Remarks of Chairman Reed Hundt, by video
Transatlantic Telemedicine Summit
May 20, 1997


     Greetings to the participants in the Transatlantic
Telemedicine Summit.  I am sorry not to be able to be with
you in person.  Your goal of increasing the development of
telemedicine is one that is enthusiastically shared by the
FCC and the United States.  

     Less than two weeks ago, on May 8, the FCC issued
rules that put into place the single most important policy for
encouraging the growth of telemedicine in the U.S. --
universal service.  

     I'd like to give you a sense of what universal service
policy will mean to health care providers and patients in the
United States -- and how this and other FCC policies will
encourage the world-wide use of telemedicine.  

Universal Service & Health Care

     The goal of universal service policy is to make
affordable telecommunications service accessible to all
Americans.  Universal service funds are collected from a
broad-based group of interstate telecommunications
carriers in all areas of the country.  The
Telecommunications Act of 1996 directed the FCC to
develop a new plan for universal service policy based on a
series of principles.  Among these principles are quality
service at "just, reasonable and affordable rates," services
for rural, insular and high-cost area consumers at rates
"reasonably comparable to those in urban areas,"
affordable access to telecommunications services for
schools and classrooms and libraries, and rates for public
and non-profit rural health care providers that are
reasonably comparable to those paid in urban areas. 

     This is the first time universal service benefits have
ever been specifically targeted to rural health care
providers.  Congress recognized that rural health care often
suffers because of distance -- distance that can be
overcome by telemedicine.   About one quarter of the US
population, over 60 million people, live in rural areas.   The
FCC's rules will directly link the 12,000 non-profit and public
health care providers who serve rural Americans to
specialists who would otherwise be hours or days away.  
     Universal service policy will save lives by saving
time.  In rural areas, trauma injuries are 4 times more likely
to result in death than in urban areas due to distance and
lack of information.  Through universal service, rural health
care providers will get support for telecommunications links
that could reduce 50-fold the time needed to transmit an
x-ray in an emergency situation and cut the charge as much
as 10 times. 
 
     Congress saw that a big impediment to the use of
telemedicine in rural areas was the very high cost of
telecommunications services -- often several times the cost
of similar services in urban areas.  So it asked the FCC to
figure out how to give public and non-profit rural health care
providers access to advanced telecommunications services
at rates comparable to those paid by their urban
counterparts.  Based on recommendations from our
Advisory Committee on Telecommunications and Health
Care, which were supported by a federal/state board of
communications policy-makers, the FCC voted in favor of
the following:  

* Non-profit and public rural health care providers will be
able to choose any level of transmission speed up to and
including 1.54 Mbps (equivalent to a T-1) at rates
comparable to those paid in urban areas.  (They could
choose a T-1, a quarter T-1, ISDN, a satellite connection, or
any communications link of bandwidth equal to or less than
1.54 Mbps).  

* Rates for these services will be made comparable through
funding support for distance charges.  Many
telecommunications carriers charge a per-mile fee for their
services.  These distance charges make up the bulk of the
difference between the telecommunications costs of rural
health care providers and those of urban health care
providers.   Universal service funds will cover per-mile
charges for a distance equivalent to that of the nearest city
of 50,000.  

* Universal service funds will cover a limited amount of toll-
free access to the Internet.  Some health care providers
must make long distance calls to reach the nearest Internet
service provider.  For these health care providers, whether
they are rural or urban, universal service will cover the
lesser of $180 in toll charges or the amount of toll charges
incurred for 30 hours a month to reach an Internet service
provider.  As you know, access to the Internet and its wide
variety of health care information will provide new vehicles
for consumer education.  More than 50% of illnesses in the
US, such as heart failure, lung cancer, and AIDS, can be
traced to behavior patterns.  The Internet will bring the most
up-to-date information on disease prevention and treatment
to rural populations via clinics and health centers.  In
addition, the Internet is extremely efficient for spreading
information on regional health problems, such as epidemics
of rabies or lyme disease, that frequently strike rural areas.  

* There will be a total of $400 million per year available for
universal service funding of telemedicine.  This amount was
based on an estimate of what it would cost if every one of
the 12,000 eligible health care providers obtained universal
service support for T-1 service and for toll-free access to
the Internet.  Whether the $400 million per year is reached
will depend upon the number of eligible rural health care
providers who apply for universal service support, and the
types of services they choose.  

     I urge you to spread the word on this new support for
telemedicine.  If rural health care providers don't use it,
they'll lose it.  Universal service is among the most
important policies in the US for increasing the availability of
good health care for all Americans.  To find out more about
the FCC's universal service benefits for telemedicine, visit
our health care web site at www.fcc.gov/healthnet.


International 

     As you know, the FCC's universal service policy will
directly support only health care providers in the United
States.  But it can be seen as a model for other countries
that want to encourage the use of telemedicine to improve
their health care.  

     The power of telemedicine is its ability to extend
beyond geographical boundaries.  By increasing the use of
telemedicine in the US, we are increasing the quality of
telemedicine available to any health care provider who has
access to the Internet and other international information
networks.  

     An example that many of you are familiar with of the
potential of international collaboration in telemedicine is the
work being done at Mass General Hospital.  A magnetic
resonance imaging scan of a patient in Saudi Arabia
suspected of having a brain tumor can be scanned into a
digitizer, compressed, and sent via telephone lines to
Massachusetts.  A radiologist at MGH reviews the image,
and consults with a surgeon in Saudi Arabia.  

     Such exchanges save not only time and money but
lives.  The best thing the US can do to increase the growth
of telemedicine throughout the world is to encourage the
growth of competition in telecommunications.   

     We need competition in services between countries
and between continents.  Ultimately, we need competition
in every country.  Otherwise, monopolists will at minimum
reduce the efficiency of the global network.  At worst, when
they are from large markets, they can leverage their
monopoly at home into anticompetitive behavior in world
markets.  

     The same principles of competition and deregulation
that guided our own telecommunications reform legislation
a year ago should guide the rest of the world in opening
their telecommunications markets as we have.  Over the
past three years, we have worked to create the framework
for a Global Information Infrastructure that will foster
economic development for all countries of the world.  

     The FCC is preparing to play our appropriate role in
implementing the World Trade Organization agreement that
overthrows the monopoly paradigm in favor of the
competition model in 69 countries around the world.  The
agreement is the best possible news for the world
economy, and for the improvement of health care through
telemedicine on a global scale.  

     I look forward to working with international leaders
such as yourselves, in both the public and private sectors,
to eliminate barriers to the spread of telemedicine.  Among
the most powerful contributions of this age of
communications is the opportunity to improve the level of
health care around the world.