FCC Record

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methodology for support for entirely rural areas because we are relying on the same statutory provision. Therefore, we establish a 50 percent discount off the commercial rate for the purchase of advanced telecommunications and information services for states that are "entirely rural."163 We emphasize that the entire state must meet the definition of rural, as described above, to be eligible to receive the 50 percent discount. We conclude that this discount will assist health care providers in the purchase of such services as well as subsidize the cost of these services in areas where they are currently being provided. Based on past experience, a flat discount is easy to administer and is consistent with section 254(b)(5), which requires a specific, sufficient, and predictable mechanism. In addition, a flat discount percentage of 50 percent is both technically feasible and economically reasonable, because it provides a limit on the amount of support per provider, it provides incentives for rural health care providers to make prudent economic decisions concerning their telemedical needs, and it will deter wasteful expenditures.166 Further, we find that a 50 percent discount is slightly less than the average discount rural health care providers currently receive for telecommunications services under section

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254(h)(1)(A). 167 Consistent with the Commission's principles of competitive neutrality, eligible health care providers may receive increased discounts for any advanced telecommunications and information service, regardless of the platform.

168

45. Section 254(h)(2)(A) provides that the Commission "shall establish competitively neutral rules to enhance, to the extent technically feasible and economically reasonable, access to advanced telecommunications and information services for all public and non-profit elementary and secondary school classrooms, health care providers, and libraries...."169 Accordingly, the Act contemplates

actions to enhance access to information services, such as Internet access, for rural health care providers.

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(...continued from previous page)

infrastructure designed to support the provision of advanced telecommunications and information services in entirely rural states.

164 The Commission will post the list of states and territories that are "entirely rural" on USAC's website, as is done now. See supra para. 13.

16547 U.S.C. § 254(b)(5). As discussed above, the Commission adopted a flat discount of 25 percent off the cost of monthly Internet access for all eligible rural health care providers. See Report and Order, 18 FCC Rcd at 24460-61, para. 27. See also 47 C.F.R. § 54.621.

166 Report and Order, 18 FCC Rcd at 24560-61, para. 27. Health care providers in entirely rural areas will have an incentive to choose a level of service appropriate to their needs.

16747 U.S.C. § 254(h)(1)(A). See http://www.atmeda.org/news/2004 presentations/13 (average support is 66 percent of service cost).

168 See Report and Order, 18 FCC Rcd at 24561-62, para. 28.

16947 U.S.C. § 254(h)(2)(A).

170 See TOPUC, 183 F.3d at 443-44 (affirming the Commission's authority under section 254(h)(2)(A) to provide support to non-telecommunications carriers in their provision of Internet access and internal connections). See also 1997 Universal Service Order, 12 FCC Rcd at 9107, para. 630.

46. In the 2003 Report and Order, the Commission determined that, given the rapid development of the Internet's capacities, the proliferation of applications available on the Internet, and the increase in the number of Internet users, it was appropriate to provide funding for Internet access to rural health care providers." The Commission defined eligible Internet access as an information service that enables rural health care providers to post their own data, interact with stored data, generate new data, or communicate over the World Wide Web.122 In particular, the Commission concluded that support equal to 25 percent of the monthly cost for any form of Internet access reasonably related to the health care needs of the facility should be provided to rural health care providers. 173 In doing so, the Commission stated that a flat discount percentage of 25 percent off the cost of monthly Internet access would assist rural health care providers seeking to purchase Internet access, while also providing 174 incentives for providers to make prudent economic decisions concerning their telemedical needs. The Commission specifically noted that it was acting conservatively by choosing a 25 percent flat discount initially. The Commission also stated that it will determine whether an increase in the discount is necessary or advisable as it gains more experience with this aspect of the support mechanism.176

175

178

47. To the extent that we were concerned in the 2003 Report and Order that demand for Internet access support would exceed the annual funding cap, to date, those concerns have not come to fruition.'” This does not mean, however, that we can increase the discount for Internet access. We continue to remain concerned that rural health care providers choose a level of service appropriate to their needs, and we want to deter wasteful expenditures. Because requests for Internet access discounts have remained at low levels, we take this opportunity to seek comment on whether a 25 percent flat discount off the cost of monthly Internet access for eligible rural health care providers is sufficient. We continue to believe that a flat discount will lead to greater predictability and fairness among health care providers.179 We encourage commenters to be specific as to the level of support that we should offer, and to provide us with the facts that they rely upon in advocating a level of support.

48. Further, to accurately gauge the demand for support under the rural health care mechanism, we seek comment on the effect that an increase in Internet access support would have on the demand for support from rural health care providers. We therefore seek comment from rural health care providers on the demand for Internet access, and from service providers on the cost of such services. We seek comment on whether demand for Internet access is likely to reach the $400 million cap on the amount of support to be provided by the rural health care mechanism, and how increased demand would affect the

171

Report and Order, 18 FCC Rcd at 24557, para. 22. The Commission found authority for this funding under section 254(h)(2)(A) of the Telecommunications Act of 1996. 47 U.S.C. § 254(h)(2)(A).

17247 C.F.R. § 54.601(c)(2)(i). See also Report and Order, 18 FCC Rcd at 24559, para. 25.

173

174

Report and Order, 18 FCC Rcd at 24557, para. 22; 47 C.F.R. §§ 54.601(c)(2)(ii), 54.621(a).

Report and Order, 18 FCC Rcd at 24560-61, para. 27. Rural health care providers can use this discount towards the cost of monthly charges for information services only. Id. at para. 18 (defining “information services"). Support for telecommunications services is not included under this discount. The Act defines "telecommunications service"

as "the offering of telecommunications for a fee directly to the public, or to such classes of users as to be effectively available directly to the public, regardless of the facilities used." 47 U.S.C. § 153(46).

175 Report and Order, 18 FCC Rcd at 24560-61, para. 27.

176 Id.

177 Id.

178 Id.

179 Id.

operation of the rural health care mechanism.

49. We also seek comment on the positive or negative effects that a decision to increase Internet access support will have on the rural health care support mechanism, from the perspective of the health care providers, the service providers, and USAC. We encourage parties to discuss any issues relevant to whether we should provide increased support for Internet access, what level of support to provide, what restrictions, if any, we should place on such support, what administrative problems and concerns may arise if we provide increased support, and the impact of an increase in support on the mechanism's ability to support other services. Specifically, we seek comment on whether an increase of support would have positive or negative effects on facilities-based broadband deployment in rural areas.

Support for Other Telecommunications Services for Mobile Rural Health Care
Providers

50. In the foregoing Report and Order, we revise our policy to allow mobile rural health care clinics to receive discounts for satellite services calculated by comparing the actual cost of the satellite service to the rate for an urban wireline service with a similar bandwidth.180 We recognize that not only satellite services but other telecommunications platforms, such as terrestrial wireless, may provide the most cost-effective means of providing the telemedicine link. Because we want to encourage mobile health care providers to consider all available telecommunications services when determining which service best suits the needs of the telemedicine project, we seek comment on whether to modify our rules specifically to allow mobile rural health care providers to use services other than satellite. We seek comment on what other telecommunications services might be available to support mobile rural telemedicine projects. We ask commenters to address how such service may be a more cost-effective method of providing service than a satellite connection. We also request whether services other than satellite services would require different rules, different eligibility criteria or any other changes from the rules we establish today.

51. In the 1997 Universal Service Order, the Commission requested comment on whether and how to support infrastructure development or "network buildout" needed to enhance public and not-forprofit health care providers' access to advanced telecommunications and information services. 181 At the time, the Commission noted that the record contained anecdotal evidence regarding the need for support for infrastructure development. We now seek to refresh the record on this issue.

52. In the 1997 Universal Service Order, the Commission agreed with MCI that infrastructure development is not a "telecommunications service" within the scope of section 254(h)(1)(A) and concluded that the Commission has the discretionary authority to establish rules to implement a program of universal service support for infrastructure development as a method to enhance access to advanced telecommunications and information services under section 254(h)(2)(A), as long as such a program is competitively neutral, technically feasible, and economically reasonable.182 Section 254(h)(2)(A) directs 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 all.. . health care providers.' Extending or upgrading existing telecommunications infrastructure could enhance access to the advanced services that may be offered over that infrastructure. Alternatively, in the

180 See supra paras. 26-32.

3,183

181 1997 Universal Service Order at 9109-10, para. 635.

182 Id. at para. 634.

18347 U.S.C. § 254(h)(2)(A).

schools and libraries context, the Commission has recognized that some carrier infrastructure costs may be passed on as a component of monthly service charges.

184

53. Should the Commission authorize support for upgrades to the public switched or backbone networks? How would the program be structured so that it is competitively neutral, technically feasible and economically reasonable? If so, how should the Commission limit such support so that funds are only provided when such upgrades can be shown to be necessary to deliver services to eligible health care providers? Should certifications or other evidence of necessity attesting to the use of such support be required from the rural health care provider or the service provider? Are other safeguards required to ensure that no waste, fraud or abuse occurs? Should these charges be prorated over a specified number of years? Commenters should provide specific information on the probable costs, advantages, and disadvantages of supporting such upgrades. Commenters should also provide information regarding the effect on the fund's resources.

54. As required by the Regulatory Flexibility Act, 5 U.S.C. § 604, the Commission has prepared a Final Regulatory Flexibility Analysis (FRFA) for the Report and Order and Order on Reconsideration, set forth at Appendix C. The Commission has also prepared an Initial Regulatory Flexibility Analysis (IRFA) for the Further Notice of Proposed Rulemaking (Further Notice), set forth at Appendix D. Comments on the IRFA should be labeled as IRFA Comments, and should be submitted pursuant to the filing dates and procedures set forth in paragraphs 58-65, infra.

55. The Report and Order and Order on Reconsideration contains modified information collection requirements subject to the Paperwork Reduction Act of 1995 (PRA), Public Law 104-13. It will be submitted to the Office of Management and Budget (OMB) for review under Section 3507(d) of the PRA. OMB, the general public, and other Federal agencies are invited to comment on the modified information collection requirements contained in this proceeding. In addition, we note that pursuant to the Small Business Paperwork Relief Act of 2002, Public Law 107-198, see 44 U.S.C. 3506(c)(4), we previously sought specific comment on how the Commission might "further reduce the information collection burden for small business concerns with fewer than 25 employees."

56. In this present document, we have assessed the effects of the measures adopted to protect against waste, fraud and abuse in the administration of the rural health care universal service support mechanism. We find that the modified information and record retention requirements for mobile rural health care providers and the modified certification requirements for health care providers in states that are entirely rural will not be unduly burdensome on small businesses.

184 Request for Review of the Decision of the Universal Service Administrator by Brooklyn Public Library, FederalState Joint Board on Universal Service, Changes to the Board of Directors of the National Exchange Carrier Association, Inc., Order, File No. SLD-149423, CC Docket Nos. 96-45 and 97-21, 15 FCC Rcd 18598, 19599-600, 18602-3, paras. 4, 9 (2000); Request for Review by the Department of Education of the State of Tennessee of the Decision of the Universal Service Administrator, Request for Review by Integrated Systems and Internet Solutions, Inc. of the Decision of the Universal Service Administrator, Request for Review by Education Networks of America of the Decision of the Universal Service Administrator, Federal-State Joint Board on Universal Service, Changes to the Board of Directors of the National Exchange Carrier Association, Inc., Order, Application No. 18132, CC Docket Nos. 96-45, 97-21, 14 FCC Rcd 13734, 13749, para. 29.

57. The Further Notice does not contain proposed information collections(s) subject to the Paperwork Reduction Act of 1995, Public Law 104-13. In addition, therefore, it does not contain any new or modified "information collection burden for small businesses with fewer than 25 employees," pursuant to the Small Business Paperwork Relief Act of 2002, Public Law 107-198, see 44 U.S.C. 3506(c)(4).

C. Filing Procedures

58. Pursuant to sections 1.415 and 1.419 of the Commission's rules, 185 interested parties may file comments not later than 60 days after publication of this Second Report and Order in the Federal Register and may file reply comments not later than 90 days after publication of this Second Report and Order in the Federal Register. In order to facilitate review of comments and reply comments, parties should include the name of the filing party and the date of the filing on all pleadings. Comments may be filed using the Commission's Electronic Comment Filing System (ECFS) or by filing paper copies.

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59. Comments filed through the ECFS can be sent as an electronic file via the Internet to <http://www.fcc.gov/cgb/ecfs>. Generally, only one copy of an electronic submission must be filed. If multiple docket or rulemaking numbers appear in the caption of this proceeding, however, commenters must transmit one electronic copy of the comments to each docket or rulemaking number referenced in the caption. In completing the transmittal screen, commenters should include their full name, U.S. Postal Service mailing address, and the applicable docket or rulemaking number. Parties may also submit an electronic comment by Internet e-mail. To get filing instructions for e-mail comments, commenters should send an e-mail to <ecfs@fcc.gov>, and should include the following words in the body of the message, "get form." A sample form and directions will be sent in reply. Or you may obtain a copy of the ASCII Electronic Transmittal Form (FORM-ET) at <www.fcc.gov/e-file/email.html>.

60. Parties that choose to file by paper must file an original and four copies of each filing. 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 we continue to experience delays in receiving U.S. Postal Service mail). The Commission's contractor, Natek, Inc., will receive hand-delivered or messengerdelivered paper filings for the Commission's Secretary at a new location in downtown Washington, DC. The address is 236 Massachusetts Avenue, NE, Suite 110, Washington, DC 20002. The filing hours at this location will be 8:00 a.m. to 7:00 p.m. All hand deliveries must be held together with rubber bands or fasteners. Any envelopes must be disposed of before entering the building.

61. 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 mail, Express Mail, and Priority Mail should be addressed to 445 12th Street, SW, Washington, D.C. 20554. All filings must be addressed to the Commission's Secretary, Office of the Secretary, Federal Communications Commission.

If you are sending this type of document or using this delivery method...

Hand-delivered or messenger-delivered paper filings for the Commission's Secretary

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FCC Record: A Comprehensive Compilation of Decisions, Reports ..., Volume 19