(January 14, 2007)--Texas phone customers spent nearly $1.3 billion over the past three years in subsidies for large phone companies.
The funds supported companies that provide landline service in rural areas.
San Antonio-based AT&T and Verizon received the subsidies on a per-line basis for rural areas, but neither the formula nor the areas have been updated since 1997.
Smaller and rural phone companies also qualify for subsidies.
The Associated Press reports cellular phone users pay the subsidies even though they get no apparent benefit.
Money in the Texas Universal Service Fund, from which the subsidies are paid, is used for a variety of communications programs that could benefit landline customers.
AT&T spokesman Kerry Hibbs says cell phone users do benefit from rural landline improvements because it allows them to reach rural customers on the phone.
Legislators in 2005 asked the Public Utility Commission for a report on the program.
Hearings on the subsidies are planned during the current legislative session.
