HOUSTON – Your phone bills - both cell service and landlines - may be going up next month, thanks to a fee increase passed by the Public Utility Commission in July. Many of you were emailing to ask about this, concerned about just how high your bills may go.
Will my cell phone bill increase?
Whether your bill will increase and how much depends on your provider, the type of plan you have, and how much you use your phone. The fee that just went up from 3.3% to 24% is called the Texas Universal Service fee. It only applies to the voice portion of your bill, not data or texting.
Many T-Mobile customers received notifications about this increase and sent them to us with questions.
The Texas Universal Service fee is collected to help keep rural phone bills affordable so that even people who live far away from the city can have access to phone service and emergency services through 9-1-1.
Why is the fee going up?
Two years ago when smaller rural telephone companies told the Public Utility Commission the fund was running low, the PUC took no action.
The companies finally sued when they were out $200 million. They used this money to run lines and provide services to rural areas of the state. The phone companies won and a judge ordered the PUC to fully fund the state’s Universal Service Fund. In order to catch up, the PUC passed this big increase.
What will the new cell phone charges mean for my bill?
We wanted to know what this might mean for an average cell phone bill. Viewer Judy sent us her bill:
- At 3.3%, the fee was 61 cents.
- At 24%, the fee would be $4.44.
- This fee is applied to every line if you have multiple phone lines on one account.
Jo Wheeler told us T-Mobile told her, “My bill will only go up about $4 each phone but I have six devices! So my bill will go up $24!”
When we reached out to T-Mobile, a spokesperson sent a statement that reads in part, “while this will not impact the overall monthly bill for the vast majority of T-Mobile and sprint customers who are on plans with monthly taxes and fees included, customers on other plans may see a small increase.”
The fee increase took effect on August 1, so you will notice it on your next bill due in September. The PUC did tell us that it plans to lower the rate after about 12 months. That will allow it to make enough money for that $200 million shortfall. Then it will set the fee at a rate that will be able to pay for the rural service moving forward.
The PUC administers the Texas Universal Services Fund for the state of Texas (https://www.Puc.Texas.Gov/industry/communications/reports/tusf/default.Aspx). Last month, a court ordered the PUC to fix shortfalls in the fund. As a result, the PUC adopted a temporary rate of 24% up from 3.3%, which will generate enough fees to fully fund all outstanding obligations. Once the outstanding obligations are fulfilled, the commission anticipates lowering the rate to a level that maintains the fund balance going forward, which could be within the next 12 months. Phone companies that must pay into the USF may choose to pass this cost on to customers but are not required to.
Currently, the TUSF supports several programs: The relay Texas and specialized telecommunications assistance programs, the tel-assistance, lifeline and link-up programs, and the small local exchange carriers universal service fund, and the Texas high-cost universal service plan.
The fee applies to the intrastate voice portion of each customer’s bill. Landline and cell phone customers pay this fee. Voice over internet protocol (voip) And cable telephone providers do not pay the fee, nor is the fee assessed against the data portion of a cellular phone bill.
The Public Utility Commission of Texas increased the Texas universal service fund assessment for all wireless customers in the state on the voice portion only. While this will not impact the overall monthly bill for the vast majority of t-mobile and sprint customers who are on plans with monthly taxes and fees included, customers on other plans may see a small increase. Our commitment to keeping the price of the monthly talk, text and data included in eligible rate plans isn’t changing as taxes and charges like the Texas universal service fund is separate from rate plan prices.
We reached out to Verizon and AT&T to see if they will charge fees on customer bills. They are still getting back to us. We will let you know what they say.