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Texas Gubernatorial Candidates Debate Broadband Efforts

The political sparring underscores how tenuous the state of broadband remains in Texas, where some 2.8 million homes do not have access to high-speed Internet, according to the comptroller's office.

Beto O’Rourke
Beto O’Rourke (TNS)
(TNS) — Gov. Greg Abbott was in Laredo last week touting his efforts to get the roughly 7 million Texans without broadband access online, something he deemed an emergency item in the last legislative session.

"No matter what corner of the state of Texas you may live in, you will have access to fast, reliable internet," the governor said, promoting a $500 million investment of federal COVID funds the state plans to put toward broadband expansion and a new state office overseeing that expansion. "The future of business in Texas is online, and in Texas, we are now bringing that future to absolutely everyone."

But Abbott's Democratic challenger, Beto O'Rourke, has been hammering him for vetoing a bill that would have shored up state funding used to build and maintain phone lines that carry broadband service in rural areas. O'Rourke blamed the veto for phone bills jumping by as much as $4.61 in August for some rural Texans.

"This guy has left you high and dry," O'Rourke told a crowd in Lubbock. "He's taking you for granted. He thinks your votes are in the bank."

The political sparring underscores how tenuous the state of broadband remains in Texas, where some 2.8 million homes do not have access to high-speed internet, according to the comptroller's office. State officials are gearing up for a massive, federally funded buildout of the service, but have not figured out how to fund it in the long run.

Texas is on tap to receive $500 million from the American Rescue Plan and as much as $4 billion through the bipartisan infrastructure law, though the actual amount has yet to be determined. It's also unclear how many homes the federal funding will be able to get online. By some estimates, it could cost as much as $15 billion to get every home connected to high-quality fiber networks.

The Legislature has created the Broadband Development Office to oversee the expansion and appropriated $5 million to the comptroller, where the office is housed.

Comptroller Glenn Hegar is optimistic that the state will be able to get internet to every Texan, but cautioned that it might not be through the highest-quality fiber networks. He said getting a connection, even through lower-quality lines, is the first step as millions of Texans still cannot use the internet for school, work or telehealth.

"If you don't have broadband access, it's like you don't have access to your property," Hegar said. "I think you'll take a gravel road."

Hegar estimates the work could be completed in five to six years, barring any unforeseen labor shortages or supply chain issues.

The federal funding comes with a required 25 percent state or local match, and Hegar said he thinks the state can and should cover the match.

"I have a lot of members continuing to talk to me about this issue," Hegar said of the Legislature. "There's a lot of interest in it. They know there's a lot of constituents that don't have service that want that service."

A disputed veto

The longevity of any expansive broadband program is still up in the air. Right now, the state uses money from the Texas Universal Service Fund to build and maintain rural phone lines that often carry broadband signals as well.

"Having a healthy and robust universal service fund to support those networks is very important," said Kathryn de Wit, director of the Pew Charitable Trusts's broadband access initiative. "Networks need long-term maintenance and operations — that's why universal service funds exist."

But in recent years, that funding has dwindled as cell phone companies changed how they allocated costs. The fee that pays for the fund is assessed on telecommunications providers' receipts for voice services, a charge that has become less relevant with the rise of unlimited voice plans and growing data plans.

The shrinking contributions "virtually stopped all new network development, meaning the expansion of telecom services in rural Texas was put on hold for almost three years," said Mark Seale, executive director of the Texas Telephone Association, which represents 43 rural telecoms.

Lawmakers last year passed a bill that would modernize the fund, in part by expanding the fee to include calls made over programs like Skype, known as Voice Over Internet Protocol calls.

Abbott vetoed the bill, likening it to a new tax for millions of Texans.

"The only meaningful change made to the Texas Universal Service Fund was, in House Bill 2667, to expand the number of people paying fees," the governor said in a statement after the decision.

In response, the Public Utility Commission of Texas, which oversees the fund and had declined in the past to raise rates, found itself staring down a court order to pay $200 million in overdue bills. It voted in July to raise the existing fee — from 3.3 percent to 24 percent.

The new rate took effect Aug. 1, and added a couple of dollars a month for a consumer with a typical individual cell phone plan, although the amount customers pay varies depending on their plan and service provider. The commission has said the added fees were imposed on the telecom companies, and they "are not required" to pass on the costs onto residential and business customers.

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