The Texas Universal Service Fund (TUSF)

You may have noticed a charge labeled Texas Universal Service (TUSF)on your phone bill. The charge started appearing in January 1999, but there have been some changes since required by state law.

The good news about the Texas Universal Service charge is the benefit you get in return--lower rates on your long distance calls. Texas in-state long distance rates have decreased by about 4 cents per minute since the Texas Universal Service Fund was established.

The law requires all telecommunications companies including local, long distance and wireless companies to contribute to the fund. Beginning July 1, 2007 the rate is set at 4.4 percent. Companies are not required to collect this charge from customers, but most of them do.

What does it pay for? Mainly for providing basic telephone service at affordable rates in the high-cost, rural parts of the state. A small portion of the fund supports service to low-income and hearing-impaired Texans.

The fund was created by the Texas Legislature in 1987, but the contribution was hidden in long distance rates—the access charge that local telephone companies charged long distance companies to make in-state calls. That was one reason why Texas in-state long distance calls were expensive. Long distance companies are required by law to pass access fee savings through to their customers, which results in lower long distance rates.

This year, the fund is estimated to total about $550 million.

• Texas High Cost Universal Service Plan – provides affordable telephone service in high-cost rural areas served by large phone companies; $405 million

• Small and Rural Service Plan - helps small and rural phone companies provide affordable telephone service to customers who live in high-cost rural areas; $90.3 million
• Administration Costs - $1.58 million
• Telecommunications Relay Service - allows deaf customers and those with speech or hearing disabilities to communicate using specialized devices and operator translations; $11.4 million
• Lifeline - reduces monthly local phone rates by $10.50 for eligible low-income customers; and Link-up - reduces phone installation charges for eligible low-income customers; $9 million
• Tel-Assistance - lowers monthly phone rates by 65 percent for disabled, low-income customers; $6.45 million
• Specialized Telecommunications Assistance Program - reduces costs of telephone equipment for customers who are deaf or hard-of-hearing; $2.25 million

What You Need To Know About Texas Universal Service Fund Charge (pdf*)

What You Need To Know About Utility Payment Assistance Programs (pdf*)

Last Updated: 08/23/07

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