Thank you for the opportunity to participate in this joint Partnerships '97 and Friends of the National Library of Medicine Conference. I am honored to be among so many of the world's leaders in the field of health care.

Telehealth is one of several very important subjects that the Commission will address in its Universal Service Order. Our decision will be on time and I hope on target. At a meeting scheduled for May 6, the FCC will deliver a detailed, comprehensive, and complete decision to connect all the groups and locations Congress wants connected to the information highway.

The goal of universal service policy is to make telecommunications service both affordable and accessible to all Americans. As you may know, the Telecom Act directs 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 rural health care providers that are reasonably comparable to those paid in urban areas.

In May the Commission will set out ways to provide the necessary subsidies for low income consumers, rural telephone companies, small telephone companies, high cost areas, schools, libraries, and rural health care providers.

On a long-term basis, a sustainable national universal service plan requires FCC coordination with the states and reaction to the development of competition. For that reason, we intend over the course of the coming year to reconvene the federal-state universal service Joint Board.

Universal service policy has, for the first time, brought telehealth costs into the FCC's purview. But you could say that we've been involved in telehealth -- or at least preventing teleharm -- for decades. In the 1960s, pursuant to Notice, the Commission proposed a ban on cigarette advertising over the airwaves. This proposal motivated Congress subsequently to enact a statutory ban. In 1996, pursuant to Notice, the FCC adopted guidelines for evaluating the environmental effects of RF emissions from wireless devices. Based on our analysis and the recommendations of the other Federal Health and Safety agencies, as well as private sector input, we adopted RF emission guidelines which protect human health and safety. As a part of our public interest responsibility, the FCC has an important role to play in health and safety issues that relate to communications technologies.

Another dimension of our telehealth role is our concern with the impact of television on kids. The V-chip provisions of the 1996 Telecom Act of course speak to this issue. In the first week of June we will hold a hearing on whether we should approve the industry's rating plan. Other possible negative affects of TV on children have traditionally been mitigated by informal means and industry standard setting. Since 1948 the hard-liquor industry and broadcasters voluntarily refrained from using the most powerful medium on earth -- television -- because of the potentially negative impact such ads could have on kids.

The FCC has a duty to make sure that the public airwaves are used in the public interest. Instead, some people want us to ignore the potential safety and health hazards that this use of the airwaves might pose to underage drinkers. The President doesn't agree. He wants us to take a hard look at hard-liquor ads. I agree. I believe that the Commission should have a Notice of Inquiry that would allow us to get the facts from all concerned parties.

If the FCC is competent to vote on RF emission standards, we certainly have the means to gather the facts, law, and opinions necessary to decide what to do about hard liquor ads on TV. Every day judges take on harder issues in courts open to all parties with all kinds of problems. Surely as the only agency with general jurisdiction over uses of the public's property of the airwaves, we should provide a forum -- pursuant to reasonable Notice -- for a record-based debate about the issues the hard liquor industry is now forcing the country to confront.

The power of telehealth is about, of course, a much more benign use of communications technology. It made a great impression on me at a computer technology conference I attended this winter in California (ACM97). Among the many exhibits in the San Jose Convention Center was one entitled "practical, real-time telemedicine". A medical examination room was linked via the world wide web to doctors at East Carolina University in Greenville, North Carolina.

Conference participants were invited to strap themselves in for medical exams from 3,000 miles away. Of the 26,000 people who viewed the exhibits, including families on weekend excursions, one hundred apparently healthy people volunteered. The unexpected result was that, of those 100, 15 were found to have serious, previously undiagnosed medical problems, including diabetes, hypertension, and an eye tumor.

How many undiagnosed or untreated health problems must there be in rural areas, in impoverished inner-cities, and among the elderly and home-bound?

One of the greatest and most important challenges facing our nation in the century ahead is the provision of high quality, economically viable health care to all Americans. The East Carolina University telemedicine demo suggested telehealth as a part of the solution. With telehealth, how many medical problems might be treated more quickly and economically than they are now? How many might be completely averted through the timely exchange of information?

As you know, the Vice President has recently asked HCFA to investigate ways to make expedited health coverage available to people suffering from HIV/AIDS. In treatment, time is life. But through telehealth, we could reach thousands of people before they become infected. At the FCC we should do all that we can to facilitate the development of technologies with such potential to improve the health of individuals and of our nation.

It is impossible to put a value on lives improved or saved. But the value associated with health care spending is staggeringly high: one trillion dollars a year, or about 15% of GDP. Spending per person has more than tripled in the last twenty years. Unfortunately, costs will only rise as the baby-boomer generation ages. Health care spending is expected to grow at 8% annually, reaching $2.2 trillion in 2005 -- which will be about 18% of GDP. Managed care organizations have proliferated in response to the pressure to cut health care costs. They, in turn, intensify the drive toward more economical health care delivery.

We cannot say with certainty that telehealth will bring costs down. The General Accounting Office's recent report, "Telemedicine: Federal Strategy is Needed to Guide Investments," calls for a unified federal effort in data collection and evaluation of potential cost savings. The FCC is working with numerous government agencies, through the federal Joint Working Group on Telemedicine, to better quantify the costs and benefits of telehealth.

I am impressed by the anecdotal evidence that attests to telehealth's cost-saving potential. For example, I have heard about a nurse in Hays, Kansas, who used to perform five or six traditional house calls per day, who now sees 15 patients in four hours through telemedicine. Her cost savings is 75% per visit. What's cut is driving time. What's increased is time with patients. How can we encourage more successes like that?

Congress mandated the FCC to bring down the telecommunications costs of telehealth in rural areas -- information highway time should be cheaper, and driving time can then go down. That 's the idea Congress had. In the last several years, an increasing proportion of the American population has moved away from urban areas. And increasing numbers are finding a greater need for health care services in rural areas. Dr. Duke of the FCC's Advisory Committee on Telecommunications and Health Care tells me that there are about 1.5 times as many trauma injuries in rural areas as in urban ones, and that about four times as many people die from them.

Just as communications has transformed the way America does business, it can be a powerful tool for education and health care. Through the universal service proceeding, the FCC will help bring our education system from the 19th-century world of blackboards into the information age. The bi-partisan Joint Board made up of federal and state communications Commissioners recommended that the FCC allocate $2.25 billion a year to wire our classrooms and give schools discounts on communications rates.

Telehealth, like educational technology, is an investment in our future. Often the two overlap. Through the Internet any health care provider in the world could learn from the great teaching hospitals at Mount Sinai, MGH, and Yale. In addition, the Internet, as you know, is one of the greatest forces driving the trend toward Americans' taking greater responsibility for their own health. Secretary Shalala's newly unveiled "Healthfinder" consumer health information Internet site is a wonderful resource for anyone who can reach it.

Competition will increase access to communications services. The biggest change in communications policy over the last several years has been a massive acceleration in the movement from a monopoly-based policy to a competition-based policy. The Telecommunications Act of 1996 is designed to increase competition in telecommunications through deregulation. In the long run, it will result in competition within industries, such as the local telephone market, and competition among previously distinct industries. Local phone companies, long distance phone companies, wireless, satellite, and cable companies will be able to compete in each others' markets.

For telehealth providers, competition will mean more and better telecommunications choices. In the long run, you will see innovative services available at lower prices. The DR&EMS (Disaster Relief and Emergency Medical System) under development in Houston, Texas, uses satellites to map the best course for an ambulance or rescue helicopter. When the vehicle arrives, a doctor connects to the scene of the emergency by video link to monitor the victim. The patient is then routed to the nearest appropriate hospital. Such innovative uses of technology are likely to become more prevalent as prices drop and communications services are increasingly deployed throughout the country.

Despite emerging competition, many health care providers are discouraged from using telehealth at all by telecommunications rates that are sometimes several times the rates paid by their colleagues in urban areas.

Senators Snowe, Rockefeller, Exon, and Kerrey sponsored provisions of the Telecom Act that will make telecommunications rates for public and nonprofit rural health care providers comparable to rates charged for similar services in urban areas. These "comparable rates" are to apply to telecommunications services "necessary for the provision of health care services."

The opportunity to encourage the deployment of telehealth led the FCC to convene the Advisory Committee on Telecommunications and Health Care, made up of leaders from the public and private sectors who volunteered their time. Two of the members of the panel following my speech were major contributors: Greg Lawler, Chair of the Committee, and Dr. Jay Sanders. Dr. Reed Tuckson, who spoke to you at the Partnerships conference yesterday, also made invaluable contributions to its work.

In response to a Public Notice calling for further information, the FCC received input from communications companies, medical associations, and more than 65 rural health projects with 900 telehealth sites in 35 states. We now have enough information to issue our rules by May 6. The few short weeks between now and then are a crucial moment for members of the health care community to react to the FCC's ideas and help us to shape the best policy. I would like to give you an overview of the major decisions confronting us and our proposed solutions.

Services to be Supported The Act calls for support of telecommunications "services necessary for the provision of health care". But who should decide which services are "necessary," and how? Shouldn't eligible health care providers decide for themselves which services are necessary? Shouldn't every eligible health care provider be able to choose services that use bandwidths of 1.544 Mbps or less? Isn't that sufficient?

Distance Charges Telecommunications carriers generally impose distance charges at a dollar-per-mile rate. Rural health care providers often have to pay much higher distance charges than their urban counterparts. For example, in U S West's territory, for a rural health care provider who wants to connect to the nearest hospital, let's say 100 miles away, the monthly distance charge would be $1,400.00 -- for the health care provider connecting cross the city, perhaps $60.00.

The Sponsors of the telehealth provisions of the Telecom Act clarified their intent to compensate rural health care providers for the disproportionate distance charges they pay. In a letter to the Commission, they said "...The law specifically states that rates should be comparable to urban rates, meaning it prohibits the use of distance in determining transmission rates."

In my view, a failure to compensate rural health care providers for distance charges would be a failure to carry out Congressional mandate. Without the support of distance charges, the universal service provisions would do little to encourage the growth of telehealth in rural areas.

Internet Access The FCC has heard from numerous members of the health care community about the important role the Internet is expected to play in the delivery of health care services in the future. Yet many rural health care providers must pay long distance fees just to reach an Internet Service Provider, something their urban counterparts rarely face. Shouldn't we help these rural health care providers to reach the nearest ISP by supporting such long distance charges? We should also consider allowing these rural health care providers a discount on connections to the Internet that don't require per minute charges.

In addition to carrying out the universal service requirements of the Act, the FCC wants to address one of the barriers to telehealth's expansion highlighted by our Advisory Committee: a lack of equipment standards and the resulting incompatibility of telehealth equipment. The FCC will follow the Committee's suggestion that the government bring together members of the relevant government agencies, industry, and the medical community to work toward the adoption of standards and open architecture of equipment and networks. This cooperation will help the field of telehealth to develop more quickly and in a more cost efficient manner.

If the market shows demand for telehealth, its expansion should not be hampered by excessive telecommunications rates in rural areas, a lack of equipment standards, or regulatory and legal barriers left over from a previous era of health care delivery. I urge every organization represented here today to play its part to encourage the growth of telehealth.