That being said, I am not convinced that it was a good idea in the first place and lean towards getting rid of it now. I haven't studied the issue
So why are you even talking about it?
This particular subsidy was created because it was recognized that the utility of the telephone system was much greater if just about everyone had one than if there were vast areas where no one had telephone service.
Source, please? If you haven't studied the issue, then don't give speculation as assertion.
Despite your claim, the Telecommunications Act of 1996 explicitly states,
To advance the availability of such services to all consumers, including those in low income, rural, insular, and high cost areas, at rates that are reasonably comparable to those charged in urban areas
Seems to me the point is to ensure remote people get access, not to make the system have a higher utility overall.