The Texas Public Utility Commission has unanimously approved a rules change that will reduce the state's Universal Service fund by $144 million over the next four years.

The cut represents a 36.5% reduction in the funds, collected from consumers and distributed to large operators such as Verizon., AT&T and Embarq. The funds help those operators with the expense of delivering phone services to rural users.

But the amount of the fund was challenged by the USF Reform Coalition, the members of which include Time Warner telecom divisions in the state and Sprint Nextel Corp. Funds collected by those companies from consumers helped constitute the pool that was redistributed to the larger operators for the rural subsidy.

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