As it stands, the Universal Service Fund, which you pay into every month through a fee on your broadband and phone bills, goes toward delivering phone service to rural communities and in some cases broadband access to rural schools. The problem, as we've pointed out repeatedly, is that the FCC has consistently failed to manage the fund, or even really track where the money goes. Some of it goes back to the providers, but a lot is also wasted thanks to abuse, fraud, or dysfunction. One economist recently estimated taxpayers were paying $13,345 per telephone line per year (see his pdf report) for federally subsidized rural phone service, with the providers gobbling up most of that.

There's been a consistent push to expand the fund so it includes subsidizing rural broadband. A few weeks ago Senator Ted "Tubes" Stevens proposed such an idea. Democratic Rep. Rick Boucher of Virginia and Republican Lee Terry of Nebraska have also been pushing to rework and expand the fund so it subsidizes rural broadband, though that may mean an increase on the fees on your monthly bill (another good writeup of Boucher's plan is here). The problem obviously is that expanding the fund without really fixing the problems (via comprehensive audits) just means more waste, fraud, and mismanagement -- just with a larger budget.