WASHINGTON — Subsidies for companies that provide telephone service in rural areas should be capped and part of the money should be dedicated to wireless phone and high-speed Internet service, a government advisory board says.

The Federal Communications Commission oversees the program, which makes direct payments to telecommunications companies that offer phone service in rural areas where it is expensive to provide. Three companies — Sandwich Isles Communications Inc., Sprint Nextel Corp. and Mobi PCS — collect $765 a month per customer in subsidies for providing phone service to residents of Hawaiian Home Lands.

The $765-per-month subsidy for each qualifying rural phone line in Hawai'i is 36 times higher than the average national rural phone line subsidy, and the costliest subsidy in the nation.

Those subsidies could be affected by the proposed fund reforms. A joint federal-state board recommended Tuesday that the so-called "high-cost" portion of the program be capped at $4.5 billion. That part of the program has expanded tenfold the past four years without any changes to where the money goes. The board recommended $1 billion be set aside for wireless phone service and $300 million for broadband Internet service provided to residences in underserved areas.

The board said a cap is needed because "unrestrained growth" could undermine public support for the program, which is paid for with fees added to consumers' long-distance phone bills. Such fees are at record levels.

The Universal Service Fund was created in 1996 by Congress, when the nation's communications laws aimed at ensuring competition were overhauled. Congress ordered that consumers, even in rural areas, have access to phone services at similar rates charged in urban areas and financed the order through the fee added to long-distance bills.

The fund has collected $44 billion over its 10-year lifetime from surcharges on the phone bills of nearly every American. In 2006 alone, the fund collected $6.6 billion, which goes to four separate programs.

The FCC, which is not obligated to implement the board's recommendations in whole or part, has one year to act.

FCC Chairman Kevin Martin, a longtime critic of the program, said that he supports the recommendations, especially dedicating funds to subsidize broadband service.

Commissioner Michael Copps said $300 million for high-speed Internet service subsidies is not enough.

Some major telecom carriers said yesterday that they support the board's recommendations.

Susanne Guyer, Verizon Communications Inc.'s senior vice president of federal regulatory affairs, said the proposed reforms would bring fiscal responsibility to the program.

"The board took important steps to control the growth of the high-cost fund and moved us closer to a program that is efficient, market-oriented and reflects today's competitive landscape," she said.

Shirley Bloomfield, senior vice president of federal relations for Qwest Communications International Inc., said "a reassessment is necessary to control the program's escalating costs and to ensure that it is sustainable."

AT&T Inc., which collects subsidies for both its wired and wireless operations, has previously said it supports a program cap and creation of pilot programs to fund cellular and broadband services.