Congress may revamp phone fees that subsidize rural service

Congress is building toward major reform of a program that subsidizes rural phone service with billions of dollars in fees charged to all land-line and wireless customers. Reform of the Universal Service Fund - which also subsidizes phone and Internet service for schools, libraries and rural health care providers - is one of the biggest issues facing telecommunications companies. Although there is widespread agreement that some reform is necessary, big changes would be likely to trigger a lobbying battle involving rural legislators - who largely favor the current system - and may hinge on the outcome of the presidential election. The issue has gotten an added push from Sen Barack Obama, the presumed Democratic nominee for president, who argues that universal service fees should support broadband in underserved areas because rural customers already have quality voice service.