E6-18759. Rural Health Care Support Mechanism

AGENCY:

Federal Communications Commission.

ACTION:

Notice.

SUMMARY:

In this document, the Commission establishes a pilot program to examine how the rural health care (RHC) funding mechanism can be used to enhance public and non-profit health care providers' access to advanced telecommunications and information services.

DATES:

Effective September 29, 2006. The pilot program applications contain information collection requirements that have not been approved by OMB. The FCC will publish a document in the Federal Register announcing the approval by OMB.

ADDRESSES:

Interested parties may submit applications, identified by [WC Docket number 02-60 and/or FCC Number 06-144], by any of the following methods:

• Federal Communications Commission's Web site: http://www.fcc.gov/​cgb/​ecfs/​. Applicants should follow the same instructions provided on the Web site for submitting comments.
• Paper Submissions: Paper filings are permitted and must be addressed to the Commission's Secretary, Office of the Secretary, Federal Communications Commission, in accordance with the SUPPLEMENTARY INFORMATION provided herein.
• People with Disabilities: People with disabilities may contact the Commission to request reasonable accommodations (accessible format documents, sign language interpreters, CART, etc.) by e-mail at [e-mail] or by phone [phone] or TTY: [phone].

For detailed instructions for submitting applications, see the SUPPLEMENTARY INFORMATION section of this document.

FOR FURTHER INFORMATION CONTACT:

Erika Olsen, Wireline Competition Bureau, Telecommunications Access Policy Division at [phone] (voice), [phone] (TTY), or e-mail at [e-mail].

SUPPLEMENTARY INFORMATION:

This is a summary of the Commission's document FCC 06-144, Rural Health Care Support Mechanism, Rural Health Care Support Mechanism Pilot Program Order, WC Docket No. 02-60, adopted September 26, 2006, released September 29, 2006, establishing a pilot program to examine how the rural health care (RHC) funding mechanism can be used to enhance public and non-profit health care providers' access to advanced telecommunications and information services. Applications to participate in the pilot program will be due 30 days from the receipt of OMB approval. Applications may be filed using the Commission's Electronic Comment Filing System (ECFS), or by filing paper copies.

• Electronic Filers: Applications may be filed electronically using the Internet by accessing the ECFS: http://www.fcc.gov/​cgb/​ecfs/​. Applicants should follow the instructions provided on the Web site for submitting comments.
• For ECFS filers, if multiple docket or rulemaking numbers appear in the caption of this proceeding, filers must transmit one copy of the comments for each docket or rulemaking number referenced in the caption. In completing the transmittal screen, applicants should include their full name, U.S. Postal Service mailing address, and the applicable docket or rulemaking number, which in this instance is WC Docket No. 02-60. Parties may also submit an electronic application by Internet e-mail. To get filing instructions for e-mail applications, applicants should send an e-mail to [e-mail], and include the following words in the body of the message, “get form <your e-mail address>.” A sample form and directions will be sent in response.
• Paper Filers: Parties who choose to file by paper must file an original and four copies of each filing. If more than one docket or rulemaking number appears in the caption in this proceeding, filers must submit two additional copies of each additional docket or rulemaking number.

Filings can be sent by hand or messenger delivery, by commercial overnight courier, or by first-class or overnight U.S. Postal Service mail (although the Commission continues to experience delays in receiving U.S. Postal Service mail). All filings must be addressed to the Commission's Secretary, Office of the Secretary, Federal Communications Commission.

• The Commission's contractor will receive hand-delivered or messenger-delivered paper filings to the Commission's Secretary at 236 Massachusetts Avenue, NE., Suite 110, Washington, DC 20002. The filing hours at this location are 8 a.m. to 7 p.m. All hand deliveries must be held together with rubber bands or fasteners. Any envelopes must be disposed of before entering the building.
• Commercial mail sent by overnight mail (other than U.S. Postal Service Express Mail and Priority Mail) must be sent to 9300 East Hampton Drive, Capitol Heights, MD 20743.
• U.S. Postal Service first-class, Express Mail and Priority Mail should be addressed to 445 12th Street, SW., Washington, DC 20554.

People with Disabilities: To request materials in accessible formats for people with disabilities (Braille, large print, electronic files, audio format), send an e-mail to [e-mail] or call the Consumer & Governmental Affairs Bureau at [phone] (voice), [phone] (TTY).

Initial Paperwork Reduction Act of 1995 Analysis

This document contains proposed information collection requirements which will be submitted to OMB. A separate notice will be published in the Federal Register seeking comment on these information collection requirements.

Synopsis

Introduction and Background

In this Order, pursuant to section 254(h)(2)(A) of the Telecommunications Act of 1996, we establish a pilot program to examine how the rural health care (RHC) funding mechanism can be used to enhance public and non-profit health care providers' access to advanced telecommunications and information services. Specifically, the pilot program will provide funding to support the construction of state or regional broadband networks and services provided over those networks. These networks will be designed to bring the benefits of innovative telehealth and, in particular, telemedicine services to those areas of the country where the need for those benefits is most acute.

In addition, the pilot program will provide funding to support the cost of connecting the state or regional networks to Internet2, a dedicated nationwide backbone. Internet2 links a number of government research institutions, as well as academic, public, and private health care institutions that are repositories of medical expertise and information. By connecting to this dedicated national backbone, health care providers at the state and local levels will have the opportunity to benefit from advanced applications in continuing education and research. In addition, a ubiquitous nationwide broadband network dedicated to health care will enhance the health care community's ability to provide a rapid and coordinated response in the event of a national crisis.

Under this pilot program, all public and non-profit health care providers may apply for funding to construct a dedicated broadband network that connects health care providers in a state or region. In particular, given the nature of the pilot program, we encourage multiple health care providers in a state or region to join together for the purpose of formulating and submitting proposals. In accordance with general principles of universal service, we will require applicants in the pilot program to include in their proposed networks public and non-profit health care providers that serve rural areas. As detailed below, this program will provide funding for up to 85 percent of an applicant's costs of deploying a dedicated broadband network, including any necessary network design studies, as well as the costs of advanced telecommunications and information services that will ride over this network. We recognize that this funding percentage exceeds the funding percentages under our existing RHC mechanism, but find that this percentage is justified by the extraordinary benefits of universal service designed to spur broadband deployment dedicated to telehealth, including telemedicine services. Moreover, we find that this percentage is economically reasonable because the funding is constrained by the program funding caps we describe below.

The pilot program will lay the foundation for a future rulemaking proceeding that will explore permanent rules to enhance access to advanced services for public and non-profit health care providers. In particular, the goal of the pilot program will be to provide us with useful information as to the feasibility of revising the Commission's current RHC rules in a manner that best achieves the objectives set forth by Congress. If successful, increasing broadband connectivity among health care providers at the national, state and local levels would also provide vital links for disaster preparedness and emergency response and would likely facilitate the President's goal of implementing electronic medical records nationwide.

Broadband has enabled health care providers to vastly improve access to quality medical services in remote areas of the country. Among other things, telehealth applications allow patients to access critically needed medical specialists in a variety of practices, including cardiology, pediatrics, and radiology, without leaving their homes or their communities. Using video feeds over broadband and real-time patient information, intensive care doctors and nurses can monitor critically ill patients at multiple locations around the clock. Using this technology, a single medical professional is able to administer services to over a hundred patients, while cutting skyrocketing medical costs by shortening average hospital stays and reducing the need for additional tests and treatments. The benefits of these technologies are particularly apparent in underserved areas of the country that may lack access to the breadth of medical expertise and advanced medical technologies available in other areas.

In the Telecommunications Act of 1996, Congress specifically sought to provide rural health care providers “an affordable rate for the services necessary for the provision of telemedicine and instruction relating to such services.” In 1997, we implemented this directive by adopting the RHC support mechanism funded by monies collected through the Universal Service Fund. Our RHC program provides reduced rates to rural health care providers for their telecommunications and Internet services. The primary goal of our existing rules is to ensure that rural health care providers pay no more than their urban counterparts for their telecommunications needs in the provision of health care services.

In section 254(h)(2)(A), Congress directed the Commission to “establish competitively neutral rules to enhance, to the extent technically feasible and economically reasonable, access to advanced telecommunications and information services for * * * health care providers.” Since 1997, the Commission has made several changes to the RHC support mechanism to make it more viable and to reflect technological changes. For example, the Commission has exercised its authority under section 254(h)(2)(A) to establish discounts and funding mechanisms for advanced services provided by both telecommunications carriers and non-telecommunications carriers. We currently have an open proceeding seeking comment on further modifications to the existing RHC support mechanism.

Despite the modifications the Commission has made to the rural health care mechanism, the program continues to be greatly underutilized and is not fully realizing the benefits intended by the statute and our rules. In 1997, we authorized $400 million dollars per year for funding of this program. Yet, in each of the past 10 years, the program generally has disbursed less than 10 percent of the authorized funds. Although there are a number of factors that may explain the underutilization of this important fund, it has become apparent that health care providers continue to lack access to the broadband facilities needed to support the types of advanced telehealth applications, like telemedicine, that are so vital to bringing medical expertise and the advantages of modern health care technology to rural areas of the country. In addition, many of these real-time telehealth applications require a dedicated broadband network that is more reliable and secure than the public Internet. Although the Commission has taken a number of steps to spur deployment of the type of broadband facilities that would support advanced medical technologies, to date our rural health care funding mechanism has not adequately provided the type of support needed to encourage development of dedicated broadband networks among health care providers.

Because of the enormous benefits of telemedicine applications that ride over broadband facilities, it is essential that the Commission take additional steps to facilitate broadband deployment to health care providers. Before taking further action to revise or expand the current RHC program, however, we believe it is prudent to engage in a trial program that will provide us with a more complete and practical understanding of how to ensure the best use of these available funds. Results from such a pilot program will inform our examination of how we can more effectively use available funding to bring the benefits of broadband connectivity to health care providers and patients in those areas of the country most in need. Upon completion of the pilot program, we will issue a report detailing the results of the program and the status of the health care mechanism generally, and recommend any changes that are needed to improve the programs. In addition, we intend to incorporate the information we gather as part of this pilot program in the record of any subsequent proceeding.

Pilot Program

The pilot program will fund a significant portion of the costs of deploying a dedicated broadband network that connects multiple public and non-profit health care providers, within a state or region, as well as providing the “advanced telecommunications and information services” that ride over that network. Consistent with the mandate provided in section 254(h)(2)(A) and general principles of universal service, all eligible public and non-profit health care providers may apply to participate in the pilot program, but applicants must include in their proposed networks public and non-profit health care providers that serve rural areas. A comprehensive network will provide the health care communities access to the various technologies and medical expertise that reside in specific hospitals, medical schools, and health centers within a region or state.

The pilot program satisfies the requirements of section 254(h)(2)(A). First, the program will be “competitively neutral,” which “means that universal service support mechanisms and rules neither unfairly advantage nor disadvantage one provider over another, and neither unfairly favor nor disfavor one technology over another.” The pilot program meets that requirement because eligible health care providers are free to choose any technology and provider of the broadband connectivity needed to provide telehealth, including telemedicine, services. Second, the pilot program will be “technically feasible” because the program will not require development of any new technology. Rather, participants will be free to utilize any currently available technology. Third, the program will be “economically reasonable.” In discussing economic reasonableness, the Commission has generally focused on the effect any new rules would have on growth in the rural support mechanism. To ensure the pilot program is economically reasonable, we will work within the confines of the existing RHC program funding mechanism and will structure pilot program funding in a manner similar to the priority system provided for the E-rate program in the Commission's rules.

Specifically, to ensure that there is sufficient funding for the existing rural health care program, we will ensure applications for RHC support under the existing program receive priority funding. Once we have determined the funding needs for the existing program, we will fund the pilot program in an amount that does not exceed the difference between the amount committed under our existing program for the current year and $100 million (i.e., 25 percent of the total $400 million annual RHC cap). Thus, if funding for RHC support under the existing program is $35 million in a year, $65 million will be available for the pilot program. By capping the combination of applications for RHC support under the existing program and under the pilot program at $100 million (or 25 percent of the annual $400 million cap), we will ensure that the pilot program is economically reasonable. This will ensure that rural health care provider telecommunications needs under the current program are given priority and that the pilot program funding is capped at a reasonable level. We recognize that this prioritization may limit the amount of support provided to the pilot program in the event demand for the RHC program increases dramatically, but this outcome appears unlikely given our experience to date with this fund.

Because we recognize that we will need the experience of more than one year to fully evaluate the results of the pilot program, the pilot program we establish herein is limited to two years. For purposes of this pilot program, we are reopening the filing window for Funding Year 2006. Funding under this pilot program for Funding Year 2006 will be available until June 30, 2007. Participants that receive funds in Funding Year 2006 must reapply to the extent they seek additional funds in Funding Year 2007. Applicants not selected in Funding Year 2006 may apply for funds during our normal filing window for Funding Year 2007.

The funding provided under this pilot program may be used to fund up to 85% of the costs incurred by the applicants to deploy a state or regional dedicated broadband health care network, and to connect that network to Internet2. Selected applicants must use these funds for the purposes specified in the application award. Authorized purposes will include the costs of deploying transmission facilities and advanced telecommunications and information services, including associated non-recurring and recurring costs. We find that section 254(h)(2)(A), which requires the Commission “to enhance * * * access to advanced telecommunications and information services,” authorizes support for construction of facilities for the purposes of this pilot program. This is consistent with the Commission's conclusion in the May 8th Universal Service Order, FCC 98-85, released May 8, 1998, that we have authority to implement a program of universal service support for infrastructure development as a method to enhance access to advanced services under section 254(h)(2)(A). Because many health care providers would be unable to access certain telehealth services without deployment of new broadband facilities, the pilot program will support construction of those facilities.

For purposes of this pilot program, we will permit funding to be used to conduct initial network design studies. These studies will enhance access to advanced telecommunications and information services by enabling applicants to determine how best to deploy an efficient network that includes multiple locations and various technologies. We recognize that funding initial network design studies in the pilot program goes beyond the services normally eligible for support in the RHC program. Consistent with our authority in section 252(h)(2)(A), we conclude that funding these studies is in the public interest for the purposes of this pilot program because it will enable program participants to explore more efficient, effective means of delivering telemedicine in rural areas. In light of the historical trend of the RHC program to operate at 10% or less of the total amount authorized, as well as the funding cap described earlier, we find that funding network design studies for pilot program participants will be economically reasonable. We find that these justifications apply equally to supporting infrastructure deployment, which is also not covered under the existing program.

We will select a limited number of participants from applications that meet the criteria outlined below. We expect each applicant to present a strategy for aggregating the specific needs of health care providers, including providers that serve rural areas, within a state or region, and leveraging existing technology to adopt the most efficient and cost effective means of connecting those providers. Applicants should indicate in their application how they plan to fully utilize a newly created dedicated broadband network to provide health care services. We anticipate that successful applicants will be able to demonstrate that they have a viable strategic plan for aggregating usage among health care providers within their state or region. In choosing participants for the program, we will consider whether the applicant has a successful track record in developing, coordinating, and implementing a successful telehealth/telemedicine program within their state or region. In addition, because the purpose of this program is to encourage health care providers to aggregate their connection needs to form a comprehensive statewide or regional dedicated health care network, we will also consider the number of health care providers that would be included in the proposed network. In particular, we will give considerable weight to applications that propose to connect the rural health care providers in a given state or region. A proposal that connects only a de minimis number of rural health care providers will not be accepted.

To be eligible for participation in the pilot program, interested parties should submit applications that:

(1) Identify the organization that will be legally and financially responsible for the conduct of activities supported by the fund;

(2) Identify the goals and objectives of the proposed network;

(3) Estimate the network's total costs for each year;

(4) Describe how for-profit network participants will pay their fair share of the network costs;

(5) Identify the source of financial support and anticipated revenues that will pay for costs not covered by the fund;

(6) List the health care facilities that will be included in the network;

(7) Provide the address, zip code, Rural Urban Commuting Area (RUCA) code and phone number for each health care facility participating in the network;

(8) Indicate previous experience in developing and managing telemedicine programs;

(9) Provide a project management plan outlining the project's leadership and management structure, as well as its work plan, schedule, and budget.

(10) Indicate how the telemedicine program will be coordinated throughout the state or region; and

(11) Indicate to what extent the network can be self-sustaining once established.

Applicants will be required to comply with the existing competitive bidding requirements, certification requirements, and other measures intended to ensure funds are used for their intended purpose. We recognize that we may need to waive additional rules in order to implement this pilot program, and we request that applicants identify in their application any rules that they would like us to waive for purposes of this pilot program.

Applications to participate in the pilot program will be due 30 days from the receipt of OMB approval.

Instructions for Filing. Applications should reference WC Docket No. 02-60 only, and may be filed using (1) the Commission's Electronic Comment Filing System (ECFS), or (2) by filing paper copies.

• Electronic Filers: Applications may be filed electronically using the Internet by accessing the ECFS at http://www.fcc.gov/​cgb/​ecfs/​. Applicants should follow the same instructions provided on the Web site for submitting comments. In completing the transmittal screen, ECFS filers should include their full name, U.S. Postal Service mailing address, and the applicable docket or rulemaking number. To get filing instructions for e-mail applications, commenters should send an e-mail to [e-mail] and should include the following words in the body of the message, “get form <your e-mail address>.” A sample form and directions will be sent in reply.
• Paper Filers: Parties who choose to file by paper must file an original and four copies of each application. Applications can be sent by hand or messenger delivery, by commercial overnight courier, or by first-class or overnight U.S. Postal Service mail (although we continue to experience delays in receiving U.S. Postal Service mail). All filings must be addressed to the Commission's Secretary, Office of the Secretary, Federal Communications Commission.

The Commission's contractor will receive hand-delivered or messenger-delivered paper filings for the Commission's Secretary at 236 Massachusetts Avenue, NE., Suite 110, Washington, DC 20002. The filing hours at this location are 8 a.m. to 7 p.m. All hand deliveries must be held together with rubber bands or fasteners. Any envelopes must be disposed of before entering the building. Commercial overnight mail (other than U.S. Postal Service Express Mail and Priority Mail) must be sent to 9300 East Hampton Drive, Capitol Heights, MD 20743. U.S. Postal Service first-class, Express, and Priority mail should be addressed to 445 12th Street, SW., Washington DC 20554.

Applicants must also send a courtesy copy of their application to each of the following individuals: (1) Jeremy Marcus, [phone], [e-mail]; (2) Thomas Buckley, [phone], [e-mail]; and (3) Erika Olsen, [phone], [e-mail]. Each is located in the Telecommunications Access Policy Division, Wireline Competition Bureau, Federal Communications Commission, 445 12th Street, SW., Washington, DC 20554.

Ordering Clause

Pursuant to the authority contained in sections 1, 4(i), 4(j), 10, 201-205, 214, 254, and 403 of the Communications Act of 1934, as amended, 47 U.S.C. 151, 154(i), 154(j), 201-205, 214, 254, and 403, this Order is adopted, and shall become effective September 29, 2006, pursuant to 47 U.S.C. 408, except that the information collections contained in the Order will become effective following OMB approval. Applications to participate in the pilot program shall be filed 30 days from the receipt of OMB approval. The Commission will issue a public notice announcing the date upon which the information collection requirements set forth in this Order shall become effective following receipt of such approval.

Federal Communications Commission.

Marlene H. Dortch,

Secretary.