The federal government spends more than $4 billion a year, collected from phone bills, to subsidize phone service in rural and poor areas. Now, it’s considering ways to give those places more for the money: high-speed internet connections instead of old-fashioned phone lines, the Associated Press reports. The Federal Communications Commission is set to vote Tuesday to begin work on a blueprint for transforming a subsidy program called the Universal Service Fund to pay for broadband. The details the agency works out could have profound consequences not just for residents of rural areas who are still stuck with dial-up connections or painfully slow broadband speeds. Many rural phone companies–including both landline and wireless carriers–rely heavily on Universal Service funding and could lose some of this money. New FCC rules could also pave the way for cable companies to begin collecting from the program. Although the Universal Service Fund was established to ensure that all Americans have access to a basic telephone line, the Internet is replacing the telephone as today’s essential communications service, FCC Chairman Julius Genachowski said…

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staff and wire services reports