[Federal Register Volume 77, Number 138 (Wednesday, July 18, 2012)]
[Rules and Regulations]
[Pages 42185-42187]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2012-17478]


=======================================================================
-----------------------------------------------------------------------

FEDERAL COMMUNICATIONS COMMISSION

47 CFR Part 54

[WC Docket No. 02-60; FCC 12-74]


Rural Health Care Support Mechanism

AGENCY: Federal Communications Commission.

ACTION: Final rule.

-----------------------------------------------------------------------

SUMMARY: In this document, the Wireline Competition Bureau (the Bureau) 
maintains support on a limited, interim, fiscally responsible basis for 
specific Rural Health Care Pilot Program participants that have 
exhausted their funding this year or will exhaust such funding during 
funding year 2012 to ensure that they can continue to benefit from 
access to these Pilot Program-funded broadband networks, while the 
Commission considers potential reforms to transition recipients of 
Pilot funding to a longer-term mechanism for supporting broadband 
services delivered to rural HCPs. This interim support will preserve 
transitioning Pilot Program participants' connectivity and the 
resulting health care benefits that patients receive from those 
investments made by the Commission in health care broadband networks.

DATES: Effective July 18, 2012.

FOR FURTHER INFORMATION CONTACT: Linda Oliver, Wireline Competition 
Bureau at (202) 418-1732 or TTY (202) 418-0484.

SUPPLEMENTARY INFORMATION: This is a synopsis of the Commission's Order 
in WC Docket No. 02-60; FCC 12-74, adopted July 5, 2012 and released 
July 6, 2012. The complete text of this document is available for 
inspection and copying during normal business hours in the FCC 
Reference Information Center, Portals II, 445 12th Street SW., Room CY-
A257, Washington, DC 20554. The document may also be purchased from the 
Commission's duplicating contractor, Best Copy and Printing, Inc., 445 
12th Street SW., Room CY-B402, Washington, DC 20554, telephone (800) 
378-3160 or (202) 863-2893, facsimile (202) 863-2898, or via the 
Internet at http://www.bcpiweb.com.

I. Introduction

    1. In this order, we maintain support on a limited, interim, 
fiscally responsible basis for specific Rural Health Care Pilot Program 
(Pilot Program) participants that have exhausted their funding this 
year or will exhaust such funding during funding year 2012. We will 
provide continued support for the recurring costs of broadband services 
provided to those health care provider (HCP) sites to ensure that they 
can continue to benefit from access to these Pilot Program-funded 
broadband networks, while we consider potential reforms to transition 
recipients of Pilot funding to a longer-term mechanism for supporting 
broadband services delivered to rural HCPs. This interim support will 
preserve transitioning Pilot Program participants' connectivity and the 
resulting health care benefits that patients receive from those 
investments made by the Commission in health care broadband networks. 
Today's action stays within the budget of the Pilot Program and will 
therefore not impact overall demand for the universal service fund (USF 
or Fund).

II. Discussion

    2. The USF Rural Health Care support mechanism consists of the 
``Primary'' program and the ``Pilot'' program. The Commission created 
the Pilot Program in 2006 in an effort to examine ways to use the RHC 
support mechanism to enhance public and non-profit HCPs' access to 
advanced telecommunications and information services. Participants in 
the Pilot Program are eligible to receive universal service funding to 
support up to 85 percent of the cost of construction of state or 
regional broadband health care networks and of the cost of advanced 
telecommunications and information services provided over those 
networks. Through the Pilot Program, projects have created health 
broadband networks that consist of multiple interconnected HCPs, often 
in a hub-and-spoke configuration, that typically connect rural HCPs to 
larger, more urban medical centers. The networks created by these 
projects enable rural HCPs to access medical specialists, technical 
expertise, and other resources that are usually found only within the 
larger HCPs on the network.
    3. Approximately 13 out of the 50 active projects have some 
individual HCPs that have spent all of the money allocated to them, or 
are scheduled to do so during funding year 2012. According to the 
Universal Service Administrative Company (USAC), some HCPs may exhaust 
their funding in the last few months of Funding Year 2011, and an 
estimated 484 HCPs (or 22.5 percent of individual HCP sites 
participating in the Rural Health Care Pilot projects) are expected to 
exhaust their allocated funding before or during funding year 2012.
    4. Through this order, we provide funds to support ongoing 
connectivity to Pilot Program HCPs that will exhaust funding allocated 
to them before or during funding year 2012. Such funding is necessary 
to ``bridge'' their participation in the Pilot Program and their 
participation in any reformed Rural Health Care programs under 
consideration. Accordingly, as discussed below, we direct USAC to 
provide continued support to Pilot projects for up to 85 percent of 
eligible recurring costs for those individual HCP sites on their 
networks that will exhaust their funding on or before June 30, 2013, 
including those that will have exhausted their funding before the 
effective date of this order. Bridge funding will maintain support for 
this limited number of HCPs and in doing so help ensure that they will 
remain connected to the broadband networks developed with Pilot Program 
funding, while providing the Commission additional time to consider how 
best to transition Pilot Program participants to permanent Rural Health 
Care funding programs. Thus, this support will help maintain the status 
quo for the many patients and communities that benefit from the 
telemedicine and other telehealth applications made available by the 
Pilot projects during this transition period. Consistent with this 
objective, the support is limited in time and scope and does not 
provide new funds for Pilot projects to expand their networks.
    5. This bridge funding will not increase the demand on the Fund 
relative to what was already designated for Pilot Program projects. 
Accordingly, we direct USAC to use up to $15 million of the Pilot 
Program funds that were previously set aside for projects that either 
withdrew from the Program or otherwise failed to meet program deadlines 
to provide bridge funding to transitioning Pilot project participants. 
These funds were designated for Funding Year 2009 and have already

[[Page 42186]]

been collected. Thus, there will be no effect on Fund demand for the 
next year as a result of our action today.
    6. We are mindful that if we do not provide bridge funding, Pilot 
project participants that will exhaust their support under the Pilot 
Program could be required to ``transition'' twice, within a relatively 
short time period, to different RHC programs--the Primary Program and, 
potentially, any programs that may ultimately be adopted by the 
Commission in the pending Rural Health care rulemaking. As discussed 
above, there are significant differences between the Pilot Program and 
the Primary Program, and the Commission is still considering how best 
to reform the existing program consistent with our overarching goals to 
promote access to broadband for health care providers. Almost every 
commenter responding to the Bridge Public Notice, 77 FR 14364, March 9, 
2012, supports the provision of ``bridge'' funding for funding year 
2012. These commenters state that without an orderly transition, many 
of the individual HCP sites are at risk of discontinuing participation 
in their respective networks. For example, the Palmetto State Providers 
Network (PSPN) states that its individual members, especially in rural 
locations, ``often do not have the resources or time to navigate the 
RHC Primary program process'' and that allowing the RHC Pilot networks 
to continue to bill and operate as a consortium would be more 
administratively efficient. PSPN, a state-wide backbone network that 
connects rural and underserved areas in South Carolina, notes that 
uncertainty regarding the transition of HCPs from the Pilot Program has 
caused some of its HCPs to consider discontinuing their participation 
despite the demonstrated benefits of the network. Similarly, the two 
Colorado Pilot projects, Rocky Mountain HealthNet and Colorado Health 
Care Connections state that ``the value developed under the Pilot 
Program would be placed at risk if certain Pilot projects have to face 
the significant difficulties of temporarily transitioning to the 
existing Primary Program.'' Geisinger Health Systems also states that 
ending Pilot Program support for HCPs on its network, without providing 
a process to transition them into a permanent RHC support mechanism, 
may cause some members of its network to drop out.
    7. Duration of Bridge Funding. We provide support only through the 
end of funding year 2012 (through June 30, 2013). The two Colorado 
pilot projects suggest that the Commission extend bridge funding beyond 
funding year 2012, until a permanent rural health care program is 
established and participants are able to complete the application and 
award process. Geisinger suggests that the Commission should continue 
to provide support through the Pilot Program until all rural and 
underserved areas have the same connectivity opportunities as urban 
areas. We intend bridge funding to be a temporary measure, and we 
expect to issue an Order on reform of the permanent rural health care 
mechanism by the end of this year, which will make additional bridge 
funding unnecessary. We therefore decline to grant these requests.
    8. Service Substitutions. HCPs that will exhaust funding allocated 
to them before or during year 2012 may use bridge funding support for 
service substitutions. The Pilot Program has demonstrated that service 
substitutions allow HCPs to manage their networks efficiently, and have 
the effect of decreasing overall demand on the Fund. USAC notes that 
over time Pilot projects have requested three types of service 
substitutions: (1) Upgrading to fiber when it becomes available through 
the project's services provider; (2) increasing the bandwidth of an HCP 
on their network; and (3) disconnecting service to a participating HCP 
site. Bridge funding can be used for recurring and non-recurring 
charges, such as installation charges, associated with service 
substitutions that will allow participating sites to upgrade or 
downgrade their existing circuits. Bridge funding may not be used to 
add new circuits to a site, unless adding or replacing a circuit is 
necessary to complete a service substitution for an existing circuit or 
service. Allowing HCPs the ability to substitute their existing service 
with more or less bandwidth will ensure that their connectivity needs 
are being met, allowing them to increase or decrease bandwidth on 
existing circuits depending on their assessment of their own 
healthcare-related needs, and will help ensure that the Fund is used 
efficiently.
    9. Non-recurring Charges. Bridge funding cannot be used for any 
non-recurring costs other than those associated with service 
substitutions. The limited purpose of this interim funding is to 
maintain Pilot project HCP connectivity while we consider how best to 
transition the projects to a long-term funding program, not to fund 
additional construction or network expansion during this time. We note 
that no commenters suggested that funding for non-recurring charges 
(other than for service substitutions) is necessary to maintain the 
individual HCP sites on the Pilot project networks during this period.
    10. Site Substitutions. Bridge funding may only be used to support 
eligible HCP sites that participated in the Pilot Program at a 
specified location before June 30, 2012. Projects cannot use bridge 
funding to substitute sites or add new sites to their network, or to 
fund existing sites that move to a new location after June 30, 2012. 
However, Pilot project HCP sites that have exhausted their funding 
before the effective date of this order may use bridge funding to 
``reconnect'' sites that participated in the Pilot Program at a 
specified location during funding year 2011. As discussed above, the 
purpose of this funding is to maintain the status quo and to avoid 
unnecessary churn for the Pilot projects, and we decline to provide 
funds to enable Pilot projects to expand or modify their networks.
    11. Process for Obtaining Bridge Funding. Pilot Program 
participants eligible to receive bridge funding must submit a new FCC 
Form 466--A package for all eligible funding requests by March 30, 
2013. Invoices of actual incurred eligible expenses must be submitted 
to USAC by December 31, 2013. These measures will help ensure that 
bridge funding is efficiently managed, and will protect against 
potential waste, fraud, and abuse. HCPs currently receiving support for 
services eligible for bridge funding do not have to re-file an FCC Form 
465 to continue receiving support in funding year 2012, as long as the 
contract under which those services are provided is valid until June 
30, 2013. Because HCPs have already gone through the competitive 
bidding process to identify and select the most cost-effective service 
provider in instituting these contracts, sufficient safeguards are in 
place to protect against waste, fraud, and abuse, without requiring 
HCPs to conduct a competitive bidding process again. However, in 
instances where the contract for eligible services ends before or 
during funding year 2012, or is not an ``evergreen'' contract that is 
valid until June 30, 2013, HCPs seeking bridge funding must complete 
the competitive bidding process and submit a Form 465 to seek 
additional funding for the period of time not covered by their existing 
contract. We find that requiring these HCPs to complete the competitive 
bidding process is consistent with Pilot Program procedures, will help 
protect against waste, fraud, and abuse, and will help ensure that HCPs 
will choose the most cost-effective alternatives.
    12. Reporting Requirements. USAC should allocate and account for 
bridge funding as part of the last funding year

[[Page 42187]]

of the Pilot Program (funding year 2009) in its reports to the 
Commission. The overall award for those Pilot projects receiving bridge 
funding will be amended to reflect the original amount awarded to the 
projects plus any bridge funding received.
    13. Program Rules. Except as otherwise discussed in this order, all 
rules regarding the Pilot Program remain in effect and are applicable 
to any bridge funding received by Pilot Program participants.
    14. Effective Date. We find good cause to make this order effective 
upon publication in the Federal Register rather than 30 days after 
publication. Some Pilot project HCPs may exhaust all of the funding 
allocated to them in the last few months of Funding Year 2011. As a 
result, until this order becomes effective, these projects may be 
required by their service providers to pay the entirety of their 
recurring services charges until they are able to receive RHC support 
again, which could create hardship for some. Moreover, it takes 
approximately four weeks for USAC to process and send funding 
commitment letters to projects, which allows the projects to receive 
discounted rates from service providers. Requiring projects to wait an 
additional 30 days after publication in the Federal Register to file 
requests for funding commitment letters will only result in further 
delay, as many projects will be ready to request funding from USAC as 
soon as this order is released. Accordingly, we find that there is good 
cause to make this order effective immediately upon publication in the 
Federal Register, in order to eliminate a potential gap in RHC support 
and to preserve connectivity that has been developed under the Pilot 
Program.

III. Procedural Matters

A. Final Regulatory Flexibility Certification

    15. The Regulatory Flexibility Act of 1980, as amended (RFA), 
requires that a regulatory flexibility analysis be prepared for notice-
and-comment rule making proceedings, unless the agency certifies that 
``the rule will not, if promulgated, have a significant economic impact 
on a substantial number of small entities.'' The RFA generally defines 
the term ``small entity'' as having the same meaning as the terms 
``small business,'' ``small organization,'' and ``small governmental 
jurisdiction.'' In addition, the term ``small business'' has the same 
meaning as the term ``small business concern'' under the Small Business 
Act. A ``small business concern'' is one which: (1) Is independently 
owned and operated; (2) is not dominant in its field of operation; and 
(3) satisfies any additional criteria established by the Small Business 
Administration (SBA).
    16. In this order, we maintain support on an interim basis for 
Pilot Program participants that will exhaust funding allocated to them 
before or during funding year 2012 (July 1, 2012-June 30, 2013). The 
order does not significantly modify the rules of the Pilot Program to 
create any additional burden on small entities, imposes no new burden 
on any company, and has no negative economic impact on any company.
    17. Accordingly, we certify that the measures taken herein will not 
have a significant impact on a substantial number of small entities. 
The Commission will send a copy of this Public Notice, including this 
certification, to the Chief Counsel for Advocacy of the Small Business 
Administration. In addition, this document (or a summary thereof) and 
certification will be published in the Federal Register.

B. Paperwork Reduction Act Analysis

    18. This document does not contain new or modified information 
collection requirements subject to the Paperwork Reduction Act of 1995 
(PRA), Public Law 104-13. In addition, therefore, it does not contain 
any new or modified information collection burden for small business 
concerns 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. Congressional Review Act

    19. The Commission will send a copy of this order to Congress and 
the Government Accountability Office pursuant to the Congressional 
Review Act, see 5 U.S.C. 801(a)(1)(A).

IV. Ordering Clauses

    20. Accordingly, it is ordered that, pursuant to the authority 
contained in sections 1, 4(i), 4(j), 201, 254, and 403 of the 
Communications Act of 1934, as amended, 47 U.S.C. 151, 154(i), 154(j), 
201, 254, and 403, this order is adopted, and shall become effective 
July 18, 2012, pursuant to 5 U.S.C. 553(d)(3) and Sec. Sec.  1.4(b)(1), 
1.103(a), and 1.427(a) of the Commission's rules, 47 CFR 1.4(b)(1), 
1.103(a), 1.427(a).
    21. It is further ordered that the Commission's Consumer & 
Governmental Affairs Bureau, Reference Information Center, shall send a 
copy of this order, including the Final Regulatory Flexibility 
Certification, to the Chief Counsel for Advocacy of the Small Business 
Administration.

Federal Communications Commission.
Marlene H. Dortch,
Secretary.
[FR Doc. 2012-17478 Filed 7-17-12; 8:45 am]
BILLING CODE 6712-01-P