies a little bit north of the $ 208 million they are behind. And when 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 may soon follow DTS’s move.

“In our service areas, we are committed to providing service to anyone who asks for it. So we are the provider of last resort in exchange for us. Well, the state walked away from that part of their contract a year and a half ago and our companies honor “We’re still providers of last resort, but several of our companies are now saying well that we might just have to walk away from parts of the state that we just can not afford to do this anymore,” Seale said.

If this happens, it could mean that broadband expansion efforts are also at risk, as this infrastructure depends on existing telephone lines.

“You will not be able to connect the new broadband stuff with the old stuff if these companies do not exist,” Seale said.

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