The Federal Communications Commission launched a $300 million effort on Wednesday to expand broadband to hundreds of thousands of homes and businesses over the next three years.
The funds are part of the first phase of a sweeping overhaul of a program designed originally to subsidize telephone networks in rural and other under-served areas. Last year the FCC voted to revamp the fund to pay for broadband development.
"These reforms cut waste and imposed strict fiscal responsibility standards on the Fund, preventing it from growing beyond its current size," the FCC said in a statement.
Now the agency is using $300 million in savings from that fund as a one-time infusion. The money will be available to more than a dozen larger broadband service providers, which can choose to accept the money, and the obligations, within 90 days.
Companies that use the funds are required to expand broadband networks in areas that don't already have access. FCC officials estimate the money could provide access to up to 400,000 locations like homes, businesses, or libraries.
The FCC also announced a plan to reform the way smaller, rural companies receive subsidies. Previously, the system inadvertently punished companies that kept costs low.
"By cutting waste, we are saving hundreds of millions of dollars - and those savings will now provide an immediate boost to broadband deployment in unserved areas," FCC Chairman Julius Genachowski said in a statement.