Texas' Abbott Vetoes USF Overhaul

Attempts to revamp a dwindling Texas USF are back to square one after Gov. Greg Abbott (R) vetoed a bill to add VoIP providers to the contribution base. Friday's veto of HB-2667 followed a defeat for rural telco associations in state court where they challenged a Public Utility Commission’s decision not to raise the surcharge on consumer bills to fully fund USF (see 2103290060). It may be too late for legislators to override Abbott, and expect a court appeal soon, RLEC association officials said Monday.

All HB-2667 would have done is “expand the number of people paying fees,” explained Abbott. “It would have imposed a new fee on millions of Texans.” Abbott noted multiple other bills he signed “significantly expand broadband access” in rural Texas. HB-2667's lead House and Senate sponsors, Rep. John Smithee (R) and Sen. Charles Perry (R), didn’t comment Monday.

“The PUC will continue administering the fund in accordance with applicable laws,” a commission spokesperson said Monday. None of the current commissioners was there when the PUC declined last year to raise the revenue-based state USF surcharge. The governor appointed a third commissioner last week, Lori Cobos, to complete replacing all three commissioners who resigned amid fallout from the agency’s response to power outages during the recent winter storm. Abbott signed a separate bill Friday to expand the commission to five members.

RLECs have “been in constant contact” with HB-2667's lead author and other sponsors, Texas Statewide Telephone Cooperative Inc. (TSTCI) CEO Weldon Gray emailed Friday. Though the USF bill passed with more than two-thirds majorities, an override is unlikely because Abbott signed the bill after legislators' session ended, TSTCI outside counsel Daniel Gibson of Richards Elder emailed Monday. “It is unsettled law whether it could be taken up in a subsequent special session, but … I’ve never seen it done.”

Legislators can’t override Abbott’s veto because they adjourned, agreed Texas Telephone Association Executive Director Mark Seale. “We do not yet know where the new PUC commissioners are on the issue, as they have been transitioning in and focused on the electric utilities up to now,” he emailed Monday. The 60% reduction to TTA members’ bottom line caused by reduced state USF funding “is now creating an enormous financial burden, as the state has withheld payment since January,” Seale said. “We hope the new commissioners will see the necessity in keeping the fund whole until such time as a plan to adjust [its] funding can be addressed.”

TSTCI plans “within the next week” to appeal a June 7 order by Travis County District Court in Austin Judge Karin Crump to dismiss RLECs’ lawsuit against the PUC, said Gibson. “The judge did not distinguish between what she dismissed on jurisdictional grounds, and what, if any, claims were addressed on the merits.” TTA will join the challenge, said Seale. Without discussing the arguments, Crump wrote in the one-page order (case D-1-GN-21-000311) that the court “believes the Plea to the Jurisdiction and the Cross-Motion for Summary Judgment are meritorious and should be granted.”

The Texas Cable Association declined to comment Monday. AT&T and Frontier Communications didn’t comment.