Federal Communications Commission Chairman Julius Genachowski announced his plan to reform a phone subsidy program Thursday, calling the current system “outdated,” “wasteful” and “unfair.”
The Universal Service Fund (USF) is an $8 billion program originally designed to subsidize landline phone access in rural areas. Genachowski’s plan would transition the fund to focus on expanding high-speed Internet access and would rename it the “Connect America Fund.”
The program is funded through monthly charges on consumer phone bills.
USF currently pays some companies almost $2,000 a month to provide phone access to a single home, Genachowski said. The program also subsidizes companies even when there is a competing provider in the area, indicating that government support is unnecessary.