2022 CEO Report
Craig Cook
HCTC Family,
As we take pause to conduct our 71st Annual Meeting and report on the progress we’ve made over the past year, I want to take a moment and share a sincere “thank you!” On behalf of the employees, management team and your Board of Directors, we appreciate you, our member owners, for your continued support in 2022. This has been a rewarding year for HCTC on numerous fronts as we continue to serve our communities through the provision of advanced broadband and telecommunications services. Above all, we strive to provide these services to you with unparalleled customer service.
Since our last annual meeting, the challenges facing our country have changed, but continue in new forms. Whether it be global conflicts, supply chain issues, or the economy and inflation, we’ve all been tested during this past year. And while I do not want to equate our business issues with seemingly generational trials, it is important to share with you an update on an important battle that HCTC has been engaged in for over 2 years now.
Beginning in January of 2021, HCTC and other rural telephone providers began incurring sizable reductions of funding from the Texas Universal Service Fund (“TUSF”). The TUSF enables HCTC to provide affordable service to the rural areas we serve and is mandated under Texas law. Although prior PUC Commissioners chose not to take the necessary steps to fully fund the TUSF, a vast majority of the Texas Legislature supports TUSF and rural carriers like HCTC who rely on this fund to keep rates affordable. The PUC’s inaction over the last two years has resulted in HCTC being short-paid over $5M. This avoidable impact left HCTC and other providers no other option but to file a lawsuit against the PUC to restore TUSF funding that is required by law and the PUC’s own rules. In July of this year, an appeals court in Austin ruled in favor of rural carriers and ordered the PUC to restore funding and pay back over $200M in TUSF that was not paid over the last two years.
We are pleased with the Court’s decision – requiring the PUC to comply with the law, but are disappointed that the PUC chose to restore payments to rural companies by increasing the TUSF assessment rate from its former 3.3.% to over 24% – an amount that far exceeds what is needed to fund the TUSF. The TUSF assessment is levied on taxable intrastate telecommunications revenue and funds the TUSF. HCTC is displeased with the PUC’s decision to raise the assessment rate so dramatically and is working with our industry partners and the PUC to implement a more reasonable solution that will reduce the amount you pay.
Although we have had plenty of potential distractions over the course of the year, HCTC has remained on course and continues to focus on its mission – “To be the premier provider of modern telecommunications and broadband services throughout our region.” To this point, we continue to work hard each day to treat every customer like family, while providing the most robust services available – all at competitive prices.
In recent years, HCTC has received national recognition for our efforts to serve our customers. We remain committed to our communities and have invested millions of dollars in our network in 2022 to improve the quality of service to our members while aggressively expanding our fiber network to bring many new members to our cooperative. Likewise, we continue to invest in the people of our community – assisting those in need throughout our area by continued donations to local charitable organizations, our local schools and libraries and first responders.
As we look ahead to 2023, we remain excited about the numerous opportunities for our communities and the role that we’ll play to assure that you can leverage all of the benefits of broadband and telecommunications connectivity. HCTC is honored to provide these essential services to its communities.
Thank you again for your membership and support of HCTC!
Regards,
Craig Cook
CEO, HCTC
