2021 CEO Report
I always appreciate this opportunity to report on the state of our cooperative and 2021 is no different. This has been an exciting and successful year as we have pursued lofty goals and achieved much success. In short, the state of our cooperative is strong.
In looking back at a very eventful 2021, I remember the year starting with a fresh optimism and shared sense of relief that the unparalleled challenges of 2020 would soon be behind us. Even though we continued to deal with a wide-range of issues related to the pandemic, it appeared that the end was in sight. And then February arrived – introducing us to Winter Storm Uri –one of the worst winter storms to hit Texas in recent memory, impacting almost every facet of our lives. Through the worst of the storm and aftermath, HCTC faced dangerous conditions and worked around the clock to restore service to affected members.
The challenges we faced in 2021 went beyond a pandemic and winter storm. You may be aware that HCTC and other rural telephone providers receive support from the Texas Universal Service Fund (TUSF) which allows us to provide affordable telecommunications services in the rural areas we serve. This support is needed because it costs much more to provide telecommunications services to consumers spread out over large rural areas than it does to serve those in densely populated areas. Without TUSF, rural telephone rates would be much higher than they are. Unfortunately, since January of this year, HCTC and other rural providers have only received about 30% of the funds the Public Utility Commission (PUC) previously determined each rural provider was entitled to under Texas law. This is happening because in 2020, prior PUC Commissioners chose not to increase the TUSF “assessment rate,” a fee charged on the telephone portion of customer bills, even though PUC staff said an approximately 3% rate increase was necessary to keep TUSF solvent. Predictably, TUSF funds ran out at the end of last year, and the PUC has been under-paying rural providers’ support since then. When this happened, HCTC took prompt action. We are one of about 40 companies and cooperatives that initiated litigation against the PUC on this issue. Our court case is currently pending in the Third Court of Appeals in Austin. While litigation often moves slowly, HCTC is hopeful that full TUSF support payments will be restored soon. Much has changed since the PUC allowed this crisis to occur, and the three former Commissioners who refused to increase the assessment rate last year no longer serve on the PUC. The four new Commissioners are aware that a majority of the Texas Legislature actively supports TUSF, with at least 20 Senators and at least 87 Representatives having written letters to the PUC and/or to Governor Abbott asking TUSF to be restored. TUSF support is crucial to keeping rural Texas connected, and HCTC will continue to fight for its members.
Although, 2021 has proven to be just as challenging as 2020, your cooperative has continued to focus on achieving its mission which is “To be the premier provider of modern communications and broadband services throughout our region.” One of our mainstay goals towards achieving this mission is to improve our customer service and treat every customer like family. Although we’ll never be fully satisfied with our achievements in this area, we strive every day to provide you with superior customer service, improved service delivery, and competitive pricing. But, our commitment to our membership goes beyond these ambitions. As 2021 continued to bring financial hardships to some of our membership, we provided complimentary service to students, teachers and others members in need. At the same time, we maintained our commitment to our communities through participation in and countless financial donations to local charitable organizations. Our efforts have been recognized by the Federal Communications Commission (“FCC”) and earlier this year, NTCA, The Rural Broadband Association – the preeminent national association representing rural broadband providers across the nation, recognized HCTC’s efforts and awarded HCTC with its Smart Rural Community Showcase Award. HCTC was one of only four companies nationwide to receive this award, which recognizes “extraordinary achievements in promoting rural broadband networks and their broadband-enabled applications in rural communities.”
We are pleased to receive this national recognition, but be assured we wouldn’t operate any other way. Our commitment to our communities, our neighbors, friends and family – is just who we are.
Another part of our commitment to our members is expanding the reach of telecommunications and broadband services throughout our territory. It has become clear that reliable telecommunications and broadband services are critical to rural development and the economic viability of our communities. Whether working from home or remote learning, HCTC is proud to have enabled our members to continue on with life seamlessly through a robust network providing connectivity to the world. The Foundation for Rural Service commissioned a whitepaper to address the importance of broadband in rural America and specifically the benefits of job creation and job retention that are created by the provision of rural broadband. Some of the statistics that were outlined in this whitepaper include the following estimates:
Nearly 77,000 multi-sector jobs are created annually by the provision of rural broadband.
Over $2B in wages are created by rural broadband providers like HCTC.
Over $10B in economic output is generated by industries powered by rural broadband.
For every job created by a rural telco, it’s estimated that nearly 2 additional jobs are created in other industries due to the interaction with the rural broadband provider.
HCTC takes seriously its part in providing these essential services to its communities and understands the importance of staying connected. We know that it’s critical that our members have fast, reliable broadband services to conduct business, education, entertainment or just simply stay connected to the world. To this end, our employees once again showed determination as we worked to extend our telecommunications and broadband services to some of the most rural and remote portions of our territory. HCTC invested millions of dollars in its network in 2021 to improve the quality of telecommunications and broadband services to its members. By the end of the year, we estimate that an additional 90 miles of fiber will have been placed throughout our territory while we have improved broadband speeds to more than 1,200 households. This does not account for the numerous new customers that have joined our HCTC family with a new fiber connection over the past year.
As we prioritize our plans for 2022 and beyond, we remain excited about the numerous opportunities for our communities and the role that we’ll play to assure that you, your family, and business can leverage all of the benefits of broadband and telecommunications connectivity.