Before the

FEDERAL COMMUNICATIONS COMMISSION

Washington, D.C. 20554

In the Matter of )

)

Federal-State Joint Board on ) CC Docket No. 96-45

Universal Service )

)

FOURTEENTH ORDER ON RECONSIDERATION

Adopted: September 21, 1999 Released: November 3, 1999

By the Commission: Commissioner Ness issuing a statement; Commissioner
Furchgott-Roth concurring in part, dissenting in part, and issuing a
statement; Commissioner Powell concurring in the result.

I. INTRODUCTION

1.  In this Order, we reconsider the Commission\'s conclusion in the
    *Universal Service Orde*[^1][^2] that only eligible
    telecommunications carriers (ETCs) may be credited by the Universal
    Service Administrative Company (USAC) for serving eligible rural
    health care providers pursuant to section 254(h)(1)(A) of the
    Communications Act of 1934 (Act), as amended.[^3] We find that the
    Commission\'s initial interpretation of section 254(h)(1)(A) was too
    narrow, and that the record compels us to reconsider our earlier
    interpretation.[^4] We conclude that all telecommunications carriers
    that provide supported services to eligible rural health care
    providers at a discount, pursuant to section 254(h)(1)(A),^4^ are
    entitled to have the total amount of the discount treated as a
    contribution to the preservation and advancement of universal
    service. Accordingly, we direct USAC to apply, as a credit against a
    carrier\'s universal service contribution obligation, the amount
    equal to the difference between the lower, urban rate that a carrier
    charges eligible health care providers for supported
    telecommunications services and the higher, rural rates that would
    normally be charged to these customers. In addition, a
    telecommunications carrier may request reimbursement if its total
    universal service credit exceeds its contribution obligation.

2.  We emphasize that an entity must be a \"telecommunications carrier\"
    in order to be able to use discounted service to satisfy its
    obligation to contribute to universal service. We also reiterate
    that universal service support is available to reduce the cost of
    the distance-based component of services that are based on a unit of
    distance, such as mileage-based charges under section 254(h)(1)(A).
    We, therefore, direct USAC to treat the requests for support from
    eligible health care providers receiving telecommunications service
    from non-ETCs, the same as it treats those from health care
    providers receiving telecommunications service from ETCs.

II\. TELECOMMUNICATIONS CARRIERS PROVIDING\
SERVICES PURSUANT TO SECTION 254(h)(1)(A)

A. Background

1\. Universal Service Order

3.  Section 254(h)(1)(A) governs the provision of telecommunications
    services for health care providers that serve rural areas. That
    section provides, in part:

> In the *Universal Service Order*, the Commission read section
> 254(h)(1)(A) in conjunction with section 254(e) and determined that
> only those telecommunications carriers that had been designated as
> ETCs by their state commissions would be permitted to receive
> universal service support for serving health care providers[^5]^6^
> Section 254(e) reads, in part: \"After the date on which Commission
> regulations implementing this section take effect, only an eligible
> telecommunications carrier designated under section 214(e) shall be
> eligible to receive specific Federal universal service support.[^6]^7^
> According to the statute, in order to be designated as an ETC, a
> carrier must offer the services that are supported by federal
> universal service support mechanisms and advertise the availability of
> such services and the charges for these services using media of
> general distribution[^7] ^8^ The Commission concluded \"only eligible
> telecommunications carriers, as defined in section 254(e), shall be
> eligible to receive support for providing eligible services to health
> care providers under section 254(h)(1)(A).[^8]^9^

4.  The Commission also compared section 254(h)(1)(A) with section
    254(h)(1)(B), which concerns universal service support for carriers
    serving eligible schools and libraries[^9] ^10^ The Commission noted
    that the language "notwithstanding the provisions of subsection (e)
    of this section" prefaces section 254(h)(1)(B)(ii), a provision that
    permits carriers serving schools and libraries to receive
    reimbursement for offering discounts. Thus, the statute extends to
    telecommunications carriers that have not been designated as ETCs.
    Examining the language of section 254(h)(1)(B)(ii), the Commission
    concluded: \"\[u\]nlike section 254(h)(1)(B), section 254(h)(1)(A)
    does not contain an exception to the eligibility requirements of
    section 254(e). Therefore, we conclude that only eligible
    telecommunications carriers, as defined in section 254(e), shall be
    eligible to receive support for providing eligible services to
    health care providers under section 254(h)(1)(A).[^10]^11^ The
    Commission found that the omission of an exemption from the
    eligibility requirement of section 254(e) in section 254(h)(1)(A)
    meant that only an ETC could be credited for serving rural health
    care providers at urban rates.

> **2. Report to Congress**

5.  Pursuant to Congress\'s directive[^11]^12^ in its *April 10* *Report
    to Congress*, the Commission examined, among other things, \"who is
    eligible under sections 254(e), 254(h)(1), and 254(h)(2) . . . to
    receive specific federal universal service support for the provision
    of universal service and the consistency with which the Commission
    has interpreted each of those provisions of section 254.[^12]^13^
    Noting that its conclusion that only ETCs should be eligible to
    receive support pursuant to section 254(h)(1)(A) was opposed by
    several commenter[^13]^14^ and was the subject of pending petitions
    for reconsideration, the Commission found that its original
    interpretation of the statute was reasonable, but \"committed to
    taking a fresh look at this issue in the reconsideration
    proceedings.[^14]^15^

6.  In the *April 10 Report to Congress*, the Commission recognized that
    its interpretation of section 254(h)(1)(A) would reduce
    opportunities for competition among telecommunications
    carriers[^15]^16^ The Commission also acknowledged that health care
    providers would have little flexibility because they are limited to
    purchasing supported services from ETCs[^16]^17^ The Commission
    noted that it might be possible to address these concerns pursuant
    to its forbearance authority under section 10 of the 1996
    Act[^17]^18^

**3. The Impact of the ETC Requirement**

7.  In December 1998 the Commission instructed USAC to, among other
    things, evaluate ways to improve opportunities for eligible rural
    health care providers (RHCPs) to take advantage of the universal
    service support mechanism[^18]^19^ On March 5, 1999, USAC submitted
    a report that indicates that the Commission requirement that a
    carrier obtain ETC status, in order to receive universal service
    support for providing telecommunications service at urban rates to
    RHCPs, severely limits the benefits available to RHCPs[^19]^20^ USAC
    reports that as many as 35 percent of RHCPs may have failed to
    complete the application process because of the difficulties
    presented by the Commission\'s narrow interpretation of the ETC
    requirement[^20]^21^

8.  According to the USAC Report, the cost of the service provided by
    interexchange carriers (IXCs) must often be excluded from the
    calculation of the urban-rural rate differential because many IXCs
    are non-ETCs[^21]^22^ The Office for the Advancement of Telehealth
    (OAT) asserts, however, that IXCs provide the \"critical link\"
    between local exchange carriers (LECs) in rural areas[^22]^23^
    Citing a study performed by the University of Missouri[^23]^24^ OAT
    argues that, absent support for the non-ETC segment of services
    provided to RHCPs, the rates available to some RHCPs as a result of
    their participation in the program are often not reasonably
    comparable to the low rates charged for similar services in urban
    areas[^24]^25^ Moreover, in some cases, the rates that RHCPs can
    receive from the program are even higher than the rates that some
    RHCPs can obtain on their own[^25]^26^

9.  In addition, the Missouri PSC argues that the ETC requirement
    defeats the purpose of requiring RHCPs to participate in a
    competitive bidding process[^26]^27^ Specifically, the Missouri PSC
    notes that the Commission rules direct an RHCP to participate in a
    competitive bidding process to select the telecommunications carrier
    offering to the RHCP the most cost-effective method of acquiring the
    requested services[^27]^28^ According to the Missouri PSC, there is
    only one ETC that serves the rural areas of Missouri, and because it
    is the only one eligible to receive reimbursement, the competitive
    bidding process does not help the RHCPs find the carrier offering
    the most cost-effective method of acquiring the services[^28]^29^

10. The USAC report also states that the ETC requirement unnecessarily
    complicates the application process because it requires agreements
    between multiple local and long distance carriers, as well as
    extensive coordination[^29]^30^ Specifically, the USAC Report states
    that,

    \[c\]oordination between multiple telecommunication companies
    requires the rural provider to rely on employees of the companies to
    help complete forms and develop adjusted rate schedules. This adds
    time and complexity to the application process[^30]^31^

11. The Missouri PSC argues that these complications lessen the
    usefulness of the telecommunications services that the RHCPs
    receive. According to the Missouri PSC comments,

    the health care services network for services such as Telemedicine
    is more reliable when service is provided by a single entity through
    end-to-end service rather than multiple carriers providing baseline
    service with long-distance connections. A network problem can be
    remedied with a single phone call instead of multiple calls to
    different carriers to identify the exact location and cause of the
    network problem. This is crucial when emergency medical
    consultations are at risk (i.e., Telemedicine)[^31]^32^

    The Missouri PSC, thus, concludes that the Commission should permit
    non-ETCs providing telecommunications services to RHCPs to receive
    reimbursement for their services because connections between the
    rural and urban areas, for health care services, are often most
    successfully provided by IXCs, and would permit more entities an
    opportunity to offer affordable access to modern telecommunications
    services[^32]^33^

12. Finally, it appears that, for some RHCPs, excluding non-ETCs from
    receiving any benefit for providing service at urban rates may be
    tantamount to excluding the eligible RHCPs themselves from
    participating in the rural health care program. The OAT comments
    explain that this is because, in places such as Alaska, parts of
    Arizona, and the Pacific Basin, IXCs (most of which are non-ETCs)
    may be the only carriers available to provide the telecommunications
    services necessary for telemedicine[^33]^34^ In support of its
    conclusions, OAT refers to the experience of RHCPs in the
    Washington, Wyoming, Alaska, Montana, and Idaho Rural Telemedicine
    Network (WWAMI), and those in the northeast corner of
    Arizona[^34]^35^ According to OAT, WWAMI covers 20 percent of the
    continental United States, and the areas are primarily rural or
    frontier country[^35]^36^ The OAT comments state that one-half of
    WWAMIs network partners are ineligible under the current Commission
    rules because they use either AT&T, Sprint, or other IXCs[^36]^37^
    OAT reports that the most remote and active site participating in
    WWAMI has a monthly line charge of \$1,250 for the service it
    receives from AT&T, and the other sites have bills that range from
    \$280-\$1,120 per month (all of which are either ISDN or Sw-56
    lines)[^37]^38^ OAT further reports that the northeast corner of
    Arizona is one of the areas in the state with the greatest need for
    telemedicine, and it falls within the Navajo and Hopi
    reservations[^38]^39^ The OAT comments indicate that the Arizona
    Telemedicine Program serves two sites in this region, and these
    sites have no choice but to use an IXC[^39]^40^ The IXC, in turn,
    must work with four different LECs to provide dedicated T1 circuits
    to the RHCPs[^40]^41^ These circuits cost approximately \$5,000 per
    month for each site[^41]^42^ The OAT comments conclude that
    excluding IXCs from receiving any benefit for serving RHCPs, costs
    the Arizona Telemedicine Program a minimum of \$100,000 per
    year[^42]^43^

13. After assessing the impact of the ETC requirement since the release
    of the *Universal Service Order*, numerous parties have argued that
    the Commission\'s initial interpretation of section 254(h)(1)(A) was
    incorrect as a matter of law, and inconsistent with the plain
    language of the statute[^43]^44^ These parties buttress their
    arguments with evidence, such as discussed above, that the
    Commission\'s interpretation of the statute frustrates the
    underlying intent of Congress because it prevents some
    telecommunications carriers from receiving a credit against their
    universal service contribution obligations when they provide
    telecommunications services to health care providers located in
    rural areas at lower, urban rates. These parties also established a
    record demonstrating that, in some rural areas, only a non-ETC can
    provide the needed services, thus making it impossible for some
    eligible RHCPs to take advantage of the universal service support
    mechanism that was intended for their benefit[^44]^45^

**B. Discussion**

14. In light of the record developed by USAC, OAT, and other parties
    regarding the impact of the Commission\'s interpretation of section
    254(h)(1)(A), and facts that were not apparent at the time the
    Commission adopted the *Universal Service Order,* we reconsider the
    Commission\'s initial interpretation of this section of the statute.
    Our initial interpretation of section 254(h)(1)(A) was based on the
    statutory language in the context of section 254 as a whole. After
    taking a fresh look at the statutory language, and considering the
    arguments set forth in the record, however, we conclude that the
    Commission read the statute too narrowly when it concluded that ETCs
    are the only class of telecommunications carriers that may receive
    any credit against their universal service contribution obligations
    in exchange for serving rural health care providers at discounted
    rates. The new interpretation we adopt in this Order fully comports
    with the language and the structure of the statute.

15. Section 254(h)(1)(A) requires that \"a telecommunications carrier
    shall\" serve rural health care providers \"at rates that are
    reasonably comparable to rates charged for similar services in urban
    areas in that State.[^45]^46^ Thus, section 254(h)(1)(A) imposes a
    service obligation on [all]{.underline} telecommunications carriers,
    not just ETCs. Our rules already reflect this statutory
    requirement[^46]^47^ Section 254(h)(1)(A) further states that
    \"\[a\] telecommunications carrier providing service under this
    paragraph *shall be entitled* to have an amount equal to the
    difference, if any,\" between the urban and rural rates \"treated as
    a part of its obligation to participate in the mechanisms to
    preserve and advance universal service.[^47]^48^ The Commission
    initially believed that there is some tension between this
    statement, which seems to indicate that [all]{.underline} carriers
    providing discounts to rural health care providers are entitled to
    be credited for those discounts pursuant to the mechanism
    established by section 254(h)(1)(A), and section 254(e), which
    limits the payment of specific federal universal service support to
    ETCs. In the *Universal Service Order*, the Commission read section
    254(e) as the overriding command, thus concluding that only ETCs
    should \"be eligible to receive support\" for providing discounted
    services to rural health care providers[^48]^49^ Upon reexamination,
    however, we now conclude that all carriers required to provide
    discounts are also entitled to have these \"in kind\" contributions
    recognized as contributions to universal service, and these \"in
    kind\" contributions may be used to reduce or otherwise satisfy a
    carrier\'s obligation to contribute to universal service. We also
    conclude that acknowledging a telecommunications carrier\'s
    contribution in this fashion is not the same as giving a carrier
    \"specific Federal universal service support,\" and, therefore, is
    not a violation of section 254(e).

16. The statute is unambiguous in requiring that [all]{.underline}
    carriers provide discounts to rural health care providers upon
    request. Some parties apparently believe that only ETCs are required
    to provide discounts to rural health care providers[^49] ^50^ but
    that view is contradicted by the clear requirement of section
    254(h)(1)(A) that \"a telecommunications carrier shall\" provide
    such discounts[^50]^51^ The Commission\'s original interpretation,
    we now realize, would lead to the untenable conclusion that,
    although all carriers must provide discounts, only some of them will
    have the full value of those discounts recognized as contributions
    to the preservation and advancement of universal service.

17. The evidence in the record indicating that rural health care
    providers have had to rely upon non-ETCs for the services that they
    require highlights this problematic result. For example, OAT notes
    that in parts of Alaska, Arizona, and the Pacific Basin the carriers
    designated as ETCs are incapable of providing certain eligible
    telecommunications services that the health care providers need for
    the provision of health care services[^51]^52^ Several commenters
    contend that, in some rural areas, only interexchange carriers,
    which will not generally be designated as ETCs, are capable of
    offering advanced services such as T-1 or fractional T-1 bandwidth
    connections[^52]^53^ These comments emphasize that our existing
    rules create an anomaly: ETCs are the only carriers that can be
    credited for serving eligible health care providers at discounted
    rates, but these carriers often are incapable of providing the
    services that are \"necessary for the provision of health care.\"

18. We agree with the suggestion of the State of Alaska that the
    restriction in section 254(e) that limits the receipt of \"specific
    Federal universal service support\" to ETCs is distinguishable from
    the provision in section 254(h)(1)(A)[^53]^54^ Section 254(h)(1)(A)
    refers not to receipt of support, but to having the amount of the
    discount \"treated as a service obligation.\" We interpret \"treated
    as a service obligation\" to mean that the value of any discount
    given is treated in the same manner as a cash payment into the
    universal service fund. In other words, we believe that, pursuant to
    section 254(h)(1)(A), a carrier may contribute to universal service
    either in cash or in kind, with the in kind contribution being *via*
    the provision of telecommunications services at reduced rates.
    Accordingly, if a carrier satisfies its obligation to contribute to
    universal service by providing telecommunications service at the
    urban rate to a RHCP, crediting the carrier for the full amount of
    the discount it provides acknowledges this as a form of payment of
    the carrier\'s contribution obligation, consistent with section
    254(h)(1)(A), as it is not reasonably viewed as giving the carrier
    \"specific Federal universal service support.\" Viewed in this way,
    section 254(e) does not prevent a non-ETC from receiving full credit
    for its compliance with the requirements of the statute.

19. Section 254(h)(1)(A) provides that each carrier \"shall be entitled
    to have an amount Equal to the difference, if any,\" between the
    urban and rural rates \"treated as a part of its obligation to
    participate in the mechanisms to preserve and advance universal
    service.[^54]^55^ Thus, we believe we must ensure that every carrier
    providing discounted service to RHCPs is in some way given credit
    for the full value of this contribution to universal service. In
    order to do this, we conclude that each carrier should first be
    entitled to an offset against its assessed universal service
    contribution amount. In the event that the value of its \"service
    obligation\" exceeds the amount of its required contribution, we
    conclude that we should refund the difference to the carrier. Such
    refunds, as noted above, would satisfy the carrier\'s entitlement to
    have the value of the discount treated as a service obligation; it
    would not constitute the receipt of specific universal service
    support. Given the specific statutory obligation to provide
    discounts, coupled with the specific statutory entitlement to have
    the value of those discounts treated as universal service
    contributions, we believe that both offsets, and refunds where
    necessary, are required in order to satisfy the requirements of
    section 254(h)(1)(A).

20. We recognize, as we did in our earlier order, that section
    254(h)(1)(B), which addresses discounts provided to schools and
    libraries, provides an explicit exemption from section 214(e), while
    section 254(h)(1)(A) does not. We nevertheless conclude, as
    discussed above, that no such explicit exemption is necessary in
    order to implement the offsets and refunds, where necessary, as
    described above. As to offsets, we note that section 254(h)(1)(B)
    provides for offsets (which we have always interpreted as applying
    to all carriers) without providing an exemption from section 214(e),
    offering further evidence that offsets do not constitute the receipt
    of specific federal universal service support. As to reimbursement,
    the schools and libraries provision does provide an exemption from
    214(e), which raises the issue of whether refunds to non-ETCs
    pursuant to the RHCP provisions would require a similar exemption.
    We conclude, however, that no such exemption is necessary.

21. We note first that sections (A) and (B) differ in their description
    of how carriers will be credited for their contributions made in the
    form of discounts. Section (B) refers to reimbursement \"utilizing
    the \[universal service\] mechanisms,\" but section (A) contains no
    parallel language, referring instead to the amount of the discount
    being \"treated as a service obligation.\" And given the directive
    that carriers \"shall be entitled\" to have the amount of discounts
    treated as a service obligation, we believe that it would contravene
    the language and intent of the statute to prohibit some non-ETC
    carriers from receiving full credit for their participation. Refunds
    in such instances serve effectively as simply a return of
    overpayment of a carrier\'s universal service obligation, rather
    than as receipt of universal service support, making an exception to
    254(e) unnecessary.

22. The record supports the conclusion that the Commission\'s initial
    interpretation of section 254(h)(1)(A) produces results that are
    inconsistent with the statutory goals[^55]^56^ It is a well-settled
    rule of statutory construction that the plain language of a statute
    must not be applied in a manner that produces results that are
    inconsistent with the clear intent of Congress[^56]^57^ To the
    extent that a statutory provision is reasonably subject to more than
    one interpretation, we must choose the one that produces results
    most consistent with the underlying statutory purpose. We agree with
    the parties who argue that it is \"counterproductive\" to the 1996
    Act\'s goal of competitio[^57]^58^ to permit only ETCs to receive
    support for serving health care providers[^58]^59^ The Secretary of
    Health and Human Services previously observed that \"\[i\]f these
    additional \[non-eligible\] providers cannot provide discounted
    service, there will be no price competition in most rural
    areas.[^59]^60^ USAC and several of the commenters have since
    documented the lack of significant competition, and the negative
    impact that it has had on the competitive bidding process and the
    RHCPs\' ability to select the most cost effective method of
    satisfying their telecommunications service needs[^60]^61^ We concur
    with the State of Alaska that the effects of our original
    interpretation have been contrary to Congress\'s intent \"to expand
    the availability of telemedicine throughout the Nation.[^61]^62^
    Accordingly, we conclude that any telecommunications carrier may
    take advantage of the mechanism found in section 254(h)(1)(A) when
    it provides telecommunications services at urban rates to health
    care providers located in rural areas. Our decision today will
    increase the effectiveness of the competitive bidding process, and
    assist RHCPs in getting affordable access to modern
    telecommunications services. As we noted earlier, we are persuaded
    that the statutory interpretation discussed above is consistent with
    the language of the statute and achieves the statutory goals of
    section 254 more completely than did the Commission\'s initial
    interpretation. We simply find no sound policy basis to support an
    interpretation that would obligate all carriers to contribute, yet
    create arbitrary distinctions between ETCs and non-ETCs, and between
    those whose contributions are greater or lesser than their
    obligations, when it comes time to acknowledge those contributions.

**III. ELIGIBLE TELECOMMUNICATIONS SERVICES**

23. It is important to note that we are not, in this Order, altering the
    scope of services that eligible rural health care providers will be
    able to purchase at urban rates. We reiterate that interLATA toll
    charges will not be supported by universal service support
    mechanisms[^62] ^63^ with the limited exception of the support
    available pursuant to section 254(h)(2) for toll charges incurred by
    accessing an Internet service provider[^63]^64^ Although IXCs, which
    might not be ETCs, can benefit from the service obligation mechanism
    of section 254(h)(1)(A) when they serve eligible health care
    providers, we do not expand the category of supported services to
    include interLATA toll charges[^64]^65^ The distance-based component
    of services that are supported must be based on a unit of distance,
    such as mileage-based charges[^65]^66^ no per-minute, interLATA toll
    charges are supported under section 254(h)(1)(A). Because the rates
    charged for dedicated connections are generally mileage-based,
    dedicated connections, such as a dedicated T-1 connection between a
    rural health care provider and an urban hospital, will be supported.

**IV. CONCLUSION**

24. In this Order we reconsider the Commission's earlier conclusion
    under section 254, that only carriers that have been certified as
    ETCs may receive a credit or reimbursement, from the universal
    service support mechanisms, for providing telecommunications
    services to rural health care providers. We conclude that a better
    interpretation is one that permits all telecommunications carriers
    to be credited for providing telecommunications services at urban
    rates to rural health care providers, whether or not the carrier has
    been designated as an ETC. The ETC restriction has limited the
    benefits available to rural health care providers. Because this rule
    will relieve rural health care providers of this restriction, it may
    be made effective in less than 30 days, consistent with 5 U.S.C.
    section 553(d)[^66]^67^ We also find good cause under section 553(d)
    to depart from the 30 day requirement, in order to ensure that rural
    health care providers receive the full benefit of the universal
    service support mechanism as soon as possible[^67]^68^ Accordingly,
    the changes adopted in this order shall be effective immediately
    upon publication in the Federal Register. These rules shall be
    applied prospectively to all future commitments of support for the
    benefit of rural health care providers, including all pending
    requests therefor.

**V. SUPPLEMENTAL FINAL REGULATORY FLEXIBILITY ANALYSIS**

25. In compliance with the Regulatory Flexibility Act (RFA)[^68]^69^
    this Supplemental Final Regulatory Flexibility Analysis (SFRFA)
    supplements the Final Regulatory Flexibility Analysis (FRFA)
    included in the *Universal Service Order*[^69]^70^ only to the
    extent that changes to that Order adopted here on reconsideration
    require changes in the conclusions reached in the FRFA. As required
    by section 603 RFA, 5 U.S.C. § 603, the FRFA was preceded by an
    Initial Regulatory Flexibility Analysis (IRFA) incorporated in the
    Notice of Proposed Rulemaking and Order Establishing the Joint Board
    (NPRM), and an IRFA, prepared in connection with the Recommended
    Decision, which sought written public comment on the proposals in
    the NPRM and the Recommended Decision[^70]^71^

**A. Need for and Objectives of this Order.**

26. The Commission is required by section 254 of the Communications Act
    of 1934, as amended by the 1996 Act, to promulgate rules to
    implement properly the universal service provisions of section 254.
    On May 8, 1997, the Commission adopted rules whose principle goal is
    to reform our system of universal service support mechanisms so that
    universal service is preserved and advanced as markets move toward
    competition. In this Order, we reconsider one aspect of those rules.
    In order to permit all telecommunications carriers that provide
    telecommunications services to health care providers pursuant to
    section 254(h)(1)(A) to have their contributions treated as part of
    their obligation to participate in the mechanisms to preserve and
    advance universal service, we reconsider our initial conclusion that
    only telecommunications carriers designated as \"eligible\" pursuant
    to section 254(e) can receive a credit against their universal
    service contribution obligation for providing services at lower,
    urban rates to rural health care providers.

**B. Summary and Analysis of the Significant Issues**

**Raised by Public Comments in Response to the IRFA.**

27. No party commented in response to either IRFA on the issues
    addressed in this *Order*.

**C. Description and Estimates of the Number of**

**Small Entities to Which the Rules Adopted in**

**This Order will Apply.**

28. In the FRFA at paragraphs 890-925 of the *Universal Service Order*,
    we described and estimated the number of small entities that would
    be affected by the new universal service rules. The rules adopted
    herein may apply to the same entities affected by the universal
    service rules. We therefore incorporate by reference paragraphs
    890-925 of the *Universal Service Order*[^71]^72^

**D. Summary Analysis of the Projected Reporting, Record keeping,**

**and Other Compliance Requirements and Significant Alternatives.**

29. In the FRFA to the *Universal Service Order*, we described the
    projected reporting, Record keeping, and other compliance
    requirements and significant alternatives associated with the
    Carrier Eligibility and Health Care Provider sections of the
    *Universal Service Order*. Because the rules adopted herein may only
    affect those requirements in a marginal way, we incorporate by
    reference paragraphs 938-942 and 968-976 of the *Universal Service
    Order*, which describe those requirements and provide the following
    analysis of the new requirements adopted herein[^72]^73^

30. Under the rules adopted herein, we eliminate the requirement that a
    telecommunications carrier must be an eligible telecommunications
    carrier under section 54.201(a)(3) of the Commission\'s rules in
    order to receive a credit against its universal service contribution
    obligation for serving eligible health care providers. This revision
    will benefit health care providers by expanding the category of
    telecommunications carriers that can benefit from universal service
    support mechanisms, and, thus, promote competition among carriers
    serving eligible health care providers. As a result of this rule
    change, health care providers are likely to receive multiple bids
    for the supported services they request through the competitive bid
    process set forth in section 54.603 of the Commission\'s
    rules[^73]^74^

**E. Steps Taken to Minimize the Significant Economic Impact on a
Substantial Number of Small Entities Consistent with Stated
Objectives.**

31. In the FRFA to the *Universal Service Order*, we described the steps
    taken to minimize the significant economic impact on a substantial
    number of small entities consistent with stated objectives
    associated with the Carrier Eligibility and Health Care Provider
    Sections of the *Universal Service Order*. Because the rules adopted
    herein may only affect those requirements in a marginal way, we
    incorporate by reference paragraphs 938-942 and 968-976 of the
    *Universal Service Order*, which describe those requirements and
    provide the following analysis of the new rules adopted herein.

32. As described above, our decision to modify our rules to permit all
    telecommunications carriers that service eligible health care
    providers pursuant to section 254(h)(1)(A) of the Act and sections
    54.601-54.625 of the Commission\'s rules will promote competition
    among telecommunications carriers serving eligible health care
    providers and, thus, will offer health care providers, which are
    likely to be small entities, the services they require for the
    provision of health care services.

**VI. ORDERING CLAUSES**

33. IT IS ORDERED that, pursuant to the authority contained in sections
    1-4, 10, 201-202, 214, 220, and 254 of the Communications Act of
    1934, as amended, 47 U.S.C. §§ 151-154, 160, 201-202, 214, 220 and
    254, and sections 1.3 and 1.103 of the Commission\'s rules, 47
    C.F.R. §§ 1.3 and 1.103, this ORDER is ADOPTED. The requirements
    adopted in this ORDER shall be effective immediately upon
    publication in the Federal Register. They shall be applied
    prospectively to all future commitments of support for the benefit
    of rural health care providers, including all pending applications.

34. IT IS FURTHER ORDERED that, pursuant to the authority contained in
    sections 1-4, 10, 201-202, 214, 220, and 254 of the Communications
    Act of 1934, as amended, 47 U.S.C. §§ 151-154, 160, 201-202, 214,
    220 and 254, and section 1.103 of the Commission\'s rules, 47 C.F.R.
    § 1.103, that Part 54 of the Commission\'s rules, 47 C.F.R. IS
    AMENDED as set forth in Appendix A attached hereto.

35. IT IS FURTHER ORDERED that the rule changes set forth in Appendix A
    ARE EFFECTIVE immediately upon publication in the Federal Register.
    The rule changes adopted here will be applied prospectively to all
    future commitments of support for the benefit of rural health care
    providers, including all pending applications.

FEDERAL COMMUNICATIONS COMMISSION

Magalie Roman Salas

Secretary

Appendix A \-- RULE CHANGES

Part 54 of Title 47 of the Code of Federal Regulations is amended as
follows:

Part 54 \-- UNIVERSAL SERVICE

1\. The authority for part 54 continues to read as follows:

Authority: 47 USC Secs. 1, 4(i), 201, 205, 214, and 254 unless otherwise
noted.

**§ 54.201 Definition of eligible telecommunications carriers,
generally.**

2\. Amend section 54.201(a) by revising section 54.201(a)(3) to read as
follows:

\(a\) \* \* \*

\(1\) \* \* \*

\(2\) \* \* \*

\(3\) This paragraph does not apply to offset or reimbursement support
distributed pursuant to subpart G of this part.

\(4\) \* \* \*

\* \* \* \* \*

**§ 54.621 Access to advanced telecommunications and information
services.**

3\. Amend section 54.621 by removing paragraph 54.621(b) and
redesignating paragraph 54.621(a) as 54.621 to read as follows:

§ 54.621 Access to advanced telecommunications and information services.

Each eligible health care provider that cannot obtain toll-free access
to an Internet service provider shall be entitled to receive the lesser
of the toll charges incurred for 30 hours of access per month to an
Internet service provider or \$180 per month in toll charge credits for
toll charges imposed for connecting to an Internet service provider.

**Appendix B \-- PARTIES FILING IN RESPONSE TO PETITIONS FOR
RECONSIDERATION OF ELIGIBILITY OF TELECOMMUNICATIONS**

CARRIERS SERVING HEALTH CARE PROVIDERS FILED BY GENERAL COMMUNICATIONS,
INC. AND THE ALASKA PUBLIC UTILITY COMMISSION

(includes only those parties who referred to this issue)

**(JULY 19, 1997 *PUBLIC NOTICE*)**

CC Docket No. 96-45

Report No. 2212

  ----------------------------------- -----------------------------------
  [Party]{.underline}                 [Document Filed]{.underline}

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

  ----------------------------------- -----------------------------------
  State of Alaska                     Consolidated Opposition to and
                                      Comments of the State of Alaska on
                                      Petitions for Reconsideration

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

+-----------------------------------+-----------------------------------+
| General Communications, Inc.      | Comments of General               |
|                                   | Communications, Inc. on the       |
|                                   | Petitions for Reconsideration     |
|                                   |                                   |
|                                   | Reply of General Communications,  |
|                                   | Inc.                              |
+-----------------------------------+-----------------------------------+

  ----------------------------------- -----------------------------------
  GE American Communications, Inc.    GE American Communications, Inc.
                                      Reply to Comments on Petitions for
                                      Clarification or Reconsideration

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

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

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

**Appendix C \-- PARTIES FILING COMMENTS ON ELIGIBILITY OF
TELECOMMUNICATIONS CARRIERS SERVING HEALTH CARE PROVIDERS IN**

RECORD COMPILED FOR REPORT TO CONGRESS ON UNIVERSAL SERVICE

(includes only those parties who addressed this issue)

**(JANUARY 5, 1998 *PUBLIC NOTICE***)

CC Docket No. 96-45

DA 98-2

  ----------------------------------- -----------------------------------
  [Party]{.underline}                 [Document Filed]{.underline}

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

+-----------------------------------+-----------------------------------+
| Missouri Public Service           | Initial Comments of the Missouri  |
|                                   | Public Service Commission on      |
| Commission                        | Universal Service                 |
+-----------------------------------+-----------------------------------+

+-----------------------------------+-----------------------------------+
| Nebraska Public Service           | Comments by Nebraska Public       |
|                                   | Service Commission                |
| Commission                        |                                   |
+-----------------------------------+-----------------------------------+

  ----------------------------------- -----------------------------------
  Arizona Corporation Commission      Reply Comments of the Arizona
                                      Corporation Commission

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

+-----------------------------------+-----------------------------------+
| State Members of the              | Comments of the State Members of  |
| Federal-State                     | the § 254 Federal-State Joint     |
|                                   | Board on Universal Service        |
| Joint Board on Universal Service  |                                   |
+-----------------------------------+-----------------------------------+

Appendix D \-- PARTIES FILING COMMENTS AND REPLY COMMENTS IN RESPONSE TO

**UNIVERSAL SERVICE ADMINISTRATIVE COMPANY REPORT TO THE FCC: EVALUATION
OF THE RURAL HEALTH CARE PROGRAM**

(includes only those parties who referred to this issue)

**(MARCH 17, 1999 *PUBLIC NOTICE*)**

CC Docket Nos. 96-45 and 97-21

DA 99-521

  ----------------------------------- -----------------------------------
  [Party]{.underline}                 [Document Filed]{.underline}

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

+-----------------------------------+-----------------------------------+
| Office for the Advancement of     | Letter to William E. Kennard,     |
|                                   | Chairman, Federal Communications  |
| Teleheath, Health Resources       | Commission dated April 1, 1999    |
| Administration, HHS               |                                   |
+-----------------------------------+-----------------------------------+

  ----------------------------------- -----------------------------------
  United States Telephone Association Comments of the United States
                                      Telephone Association

  Rural Utilities Service             Reply Comments of the Rural
                                      Utilities Service
  ----------------------------------- -----------------------------------

#### SEPARATE STATEMENT

**OF**

#### COMMISSIONER SUSAN NESS

*Re: Changes to the Board of Directors of the National Exchange Carrier
Association, Inc.; Federal-State Joint Board on Universal Service (CC
Docket No. 96-45)*

I support today's decision to adopt modifications to the rural health
care support mechanism that will streamline administrative processes and
enhance the overall program. I care deeply about the success of the
rural health care program and have been concerned that our efforts have
thus far not been as fruitful as they could have been. We need to do
more to ensure that the universal service provisions of the
Telecommunications Act are implemented as Congress envisioned. More
specifically, we need to ensure that our rural areas \-- in this
instance rural health care providers \-- have access to
telecommunications services "at rates that are reasonably comparable to
rates charged for similar services in urban areas."[^74]

With respect to the companion order on eligible telecommunications
carriers (ETCs), I support the Commission's decision to reconsider the
ETC requirement. Based on comments filed in this proceeding, it is clear
to me that the ETC requirement we adopted previously created significant
barriers for the rural health care providers that were meant to benefit
under the program. Although our earlier decision reflected a prudent
approach based on our knowledge at that time, I believe that the
expanded interpretation of the rural health care provisions is supported
by the statutory language and reflects policy determinations that will
better effectuate the goals of the 1996 Act.

For these reasons, I vote in favor of both reconsideration orders, and I
am optimistic that our actions today will infuse new life into the rural
health care program.

**SEPARATE STATEMENT OF**

**COMMISSIONER HAROLD FURCHTGOTT‑ROTH**

**CONCURRING IN PART AND DISSENTING IN PART**

*Re: Federal-State Joint Board on Universal Service, CC Docket No.
96-45*

I agree with the Commission's conclusion that a telecommunications
carrier is entitled to have the value of the discounts that it offers to
rural health care providers pursuant to section 254(h)(1)(A) treated as
an offset to its obligation to contribute to universal service support
mechanisms. I cannot, however, endorse the Commission's decision to
permit a telecommunications carrier to obtain a refund of the amount by
which the value of these services may exceed the carrier's universal
service support obligation, regardless of whether that carrier is also
an eligible telecommunications carrier under section 214(e).[^75] This
construction of the statute is inconsistent with the plain language of
sections 254(e) and 254(h)(1).

Congress drew a distinction between permitting a telecommunications
carrier to offset the discounts it might offer under section 254(h)
against its universal service contribution, on the one hand, and
allowing a carrier to be reimbursed directly from the universal service
support fund, on the other. A telecommunications carrier may, without
regard to section 254(e) or its eligibility under section 214(e), offset
the value of the discount it offers under section 254(h) against its
universal service obligation. But with respect to direct reimbursements,
Congress clearly intended that \-- unless the statute provides
explicitly to the contrary \-- "*only* an eligible telecommunications
carrier designated under section 214(e) shall be eligible to receive
specific Federal universal service support."[^76]

Section 254(h)(1)(B) exemplifies this legislative intent. Under this
provision, a carrier may elect to have the discount it offers to schools
and libraries treated as an offset to its universal service obligation,
or it may, "notwithstanding the provisions of \[section 254(e)\],"
choose to "receive reimbursement utilizing the support mechanisms to
preserve and advance universal service."[^77] Taken together, sections
254(e) and 254(h)(1)(B) compel the conclusion that a carrier may receive
a disbursement from the universal service support mechanism only if
permitted by section 254(e) *or* if the statute explicitly excuses the
carrier from section 254(e)'s requirements.

Section 254(h)(1)(A) provides that a telecommunications carrier that
offers discounted services to rural health care providers may have that
discount "treated as a service obligation as a part of its obligation to
participate in the mechanisms to preserve and advance universal
service." Section 254(h)(1)(A) does not exempt carriers from section
254(e)'s requirements \-- indeed, it does not even mention the
provision. In light of the statutory distinction drawn in section
254(h)(1)(B), the omission cannot be deemed an oversight. Congress quite
plainly did not intend for ineligible carriers to receive reimbursement
directly from the universal service support fund for the discounts those
carriers may offer to rural health care providers.

The language that Congress used to describe the treatment of the
discount that a telecommunications carrier offers to rural health care
providers reinforces this conclusion. Specifically, the provision states
that the discount may be treated as "*part* of" the carrier's universal
service obligation,[^78] indicating that Congress intended only to
permit ineligible carriers to use the discount partially to offset their
universal service support obligations, not as a means directly to obtain
universal service funding.

The Commission acknowledges that "section 254(h)(1)(B) . . . provides an
explicit exemption from section 214(e), while section 254(h)(1)(A) does
not."[^79] But it reasons that refunds under section 254(h)(1)(A) "serve
effectively as simply a refund for overpayment of a carrier's universal
service obligation, rather than as receipt of universal service
support."[^80] If this were the case, however, it would not have been
necessary for section 254(h)(1)(B) expressly to exempt carriers from
section 254(e)'s requirements in order to permit them to receive
disbursement from universal service support funds.

Sections 254(e) and 254(h)(1)(B) make clear that only those
telecommunications carriers that meet section 214(e)'s requirements are
entitled to receive reimbursement from the universal service support
mechanism, unless the statute explicitly exempts ineligible carriers
from section 254(e)'s requirements. Section 254(h)(1)(A) contains no
such express exemption. I therefore respectfully dissent from the
Commission's conclusion that a telecommunications carrier that is
ineligible to receive universal service funding under section 254(e) may
nevertheless receive reimbursement for the amount by which the value of
the discount that it offers rural health care providers exceeds that
carrier's universal service support obligation.

[^1]: ^r^ 1 *Federal‑State Joint Board on Universal Service*, CC Docket
    No. 96‑45, Report and Order, 12 FCC Rcd 8776 (1997), as corrected by
    *Federal‑State Joint Board on Universal Service, Errata*, CC Docket
    No. 96‑45, FCC 97‑157 (rel. June 4, 1997), *affirmed, reversed, and
    remanded in part sub nom. Texas Office of Public Utility Counsel v.
    FCC*, 183 F.3d 393 (5th Cir. 1999) motion for stay granted in part
    (Sept. 28, 1999), petitions for rehearing and rehearing *en banc*
    denied (Sept. 28, 1999) (*Universal Service Order*).

[^2]:

[^3]: ^2^ Section 254 was added by the Telecommunications Act of 1996,
    Pub. L. No. 104-104, 110 Stat. 56 (1996 Act), codified at 47 U.S.C.
    §§ 151 *et seq.* (Hereinafter, all citations to the Act and the 1996
    Act will be to the 1996 Act as it is codified in the United States
    Code.) The 1996 Act amended the Communications Act of 1934 (the
    Act).

[^4]: ^?^ The record on this issue consists of the following: Alaska
    Public Utilities Commission Petition for Reconsideration and Request
    for Clarification (filed Jul. 15, 1997) (Alaska PUC Petition);
    General Communication, Inc. Petition for Reconsideration (filed Jul.
    17, 1997) (GCI Petition); comments filed in response to *Petitions
    for Reconsideration and Clarification of Action in Rulemaking
    Proceedings*, CC Docket No. 96-45, Public Notice, Report No. 2212
    (rel. Jul. 29, 1997); comments filed in response to *Common Carrier
    Bureau Seeks Comments for Report to Congress on Universal Service
    Under the Telecommunications Act of 1996*, CC Docket No. 96-45,
    Public Notice, DA 98-2, (rel. Jan. 5, 1998); *Universal Service
    Administrative Company Report to the FCC: Evaluation of the Rural
    Health Care Program* (filed Mar. 5, 1999) (USAC Report); comments
    filed in response to *Universal Service Administrative Company
    Report to the FCC: Evaluation of the Rural Health Care Program,
    Pleading Cycle Established*, CC Docket No. 96-45, Public Notice, DA
    99-521 (rel. March 17, 1999); and *ex parte* letters. *See*
    Appendices B, C, and D for lists of commenters.

[^5]: ^.^ 6 *Universal Service Order*, 12 FCC Rcd at 9105-06, para. 627.

[^6]: ^\"^ 7 47 U.S.C. § 254(e).

[^7]: ^.^ 8 47 U.S.C. § 214(e)(1). Section 214(e)(1)(A) requires an ETC
    to \"offer the services that are supported by Federal universal
    service support mechanisms under section 254(c).\" Pursuant to
    section 254(c), the Commission, based on the recommendation of the
    Federal-State Joint Board, determined that the following services or
    functionalities will be supported by universal service mechanisms:
    voice-grade access to the public switched network; local usage; dual
    tone multi-frequency signaling; single-party service; access to
    emergency services; access to operator services; access to
    interexchange service; access to directory assistance; and toll
    limitation for qualifying low-income customers. *See* 47 C.F.R.
    §54.101(a)(1)-(9). Accordingly, in order to be designated as an ETC,
    a carrier must offer each of these services or functionalities.

[^8]: ^\"^ 9 *Universal Service Order*, 12 FCC Rcd at 9105-06, para.
    627. *See also* 47 C.F.R. § 54.201(a)(2).

[^9]: ^.^ 10 *Universal Service Order*, 12 FCC Rcd at 9105-06, para.
    627.

[^10]: ^\"^ 11 *Id.*

[^11]: ^,^ 12 Departments of Commerce, Justice, and State, the Judiciary
    and Related Agencies Appropriations Act, 1998, Pub. L. No. 105-119,
    111 Stat. 2440, 2521-2522, § 623(b)(4).

[^12]: ^\"^ 13 Federal-State Joint Board on Universal Service, CC Docket
    No. 96-45, *Report to Congress*, FCC 98-67, at para. 148 *(April 10
    Report to Congress*).

[^13]: ^s^ 14 *See* *April 10 Report to Congress* at para. 187 n.441.

[^14]: ^\"^ 15 *Id.* at para. 187*.*

[^15]: ^.^ 16 *Id.*

[^16]: ^.^ 17 *Id.*

[^17]: ^.^ 18 *Id.*

[^18]: ^.^ 19 *Proposed First Quarter 1999 Universal Service
    Contribution Factors and Proposed Actions*, CC Docket No. 96-45, FCC
    98-318 (rel. Dec. 4, 1998).

[^19]: ^.^ 20 *See* USAC Report at 20, 35. On March 17, 1999 the
    Commission released a public notice seeking comments on the USAC
    Report. *Universal Service Administrative Company Report to the FCC:
    Evaluation of the Rural Health Care Program, Pleading Cycle
    Established*, CC Docket No. 96-45, Public Notice, DA 99-521 (rel.
    March 17, 1999).

[^20]: ^.^ 21 USAC Report at 35.

[^21]: ^.^ 22 USAC Report at 20.

[^22]: ^.^ 23 Letter from Dena S. Puskin, Office for the Advancement of
    Telehealth, Health Resources and Services Administration of the
    Health and Human Services Department to Chairman William E. Kennard,
    Federal Communications Commission (filed Apr. 1, 1999) (OAT
    Comments).

[^23]: ^,^ 24 University of Missouri Universal Service Fund Assessment
    Results (dated Oct. 12, 1998).

[^24]: ^.^ 25 OAT comments at 2.

[^25]: ^.^ 26 *Id.*

[^26]: ^.^ 27 Missouri comments at 2.

[^27]: ^.^ 28 *Id. See also* 47 C.F.R. § 54.603.

[^28]: ^.^ 29 Missouri PSC comments at 2.

[^29]: ^.^ 30 USAC Report at Appendix B, p. 54.

[^30]: ^.^ 31 *Id.* at p. 55.

[^31]: ^.^ 32 Missouri PSC comments at 2.

[^32]: ^.^ 33 *Id.*

[^33]: ^.^ 34 OAT comments at 2.

[^34]: ^.^ 35 *Id.*

[^35]: ^.^ 36 *Id.*

[^36]: ^.^ 37 *Id.*

[^37]: ^.^ 38 *Id.*

[^38]: ^.^ 39 *Id.*

[^39]: ^.^ 40 *Id.*

[^40]: ^.^ 41 *Id.*

[^41]: ^.^ 42 *Id.*

[^42]: ^.^ 43 *Id.*

[^43]: ^.^ 44 *See e.g.,* State of Alaska comments at iii; comments of
    GCI on the Petitions for Reconsideration, filed August 18, 1997 (GCI
    comments) at 2 (stating that limiting support to ETCs that serve
    health care providers is inconsistent with the intent of Congress
    and contrary to the public interest.).

[^44]: ^.^ 45 OAT comments at 2.

[^45]: ^\"^ 46 47 U.S.C. § 254(h)(1)(A).

[^46]: ^.^ 47 *See* 47 C.F.R. § 54.615(b) (\"\[u\]pon receiving a bona
    fide request for an eligible service from an eligible health care
    provider . . . a telecommunications carrier shall provide the
    service at a rate no higher than the urban rate . . . .\").

[^47]: ^\"^ 48 47 U.S.C. § 254(h)(1)(A) (emphasis added).

[^48]: ^.^ 49 *Universal Service Order*, 12 FCC Rcd at 9106, para. 627.

[^49]: ^,^ 50 *See, e.g.,* Letter from Geoffrey Honaker, New Hanover
    Regional Medical Center, to Chrm. William E. Kennard, FCC, dated
    April 22, 1998; Letter from Neal Neuberger, American Telemedicine
    Association, to Chrm. William Kennard, FCC, dated April 16, 1998;
    Letter from John R. White, Public Hospital District No. 1 of Pend
    Oreille County, to Magalie Roman Salas, FCC, dated April 28, 1998.

[^50]: ^.^ 51 47 U.S.C. § 254(h)(1)(A).

[^51]: ^.^ 52 OAT comments at 2. *See also* Alaska PUC petition at 10;
    GCI petition at 2-3.

[^52]: ^.^ 53 *See, e.g.,* OAT comments at 2; Letter from Geoffrey
    Honaker, New Hanover Regional Medical Center, to Chrm. William E.
    Kennard, FCC, dated April 22, 1998; Letter from Neal Neuberger,
    American Telemedicine Association, to Chrm. William Kennard, FCC,
    dated April 16, 1998; Letter from John R. White, Public Hospital
    District No. 1 of Pend Oreille County, to Magalie Roman Salas, FCC,
    dated April 28, 1998.

[^53]: ^.^ 54 State of Alaska comments at 11 n.6.

[^54]: ^\"^ 55 47 U.S.C. § 254(h)(1)(A).

[^55]: ^.^ 56 *See e.g.* USAC Report at 20; OAT comments at 2; GCI
    comments at 2.

[^56]: ^.^ 57 *Holy Trinity Church v. United States*, 143 U.S. 457, 459
    (1898) (\"it is a familiar rule, that a thing may be within the
    letter of the statute and yet not within the statute, because not
    within its spirit, nor within the intention of its makers . . . .
    \"); *see also Public Citizen v. United States Department of
    Justice*, 491 U.S. 440, 454-455 (1989) (\"where the literal reading
    of a statutory term would compel an odd result, we must search for
    other evidence of congressional intent to lend the term its proper
    scope.\"); *United States v. American Trucking Associations,* 310
    U.S. 534, 543 (1967) (\"even when the plain meaning \[of statutory
    language\] d\[oes\] not produce absurd results but merely an
    unreasonable one plainly at variance with the policy of the
    legislation as a whole this Court has followed that purpose, rather
    than the literal words.\"). The United States Courts of Appeals and
    this Commission have followed these precedents. *See, e.g.,*
    *Environmental Defense Fund v. Environmental Protection Agency*, 82
    F.3d 451, 468-469 (D.C. Cir.), *amended on other grounds*, 92 F.3d
    1209 (D.C. Cir. 1996) (\"because this literal reading of the statute
    would actually frustrate the congressional intent supporting it, we
    look to the EPA for an interpretation of the statute more true to
    Congress\'s purpose.\"); *Red River Broadcasting Co. v. Federal
    Communications Commission*, 98 F.2d 282, 287 (D.C. Cir.), *cert.
    denied*, 305 U.S. 625 (1938) (\"a well-settled rule of statutory
    construction enjoins courts not to attribute to the Legislature a
    construction which leads to absurd results.); *Application of Fox
    Television Stations, Inc.*, Third Memorandum Opinion and Order, 10
    FCC Rcd 8452, 8471 (1995), *recon. denied* 11 FCC Rcd 7773 (1996)
    (rejecting literal \"count-the-shares\" methodology for determining
    whether foreign ownership ceiling in 47 U.S.C. § 310(b)(4) is
    reached).

[^57]: ^n^ 58 *See* S. Conf. Rep. No. 104-230, 104th Cong. 2nd Sess 1
    (1996) (Joint Explanatory Statement) (establishing a
    \"pro-competitive, de-regulatory national policy framework designed
    to accelerate rapidly private sector deployment of advanced
    telecommunications and information technologies and services to all
    Americans by opening all telecommunications markets to competition .
    . . .\").

[^58]: ^.^ 59 *See, e.g.,* Letter from Jane Smith Patterson, State of
    North Carolina Office of the Governor, to Chrm. William E. Kennard,
    FCC, dated April 17, 1998; Letter from Martha A. McInnis, Alabama
    Department of Economic and Community Affairs, to Chrm. William E.
    Kennard, FCC, dated April 21, 1998.

[^59]: ^\"^ 60 Letter from Secretary Donna E. Shalala, Department of
    Health and Human Services, to Chrm. William E. Kennard, FCC, dated
    May 6, 1998, at 2.

[^60]: ^.^ 61 *See e.g.* USAC Report at 35; OAT comments at 2; Missouri
    PSC comments at 2.

[^61]: ^\"^ 62 State of Alaska comments at 11-12, *citing* 142 Cong.
    Rec. S691-92 (daily ed. Feb. 1, 1996) (\"this bill means
    telecommunications will bring telemedicine in \[to rural areas\].\")
    (remarks of Sen. Stevens).

[^62]: ^,^ 63 *See* *Universal Service Order*, 12 FCC Rcd at 9132,
    paras. 682-683.

[^63]: ^.^ 64 *See* 47 C.F.R. § 54.621(a) (\"each eligible health care
    provider that cannot obtain toll-free access to an Internet service
    provider shall be entitled to receive the lesser of the toll charges
    incurred for 30 hours of access per month to an Internet service
    provider or \$180 per month in toll charge credits for toll charges
    imposed for connecting to an Internet service provider.\")

[^64]: ^.^ 65 The Alaska PUC and GCI contend that rural health care
    providers in Alaska will require \"toll\" services to connect to
    Anchorage, the only city of at least 50,000 in the state. *See*
    Alaska PUC petition at 9-10; GCI petition at 2.

[^65]: ^;^ 66 *See* *Universal Service Order*, 12 FCC Rcd at 9128, para.
    674.

[^66]: ^.^ 67 5 U.S.C. § 553(d)(1).

[^67]: ^.^ 68 *See* 5 U.S.C. § 553(d)(3).

[^68]: ^,^ 69 *See* 5 U.S.C. § 604. The Regulatory Flexibility Act, 5
    U.S.C. § 601 *et seq.*, was amended by the \"Small Business
    Regulatory Enforcement Act of 1996\" (SBREFA), Subtitle II of the
    Contract with America Advancement Act of 1996, Pub. L. No. 104-121,
    110 Stat. 847 (1996) (CWAA).

[^69]: ^,^ 70 *Universal Service Order*, 12 FCC Rcd at 9219-9260, paras.
    870-983.

[^70]: ^.^ 71 61 Fed. Reg. 63,778, 63,796 (1996).

[^71]: ^.^ 72 *Universal Service Order*, 12 FCC Rcd at 9227-9241, paras.
    890-922.

[^72]: ^.^ 73 *Id.* at 9256-9258, paras. 968-976.

[^73]: ^.^ 74 47 C.F.R. § 54.603.

[^74]: ^?^ 7 U.S.C. § 254(h)(1)(A).

[^75]: ^?^ *See* Order ¶ 19.

[^76]: ^?^ 47 U.S.C. § 254(e) (emphasis added).

[^77]: ^?^ *See* 47 U.S.C. § 254(h)(1)(B) (emphasis added).

[^78]: ^?^ 47 U.S.C. § 254(h)(1)(A) (emphasis added).

[^79]: ^?^ *See* Order ¶ 20.

[^80]: ^?^ *Id.* ¶ 21.