**Before the**

**Federal Communications Commission**

**Washington, D.C. 20554**

+--------------------------------------+---+---------------------------+
| In the Matter of                     | * | WC Docket No. 02-60       |
|                                      | * |                           |
| Rural Health Care Support Mechanism  | ) |                           |
|                                      | * |                           |
| Texas Healthcare Network and Texas   | * |                           |
| Health Information Network           |   |                           |
| Collaborative Request for Merger of  | * |                           |
| Rural Health Care Pilot Program      | * |                           |
| Projects                             | ) |                           |
|                                      | * |                           |
|                                      | * |                           |
|                                      |   |                           |
|                                      | * |                           |
|                                      | * |                           |
|                                      | ) |                           |
|                                      | * |                           |
|                                      | * |                           |
|                                      |   |                           |
|                                      | * |                           |
|                                      | * |                           |
|                                      | ) |                           |
|                                      | * |                           |
|                                      | * |                           |
|                                      |   |                           |
|                                      | * |                           |
|                                      | * |                           |
|                                      | ) |                           |
|                                      | * |                           |
|                                      | * |                           |
|                                      |   |                           |
|                                      | * |                           |
|                                      | * |                           |
|                                      | ) |                           |
|                                      | * |                           |
|                                      | * |                           |
|                                      |   |                           |
|                                      | * |                           |
|                                      | * |                           |
|                                      | ) |                           |
|                                      | * |                           |
|                                      | * |                           |
+--------------------------------------+---+---------------------------+

**ORDER**

**Adopted: April 16, 2009 Released: April 16, 2009**

By the Acting Chief, Wireline Competition Bureau:

# INTRODUCTION

1.  In this order, the Wireline Competition Bureau (Bureau) grants a
    request from two participants in the Rural Health Care Pilot Program
    (Pilot Program), the Texas Healthcare Network (THN) and the Texas
    Health Information Network Collaborative (THINC), to merge their
    respective Pilot Program projects and designate THINC as the
    successor to THN's Pilot Program project.[^1] Specifically, the
    Bureau finds that THN has demonstrated that it is unable to continue
    to participate in the Pilot Program due to extenuating
    circumstances. The Bureau also finds that THINC has demonstrated
    that the public interest would be served by designating THINC as the
    successor to THN because THINC: (1) has committed to fulfill the
    goals identified in THN's Pilot Program application; (2) will use
    any funds saved by combining the projects to broaden the goals
    identified in both applications; and (3) has identified an eligible
    source for the 15 percent of costs not funded by the Pilot Program.

# BACKGROUND

2.  On September 26, 2006, the Commission established the Pilot Program,
    pursuant to section 254(h)(2)(A) of the Communications Act of 1934,
    as amended (the Act), to examine ways to use the universal service
    rural health care funding mechanism to enhance public and non-profit
    health care providers' access to advanced telecommunications and
    information services.[^2] On November 16, 2007, the Commission
    selected 69 participants, including THN and THINC, to participate in
    the Pilot Program.[^3] Participants are eligible to receive funding,
    up to their maximum support amount, for up to 85 percent of the
    costs associated with: (1) the construction of state or regional
    broadband networks and the advanced telecommunications and
    information services provided over those networks; (2) connecting to
    nationwide backbone providers Internet2 or National LambdaRail
    (NLR); and (3) connecting to the public Internet.[^4] If a
    participant is unable to participate in the Pilot Program due to
    extenuating circumstances, the Bureau may designate a successor.[^5]

3.  THN is a consortium of health care providers.[^6] Its member
    organizations include the Texas Organization of Rural & Community
    Hospitals (TORCH); the TORCH Foundation (formerly the Community
    Hospital Foundation of Texas); Southeast Texas Health System (STHS);
    and its fiduciary agent and project coordinator, Hospital Networks
    Management, Inc., doing business as (d/b/a) Texas Healthcare Network
    (HNMI).[^7]

4.  THINC is a consortium of health care providers whose member
    organizations include TORCH; the University of Texas Medical Branch;
    the Texas A&M Health Science Center; East Texas Area Health
    Education Center; the Rural and Community Health Institute;
    TeleCommunity Resource Center; and its fiduciary agent, CHRISTUS
    Health System (CHRISTUS Health).[^8]

5.  The maximum Pilot Program support the Commission awarded to THN is
    \$4,889,200, and the maximum Pilot Program support the Commission
    awarded to THINC is \$11,042,096.[^9] THN proposed to upgrade an
    existing dedicated broadband network serving approximately 40 rural
    health care facilities and expand it to encompass 150 rural
    hospitals and more than 120 rural health clinics throughout
    Texas.[^10] THN planned to enhance that network by: (1) providing
    increased bandwidth of at least 45 Mbps to eligible facilities; (2)
    establishing secure gateways to the network to facilitate
    collaboration with other health care networks statewide and
    nationwide; and (3) developing a plan for the deployment of advanced
    health care applications.[^11] THINC proposes to build a Texas
    statewide broadband network, connected to Internet2 or NLR, linking
    more than two hundred health care facilities.[^12] THINC plans to
    use this network to: (1) enhance broadband connectivity for rural
    health care providers; (2) provide access to advanced medical
    services, resources, and other telehealth applications; (3) reduce
    the costs of health care service delivery through aggregation and
    resource sharing; (4) enable teleconference peer meetings, remote
    telemetry, monitoring, diagnostics, and consultations; (5) allow for
    secure Health Insurance Portability and Accountability Act
    (HIPAA)-compliant intranets for medical information and health
    records exchange; (6) provide consumer health education and
    outreach, information, and professional training; (7) enhance
    community health/emergency preparedness/disaster management network
    components; (8) enable the provision of electronic medical
    records/health records to clinicians and individuals; and (9) allow
    for access to government agencies' web tools and services by rural
    health care providers.[^13]

6.  On December 22, 2008, THN provided notice that it was unable to
    continue as a participant in the Pilot Program due to the
    consortium's resource limitations.[^14] The THN members also assert
    that the remaining members of the consortium lack the project
    management, broadband network expertise, and resources to continue
    in the Pilot Program after the resignation and withdrawal of the
    consortium's project coordinator.[^15] In separate correspondence
    dated December 22, 2008, TORCH requested that the Commission allow
    the THN project to merge with THINC's project and designate THINC as
    successor to THN.[^16] CHRISTUS Health will serve as the fiduciary
    agent for the merged projects.[^17] The health care provider members
    of THN (TORCH, the TORCH Foundation and STHS) and THINC jointly
    request that the maximum support amount awarded to THN in the *2007
    RHC PP Selection Order* be available to THINC to: (1) upgrade
    existing network connections to provide high speed bandwidth to
    rural health care facilities; (2) deploy the services proposed in
    THN's Pilot Program application; and (3) increase the number of
    facilities with access to the broadband network proposed by
    THN.[^18] THINC and the health care provider members of THN indicate
    that the benefits of merging the two projects include (i) reducing
    management and administration costs, (ii) achieving the goals of
    both projects in a more timely and coordinated manner, and (iii)
    expanding the project to include additional facilities.[^19]

# DISCUSSION

7.  The Bureau grants the request by THINC and the health care provider
    members of THN to merge their Pilot Program projects and designate
    THINC as the successor to THN's project. Consistent with past Pilot
    Program merger decisions, the Bureau finds that the health care
    provider members of THN have demonstrated that, due to extenuating
    circumstances, THN will not be able to fulfill the goals and
    objectives detailed in its Pilot Program application.[^20] The
    Bureau also finds that THINC has demonstrated that it is committed
    to fulfilling the goals and objectives identified in THN's Pilot
    Program application, as well as the goals and objectives identified
    in its own application.[^21] Merging the two projects and
    designating THINC as successor to THN serves the public interest and
    furthers the goals of the Pilot Program by connecting eligible
    health care providers throughout Texas to a dedicated broadband
    infrastructure, and bringing the benefits of telehealth and
    telemedicine services to areas within Texas where the need for those
    services is most acute.[^22]

8.  The THN consortium has demonstrated that it will be unable to
    participate in the Pilot Program for the duration of the Pilot
    Program because its fiduciary agent and project coordinator, HNMI,
    withdrew from participation in the Pilot Program project.[^23]
    Accordingly, appointing a successor to THN is necessary to enable
    the approved Pilot Program project to deploy a dedicated, high-speed
    broadband network connecting rural Texas health care providers and
    other network members and enabling access to advanced telehealth and
    telemedicine services.[^24]

9.  THINC has committed to, and is qualified to achieve the goals
    identified in THN's application. Specifically, in selecting THINC as
    a participant, the Commission has already determined that THINC is
    qualified to participate in the Pilot Program.[^25] For example, the
    Commission found that THINC demonstrated that it was capable of
    leveraging existing technologies and aggregating the specific needs
    of health care providers.[^26] As successor to THN, THINC has
    committed to fulfill the project goals identified in THN's project
    application as well as those in THINC's own project
    application.[^27] Furthermore, THINC has committed to provide the
    required 15 percent of non-funded eligible costs for the combined
    projects.[^28]

10. The Bureau finds that it will serve the public interest, and is
    consistent with the goals of the Pilot Program, to designate THINC
    as successor to THN. As noted in the *2007 RHC PP Selection Order*,
    one of the goals of the Pilot Program is to "stimulate deployment of
    the broadband infrastructure necessary to support innovative
    telehealth and, in particular, telemedicine services to those areas
    of the country where the need for those benefits is most
    acute."[^29] In selecting THN for participation in the Pilot
    Program, the Commission found that its project will advance the
    goals of the Pilot Program by bringing the benefits of telemedicine
    to rural communities.[^30] Designating THINC as successor to THN
    will continue to make Pilot Program funds available for connecting
    eligible health care providers throughout Texas to a dedicated
    broadband infrastructure, bringing the benefits of telemedicine to
    rural parts of the state.

11. Appointing THINC as successor to THN also serves the public interest
    because it will ensure that Pilot Program funds are used
    efficiently.[^31] Specifically, THN and THINC indicate that merging
    the two projects will reduce management and administration costs,
    and will achieve the goals of both projects in a more timely and
    coordinated manner.[^32] THINC has committed to use any funds saved
    by merging the two projects to add more rural health care facilities
    to the network than were included in the original two project
    applications.[^33]

12. For these reasons, the Bureau finds that THN and THINC have
    demonstrated that it is in the public interest to merge the two
    projects and designate THINC as successor to THN. Accordingly, the
    maximum funding available to THINC for the combined THINC/THN
    project over the three funding years is \$15,931,296 (\$5,310,432
    over three funding years).[^34] To ensure that the benefits of the
    Pilot Program are achieved, we encourage other selected participants
    that are unable to continue their Pilot Program projects to seek the
    designation of successors, consistent with the *2007 RHC PP
    Selection Order* and the Bureau's orders designating Pilot Program
    project successors.[^35]

13. THINC shall follow the network plans set forth in THN's and THINC's
    applications. To the extent THINC seeks to modify those plans, THINC
    must follow the network modification requirements detailed in the
    *2007 RHC PP Selection Order*.[^36] The Bureau also reminds THINC
    that it must adhere to the requirements of the *2007 RHC PP
    Selection Order* and that it shall be subject to audit and
    investigation by the Commission's Office of Inspector General to
    determine compliance with the Pilot Program, Commission rules and
    orders, and section 254 of the Act.[^37] In addition, if funds are
    not distributed or used in accordance with the *2007 RHC PP
    Selection Order*, the Commission will recover such funds.[^38]

# ORDERING CLAUSES

14. Accordingly, IT IS ORDERED that, pursuant to the authority contained
    in sections 1-4 and 254 of the Communications Act of 1934, as
    amended, 47 U.S.C. §§ 151-54, 254, and pursuant to authority
    delegated under sections 0.91 and 0.291 of the Commission's rules,
    47 C.F.R. §§ 0.91, 0.291, the request filed by the Texas Healthcare
    Network and the Texas Health Information Network Collaborative IS
    GRANTED to the extent provided herein.

15. IT IS FURTHER ORDERED that, pursuant to section 1.102(b)(1) of the
    Commission's rules, 47 C.F.R. § 1.102(b)(1), this order SHALL BE
    EFFECTIVE upon release.

    FEDERAL COMMUNICATIONS COMMISSION

    Julie A. Veach

    Acting Chief

    Wireline Competition Bureau

[^1]: Letter from David Pearson, President and CEO Texas Organization of
    Rural & Community Hospitals, to William England, Universal Service
    Administrative Company, WC Docket No. 02-60 (dated Dec. 22, 2008)
    (TORCH December 22 Letter); Letter from George S. Conklin, Project
    Coordinator THINC and Senior Vice-President and CIO CHRISTUS Health,
    and David Pearson, President and CEO Texas Organization of Rural &
    Community Hospitals, to William England, Universal Service
    Administrative Company, WC Docket No. 02-60 (dated Jan. 28, 2009)
    (January 28 Letter); Letter from Quang Ngo, President and CEO TORCH
    Foundation, to Marlene H. Dortch, Federal Communications Commission,
    WC Docket No. 02-60 (dated Mar. 25, 2009) (TORCH Foundation March 25
    Letter); Letter from Shannon S. Calhoun, Executive Director
    Southeast Texas Health System, to Marlene H. Dortch, Federal
    Communications Commission, WC Docket No. 02-60 (dated Mar. 25, 2009)
    (STHS March 25 Letter).

[^2]: 47 U.S.C. § 254(h)(2)(A); *Rural Health Care Support Mechanism*,
    WC Docket No. 02-60, Order, 21 FCC Rcd 11111, para. 1 (2006) (*2006
    Pilot Program Order*).

[^3]: *See Rural Health Care Support Mechanism*, WC Docket No. 02-60,
    Order, 22 FCC Rcd 20360, 20429-30, Appendix B (2007) (*2007 RHC PP
    Selection Order*); Texas Healthcare Network Application, WC Docket
    No. 02-60 (filed May 4, 2007) (THN Application); Texas Health
    Information Network Collaborative Application, WC Docket No. 02-60
    (filed May 7, 2007) (THINC Application).

[^4]: *2007 RHC PP Selection Order*, 22 FCC Rcd at 20361, para. 2.

[^5]: *Id.* at 20422, para. 124 ("In instances where a selected
    participant, including a consortium, is unable to participate in the
    Pilot Program for the three-year term due to extenuating
    circumstances, a successor may be designated by the Bureau upon
    request."). On December 5, 2008, under its delegated authority, the
    Bureau granted a merger request to designate the University of
    Mississippi Medical Center as the successor to As One Together for
    Health's Pilot Program project. *Rural Health Care Support
    Mechanism*, *As One Together for Health and the University of
    Mississippi Medical Center Request for Merger of Rural Health Care
    Pilot Program Projects*, WC Docket No. 02-60, Order, 23 FCC Rcd
    17401 (Wireline Comp. Bur. 2008) (*As One Together Merger Order*).
    On the same day, the Bureau granted a request to designate the
    Southern Ohio Health Care Network as the successor to Holzer
    Consolidated Health Systems' Pilot Program project. *Rural Health
    Care Support Mechanism*, *Holzer Consolidated Health Systems and
    Southern Ohio Health Care Network Request for Merger of Rural Health
    Care Pilot Program Projects*, WC Docket No. 02-60, Order, 23 FCC Rcd
    17396 (Wireline Comp. Bur. 2008) (*Holzer Merger Order*).

[^6]: THN Application at 6-9.

[^7]: *Id*. at 8-9; TORCH December 22 Letter at 1; TORCH Foundation
    March 25 Letter.

[^8]: THINC Application at 3, 48-50.

[^9]: *2007 RHC PP Selection Order*, 22 FCC Rcd at 20430, Appendix B.

[^10]: THN Application at 11-12, 18, 29.

[^11]: *Id.* at 10-12.

[^12]: THINC Application at 3-6, 24.

[^13]: *Id.* at 4; January 28 Letter at 3.

[^14]: Letter from Randall Zunke, President Hospital Networks
    Management, Inc., d/b/a Texas Healthcare Network, to William
    England, Universal Service Administrative Company, WC Docket No.
    02-60 (dated Dec. 22, 2008) (THN December 22 Letter).

[^15]: *See* January 28 Letter at 1-2.

[^16]: TORCH December 22 Letter; *see also* TORCH Foundation March 25
    Letter; STHS March 25 Letter. HNMI, the fiduciary agent and project
    coordinator of THN, did not join the December 22, 2008 merger
    request. The Bureau notes, however, that HNMI did not provide
    comments during the applicable comment period in opposition to the
    merger. The health care provider members of THN and THINC expressed
    joint support for the proposal in a January 28, 2009 letter. *See*
    January 28 Letter.

[^17]: January 28 Letter at 6.

[^18]: *Id.* at 4.

[^19]: *Id.* at 4-5.

[^20]: *2007 RHC PP Selection Order*, 22 FCC Rcd at 20422, para. 124;
    *see As One Together Merger Order*, 23 FCC Rcd at 17403, para. 6;
    *Holzer Merger Order*, 23 FCC Rcd at 17398, para. 6; THN December 22
    Letter; January 28 Letter.

[^21]: *See* January 28 Letter at 3-5; *see also As One Together Merger
    Order*, 23 FCC Rcd at 17403, para. 7; *Holzer Merger Order*, 23 FCC
    Rcd at 17398, para. 7.

[^22]: *See* THN Application at 10-12; *As One Together Merger Order*,
    23 FCC Rcd at 17403, para. 8; *Holzer Merger Order*, 23 FCC Rcd at
    17398-99, para. 8.

[^23]: TORCH December 22 Letter at 1; January 28 Letter at 1-2.

[^24]: *See* THN Application at 10-12. A dedicated broadband network may
    be used for the provision of medical care or medical expertise from
    a distance using telecommunications technology (telemedicine or
    telehealth) for long-distance clinical care, consumer and
    professional health-related education, public health, health
    administration, research, and electronic health records, as
    permitted by the *2006 Pilot Program Order* and the *2007 RHC PP
    Selection Order*. *See 2006 Pilot Program Order*, 21 FCC Rcd at
    11111-12, paras. 1 n.2, 5; *2007 RHC PP Selection Order*, 22 FCC Rcd
    at 20367-68, para. 16. Eligible health care providers are: (i)
    post-secondary educational institutions offering health care
    instruction, teaching hospitals, and medical schools; (ii) community
    health centers or health centers providing health care to migrants;
    (iii) local health departments or agencies; (iv) community mental
    health centers; (v) not-for-profit hospitals; (vi) rural health
    clinics; and (vii) consortia of health care providers consisting of
    one or more entities described in clauses (i) through (vi). 47
    U.S.C. § 254(h)(7)(B); *see also 2007 RHC PP Selection Order*, 22
    FCC Rcd at 20368, para. 18. Other network members may include
    ineligible health care providers that use the dedicated network for
    health-related purposes. *See 2007 RHC PP Selection Order*, 22 FCC
    Rcd at 20395-96, para. 71.

[^25]: *2007 RHC PP Selection Order*, 22 FCC Rcd at 20429-30, Appendix
    B.

[^26]: *Id.* at 20376-78, paras. 40 and 41.

[^27]: January 28 Letter at 5-6.

[^28]: *Id.* at 4.

[^29]: *2007 RHC PP Selection Order*, 22 FCC Rcd at 20361, para. 1.

[^30]: *Id.* at 20376, para. 39.

[^31]: *See As One Together Merger Order*, 23 FCC Rcd at 17403-04, para.
    9; *Holzer Merger Order*, 23 FCC Rcd at 17399, para. 9.

[^32]: January 28 Letter at 3-4. *See also* *2007 RHC PP Selection
    Order*, 22 FCC Rcd at 20406, para. 87, n.291.

[^33]: January 28 Letter at 4-5.

[^34]: To determine the maximum funding amount available to the combined
    THINC/THN project, the Bureau added the maximum funding amounts the
    Commission awarded to THINC, \$11,042,096, and THN, \$4,889,200. To
    the extent THINC does not use all of the available funds in a
    funding year, USAC will "carry over" the remaining funds to the
    following funding year. *See* Letter to Scott Barash, Acting Chief
    Executive Officer, Universal Service Administrative Company, from
    Dana Shaffer, Chief, Wireline Competition Bureau, Federal
    Communications Commission (Jan. 17, 2008), *available at*
    http://hraunfoss.fcc.gov/edocs_public/attachmatch/DOC-279603A1.pdf.

[^35]: *2007 RHC PP Selection Order*, 22 FCC Rcd at 20422, para. 124;
    *As One Together Merger Order*, 23 FCC Rcd 17401; *Holzer Merger
    Order*, 23 FCC Rcd at 17396.

[^36]: *2007 RHC PP Selection Order*, 22 FCC Rcd at 20401, para. 80.

[^37]: *Id.* at 20422, para. 125.

[^38]: *Id.* at 20423, para. 125.