The Federal Communications Commission insists that it has the legal authority to dramatically overhaul the $8 billion dollar universal service fund -- and doesn't require congressional action to shift its focus from subsidizing phone service in rural and poor areas to instead reducing broadband connectivity costs. In a speech today, FCC Chairman Julius Genachowski outlined his vision for recalibrating the fund to help the agency achieve its goal of connecting at least 90 percent of Americans to the Internet over the next decade (roughly 2/3rds of U.S. citizens use broadband now).
But there are lingering legal questions as to whether the agency has the authority to craft new policies affecting broadband following a federal appeals court decision last year that struck down another commission attempt to regulate the technology. Speaking this afternoon to reporters, a senior agency official said the FCC, which votes Tuesday morning on the latest in a series of proposals designed to revamp the fund, will draw its legal authority from section 254 of the 1996 Telecom Act, which created the subsidy program. The official also insisted that congressional legislation is not required for the commission to pursue its planned changes, a view that some lawmakers have previously disputed.