U.S. lawmakers said on Friday they introduced a measure aimed at overhauling an annual fund intended to ensure nationwide telephone service in high-cost, rural areas by including money for high-speed Internet use.

The bill, introduced by U.S. Representatives Rick Boucher, chairman of the House Energy and Commerce Subcommittee on Communications, Technology and the Internet, and Lee Terry, a Nebraska Republican, would establish a competitive bidding process and cap the fund.

Rural carriers such as CenturyTel Inc's Embarq and United States Cellular Corp have said funding should stay based on actual costs and said a cap would discourage investment and jeopardize coverage in hard-to-serve areas.

The bill would broaden the base of who pays into the fund to include companies that provide Internet calling services over wireless, cable and satellite networks, as well as the traditional telephone companies and local exchange service providers.

The bill, called the Universal Service Reform Act of 2009, would also direct the FCC, with the help of a federal-state joint board, to set policies including methodologies to determine access to the fund.

AT&T and Verizon lauded the measure, saying it also puts an end to traffic pumping, which is when third-party companies route adult chat and "free" conference calls through rural exchanges in order to generate fees.