FCC Chairman Tom Wheeler will roll out a plan on Thursday to his commissioners suggesting major changes to a $1.7 billion subsidy program, the newspaper cited senior officials as saying.
Wheeler will propose potentially giving recipients a choice of phone service, Internet service or a mix of both, the officials said.
The subsidy program, Lifeline, is funded through fees paid by landline and cellphone customers.
"Lifeline helps ensure that all Americans can afford phone service, providing connections to jobs, family and 911," Wheeler said last year.
Wheeler will also suggest new measures to curb fraud, the newspaper said.
Lifeline has been a subject of controversy in recent years, after instances of abuse. Three men were indicted on charges of defrauding the subsidy program last year.
While the plan proposed by Wheeler is likely to win the support of the FCC's Democratic majority in a vote next month, it is almost certain to set off fierce debate in Washington, the newspaper said.
The FCC could not immediately be reached for comment outside regular business hours.
© Thomson Reuters 2015