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Federal Communications Commission
1919 - M Street, N.W.
Washington, D.C. 20554
News media information 202 / 418-0500
Fax-On-Demand 202 / 418-2830
Internet: http://www.fcc.gov

June 3, 1997

Informal Questions and Answers on Universal Service Benefits
for Rural Health Care Providers

The Telecommunications Act of 1996, enacted on February 8, 1996, requires the Federal Communications Commission and the states to ensure that affordable, quality telecommunications services are available to all Americans by establishing a policy to foster universal service.

On May 7, 1997, the FCC adopted the Universal Service Order, which funds Congress's universal service goals, including those outlined in the Snowe-Rockefeller-Exon-Kerrey amendment of the 1996 Act. This amendment requires that public and non-profit rural health care providers have access to telecommunications services necessary for the provision of health care services at rates comparable to those paid for similar services in urban areas.

Congress recognized that the provision of health care in rural areas often suffers from a lack of access to medical specialists and information. Telehealth can greatly increase such access, but many rural heath care providers are discouraged from using it by the high costs for telecommunications services. The FCC's Universal Service Order is designed to lessen this barrier to the use of telehealth.

The following are informal questions and answers about the program adopted by the FCC to provide eligible rural health care providers with access to telecommunications services at rates comparable to those paid by their urban counterparts:

Which health care providers are eligible for universal service benefits?

There are an estimated 12,000 eligible rural health care providers. The 1996 Act specifies that, to be eligible for universal service benefits, rural health care providers must be public or non-profit. Eligible providers include teaching hospitals, medical schools, community health centers, migrant health centers, mental health centers, not-for-profit hospitals, local health departments, rural health clinics, and consortia of these entities. Eligible health care providers must also be located in rural areas.

Which telecommunications services will be supported for eligible health care providers?

Public and non-profit rural health care providers are eligible for support for any telecommunications services employing transmission speeds of less than or equal to 1.54 Mbps.

1.54 Mbps is equivalent to a T-1, so, for example, an eligible health care provider could choose a T-1, a quarter T-1, an ISDN line, or a satellite connection at supported rates. The 1996 Act requires that universal service funds be available on a technology neutral and telecommunications provider neutral basis.

In addition, any public or non-profit health care provider that does not have toll free access to an Internet service provider is eligible for limited support for toll charges to reach the nearest Internet service provider. Universal service support per month will be the lesser of $180 of toll charges or the amount of toll charges incurred for 30 hours of access to an Internet service provider.

Will universal service funding apply to distance charges?

Universal service funds will cover distance charges for the telecommunications services described above. Many telecommunications carriers charge a per-mile fee for their services. These mileage charges make up the bulk of the difference between the telecommunications costs of rural health care providers and those of their urban counterparts. Support for rural health care providers is limited to the amount of funding necessary to support a service connecting the eligible provider (as described above) to the farthest point within the nearest large city in the state.

How much funding will be available to support eligible rural health care providers?

There will be a cap of $400 million per year on total universal service telehealth spending. The amount of the cap was based on an estimate of what it would cost if every eligible health care provider obtained universal service support for T-1 service and for limited toll free access to an Internet service provider. Whether the cap is reached will depend upon the number of eligible rural health care providers who apply for universal service support, and on the types of services they choose, but the actual cost of support is expected to be lower than $400 million per year.

How can rural health care providers apply for universal service support?

A universal service administrator will be designated by the FCC to process requests for support. Health care providers will submit descriptions of services requested to the administrator, who will post them on a universal service website. Telecommunications carriers may then contact the health care providers whose descriptions of services were posted and may submit bids for the provision of the requested services. Eligible health care providers will not receive universal service funds directly, but as discounts on their charges from telecommunications carriers.

When will health care providers start receiving universal service benefits?

Universal service funds will be available for eligible health care providers beginning on January 1, 1998. Over the next few months, the FCC will develop an application process for universal service support. Eligible health care providers should use the time until then to assess their resources and their telehealth needs, and to decide which telecommunications services would best suit them.

What is the best way to stay informed about the FCC's universal service benefits for rural health care providers?

Visit the FCC's health web site at www.fcc.gov/healthnet or call 1-888-CALL-FCC.

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