THE LEDE: Federal Communications Commission Chairman Julius Genachowski announced his plan to reform the Universal Service Fund on Thursday, calling the current system "outdated," "wasteful" and "unfair." The FCC estimates 18 million Americans live in areas without access to broadband; Genachowski said his plan would cut that figure in half within five years. It's still unclear how similar Genachowski's proposal is to America's Broadband Connectivity (ABC) Plan, which was drafted by the major telecom firms. He said his plan "will not rubber stamp or adopt wholesale the proposals of any stakeholders" but rather he reviewed a variety of suggested proposals and his plan includes elements of many of them.


“Chairman Genachowski has taken an important step forward today in bringing broadband — both wired and wireless — to all Americans. I strongly support and applaud his efforts and look forward to working with him and his fellow Commissioners to reform the universal service system. Next week, the Commerce Committee will hold a hearing on the need to move forward on these important proposals. We have a real opportunity to close the digital divide in rural America if we get this right. The time to act is now." — Senate Commerce Chairman Jay Rockefeller (D-W.Va.)

“We welcome FCC Chairman Genachowski’s announcement that he plans to move forward with an order to reform universal service and intercarrier compensation to ensure that broadband can be extended to areas with no access. As the chairman pointed out in his speech, these regulatory regimes have long needed reform, and it is time to take action. We agree with his assessment that reform will bring massive consumer benefits. We also appreciate the dedication and commitment to reform that the other FCC commissioners have expressed in working on these difficult issues over that past year.” — Spokesman for ABC Plan

GOP was cap on USF: Fourteen GOP lawmakers, led by Reps. Joe Barton (Texas) and Marsha Blackburn (Tenn.), urged Federal Communications Commission Chairman Julius Genachowski to focus on "fiscal responsibility" Thursday as he moves to reform the Universal Service Fund (USF), a multibillion-dollar phone subsidy program. Earlier in the day, Genachowski announced his plans to update the program to expand broadband access.

"Every dollar of USF support ultimately comes from consumers, and we do not support the current reality of consumers paying into a broken system," the lawmakers wrote. They recommended that Genachowski set a cap of $4.5 billion for the USF's high-cost program, eliminate any subsidies in areas that already have an unsubsidized provider and use competitive bidding or reverse auctions to award subsidies.

Genachowski's plan would award subsidies based on a competitive bidding process. The FCC will vote on USF reform at its next meeting on Oct. 27.

Also on the agenda for the FCC's Oct. open meeting: The commission will consider amending the television broadcaster requirement by making stations post their public files online, hosted by the FCC.


Oracle settled a qui tam lawsuit with the Justice Department under the False Claims Act for $199.5 million.

The legal challenges to the FCC's net-neutrality rules will be heard in the D.C. Circuit Court of Appeals, a win for opponent Verizon.

There's buzz that Facebook's Mark Zuckerberg could win the Nobel Peace Prize on Friday.

YouTube launched a politics channel.

And lastly, our obit for Apple's Steve Jobs and some word to remember him by.

Said. “The cure for Apple is not cost-cutting. The cure for Apple is to innovate its way out of its current predicament.” — Steve Jobs, Apple Confidential: The Real Story of Apple Computer