Money For Nothing, Rings Not Free

Texas taxpayers are a generous lot. Just ask the good folks at Windstream Communications, who state bureaucrats say improperly received more than $6 million from Texans over the last seven years. Operating then under the name Valor Telecommunications, the company is accused by regulators of taking advantage of the outdated, unaccountable Texas Universal Service Fund one of the dizzying array of fees and charges on your monthly phone bill.

Windstream strenuously maintains that they have done nothing wrong.


The Texas Public Utilities Commission is investigating the Windstream case, with state commissioners looking at charging the company more than $12 million for the alleged overpayments plus interest and penalties.

The problem isn’t with this particular company, but the USF in general. Originally designed decades ago, when land-line telephones were cutting edge technology, to ensure that even folks in the most remote portions of the state have telephone access. Phone customers are required to pay the fee, which is theoretically used to provide service in hard-to-reach areas and for customers with other challenging situations.

In reality, the USF has become little more than a cash-cow for telephone companies needing to shore up their bottom-line. The funds are disbursed with almost no accountability, and the telephone companies need only turn in a one-page form that contains no background information and no proof of having actually rendered service. Not a bad day: fill out a form, and get millions in taxpayer cash without so much as a pesky question.

The telecommunications business is vastly different today than it was just a decade ago and almost unrecognizable from the sector as recently as the 1970s. Increasing numbers of families don’t even have a land-line, preferring the ease of cell phones, while others use voice-over-internet services, satellite phones, and cable-lines to make the home phone ring.


It’s abundantly clear that the telecom business has changed, but the USF remains stuck in telephony’s dark ages.

In the Windstream case, it is alleged that the company was ‘double-dipping’ by getting monies from both the federal and state USF pots — never mind that the money all comes from the phone customers pocket. When government gives corporations unfettered access to the taxpayers’ wallets, in the form of mandated fees, without any true oversight or accountability, we’re just asking for fraud and abuse.

Obviously cases of overt mis-payment and fraud must be pursued, but for the health of the state’s economy, and the good of Texas’ taxpayers, lawmakers should seek to reform the USF. Heck, it might even be time just to hang-up on it.

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Michael Quinn Sullivan

Michael is the CEO of Empower Texans. A graduate of Texas A&M, former newspaper reporter, one-time Capitol Hill staffer, think tank vice president, and an Eagle Scout, Sullivan is married with three children. He divides his time between the Metroplex, the rest of Texas, and Austin.

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