Internet and phone services in rural Texas threatened as state slashes subsidies for providers Texas Tribune Tags: Credit: Miguel Gutierrez Jr./The Texas Tribune , our daily newsletter that keeps readers up to speed on the most essential Texas news. Some rural Texans are facing the threat of losing phone and internet service after the state recently slashed subsidies that help providers offer service in sparsely populated areas. More than a million Texas households are in rural areas where network phone service is more expensive to provide, with fewer customers and longer distances between them. Broadband internet service is not subsidized but is often provided on those same lines. Normally, the state reimburses telecommunication companies for providing service in these areas through the Texas Universal Service Fund. But for the past five years, the fund has been bleeding money.