Notices & Press Releases
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08/12/09
Pennsylvania RHCPP Merger Order: In this order, the Wireline Competition Bureau grants a merger request from two participants in the Rural Health Care Pilot Program, the Juniata Valley Network (JVN) and Pennsylvania Mountains Healthcare Alliance and its designated agent, Pennsylvania Mountains Healthcare Resource Development (collectively PMHA).
Order:
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08/10/09
Rural Health Care Pilot Program Form 466-A Deadline Waiver PN: In this PN, WCB establishes the filing deadline for Form 466-A (Funding Commitment Requests) for the second funding year of the Rural Health Care Pilot Program.
Public Notice:
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07/31/09
WCB grants a merger request from four participants in the Rural Health Care Pilot Program, the North Carolina TeleHealth Network (NCTN), Albemarle Health (Albemarle), Western Carolina University (WCU), and University Health Systems of Eastern Carolina (UHS).
Order:
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06/05/09
Comment Sought On Request To Merge North Carolina Rural Health Care Pilot Program Projects.
Public Notice:
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05/06/09
Comment Sought On Request To Merge Pennsylvania Rural Health Care Pilot Program Projects.
Public Notice:
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04/16/09
FCC Update on Rural Health Care Pilot Program Inititative.
News Release:
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04/16/09
WCB Grants a Merger Request from Two Participants in the Rural Health Care Pilot Program, Texas Healthcare Network and Texas Health Information Network Collaborative.
Order:
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03/13/09
Comment Sought on Request to Merge Texas Rural Health Care Pilot Program Projects.
Public Notice:
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12/05/08
WCB grants a merger request from two participants in the Rural Health Care Pilot Program, Southern Ohio Health Care Network and Holzer Consolidated Health Systems.
Order:
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12/05/08
WCB grants a merger request from two participants in the Rural Health Care Pilot Program, As One Together for Health and the University of Mississippi Medical Center.
Order:
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10/24/08
WCB Letter to USAC on Rural Health Care Pilot
Program Eligible Costs, Restrictions on Resale, and Sustainability.
Acrobat
10/01/08
Holzer Consolidated Health Systems (HCHS) and Southern Ohio Health Care Network (SOHCN): Wireline Competition Bureau seeks comment on a request by HCHS and SOHC to merge their Rural Health Care Pilot Program projects in Ohio into one project, with SOHC as the successor of the HCHS project. Comments are due October 8, 2008, and reply comments are due October 15, 2008.
Public Notice:
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09/19/08
Comment Sought On Request To Merge Mississippi Rural Health Care Pilot Program
Projects. (9/19/08)
Public Notice:
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07/28/08
Rural Health Care Pilot Program Participants' Quarterly Reports Due July 30, 2008.
Public Notice:
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01/22/08
Office of Management and Budget Approves Rural Health Care Pilot Program Information Collection Requirements.
Public Notice:
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Text
01/17/08
WCB Letter to USAC on Rural Health Care Pilot Program Carry-Over of Funds.
Letter:
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12/20/07
WCB Sends Letter Congratulating RHC Pilot Program Selected Participants and Reminding Them of the Program’s Competitive Bid Requirements.
Letter:
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11/19/07
FCC Launches Initiative to Increase Access to Health Care in Rural America
Through Broadband Telehealth.
News Release:
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Selected Participants:
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Corrected Order:
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Erratum (12/17/07):
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Order:
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Martin Statement:
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Copps Statement:
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Adelstein Statement:
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Tate Statement:
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McDowell Statement:
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11/13/07
Chairman Martin Discusses Benefits of Deploying Broadband Telehealth Networks in
Rural and Underserved Communities.
News Release:
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Speech:
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Slides:
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08/17/07
U.S. Department of Health and Human Services Office of the National Coordinator for Health Information Technology Letter to FCC Identifying Ways the Pilot Program Can Advance the Goals of the National Health Information Network Initiative.
Letter: PDF
03/09/07
FCC Announces May 7, 2007 Deadline for Pilot Program Applications.
Public Notice:
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02/06/07
FCC Expands Eligibility for Backbone Connections in Rural Health Pilot.
News Release:
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Order:
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11/21/06
FCC Launches "Rural Health Care Pilot Program" Website.
News Release:
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11/06/06
WCB Seeks Comment on the Petition for Reconsideration or in the Alternative, Clarification Filed by National LambdaRail, Inc. On October 30, 2006, National LambdaRail, Inc. filed a petition for reconsideration or, in the alternative, clarification of the Commission's Order establishing a rural health care pilot program to encourage the provision of telehealth and telemedicine services throughout the nation. Comment Date: 11/21/06; Reply Comment Date: 11/28/06. WC Docket No. 02-60.
Public Notice:
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9/26/06
FCC Adopts Pilot Program Under Rural Health Care Mechanism.
Order:
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News Release:
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Martin Statement:
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Copps Statement:
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Adelstein Statement:
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Tate Statement:
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McDowell Statement:
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Frequently Asked Questions and Answers
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Rural Health Care Pilot Program
In the Matter of Rural Health Care Support
Mechanism,
WC Docket No. 02-60
Program Scope, Selection, and Denials
1. What is the FCC's Rural Health Care Pilot Program?
2. How does the Pilot Program differ from the existing Rural Health Care Program?
3. What are the benefits of the Pilot Program?
4. Who is able to receive funding under the Pilot Program?
5. Are data centers eligible for funding under the Pilot Program?
6. May health care providers (either those that did not apply for the Pilot
Program or those that applied but were not selected to participate in the Pilot Program) now participate in the Pilot Program?
7. How will the Pilot Program help public safety and health care officials coordinate during emergencies?
Pilot Program Administration and Audits
8. Who will administer the program?
9. What is the administrative/implementation process for reimbursement of selected Participants?
10. What types of costs are eligible for Pilot Program funding?
11. What types of costs are ineligible?
12. Does Pilot Program funding covering network design studies include costs
associated with consultant services, personnel costs, or program administration?
13. May a Participant use Pilot Program universal service support to deploy
its network and then later lease or sell parts of its network facilities or network capacity?
14. Does the program limit funding to any specific technology?
15. Are there restrictions on from where selected Participants may derive their 15 percent (or more) contribution?
16. May Pilot Program participants use broadband grant or loan funding authorized by the American Recovery and Reinvestment Act of 2009 (ARRA) for their Pilot Program networks?
17. May an applicant modify its proposed network once selected?
18. How do Participants choose their vendors?
19. May Pilot Program participants be allowed to “self-provision” components of their projects, such as network design studies and modeling?
20. Does a Participant need to submit letters of agency with its forms and
materials when it only seeks bids for a network design study?
21. What steps has the Commission taken to ensure that Pilot Program funds will be used for their intended purposes?
22. How will Pilot Program funds be disbursed?
23. How will the FCC ensure selected Participants do not game the system?
24. What types of information should be included in a participant’s sustainability plan?
25. How will the Commission evaluate the success of the Pilot Program?
26. Can discounts under the existing
Rural Health Care (RHC) support mechanism be a part of a RHC Pilot Program
participant's self-sustainability plan?
27. In selecting a vendor, may a participant consider the vendor’s commitment
to provide excess capacity for community use?
Program Scope, Selection, and Denials
1. What is the FCC's Rural Health Care Pilot Program?
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On November 19, 2007, the Federal Communications Commission (Commission)
released the Rural Health Care Pilot Program Selection Order
selecting 69 participants covering 42 states and three U.S. territories to
be eligible to receive funding for up to 85 percent of the costs associated
with: (1) the construction of a state or regional broadband network and the
advanced telecommunications and information services provided over that
network; (2) connecting to Internet 2 or National LambdaRail (NLR); and (3)
connecting to the public Internet.
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The Universal Service Administrative Company (USAC) will administer the
program under the oversight of the Commission. USAC is an independent,
not-for-profit corporation created by the Commission and designated as the
administrator of the Universal Service Fund (USF). USAC administers USF
programs for high cost companies serving rural areas, low-income consumers,
schools and libraries, as well as for rural health care providers.
Information concerning USAC can be found on its website at
www.USAC.org.
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Total maximum funding for the 69 selected participants will be
approximately $417 million over three years (Funding Years 2007 to 2009 of
the existing Rural Health Care support mechanism) (or $139 million per
funding year). Selected participants’ network build-outs must be completed
within five years of receiving an initial funding commitment letter from
USAC.
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The Commission intends to use the information gathered from funding
Participants in the Pilot Program to develop a more complete and practical
understanding of how to modify the pre-existing universal service Rural
Health Care mechanism long-term in order to support the deployment of a
broadband nationwide health care network, focusing on the rural areas of the
country where support is needed the most.
back to faqs
2. How does the Pilot Program differ from the existing Rural Health Care Program?
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The existing Rural Health Care funding mechanism is
designed to ensure that rural health care providers pay no more than their
urban counterparts for their telecommunications and Internet
access needs in providing health care services. In contrast, the Pilot
Program is broader in scope and will fund up to 85 percent of the costs of
the actual infrastructure design and construction of broadband
networks for health care purposes. If requested, the Pilot Program will also
provide funding to support up to 85 percent of the cost of connecting the
state or regional networks to Internet2 or National LambdaRail, which are
both dedicated nationwide backbones, as well as to the public Internet. In
addition, unlike the existing program, the Pilot Program will fund
connecting eligible health care providers in rural areas to those in urban
areas. This will promote telehealth and telemedicine access for rural health
care providers to medical hubs, which are often located in urban areas.
back to faqs
3. What are the benefits of the Pilot Program?
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The benefits of telehealth and telemedicine applications
that ride over broadband facilities are enormous, and a broadband network
that connects multiple health care providers, including a significant number
in rural areas, would bring those benefits to those areas of the country
where the need for those benefits is most acute. For example:
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Telehealth applications allow patients to access
critically needed medical specialists in a variety of practices, including
cardiology, pediatrics, and radiology, without leaving their homes or
communities.
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Linking statewide and regional networks to a
nationwide backbone would connect a number of government research
institutions, as well as academic, public, and private health care
institutions that are repositories of medical expertise and information.
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Intensive care doctors and nurses can monitor
critically ill patients at multiple locations around the clock.
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Health care providers would benefit from advanced
applications in continuing education and research.
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A nationwide health care network would enhance health
care communities’ abilities to provide a rapid and coordinated response in
the event of a public health crisis and provide vital links for disaster
preparedness and emergency response.
back to faqs
4. Who is able to receive funding under the Pilot Program?
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Public and not-for-profit health care providers are
eligible to receive funding. For purposes of the Pilot Program, the
definition of “Health Care Provider” is the same as that of Section
254(h)(7)(B) of the Communications Act and the FCC’s rules for the existing
Rural Health Care program. Eligible health care providers include:
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Post-secondary educational institutions offering
health care instruction, teaching hospitals, or medical schools;
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Community health centers or health centers providing
health care to migrants;
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Local health departments or agencies including
dedicated emergency departments of rural for-profit hospitals;
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Community mental health centers;
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Not-for-profit hospitals;
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Rural health clinics, including mobile clinics;
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Consortia of health care providers consisting of one
or more of the above entities; and
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Part-time eligible entities located in otherwise
ineligible facilities.
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Although emergency medical service facilities
themselves are not eligible providers for purposes of the RHC Pilot
Program, Pilot Program funds may be used to support costs of connecting an
emergency medical service facility to eligible health care providers to
the extent that the emergency medical services facility is part of the
eligible health care provider.
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Non-eligible health care providers include any
for-profit institutions (except as noted above), or any other types of
entities not listed above. Examples of non-eligible providers include:
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Private physician offices or clinics;
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Nursing homes or other long-term care facilities (e.g.
assisted living facilities);
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Emergency medical service facilities;
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Residential substance abuse treatment facilities;
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Hospices;
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For-profit hospitals;
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Home health agencies;
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Blood banks;
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Social service agencies; and
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Community centers, vocational rehabilitation centers,
youth centers.
back to faqs
5. Are data centers eligible for funding under the Pilot Program?
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If a data center is connected (e.g., transmits data to
and receives data from) to an eligible health care provider, the data center
may qualify for funding as an eligible network component. For example, the
Rural Wisconsin Health Cooperative Consortium is appropriately using Pilot
Program funding for an electronic healthcare records (EHRs) data center
connected to numerous eligible health care providers. Rural Wisconsin’s
Pilot Program application, which explains its shared EHR system, may be
accessed at: http://fjallfoss.fcc.gov/prod/ecfs/retrieve.cgi?native_or_pdf=pdf&id_document=6519409890
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Data centers, however, do not qualify as eligible health
care providers under section 254(h)(7)(B) of the Communications Act and FCC
rules. Examples of eligible health care providers are included in the answer
to FAQ # 4 above. Accordingly, a stand-alone data center (not connected to an
eligible health care provider) is not eligible for Pilot Program funding.
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If a product or service contains both eligible ad
ineligible components, costs should be allocated to the extent that a clear
delineation can be made between the eligible and ineligible components. See
2007 RHC PP Selection Order, para 76. Thus, costs associated with data centers
that are unique and specific to the Pilot Program projects may be reimbursed
with Pilot Program funds, whereas data centers that handle traffic for
eligible health care providers as well as traffic for other entities could
receive funding for a portion of the use of such data center (i.e., the
portion that relates to eligible use).
back to faqs
6. May health care providers (either those that did not apply for the Pilot
Program or those that applied but were not selected to participate in the Pilot Program) now participate in the Pilot Program?
The Pilot Program is limited to Participants that were
selected in the Rural Health Care Pilot Program Selection Order.
However, eligible health care providers not represented in the selected
Participants’ applications may pursue ways to be included in their networks
which are eligible for Pilot Program funding. Eligible health care providers
not participating in the Pilot Program also are encouraged to contact USAC
to discuss their possible participation in the existing Rural Health Care
support mechanism which, among other things, provides discounts on
installation and monthly charges for telecommunications and Internet access
service. Information on the existing program and USAC contact information is
available on USAC’s website at
www.usac.org/rhc/. In addition, after three years, the Commission
intends to revisit its rules and determine how to improve the current
program, and encourages all eligible health care providers to participate in
any subsequent proceedings.
back to faqs
7. How will the Pilot Program help public safety and health care officials coordinate during emergencies?
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In 2004, the President issued an Executive Order
calling for the development and implementation of a national interoperable
health information technology infrastructure. To further this goal, funded
Participants, where feasible, must: (1) use health information technology
(IT) systems and products that meet interoperability standards recognized
by the Secretary of the United States Department of Health and Human
Services (HHS); (2) use health IT products certified by the Certification
Commission for Healthcare Information Technology; (3) support the
Nationwide Health Information Network (NHIN) architecture by coordinating
activities with the organizations performing NHIN trial implementations;
(4) use resources available at HHS’s Agency for Healthcare Research and
Quality National Resource Center for Health Information Technology; (5)
educate themselves concerning the Pandemic and All Hazards Preparedness
Act and coordinate with the HHS Assistant Secretary for Public Response as
a resource for telehealth inventory and for the implementation of other
preparedness and response initiatives; and (6) use resources available
through HHS’s Centers for Disease Control and Prevention (CDC) Public
Health Information Network to facilitate interoperability with public
health and emergency organizations
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Pilot Program Participants must coordinate in the use
of their health care networks with HHS and, in particular, with the CDC in
instances of national, regional, or local public health emergencies (e.g.,
pandemics, bioterrorism). In such instances, where feasible, selected
Participants shall provide access to their supported networks to HHS,
including CDC, and other public health officials.
back to faqs
Pilot Program Administration and Audits
8. Who will administer the program?
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The Universal Service Administrative Company (USAC)
will administer the program under the oversight of the Commission. USAC is
an independent, not-for-profit corporation created by the Commission and
designated as the administrator of the Universal Service Fund (USF). USAC
administers USF programs for high cost companies serving rural areas,
low-income consumers, schools and libraries, as well as for rural health
care providers. Information concerning USAC can be found on its website at
www.USAC.org.
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USAC will also conduct a targeted outreach program to
educate and inform Participants on the Pilot Program administrative
process, including various filing requirements and deadlines, in order to
minimize the possibility of selected Participants making inadvertent
ministerial or clerical errors in completing the required forms.
back to faqs
9. What is the administrative/implementation process for reimbursement of selected Participants?
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Selected Participants must file FCC Form 465 with USAC
to make a bona fide request for supported services. The FCC Form 465 is
the means by which a selected Participant requests bids for supported
services and certifies to USAC that it is eligible to benefit from the
Rural Health Care support mechanism. USAC posts the completed FCC Form 465
on its website and a selected Participant must wait at least 28 days from
the date on which its FCC Form 465 is posted on USAC’s website before
selecting a service provider(s).
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Next, after the selected Participants choose their
service provider(s), they must submit to USAC FCC Form 466-A to indicate
the type(s) of service ordered, the cost of the ordered service,
information about the service provider(s), and the terms of the service
agreement(s). Each selected Participant must certify on the FCC Form 466-A
that the Participant has selected the most cost-effective method of
providing the selected service(s). Along with its FCC Form 466-A, a
selected Participant must submit to USAC a copy of the contracts or
service agreements with the selected service provider(s) and must include
a detailed line-item network costs worksheet that includes a breakdown of
total network costs (both eligible and ineligible costs). Selected
Participants’ network costs worksheet submissions must demonstrate how
ineligible (e.g., for-profit) Participants will pay their fair
share of network costs.
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FCC Form 467 is then used by the selected Participant
to notify USAC that the service provider has begun providing the supported
service and is also used to notify USAC when the applicant has
discontinued the service or if the service was or will not be turned on
during the funding year.
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USAC will disburse Pilot Program funds based on
monthly submissions (i.e., invoices) from service providers of
actual incurred eligible expenses. Service providers are only permitted to
invoice USAC for eligible services apportioned to eligible health care
provider network Participants.
back to faqs
10. What types of costs are eligible for Pilot Program funding?
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Initial network design studies;
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Construction and network deployment;
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Transmission facilities;
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Recurring and non-recurring costs of advanced
telecommunications and information services, such as connection to the
public Internet; and
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If requested, costs of connecting the regional or
state networks to Internet2 or National LambdaRail, which are both
dedicated nationwide backbones.
back to faqs
11. What types of costs are ineligible?
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Personnel costs (including salaries and fringe
benefits), except for those personnel directly engaged in designing,
engineering, installing, constructing, and managing the dedicated
broadband network. Ineligible costs of this category include, for example,
personnel to perform program management and coordination, program
administration, and marketing.
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Travel costs.
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Legal costs.
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Training, except for basic training or instruction
directly related to and required for broadband network installation and
associated network operations. For example, costs for end-user training,
e.g., training of health care provider personnel in the use of
telemedicine applications, are ineligible.
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Program administration or technical coordination that
involves anything other than the design, engineering, operations,
installation, or construction of the network.
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Inside wiring or networking equipment (e.g.,
video/Web conferencing equipment and wireless user devices) on health care
provider premises except for equipment that terminates a carrier’s or
other provider’s transmission facility and any router/switch that is
directly connected to either the facility or the terminating equipment.
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Computers, including servers, and related hardware (e.g.,
printers, scanners, laptops) unless used exclusively for network
management.
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Helpdesk equipment and related software, or services.
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Software, unless used for network management,
maintenance, or other network operations; software development (excluding
development of software that supports network management, maintenance, and
other network operations); Web server hosting; and Website/Portal
development.
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Telemedicine applications and software; clinical or
medical equipment.
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Electronic records management and expenses.
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Connections to ineligible network participants or
sites (e.g., for-profit health care providers) and network costs
apportioned to ineligible network participants.
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Administration and marketing costs (e.g.,
administrative costs; supplies and materials (except as part of network
installation/construction); marketing studies, marketing activities, or
outreach efforts; evaluation and feedback studies).
back to faqs
12. Does Pilot Program funding covering network design studies include costs
associated with consultant services, personnel costs, or program administration?
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Yes. As specified in the 2007 Rural Health Care Pilot Program Selection
Order, for purposes of the Pilot Program, funding covers all costs to set up a
network design study, costs to analyze both technical and non-technical
requirements of the network design; and all costs to develop a feasible network
design based on network design analyses. Personnel costs (including salaries and
fringe benefits) for personnel directly engaged in designing a Participant’s
broadband network are also covered by the Pilot Program. In addition, Pilot
Program funding may be used for costs associated with program administration or
technical coordination that involve design of the network. See 2007 RHC PP
Selection Order, paras. 74-75, n. 238.
back to faqs
13. May a Participant use Pilot Program universal service support to deploy
its network and then later lease or sell parts of its network facilities or network capacity?
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No. A Pilot Program Participant may not sell, lease, or transfer its
network facilities or network capacity supported by Pilot Program universal
service funding to another entity. See 47 U.S.C. § 254(h)(3); 47 C.F.R. §
54.617(a); 2007 RHC PP Selection Order, paras. 105-108.
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Pilot Program funds must be used to support the costs of constructing
dedicated telehealth broadband networks that connect health care providers in a
state or region, and connect such state and regional networks to the public
Internet, as well as, Internet2, or National LambdaRail. In doing so, Pilot
Program funding is available only for network components eligible for support.
See 2007 RHC PP Selection Order, para. 74; 2006 Pilot Program Order, paras. 10,
14, 74-76.
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Section 254(h)(3) of the 1996 Act provides that “[t]elecommunications
services and network capacity provided to a public institutional
telecommunications user under this section may not be sold, resold, or otherwise
transferred by such user in consideration for money or any other thing of
value.” Consistent with this statute, section 54.617 of the Commission’s rules
states, “services purchased pursuant to universal service support mechanisms
under this subpart shall not be sold, resold, or transferred in consideration
for money or another thing of value.” See 47 U.S.C. § 254(h)(3); 47 C.F.R. §
54.617(a); 2007 RHC PP Selection Order, paras. 105-108.
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A Participant, however, may share excess network capacity with an
ineligible entity so long as the ineligible entity pays its fair share of
network costs attributable to the portion of the network capacity used, and the
Participant has not received program funding for such portion. See 2007 RHC PP
Selection Order, para. 107.
back to faqs
14. Does the program limit funding to any specific technology?
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No. Consistent with section 254(h)(2)(A) of the 1996
Act, the program is “competitively neutral,” which means that universal
service support mechanisms and rules neither unfairly advantage nor
disadvantage one provider over another, and neither unfairly favor nor
disfavor one technology over another. Provided they comply with the
administrative and other requirements of the Pilot Program Selection
Order and Commission rules, eligible health care providers may choose
any technology and provider of the broadband infrastructure and
connectivity needed to provide telehealth, including telemedicine
services. Consistent with section 254(h)(2)(A) of the 1996 Act, the
ultimate selection of a vendor is subject to competitive bidding
requirements.
back to faqs
15. Are there restrictions on from where selected Participants may derive their 15 percent (or more) contribution?
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Yes. Only funds from an eligible source will apply
towards selected Participants’ required 15 percent minimum contribution.
Eligible sources include the applicant or eligible health care provider
Participants; state grants, funding, or appropriations; federal funding,
grants, loans, or appropriations except for Rural Health Care funding; and
other grant funding, including private grants. Ineligible sources include
in-kind or implied contributions; a local exchange carrier (LEC) or other
telecom carrier, utility, contractor, or other service provider; and
for-profit participants. Moreover, selected Participants may not obtain
any portion of their 15 percent contribution from the existing Rural
Health Care support mechanism.
back to faqs
16. May Pilot Program participants use broadband grant or loan funding authorized by the American Recovery and Reinvestment Act of 2009 (ARRA) for their Pilot Program networks?
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Yes. As discussed in the 2007 Rural Health Care Pilot Program Selection
Order, Pilot Program participants may utilize federal grants and loans to
pay for their minimum 15 percent contribution. See 2007 RHC PP Selection
Order, para. 77. Accordingly, Pilot Program participants may seek ARRA
funding for their 15 percent match provided that this use of funding is
consistent with all requirements of the ARRA.
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The FCC does not have jurisdiction over the broadband grants and loans
authorized by the ARRA. The U.S. Department of Commerce’s National
Telecommunications and Information Administration (NTIA) and the U.S. Department
of Agriculture’s Rural Utilities Service (RUS) are responsible for administering
the grants and loans authorized by the ARRA. Detailed information about NTIA’s
and RUS’s broadband grant and loan programs can be found at the following
websites:
http://www.ntia.doc.gov/broadbandgrants/
http://www.usda.gov/rus/telecom/index.htm
back to faqs
17. May an applicant modify its proposed network once selected?
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Yes, if a selected Participant wishes to upgrade,
replace technology, or add eligible health care providers to its proposed
network prior to commencing and completing the competitive bidding
process, it may receive support to do so as long as that support does not
exceed the maximum available support amount listed in the Pilot Program
Selection Order and the support is used for eligible expenses. However,
each funding commitment letter (FCL) caps the Participant’s support for
the services covered by the FCL and the last FCL issued to the Participant
in a Funding Year caps the support available for that Funding Year. The
difference between the total amount committed under all FCLs for the
Participant for the Funding Year and the maximum support amount for the
Participant for the Funding Year – the “cap carry over” amount – will then
be applied to the next Funding Year in addition to the Participant’s
maximum support amount for the next Funding Year.
back to faqs
18. How do Participants choose their vendors?
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The Pilot Program operates under the Commission’s
existing universal service rules, including the competitive bidding
requirements. The Commission, however, provided for a limited exception to
the competitive bidding rules allowing applicants to pre-select the use of
Internet2 or National LambdaRail (NLR) as a nationwide backbone provider
in their applications filed in May 2007 to participate in the Pilot
Program. Other than existing pre-selections covered by this approved,
limited exception, all funding requests are subject to the competitive
bidding rules.
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The competitive bidding rules ensure that health care
providers are aware of cost-effective alternatives and ensure that
universal service support is used wisely and efficiently.
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The competitive bidding rules also ensure that
universal service support does not disadvantage one provider over another,
or unfairly favor or disfavor one technology over another.
back to faqs
19. May Pilot Program participants be allowed to “self-provision” components of their projects, such as network design studies and modeling?
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Yes. A participant may ultimately select itself to “self-provision”
components of its project – but only after participating in a competitive
bidding process in which the participant determines that it is the most
cost-effective provider. After selecting a vendor, whether itself or another
provider, a participant must certify that it selected the most cost-effective
method of providing service. See 2007 RHC PP Selection Order, para. 100.
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As explained in the answer to FAQ # 18 above, the competitive bidding rules
ensure that Pilot Program participants are aware of cost-effective alternatives,
and that universal service support is used wisely and efficiently.
back to faqs
20. Does a Participant need to submit letters of agency with its forms and
materials when it only seeks bids for a network design study?
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Yes. Consistent with the 2007 Rural Health Care Pilot Program Selection
Order, each Participant is to include with its FCC Form 465 a Letter of Agency
(LOA) from each participating health care facility to authorize the lead project
coordinator to act on its behalf, to demonstrate that each health care provider
has agreed to participate in the selected participant’s network, and to avoid
improper duplicate support for health care providers participating in multiple
networks. See 2007 RHC PP Selection Order, para. 87.
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21. What steps has the Commission taken to ensure that Pilot Program funds will be used for their intended purposes?
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In order to receive universal service support,
selected Participants must submit, in addition to the required USAC Forms,
detailed worksheets concerning their proposed network costs (both eligible
and ineligible), certifications demonstrating universal service support
will be used for its intended purposes, letters of agency from each
participating health care provider, and detailed invoices showing actual
incurred costs of project build-out, among others.
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In addition, all Pilot Program Participants (health
care facilities and service providers) are subject to being audited by the
Office of the Inspector General.
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22. How will Pilot Program funds be disbursed?
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USAC will disburse Pilot Program funds based on
monthly submissions (i.e., invoices) of actual incurred eligible
expenses, and will respond to service provider invoices in accordance with
its current bi-monthly invoicing payment plan. This invoice process will
permit disbursement of funds to ensure that the selected Participants’
network projects proceed, while allowing USAC and the Commission to
monitor expenditures in order to ensure compliance with the Pilot Program
and prevent waste, fraud, and abuse.
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23. How will the FCC ensure selected Participants do not game the system?
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The Commission will ensure waste, fraud, and abuse
does not occur by requiring all Participants to comply with the
competitive bidding requirements. In addition, USAC will conduct random
site visits to selected Participants to ensure support is being used for
its intended purposes, and as necessary and appropriate based on USAC’s
review of the selected Participants’ data submissions.
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Each Pilot Program Participant and service provider
shall be subject to audit by the Commission’s Office of the Inspector
General (OIG) and, if necessary, investigated by the OIG, to determine
compliance with the Pilot Program, Commission rules and orders, as well as
section 254 of the 1996 Act. To further prevent against waste, fraud, and
abuse, selected Participants are required to identify any consultants,
service providers, or any other outside experts, whether paid or unpaid,
who aided in the preparation of their Pilot Program applications.
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24. What types of information should be included in a participant’s sustainability plan?
In order to ensure the long-term success of broadband health care networks
and to prevent wasteful allocation of limited universal service funds, RHC Pilot
Program participants are required to provide assurances that their proposed
networks will be self-sustaining once established.
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25. How will the Commission evaluate the success of the Pilot Program?
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Selected Participants will be required to submit to
USAC and to the Commission quarterly reports containing certain data
specified in the Pilot Program Selection Order. These data will
serve as a guide for further Commission action by informing the
Commission’s understanding of cost-effectiveness and efficacy of the
different state and regional networks funded. These data will also enable
the Commission to ensure Rural Health Care program funds are being used in
a manner consistent with section 254 of the 1996 Act, the Pilot Program
Selection Order, and the Commission’s rules and orders. In particular,
the Commission has determined collection of this data is critical to the
goal of preventing waste, fraud, and abuse by ensuring that funding is
flowing through to its intended purpose.
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26. Can discounts under the existing Rural Health Care (RHC) support mechanism be a part of a RHC Pilot Program
participant's self-sustainability plan?
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27. In selecting a vendor, may a participant consider the vendor’s commitment
to provide excess capacity for community use?
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Yes, as long as USF funds are not used to pay for the excess capacity and there is no increase in the cost for the dedicated
network facilities.
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The Pilot Program will fund up to 85% of the costs incurred to deploy a state or regional dedicated broadband
health care
network. Only eligible health care providers and consortia that include eligible health care providers may apply for and
receive funding. Ineligible entities are prohibited from receiving any funding from the Pilot Program. A selected participant
is not restricted from sharing a network with ineligible entities, but the ineligible entities must pay their fair share of
network costs attributable to the portion of network capacity used. See 2007 RHC PP Selection Order, paras. 16-19, 47, 73, 107.
For these reasons, a participant must be able to demonstrate that a vendor’s provision of excess capacity for community use will
not increase the cost of the dedicated broadband health care network.
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As part of the competitive bidding requirements, participants must certify to USAC that the vendor it chooses is, to the
best of the participant’s knowledge, the most cost-effective service or facility provider available. The Commission has
defined “cost-effective” as “the method that costs the least after consideration of the features, quality of transmission,
reliability, and other factors that the health care provider deems relevant to . . . choosing a method of providing the
required health care services.” While participants must make price a primary factor it does not have to be the sole
primary factor. As detailed in paragraphs 78 and 79 of the 2007 RHC PP Selection Order, participants are required to
consider non-cost evaluation factors. Accordingly, if a participant is either required under its applicable procurement
rules or chooses to consider factors or assign points related to a vendor’s commitment to provide excess capacity for
community use, it may do so, as long as the selected vendor is the most cost-effective.
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If a vendor only pays the incremental costs for excess capacity facilities built on the vendors own initiative or at
the request of the participant, ownership of such facilities must be retained by participant and eligible HCP entities
(because the bulk of the costs are USF funded). In contrast, if the vendor pays
fair share for the excess capacity
facilities, it may retain ownership and/or sell the excess capacity to future customers.
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The following must be considered when including excess capacity for community use as a factor in
selecting a vendor:
- Participant must demonstrate that USF funds will not be used to pay
for such excess capacity.
- The vendor must show that the costs for such excess capacity did not
increase the eligible costs for the dedicated health care network.
- Participants must receive sufficient cost information to be able to
determine costs for the excess capacity apart from the costs for the
dedicated health care network, and should seek assurances from vendors
that the bid cost and quality of service for dedicated broadband health
care network is the same whether the excess capacity for community use
is included or not.
- Participants should clarify in their RFPs that responses to the RFP
that do not have commitments for excess capacity for community use, will
also be considered.
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