In an attempt to kick off the Federal Communications Commission (FCC)’s efforts to overhaul an $8 billion subsidy program for funding new broadband lines in underserved US areas, the FCC chairman Julius Genachowski will reportedly put forth a proposal, in a speech on Monday.

According to the information shared by FCC officials, Genachowski will propose the phasing out the payments between phone companies, which, in his opinion, result in the creation of “inefficiencies and perverse incentives”; thereby leading to wastage in the fund.

In addition, the FCC will also propose the setting up of the Connect America Fund, which essentially will be a new pool for consolidating the current methods of payments for rural phone service. The Fund will be largely used for making any requisite payments for ensuring the availability of broadband services to the thus-far-underserved areas.

Genachowski, who will outline the proposals during his speech to the Information Technology and Innovation Foundation, a Washington-based nonpartisan research institute, will likely state: “At the end of this transition, we would no longer subsidize telephone networks; instead we would support broadband.”

While the FCC officials have also suggested that changes need to be made to the manner in which the Universal Service Fund (USF) - which subsidizes phone lines in rural areas and for low-income Americans – is funded, the FCC will probably take up that issue later this year.