FEDERAL COMMUNICATIONS COMMISSION

                          TELEMEDICAL ADVISORY COMMITTEE









Pages:    1 through 113

Place:    Washington, D. C.

Date:     June 12, 1996

                  FEDERAL COMMUNICATIONS COMMISSION
     
                         TELEMEDICAL ADVISORY COMMITTEE
     
     
     
     
     
                                 June 12, 1996
     
     
     
                         RUSSELL SENATE OFFICE BUILDING
                                    ROOM 385
                                WASHINGTON, D.C.
     
     
                     APPEARANCES:
     
                     GREG LAWLER, ESQUIRE
                     Chairman
                     (301) 654-9737
                     (301) 907-8212 (fax) 
     
                     BILL BAILEY
                     Director, Regulatory and External Administration
                     Southwestern Bell Telephone
                     (314) 247-2565
                     (314) 247-1280 (fax)
     
                     RON BOTTS
                     Grants Specialist, Policy Office 
                     Brown Medical Institute  
     
                     JAMES BRICK
                     Founder, Mountaineer Doctor Television
                     (304) 293-2084
                     (304) 293-8824 (fax)
     
                     CATHY BROWN
                     Associate Administrator for the Office of Policy
                Analysis and Development
                     NTIA
                     Department of Commerce
                     (202) 432-1880 
                     (202) 432-6173 (fax)
     
                          APPEARANCES:  (Continued)
     
                     NARCISO CANO
                     President and Owner,         Distributed Communications   
                Corporation
                     (210) 731-6601
                     (210) 731-6606 (fax)
     
                     CANDY CASTLES
                     Director of External Affairs,          
                     AT&T Wireless Services, Inc.
                     (202) 828-8407
     
                     HELEN R. CONNERS, RN, FAAN
                     Associate Dean of Academic Affairs and 
                     Associate Professor, PhD
                     University of Kansas 
                     School of Nursing 
                     (913) 588-1614
                     (913) 588-1660 (fax)
     
                     STEVE COTTON
                     Director of Programming and Marketing Development
                     Texas Tech. University
                     (806) 743-1500
                     (806) 743-2233 (fax)
     
                     MARY JO DEERING, PHD
                     Director, Health Communication,        Office of Disease
                Prevention and Health Promotion
                     HHS
                     (202) 401-6295
                     (202) 401-6295 or (202) 205-9478 (fax)
     
                     JUDY DEMERS, RN
                     Associate Dean of Student Affairs and Admissions
                     University of North Dakota School of Medicine
                     Honorable State Senator of North Dakota
                     (701) 777-4221
                     (701) 777-4942 (fax)
     
                     CHARLES DOUGHERTY, PHD
                     VP for Academic Affairs
                     Creighton University, Nebraska
                     (402) 280-2772
                     (402) 280-5762 (fax)
     
     
                          APPEARANCES:  (Continued)
     
                     WILLIAM ENGLAND
                     Office of Research Demonstration
                     HCFA
                     (410) 786-0542
                     (410) 786-5534 (fax)
     
                     ROGER GUARD
                     Director, University of Cincinnati 
                     Medical Center Libraries
                     (513) 558-5656
                     (513) 558-2682 (fax)
     
                     FRANK LYMAN
                     EthiconEndo
                     
                     CHARLE F. HOLUM
                     Doherty, Rumble & Butler
                     (303) 572-6200
                     (303) 572-6203 (fax)
     
                     MICHAEL G. KIENZLE, MD
                     Van Buren County Hospital, Iowa
                     (319) 353-5637
                     (319) 335-8318 (fax)
     
                     JOAN KING          
                     National Legislative Council of AARP
     
                     JOSEPH C. KVEDAR, MD
                     Professor, Harvard Medical School
                     (617) 726-4477
                     (617) 726-4453 (fax)
     
                     ART LIFSON
                     VP for Health Policy, CIGNA
                     (202) 296-7174
                     (202) 296-2521 (fax)
      
                     MARY JO MACLAUGHLAN
                     Director of Regional Information 
                     Bangor Hospital
                     (207) 973-7046
                          (207) 973-8995 (fax)                APPEARANCES:  (Continued)
                     
                     ELLIOT MAXWELL
                     Deputy Chief, Office of Plans and Policy 
                     FCC
     
                     BOB PILLAR
                     Director of Public Utility Law Project, NY
                     39 Columbia Street
                     Albany, NY 12207
                     (518) 449-3375, ext. 19
                     (518) 449-1769 (fax)
     
                     JAMES POTTER
                     American College of Radiology
     
                     DENA PUSKIN
                     Chair, Federal Joint Working Group on
                Telemedicine 
                     HHS Office of Rural Health Policy
                     (301) 443-0835
                     (301) 443-7320 (fax)
     
                     LYGEIA RICCIARDI 
                     Office of Plans and Policy        
                     FCC                     
     
                     GONZALO SANCHEZ, MD
                     President, Neurology Associates
                     Chief of Neurology and Neurosurgery
                     Sioux Valley Hospital
                     (605) 335-8470
                     (605) 335-1489 (fax)
     
                     JAY SANDERS, MD
                     President, American Telemedicine Association
                     Professor of Medicine & Surgery
                     Medical College of Georgia
                     (706) 721-6616
                     (706) 721-7270 (fax)
     
                     AL SONNESTRAHL
                     President, Consumer Action Network
                     Telecommunications Deaf Inc.
                     1-800-735-2258 then dial (301) 552-2110          
                     (301) 552-552-1337 (fax)
     
     
                          APPEARANCES:  (Continued)
     
                     THOMAS R. SPACEK
                     Executive Director, National Information
                Infrastructure Initiative
                     Bellcore
                     (201) 829-3990
                     (201) 829-4325 (fax) 
                     spacek@bellcore.com  (e-mail)
     
                     EUGENE SULLIVAN
                     Professor of Neurosurgery, University of Virginia
                     (804) 243-0303
                     (804) 243-0332 (fax)
     
                     ERIC G. TANGELOS, MD
                     Mayo Clinic
                     Institute of Medicine's Committee to Evaluate
                Telemedicine Applications 
                     (507) 284-5126
                     (507) 284-7811 (pager)
     
                     DOUG TINDALL
                     UT-Houston 
     
                     REED TUCKSON, MD
                     President, Charles Drew University of Medicine
                and Science
                     (213) 563-4987
                     (213) 563-5987 (fax)
     
                     CYNTHIA TRUTANIC, ESQUIRE
                     Consultant, Health Care           and       Telecommunications
                     Health Information Applications Working Group of  
                Committee on Applications and Technology of the
                Information Infrastructure Task Force             
                (202) 456-6640
                     (202) 456-6298 (fax)
     
                     ROBERT WATERS, ESQUIRE
                     Arent Fox
                     Creator, World Wide Web legal reference site on
                Telecommunications and Health Care
                     (202) 857-6000
                     (202) 857-6395 (fax)
     
     
     
                          APPEARANCES:  (Continued)
     
                     WILLIAM WELCH
                     President, Nevada Rural Hospital Project
                     (702) 827-4770
                     (702) 827-0190 (fax)
     
                     BRIG. GENERAL ZAJTCHUK
                     Commander, US Army Medical Research Development
                     Acquisitions and Logistics Command, DOD
                     Russ, MD
                     (301) 619-7613
                     (301) 619-2982 (fax)
     
                     PAUL ZIMNIK        
                     Medical Records & Materiel         Command
                     (301) 619-7928               
                     
                                  P R O C E E D I N G S
                    MR. LAWLER:  Hello, and welcome.  My name is Greg
     Lawler, and I am the chair of the Advisory Committee.  I
     welcome you all here to the Advisory Committee for what I
     think is a very interesting and exciting opportunity to
     participate in a public policy discussion about where
     telemedicine is going and to assist the Federal
     Communications Commission in that effort.
                    What I'd like to do just to start -- we have a lot
     of people here, some I've met, some I've not met -- is just
     go around the room, introduce yourself, say where you're
     from, say anything you want about yourself, professional or
     perhaps personal, if you'd care, so we begin to put names
     with faces.
                    One rule to start -- and we'll talk about more
     rules later -- but one rule to start, we do have
     interpreters here; so whenever anyone speaks throughout the
     day, if you would first identify yourself so they can
     identify you.  I think that will help the court reporter
     also who isn't familiar with all of us, and we don't have
     name tags in front of us.
                    I will start.  I am Greg Lawler.  I am a lawyer in
     private practice here in Washington; have been in private
     practice for about a year, year and a half; have worked on
     healthcare, first in the White House for two years; before
     that worked for the Governor of New Jersey in New Jersey;
     and then worked for many years on the House Commerce
     Committee.
                    I'm looking forward to our opportunity for the
     intersection of telecommunications and healthcare and what
     advice we can provide to the FCC.
                    Elliot, why don't we start next with you.
                    MR. MAXWELL:  I'm Elliot Maxwell.  I'm Deputy
     Chief of the Office of Plans and Policy at the FCC.  And I'm
     working with Greg and with the Advisory Committee and the
     other parts of the FCC to try to make the act requirements
     about telemedicine come to life and to try to help the FCC
     understand where this burgeoning area is going.
                    I am just delighted to see all of you here and to
     welcome you.
                    MR. HOLUM:  I'm Chuck Holum.  I'm a lawyer from
     Denver, Colorado, where I work on a number of different
     rural issues and rural groups, including some rural health
     groups, many of whom are very curious what will happen in
     this room.
                    MR. SULLIVAN:  Good morning.  Gene Sullivan.  I'm
     at the University of Virginia.  I am the Director of the
     Office of Telemedicine at the Medical Center.
                    MR. DOUGHERTY:  I'm Charlie Dougherty, Academic
     Vice President of Creighton University in Omaha; former
     Director of Creighton's Center for Health Policy and Ethics;
     and my academic field is medical evidence.
                    MR. TANGELOS:  I'm Eric Tangelos, a physician at
     Mayo Clinic; and over the years, I have been involved with
     most of the aspects of our telemedicine programs.
                    MS. DEMERS:  I'm Judy DeMers.  I'm from the
     University North Dakota.  I'm Associate Dean for the School
     of Medicine there.  I'm also a State Senator in North Dakota
     serving my 14th year.
                    MR. SANDERS:  I'm Jay Sanders.  I am a physician. 
     I was formally the Director of the Telemedicine Center at
     the Medical College of Georgia.  I will be with the Medical
     College of Georgia for another two weeks, at which point I'm
     moving to Washington D.C.  I'm also President of the
     American Telemedicine Association.
                    MR. KVEDAR:  Joseph Kvedar from Partners
     HealthCare Systems, Inc., the company that is the merger of
     the Massachusetts General Hospital and the Bingham Women's
     Hospital in Boston.  My role there is Director of the
     Telemedicine and Remote Education.
                    MR. SANCHEZ:  I'm Gonzalo Sanchez.  I'm a
     neurosurgeon in Sioux Falls, South Dakota.  I'm involved in
     the telemedicine and education aspects.
                    MR. BARR:  Rick Barr, Executive Vice President
     MEDCO International, McLean, Virginia.  We operate remote
     diagnostic centers for rural communities.
                    MS. MACLAUGHLAN:  I'm Mary Jo MacLaughlan, Eastern
     Main Healthcare, in Bangor, Maine.  I'm the Director of
     Telemedicine for the Northern New England Telemedicine
     System.
                    MR. CANO:  Narciso Cano, San Antonio, Texas. 
     Owner of Distributed Communications Corporation, which is an
     Internet service provider and provider of digital circuits.
                    MS. KING:  I'm Joan King.  I'm representing AARP. 
     I'm a member of the National Legislative Council of AARP's,
     which is an advisory board.  I'm a policymaker, and I Chair
     the Consumer Committee.  My background is in hospital
     medical social work.
                    MR. LEWIS:  Michael Lewis.  And I'm with MCI.  I
     work in public policy with MCI.
                    MR. KEMPLER:  I work in FCC Affairs.
                    MS. KARY:  Margaret Kary, physician from Denver,
     Colorado.  I'm currently representing a six-state area and
     happen to be outside the Beltway for a couple of issues: 
     One is telemedicine and telehealth; and the other one is
     American Indian issues for the Department of Health and
     Human Services.
                    MR. ENGLAND:  I'm Bill England with the Health
     Care Finance Administration, Office of Research.  I'm an
     electrical engineer and a lawyer.  And I run HCFA's
     telemedicine demonstration, which will be starting this
     fall.
                    MR. WELCH:  Bill Welch, President of the Nevada
     Rural Hospital Project, a 12 hospital-consortium.  We have a
     teleradiology program.  We also have telemedicine and a
     nursing for program.
                    MS. MADISON:  I'm Cathy Madison.  I'm with AT&T
     Wireless Services.  I'm the Vice President for External
     Affairs.  I'm sitting in today for Candy Castles who is our
     Director of External Affairs.
                    MR. BRICK:  I'm Jim Brick from West Virginia
     University.  I'm our Medical Director for our Telemedicine
     Program, and I'm also a physician.
                    MR. BAILEY:  I'm Bill Bailey.  I'm with
     Southwestern Bell Telephone Company, St. Louis.
                    MR. SONNESTRAHL:  Hello.  My name is Al
     Sonnestrahl.  I'm another person who has a hearing problem
     other than the court reporter.
                    Before I was Director of Telecommunications for
     the Deaf, we developed Title IV in the Americans With
     Disabilities Act, and that led to implementing relay
     services all over the country.
                    We also developed a language in Title II in the
     Americans With Disabilities Act that required all emergency
     service centers to have access to TTY telecommunications in
     systems for deaf people who use text telephones.
                    I'm now Chair of Consumer Action Network for deaf
     and hard of hearing people.  And I'm here to make sure that
     everything is accessible to people with hearing impairments
     and hearing people with disabilities as well.
                    MR. MARINE:  I'm Steve Marine from the University
     of Cincinnati Medical Center.  I'm here for Roger Guard.  He
     couldn't make it today but sends his regards.
                    I'm involved in a number of clinical telemedicine
     programs and distance learning programs.
                    MR. TINDALL:  Hello.  I'm Doug Tindall.  I am
     trying to act as much as I can without the accent as Red
     Duke would if he were here.
                    We have a multi-facted research proposal and
     project underway that had a demonstration last year with a
     pilot project -- hopefully it will kick off in 1997 -- that
     takes a look at what can we do within a medical center to
     help support EMS units in far, rural areas and in suburban
     rural areas.  And that's the focus of what we are working
     on.
                    Dr. Duke does sends his regrets.  He very much
     wants to be here and is definitely honored and excited to be
     working on this committee.
                    MR. SPACEK:  I'm Tom Spacek from Bellcore in New
     Jersey.  I'm responsible for the
     business/market/policy/technology issues associated with
     making the national and global information infrastructure a
     reality.
                    I'm personally interested in those situations
     where market forces will not create the incentives for
     private sector investment in particular applications and
     interconnections and networks.
                    MR. PILLAR:  I'm Bob Pillar.  I'm the Executive
     Director of the Public Utility Law Project in New York
     State.  We're an intervener group that represents the
     interests of low-income consumers in utility and energy
     issues.  We're here on behalf of the National Association of
     State Utility Consumer Advocates.
                    In addition to that, I serve as the Vice Chair of
     the Diffusion Fund in New York State which is a group that's
     come together as a byproduct of a piece of the settlement of
     the last NYNEX rate case in New York State where a fund was
     created to allocate $50 million over a five-year program for
     advanced telecommunications projects in economically
     disadvantaged areas.  A number of those proposals include
     rural, health-related advanced telecommunications projects.
                    MS. TRUTANIC:  My name is Cynthia Trutanic.  I'm a
     lawyer with a background in telecommunications and in mental
     health.  I have been working in this area for -- doing
     special projects in telemedicine and mental health for
     Tipper Gore.
                    And I also was in the telecommunications business
     as an entrepreneur in the early '80s during the first
     deregulations.
                    MR. ZIMNIK:  My name is Paul Zimnik.  I'm here
     representing General Russ Zajtchuk and the Department of
     Defense Telemedicine Test Bed.
                    I'm a physician and manage several of the ongoing
     telemedicine projects in the Department of Defense.
                    MS. DEERING:  I'm Mary Jo Deering in the
     Department of Health and Human Services.  I'm the Director
     of Health Communications and Telehealth in the Office of
     Disease Prevention and Health Promotion.
                    We are very concerned with the non-healthcare
     services aspects of the telecommunications in health, which
     includes direct-to-consumers, into the home, and work sites
     and other settings, and also those applications which would
     be relevant for broader public health, what we call
     population-based health.
                    MR. LIFSON:  I'm Art Lifson.  I'm with CIGNA.  I
     represent them with regards to health policy and
     telemedicine.  Telemedicine, obviously, is one of the great
     potentials of the future.
                    MS. RICCIARDI:  I'm Lygeia Ricciardi.  I'm with
     the Federal Communications Commission in the Office of Plans
     and Policy.  I've been working on implementing the universal
     service, parts of the Telecom Act of 1996.
                    I've spoken with most of you on the phone, and I'm
     very glad to see you in person.  Thanks For coming.
                    MS. CHEW:  I'm Patricia Chew.  I'm with the FCC's
     Office of Public Affairs.  I am your liaison person with
     that office, so I need to make sure I have everybody's fax
     numbers and phone numbers.  And if you need anything, just
     call us.  We are glad to serve you.
                    MR. LAWLER:  Did we get everybody over -- no.  We
     have more.
                    MR. WATERS:  My name is Bob Waters.  I'm an
     attorney and a partner in the health group of Arent Fox.  We
     serve as counsel to the Center Telemedicine Law.  We are
     particularly interested in areas where there are barriers to
     access for health access --
                    MR. POTTER:  My name is Jim Potter.  I'm with the
     American College of Radiology.  I'm here representing
     Dr. George Kamp who regrets that, because of his schedule,
     he couldn't make this meeting.
                    The American College of Radiology, with the
     National (inaudible) Manufacturers Association, over 12
     years ago, developed an ACR NIMA standard for electronic
     transmission of data that has now been transformed to what
     is called the DIMCOM standard, the Digital Imaging Medical
     Communications Standards, which is about, yea thick
     (indicating), and represents the body of standards that are
     very flexible and that help implement current standards
     among the manufacturers to date.
                    In fact, one example I have is where I guess a
     number of systems for the Bosnian theater for medical
     imaging were developed in less than four months due to the
     DIMCOM standard.  Without that standard, it was estimated it
     would have taken two to three years to develop that medical
     imaging.
                    The American College of Radiology also has a
     practice standard on teleradiology for its member
     practitioners.
                    Thank you.
                    MS. BROWN:  Good morning.  I'm Cathy Brown.  I am
     with NTIA, which is the National Telecommunications and
     Information Administration, in the Department of Commerce. 
     We advise the President, Vice President, and Secretary of
     Commerce on telecommunications matters.
                    The administration has been very involved in the
     universal service issues with respect to this bill.  And I
     am very pleased that we are here at the table with you.
                    MR. SHORT:  I'm Brad Short with the American
     College of Radiology.  I'm an observer today.
                    MS. SHIVER:  Nancy Shiver with the American
     College of Nurse Practitioners.  Also an observer today.
                    MS. TICHNER:  I'm Susie Tichner with the Council
     on Competitive Investment.  Observer.
                    MR. PLISKO:  I'm Harry Plisko with the Ball
     Institute.  And I'm an observer.
                    MS. BRENNER:  I'm Irene Brenner.  I'm an attorney
     at the FCC.  And I too am working on the Universal Service
     Provision of the telecom act.
                    MR. LYMAN:  Good morning.  I'm Frank Lyman, Vice
     President of Professional Education at Ethicon Endosurgery,
     a Johnson & Johnson company.  I'm sitting in today for Bill
     Hawkins, our President.  He sends his regrets that he could
     not make it.
                    Ethicon Endosurgery is a medical device company. 
     We've primarily been using this technology for educational
     purposes at Johnson & Johnson.  We are very excited about
     the future of this technology.
                    MR. BOTTS:  And I'm lost.
                    I'm Ron Botts.  I'm a grants specialist at Brown
     Medical Institute working in our policy office.
                    MS. NELSON:  I'm Thayer Nelson.  I'm a healthcare
     consultant working with the Managed Care Options in
     Bethesda.
                    And I work with Greg Lawler.  If you need
     anything, I'm a lot easier to get in touch with than Greg.
                    MS. JANES:  I'm Laurie Janes with GCI in Alaska. 
     I'm an observer today.
                    MR. LAWLER:  Let me just start by describing what
     we're going to do today so everybody can get a sense of what
     our schedule is.
                    We are here in the Senate Office Building because
     there is a meeting today of the Congressional Ad Hoc
     Steering Committee on Telemedicine and Health Care
     Informatics.  And they have a demonstration that starts at
     2 o'clock, as I think you have probably all seen in the
     information that was sent to you.
                    So we are going to meet from now until we break
     up, with time for lunch, and then go to the demonstration.
                    At 3 o'clock, there is a press conference with --
     I believe, there are several Senators coming, including
     Senators Snowe and Rockefeller and Chairman Hunt.
                    MS. RICCIARDI:  Senators, also, Exon, Pressler,
     and Conrad.
                    MR. LAWLER:  And I think Commissioners Ness and
     Chong also will be there.
                    What I'd like to try to do first is just describe,
     to the extent that I can, why we're here, what I think our
     mission is, and the short time frame, frankly, that we have
     to accomplish it, because we do have a very short time
     frame.
                    Everybody knows that telemedicine is a great
     subject that people are interested in because it is, in a
     sense, an unknown.  It's something out there that looks like
     we can make a tremendous amount of progress, both in
     healthcare and in the telecommunications industry as a way
     to deliver better healthcare, reduce costs, and make money
     from it in some cases.
                    Senators Snowe and Rockefeller, as you know, have
     a provision in the telecom bill that talks about rural
     healthcare and requires the FCC to implement it in a -- I
     forget what the final date is -- but in a fairly short time
     frame.  Elliot and Lygeia can describe what the FCC
     specifically is doing on that.  I know there is a joint
     board.  They have another meeting sometime in July.  They
     are specifically looking at this issue.
                    Our role, as I see it -- and I really would like
     this to be a discussion.  If there are things that we are
     leaving out or that are over-inclusive, people can feel free
     to speak their mind.  We want to make this a real meeting
     and have a discussion about it.
                    We have been arbitrary in some senses because of
     the time frame and tried to arrange things, tried to group
     things, simply to get going on this because of the short
     time frame.
                    We have planned a meeting in July.  We have
     planned another meeting in September.  And then we have a
     report to the FCC which is due before the end of the month
     in September, which frankly, given the summer schedules that
     people generally have, is not a heck of a lot of time to
     produce.
                    We have tried to look at telemedicine in a
     specific way and also in a general way.  We want to provide
     whatever advice we can to the joint board to the FCC on the
     telecom bill, on the rural health provision that is in the
     telecom bill.  But we don't want to restrict it only to
     that.
                    What we want to do is look at where telemedicine
     is, where it's going, look at this from the communications
     perspective.  A lot of people here have backgrounds in
     healthcare as well as in telemedicine.  There are a lot of
     discussions going on, if I can call them that, on the
     healthcare side about reimbursement, about licensing, about
     all kinds of things.  That's what we're not -- we're not
     here to discuss those things.  We're here to the look at the
     telecommunications part of this.
                    I mean, put yourselves in the shoes of the FCC. 
     They're making enormously important decisions about the
     shape of our telecommunications system literally for the
     next several decades.  And those decisions are going to be
     made in the next months and year.
                    This is our opportunity, as I view it, to say: 
     Look, there's another perspective on this that you just have
     to keep in your mind if you do this.  There is a
     telemedicine aspect of this.  We're not going to be able to
     predict precisely where it's going, but we know it's going
     somewhere.  I think it's going somewhere very important. 
     You know, we could create an office pool here to --
     everybody put in a buck to say where it's going to be in 10
     years, and we probably would all be wrong.
                    But I think, at least from the number of people
     that I've talked to, that everybody believes, in the next
     decade, that it's going to be a very, very significant part
     of our healthcare system; it's going to be a very
     significant part of our telecommunications system; and that
     means it's going to be part of our insurance reimbursement
     system for healthcare; medicare is already in the middle of
     it.  You know, there's just so many aspects of this that
     it's almost difficult to get your mind around it at one
     time.
                    What we have done -- and I'll talk it about it
     more, but you may just want to -- if you haven't gone
     through the packet, we actually have two things in there
     that we can talk about.  It's this sheet that looks like
     this, which is a breakdown of subgroups, which we can
     discuss.  And then there is an arbitrary dictatorial
     breakout of people in the subgroups with a Chair for each
     one.
                    We haven't had a lot of time to talk to the
     chairs.  I think and hope everybody is willing to do it; but
     we may have somebody who says, you know, I've got a big
     business deal coming up or I've got a big report due, and I
     can't do it.  So that really is a discussion we need to
     have.
                    At this point, why don't I turn it over to Elliot
     Maxwell from the FCC who can talk about this from the FCC's
     perspective, and then Lygeia can say a few words.
                    Elliot.
                    MR. MAXWELL:  For someone who comes from the
     telecom side and who's worked in this area for most of my
     professional life, it really is a privilege to look around
     the table and see an extraordinary group of people working
     in an area which looks to be on the point of taking off and
     a group of people who can really provide us with the
     expertise and the insight so that at least on the telecom
     side, from the regulatory side, we don't do anything that
     inhibits the development of this area and, in fact, we do
     things that provide a foundation for it, to grow and to kind
     of take its rightful place in healthcare.
                    We look to you for expertise and advise.  I mean,
     that's what we're all here for.  And we really look to you
     for work because we don't know this area.  And the processes
     that we have, that are common in the regulatory world,
     really are processes that generally involve the providers of
     telecommunications.
                    What we wanted to do is to kind of make sure that
     we could bring around the table people from the provider
     side but more importantly people who have a vision of where
     this area is going; what it needs to succeed; where we may
     be standing in the way; or where we, through the universal
     service provisions of the telecom act, can help provide the
     monetary incentives, as much is necessary, to ensure access
     to these services throughout the country and which would not
     be available if markets simply went as they currently exits.
                    I'm going to turn it over to Lygeia who can give
     you background about what the provisions of the
     Telecommunications Act of 1996 say and what we're trying to
     accomplish.  But, once again, let me thank you all for
     participating.  It's both short notice, heavy lifting; but
     the possibility, I think, exists for our doing something
     that, in 30 years, you can look back and say, I was there,
     and I helped make this thing work.  And our children and our
     children's children will benefit from it.
                    MS. RICCIARDI:  You people are here for a couple
     of different reasons.  One is, as Elliot mentioned, you're
     all experts in your field, be it healthcare or
     telecommunications or some combination of the two.  And we
     need to benefit from your expertise.
                    Another important reason that you're here is that
     on February 8th, President Clinton signed the
     Telecommunications Act of 1996.  This really is a revolution
     piece of legislation because it totally changed
     communications policy for the first time in about 62 years.
                    Regulation of the communications field used to be
     based on the monopoly model.  And now all regulation is
     going to move toward engendering competition.  So that's a
     new direction we're taking in policy.
                    While we are growing this competition, the act
     also keeps in it very important provisions that help to
     assure that public benefits from that competition can be
     realized.
                    Among the most important of those public benefits
     is the idea that all Americans should have access to
     communication services.  There's a part of the act which we
     have been talking about, the Universal Service Provision,
     that helps assure that access to everyone.
                    And the Universal Service Provision has several
     broad principles that its based on.  One of those is that
     advanced services should be made available to all schools,
     libraries, and healthcare providers.  That's Section 254. 
     And that part of the telecommunications act is in your
     folders, as is Section 706 which talks about the advanced
     deployment of telecommunications services.
                    Now, this is a very complicated process of
     implementation at the FCC.  Because this is more intricate
     than a lot of the other proceedings that we work on, the act
     commanded us to put together a federal-state joint board
     which is going to help us specifically on our Universal
     Service Proceeding.
                    The joint board members are:  Chairman Hunt,
     Commissioner Ness, Commissioner Chong from the FCC.  You'll
     be meeting those three later on today.
                    The state Commissioners Ken McClure from Missouri,
     Sharon Nelson from Washington, Julia Johnson from Florida,
     and Laska Schoenfelder from South Dakota.
                    There's also a state utility consumer advocate,
     Martha Hogerty who's from the State of Missouri.
                    Now, also we have a joint board staff which is
     made up of both FCC staff and state staff.  Irene is a
     member of that staff, and she's helping us to do some of the
     heavy lifting in terms of reading and analyzing public
     comments that went out.
                    We issued something called a "Notice of Proposed
     Rule-making," which broke down pieces of the act that apply
     to universal service and asked questions about them.  We
     then received comments and reply comments on those issues. 
     That Notice of Proposed Rule-making is also in your folder.
                    The reason that we're here on such short notice is
     that we have a very short time frame in which to work on
     these issues.  We need to produce our report -- which will
     help the joint board and the FCC -- by September because, by
     November 8th, the joint board needs to make a recommendation
     on universal service to the FCC.  And the FCC must then
     write some rules by next March 8th.  So that's why
     everything is happening so quickly here.  And we appreciate
     you're being able to jump in and help us out at such short
     notice and under such pressure.
                    MR. LAWLER:  Thank you both.
                    MR. MAXWELL:  It may be because it's very easy for
     us to fall into sort of "teleco" speak or "regulatory"
     speak, and sometimes, even in legislation it's not so
     wonderfully clear, but let me just sort of ask you to kind
     of open up -- or if you want not open and have me read -- to
     this piece which is headed "Communications Act of '94,"
     which is in the folders.
                    And if you look in there, you will see a provision
     that says:  "Telecommunication services for certain
     providers," Section 254.  And just to make clear what we're
     focused on, it says:  "Telecommunications carriers shall,
     upon receiving a bona fide request, provide
     telecommunications service which are necessary for the
     provision of healthcare services in a state, including
     instruction relating to such services, to any public or
     non-profit healthcare provider that serves person who reside
     in rural areas in that state at rates that are reasonably
     comparable to rate structures of similar services in urban
     areas."
                    And it's a remarkable provision in the sense that
     the society is saying that we will provide a mechanism to
     allow for users as a whole to ensure that people have access
     to those services at reasonably comparable rates and to
     direct it at healthcare in ways that has not taken place in
     the past.
                    And so we're trying to understand and to work with
     you not only in the question of what this provision means
     but in the larger set of questions, how can we encourage an
     environment in which people have access to services not
     necessarily subsidized but through the operation of the
     marketplace?
                    So this is a very big job and a very big task that
     the Congress has set for us.  And because there will be
     funding mechanisms, we have an opportunity to intervene,
     because of a social decision, but we also have a chance to
     set a framework so that the market can drive these
     activities as well.
                    So I just wanted to point you to what our charter
     is and to let you know how important this is, because it's
     going to affect the flow of millions and probably billions
     of dollars and, of course, that benefits a part of society
     that might not otherwise have access to these things.  And
     we really do need your help.
                    MR. SONNESTRAHL:  Excuse me.  I only have one pair
     of eyes.  It's hard for me to read and watch the speaker
     sometimes.
                    Do you mind giving me or telling us which part of
     this section you're talking about?  254?  Or where are you
     quoting from exactly?
                    MR. MAXWELL:  I'm quoting from 254(h)(1).  It's 
     page 96 in this handout which is set horizontally, and the
     page number is found in the upper right-hand corner.
                    MR. SONNESTRAHL:  I've got it.  Thanks.
                    Thank you.
                    MR. LAWLER:  If any -- Eric?
                    MR. TANGELOS:  Yeah, I do have a question.  We are
     appointed by FCC, at least that's how the announcements
     went.  The joint boards seem to have a lot of responsibility
     to the FCC, and it really seems to be where our report is
     going to end up.  There's also been a lot of proposed
     rule-making that's out there.  There's a lot of information
     that you've already seen.  A lot of deadlines have already
     ended.
                    So where do we fit in between now and September? 
     Who do we report to?  Why us now, with proposed rule-making
     in place?
                    Just so we get an idea of what our role is as we
     complete our tasks.
                    MR. MAXWELL:  We had to kick off, because of the
     time requirements in the act, the universal service
     proceeding like any other FCC proceeding governed by the
     Administrative Procedure Act.
                    There have been comments upon the questions that
     we asked -- and the questions are included in your folders
     -- and reply comments.
                    What we have gotten so far takes us some way in
     our understanding of this field.  But I think it would be
     fair to say that, without further comment and further
     information, it would be very hard for us to meet the
     requirements of the act and to really specify the kinds of
     services or functionality, the kinds of price supports that
     are necessary.
                    And the way we anticipate this occurring is this
     is a body that will advise the FCC.  The report that it
     makes will go into the file of comments for the universal
     service proceeding.  They will be opening it to comments by
     others, by the public in general to say:  That's a good
     idea.  That's a bad idea.  No, what about this?  What about
     that?
                    The joint board, then, will take the report and
     the other comments that are made before and after that,
     consider them, and then make a report to the FCC saying what
     the joint board, the state and federal regulatory members,
     say should happen.
                    Then, next spring, the FCC will adopt its findings
     on universal service based on the joint board
     recommendations and any subsequent information.
                    So that's one role for this committee.  The second
     role -- and I don't want to minimize this -- is that, as a
     regulator, I am sure, as God made little green apples, that
     there are things that we do or don't do that get in the way
     of the development of this field.
                    And what I would like the committee to feel
     comfortable in is to say:  Well, we understand this
     universal service requirement and we will bend our backs to
     get what you need to make good judgments about this for the
     country; but we will also look at what you do or don't do in
     equipment authorization, in how companies offer services or
     price services, how you do the geographical relationship
     between states, and the federal jurisdictions for services. 
     All of these things may have an impact, and we would like to
     identify those things to get regulatory underbrush cleared
     away to make this field flourish.
                    So I think there are two parts.  The universal
     service is the most obvious, nearest term, with the largest
     dollar amount attached to it and one which I think all of
     us, not only as practitioners but as citizens, have a real
     stake in.  The other is:  Can we do things as a commission,
     as a regulatory agency, that make more sense for the field?
                    MR. LAWLER:  Just to add on to that, it is clear
     we have a role with respect to this specific provision in
     the telecom law.  And it's my view of this that you can't
     really act responsibly as a commission on that unless you
     have some concept of where the whole field is going.
                    So it is part and parcel of the same overall --
                    MR. TANGELOS:  But if the proposed rule-making
     comments had been incredibly rich and full, there would
     probably be no reason for us to be here?
                    MR. MAXWELL:  No.  Reason two -- I mean, the
     second piece of that would have existed regardless of the
     rule-making.  We need to look for expertise beyond our own
     field because you are users, you are takers of an input; you
     are people who understand that it will make some difference
     whether you have this facility available or whether there's
     something in the rules that discourage people from doing
     that.
                    MR. LAWLER:  Mary Jo?
                    MS. DEERING:  As you've said, we really are
     working here on something that will be in place for decades
     yet to come.
                    And I'm wondering if there's been any thought to
     helping us start off, from a common foundation, of a vision
     of what healthcare is likely to be at that time.
                    We need only read the newspapers to know how
     rapidly it's reinventing itself right now.  And I think of
     an excellent presentation by Admiral Bill Rowley who heads
     the Defense Department's "Health Systems 2020" project and
     who would tell us all here today that it is certainly
     evolving, as we already know, away from hospitals to clinics
     and away from clinics to homebound care.
                    And so if we make decisions here based on the
     structure that we have known, we will be in grave error
     because the likelihood is that an increasing amount of care
     will not be delivered in clinics or what we consider
     healthcare facilities now, and a lot will be delivered in
     homes.
                    MR. LAWLER:  Right.  From my healthcare
     background, I certainly agree with that.  I think predicting
     where we are going to be on any of these things 10, 20 years
     from now is extremely difficult because of the great unknown
     of the new thing that's out there that will change how we do
     both healthcare and telecommunications.  But I absolutely
     agree with your statement.
                    MS. DEERING:  The Defense Department is investing
     quite a bit in understanding that structure, and I just
     thought it might be helpful if we had the benefit of
     understanding some of those trends as they are perceived by
     people who are putting a lot of energy into them.
                    MR. LAWLER:  Well, certainly I'll take that as a
     suggestion for our next something.  Maybe that's something
     that -- I don't know, Admiral Rowley?  Is that his name? --
     but maybe that's something we could arrange for the next
     meeting.
                    MR. ZIMNIK:  I'm Paul Zimnik with the Department
     of Defense, and I'm on the steering committee for H.S. 2020
     for Admiral Rowley.
                    I would certainly endorse that comment.  We in the
     Department of Defense -- as all of you know, because we have
     worked in partnership with many of you -- have been looking
     at this field seriously for a long time because we recognize
     the importance of what we're talking about today to what
     medicine will be like in the future.
                    And as a foundational step in that effort, what
     this committee is, this meeting is, H.S. 2020 that we're
     talking about, gathering a representative group of
     healthcare, involved people, providers and customers of the
     healthcare system, from many different aspects of military
     healthcare systems, and actually our partners who are
     non-military, and come together to try to define what
     medicine will be like in the year 2020.
                    Now you can imagine, that is a very involved
     process.  We are about half way through the effort and are
     trying to formulate our ideas that cover a large range of
     issues.  And I know that we would be thrilled to contribute
     some of those thoughts to this advisory panel.  And I'm sure
     that Admiral Rowley himself would be very interested in
     pursuing a collaborative effort, again, to share some of the
     thoughts and resources that we have brought together on this
     topic with this commission.
                    MR. LAWLER:  Well, let's see if that isn't
     something we could do for July.
                    I'm sorry.  I don't know your name yet.
                    MR. TINDALL:  That's okay.  I'm Doug Tindall from
     UT Houston.  I'm representing Dr. Duke today.
                    Dr. Duke is partnered with numerous other groups
     as well, including DoD up in Fort Dietrich, have been
     looking, as I said before, at telemedicine out in the field.
                    We have three doctors there, along with some
     people in the School of Public Health and with telemedicine
     programs at the Medical Center UT that are really already
     spending a lot of cerebral time thinking about this as well.
                    We are going to be working with the Defense
     Department at Fort Dietrich, and I know that Dr. Duke would
     very much like to present some of our thoughts as well in
     conjunction possibly with Fort Dietrich's presentation.
                    MR. LAWLER:  Sure.
                    MR. MAXWELL:  You may want to introduce Dena.
                    MR. LAWLER:  Oh.  Hi.
                    MS. PUSKIN:  Hi.  I'm sorry I'm late.  I just got
     in from rural America, Durango.  Let me tell you, it's hard
     to get from there to here.
                    Let me just say that I would share much of the
     comments here about the evolving healthcare system.  And I
     think it's very important that we have a perspective on
     that, or at least we speak off of the same sheet.
                    I would be very, very concerned that we also have
     a good picture of where we are now and what some of the
     issues are and barriers.
                    I just came off of the Navajo Reservation at
     Shiprock -- and let me tell you, it looks a lot different in
     Shiprock than it does here -- and what is happening
     currently, so that when we look at the vision, we have a
     sense of how to get from here to there, because part of what
     your charge is, as I understand it, is not to make the
     final, this is the be-all, end-all, but that this is an
     evolving process in defining universal service.
                    So I think a very key component of our
     deliberations is not only where we want to be but how we get
     there over time with a recognition that there are those with
     that perspective.  So I would also urge that in this process
     we all have some sense of where we are right now; and I
     think we probably have different perspectives.
                    MR. LAWLER:  Sure.
                    MR. MAXWELL:  Dena, you want to introduce
     yourself?
                    MS. PUSKIN:  I'm Dena Puskin.  I'm the Chair for
     the joint working group on telemedicine that is the federal
     interagency working group on telemedicine that cuts across
     all federal agencies.
                    And in another hat, I'm Deputy Director of the
     Office of Rural Health Policy.
                    MS. DeMERS:  I'm Judy DeMers from North Dakota.
                    I just want to make sure if we're going to
     concentrate on where medicine is going to be that we look at
     rural medicine because I see that as the true charge of this
     bill; and I think that's very different than what you see in
     the major medical centers.  A lot of us are from rural parts
     of the country, and we see this as a real opportunity to
     have access to the same kinds of specialists and quality of
     services that people in large cities and large medical
     centers do.
                    I guess I'm a little worried that the DoD study
     might not be looking at that kind of delivery system.  So I
     guess I'm supporting what you said:  I think it's very, very
     important that we do that and that we not just focus on the
     theoretical of where medicine is going in general.
                    MR. LAWLER:  Chuck?
                    MR. HOLUM:  Chuck Holum from Denver.
                    I want to second that comment.  We have three
     meetings, including one that's probably half over now. 
     We're not going to understand the healthcare system in any
     context in three meetings.  That's just a general
     observation.
                    I guess, getting back to the FCC process, there
     have already been 200-some comments on the rule-making
     process.  I don't want to repeat all that work either.  And
     I wonder if there's some way that we could get some summary
     of the comments that have already been made so that we can
     use that as a starting point?
                    MR. MAXWELL:  Absolutely.  And we will do that.
                    What I want to caution you is that few of those
     200 addressed the rural healthcare issues; and even fewer of
     those, I think, helped move the ball along some considerable
     way.  So you will it, but it's not something that I think --
                    MR. HOLUM:  Won't take that long to read then.
                    MR. MAXWELL:  And it will take less time to
     understand.
                    When we talked about sort of the these three
     meetings, I think our expectation is that people will
     need-be doing homework between those meetings if we are to
     make the kind of progress that we need.
                    MR. HOLUM:  That's why I think some of the written
     materials would be helpful.
                    MR. LAWLER:  Did somebody have their hand up back
     here?
                    MARGARET CAREY:  I want to just go back to
     something Mary Jo said.
                    Last week, I was talking with another person about
     putting up a web page that would be accessible to everyone,
     and we are in the process of doing that.  So if that
     happens, I will let you know.
                    MR. SULLIVAN:  Gene Sullivan from the University
     of Virginia.
                    I think you just beat me to the punch.
                    Paul, you've got a really good web page up at the
     DoD telemedicine.
                    I think maybe if the Admiral's presentation could
     be posted there, those that haven't seen it will see that
     there is quite a bit of correlation to military telemedicine
     and rural medicine or rural telemedicine, if you will.
                    Don't think of just big installations.  Think of
     small ships with limited duty corpsmen, with maybe a primary
     care physician on board; and that can very closely replicate
     rural environments throughout many parts of the United
     States.
                    MR. LAWLER:  Al, did you have a comment?
                    MR. SONNESTRAHL:  Thank you.  Al Sonnestrahl from
     Consumer Action Network.
                    When you're speaking about rural medicine, I was
     wondering what's the definition of "rural."  Are you
     speaking geographically?  Or what about minority
     communities?  Low, incidental populations?
                    For example, what about those people who live in a
     larger community, for example, just that sector of a
     metropolitan area, who rely heavily on interpreters, sign
     language interpreters, for communication purposes with their
     physicians?
                    As a deaf person, are you considering deaf people
     -- I'm considering myself as rural communities here, because
     they are isolated in larger metropolitan communities.
                    So if you could just think about the definition
     that you're using with rural in these proceedings.
                    MR. LAWLER:  Cindy?
                    MS. TRUTANIC:  I'd just like to sort of underscore
     the point that's being made here, that there are some
     regulatory barriers to the implementation of telemedicine in
     general, whether it be rural or underserved populations in
     urban areas.
                    And then if we focus on the specific types of
     telemedicine that we may be limiting ourselves in the
     process trying to understand what the barriers are and how
     the new rule-making seems to be enhancing the direction of
     telemedicine for the next decade or two.
                    MR. LAWLER:  Paul?
                    MR. ZIMNIK:  Paul Zimnik of the Department of
     Defense.
                    I would like to address two issues real quick.
                    Number one, we do, in fact, have a large body of
     information from H.S. 2020 and a variety of our other
     telemedicine projects that are all available on the Internet
     at various worldwide web locations.
                    To address your comments, sir, perhaps maybe to
     help educate what we're doing, between our meetings, I
     noticed that there is a sign-up sheet, if at some point I
     could get the e-mail addresses of everyone here, I could
     certainly have an e-mail sent to you that would give you the
     addresses of all of these.
                    If there happens to be any areas that right now,
     for whatever reason, aren't generally available to the
     public, I'll make them available to you.  And I could
     communicate that by e-mail.
                    And then to address the topic of the rural issues
     and non-rural access, difficult access areas, we in the DoD
     are acutely attuned to that.  And in fact of late, over the
     last one or two years, we have been very aggressive in
     forming partnerships and collaborations with non-DoD groups
     and have addressed the topic of rural access issues in
     Alaska, where we're being very aggressive; in the Southwest
     with some of the Indian Health Service programs that are out
     there; and we also recognize that there are significant
     access issues in inter-city-type environments.
                    So access that's difficult for people is not only
     in rural communities, and we're looking at systems and
     technologies that can improve that.  So that kind of
     information will also be available.
                    And in the short time frame that we have, I would
     further promote the concept that we need to be somewhat
     virtual in our proceedings here.  So, again, if I could have
     -- whoever is collecting the e-mail addresses, I will make
     sure that people get that information.
                    MS. RICCIARDI:  Yeah.  Actually, in your folders,
     you will find a sheet that asks for your name and your
     title.  And please make any corrections on information that
     we already have on you.  And do include your e-mail address
     and give it, before the end of the day, either to myself or
     to Thayer Nelson.  And we'll be sure that we circulate that
     information.
                    MR. LIFSON:  I have -- this is probably a very
     naive question.
                    MR. LAWLER:  Best kind.
                    MR. LIFSON:  Our charge in this is universal
     access to the transmission of data, or it's not -- I just
     want to be careful.  Are we talking about universal access
     to the delivery of the healthcare services?  Or
     facilitating, through new methods of transmitting data and
     creating a more competitive marketplace for the transmission
     of those data that the delivery of the services will be
     facilitated whether it's in rural areas or inter-city areas
     or wherever?  But we're not necessarily talking about those
     services but rather making it possible for those services to
     be delivered?
                    MR. LAWLER:  If I hear what you're saying, we are
     talking about the telecommunications part of this, not the
     healthcare part of this.  If I catch your drift, we're not
     talking about the delivery of the healthcare services. 
     That's not the charge of the FCC in any respect.
                    Let me just make a point, and then we have more
     hands here.  In one sense, we have two very different
     charges here.  One is to respond in a fairly detailed way to
     the rural provision in the telecom bill.  And that's
     something that, you know, we can have opinions on what they
     mean; we can make recommendations to the FCC about what it
     should mean.  But it's a very specific thing.
                    There's another charge which I think was equally
     important which is, as Elliot said, regulatory barriers or
     affirmative things that the FCC can do to encourage
     telemedicine generally.  And it is a much broader charge. 
     In many cases, we have not advanced to a level where we can
     even identify precisely what that is.  There is no one over
     there pounding on the Commission's door saying:  You've set
     the wrong standard for X; therefore, my system doesn't work.
                    But to me, those are all going to be issues in the
     not very distant future, and they are things we ought to be
     thinking about.  And we are not going to solve them for
     ever.  Hopefully we can give policy direction advice so that
     the FCC is thinking about them so Elliot and Lygeia and the
     Office of Policy are saying:  Gee, here's an issue.  We need
     to be thinking about this.  In a year, we ought to be doing
     X.  Or we ought to be doing a report to the Congress saying
     we have incompatible equipment out here and that's silly. 
     We ought to come up with a way to get compatible equipment,
     whether it's an industry panel or whatever it is to come up
     with it.
                    So they're very different charges.  I happen to
     think they end up being very -- you know, you end up talking
     about precisely the same things.  But we do have words to
     respond to in the telecom law which make it a different kind
     of issue than the others.
                    I think you had your hand up.
                    MR. DOUGHERTY:  Charlie Dougherty, Creighton
     University.
                    I'm trying to put together some of the remarks
     about rural with minority populations, underserved areas, et
     cetera.
                    It seems to me the one take on this is that if
     we're moving in a market-based direction, we all understand
     the market, on its own, is not going to reach everybody,
     because that's not the way the market works.  And so
     universal service principles says we have to tweak the
     market somehow and have to pay attention to all the areas in
     which the market is not likely to serve the interests of
     Americans.
                    So if that's a fair global understanding of this,
     then it seems to me it's not only rural but any place where
     we think market incentives are not going to bring these
     services.
                    MR. MAXWELL:  I want to be a little bit careful
     about how we talk about this issue.  At one level, I think
     you're absolutely right, we need to be looking at this in
     the broadest possible way to see where there are underserved
     populations.  And we would welcome suggestions about how FCC
     actions affect that and, in particular, how one provides
     incentives for competition to serve those areas when they
     might not otherwise do that.
                    At a more narrowly focused way, the act says, with
     respect to universal service, there will be a funding
     mechanism to ensure that rural healthcare provision receives
     funds to provide services that would not otherwise be
     available.
                    So there is a specific instruction to the
     Commission that telecommunications providers will provide
     these and will be reimbursed for these through a fund which
     we will set up.  But that involves definitions of what's
     rural, what services, what costs are, and what the subsidy
     mechanism will be.
                    On this larger question, I think we do need to
     look at that.  But there is not a mechanism that says: 
     These customers will, in fact, provide some subsidy to other
     customers.  And if we try to extend that to solve all of the
     possible problems of underserved communities, A, we would be
     going beyond our charge; and, B, we might find that the best
     is the enemy of the good.  We would be forever in the
     possibility of trying to tweak every market to accomplish
     every purpose.
                    So I think we have to look at this in the two ways
     you suggest but recognize what we can do in one and what the
     limits are in the other.
                    MR. LAWLER:  Tom, did you have a question?
                    MR. SPACEK:  Tom Spacek from Bellcore.
                    With respect to some of the comments about
     background material and in particular doing homework between
     meetings, I think one of the best things to read -- at least
     that I have come across so far, and I've only read part of
     it -- is a report that the Council on Competitiveness has
     written on healthcare which talks about current situations
     and potential markets in the future, especially the chapter
     on remote healthcare.
                    And Susie Tichner is here from the Council.  I
     don't know if you want to say a little bit about the report
     or not.
                    MS. TICHNER:  Well, we just released this report
     about six weeks ago.  It was a year in preparation, and the
     tasking that we had was to look at the impact on the
     national information infrastructure on the healthcare market
     in the U.S.  So we pulled four different areas.
                    One was remote care.  One was the use of the
     infrastructure for delivering personal health information. 
     We looked at what are some of the systems integration
     challenges.  And we also looked at how these tools are being
     used to foster and encourage collaborative medical research
     and education.
                    And each section looked at:  What's the market
     today?  What does the market potential look like?  What are
     the barriers to achieving that market potential?  Whether
     they be technical, regulatory, policy, cultural, financial. 
     And then a series of recommendations that our advisory
     committee put together for both the public and the private
     sector to address some of those barriers.
                    MR. LAWLER:  Eric?
                    MR. TANGELOS:  More in the way of ground rules
     again, when I read the act and the pieces that I can
     understand in the act -- and there's the difference between
     law and medicine:  There's more footnotes in the article
     when it's done by a lawyer than there is text -- the bail
     out seems to go back to the states over and over again. 
     When you look where the rights are reserved, it goes to
     states.  And, you know, there's a dichotomy here.  We talk
     about universal access, the universality, and yet we come
     back to the states.
                    Before, again, we embark on too much, what are the
     ground rules?  What's your read on rights reserved by
     states?
                    MR. MAXWELL:  Let me give you sort of the
     30-second history of universal service.
                    What happened over time -- and this is a gross
     distortion.  This is not the FCC's view of this.  This is an
     idiosyncratic, probably wrong, view of the last 35 years in
     telecommunications in 10 seconds.
                    MR. SANDERS:  This is a footnote, right?.
                    MR. MAXWELL:  As a lawyer, when doctors criticize
     legal writings, we won't even talk about handwriting.
                    Over the last several decades, the cost of
     long-distance telecommunications has gone down because of
     technical change.  The cost of local service has stayed
     reasonably similar.  What's happened is that people have
     tried to do pricing of services in a way that kept local
     service down.  And so what they did is kind of shovel cost
     over into the long-distance piece.
                    So what you had is probably prices for
     long-distance higher than they ought to be, maybe prices for
     the local service lower than they ought to be; but it was a
     social determination that that sort of made sense.
                    What happened with universal service was basically
     that people charged long-distance carriers a cost to
     subsidize the lower costs of local service.  And so the
     funding for universal service was largely paid by large
     users of long distance service.
                    So, basically, for the purposes of universal
     service, the federal jurisdiction has had most of the
     control.  And so if you looked at all the mechanisms that
     tend to support the difference between the cost of provision
     of service and the actual price of provision, it's come from
     a long-distance thing.
                    So, net, net it has left to the FCC a charge:  How
     do I do this?  Rather than the states saying:  How do I do
     this?
                    Now, let me do the one further caveat, which is
     the states may have a decision to make whether they want
     prices to be even lower than might otherwise be the case. 
     And they have had mechanisms to support lower prices on
     their own.
                    But, basically, for universal service purposes,
     the mechanism we have in the joint board and the federal
     jurisdiction will deal with the basic fund of money that
     will accomplish the purposes of the act.  And we don't need
     to worry so much about what's going do happen at the state
     level because the action is going to be at the federal level
     involving the states through this joint board process.
                    MR. LAWLER:  Dena?
                    MS. PUSKIN:  One of the critical things, I think,
     the charge we have, as a result of the act, is to define
     what we mean by "universal service."
                    In the past, it was assumed that, at the very
     least, we would describe it as plain old telephone service
     available.  And the question now comes down to:  What do we
     mean by what is the level of service that we think is
     essential to form that base line?
                    And I think that's a very critical question that
     we have to ask.  And we will certainly make -- depending on
     how we answer it -- make a huge difference in what is
     available in those -- whether they're inter-city or rural
     underserved areas.  And it's a very delicate question
     because, as Elliot has indicated, there are cross-subsidies
     here.  And so, you know, at what point is the best the enemy
     of the good?
                    And I know in our office, we have struggled with
     it in the joint working group.  But I think as part of why
     we're here, is bringing our expertise and our expertise
     about various communities that we're dealing together with
     the communications people saying:  What is the basic service
     that we think is essential to move the field forward
     recognizing that that definition is evolving?
                    MR. LAWLER:  Yes?
                    MR. POTTER:  Jim Potter representing Dr. George
     Kamp from the American College of Radiology.
                    I would like to echo a few of Dena's comments and
     thrust.  I think telemedicine is a moving dynamic.  I think
     the one thing we can say about the future is that medicine
     will be dramatically impacted and will change from what we
     know it is now because of telemedicine.
                    Beyond that, I think there are two things that
     relate to the two charges that I would like to request.
                    One, I think we really need to know what's
     existing now.  And I would request that we make a
     presentation on the present DIMCOM standards.  We can make
     it a brief one, but we would like to do that at the next
     meeting, if possible.
                    Secondly, regarding the other charge on the
     regulatory barriers, I think it's important that we ask the
     very hard questions up front:  Are we doing a disservice to
     the American public down the line?
                    I think there's a number of legal, public
     protection issues, state rights issues, sociological issues. 
     Right now about three-quarters of our members practice
     telemedicine; and some of the anecdotal information that we
     are getting reactions from primary care providers and
     patients is probably less than what you would think, not as
     glorifying as you might expect, as well as the socioeconomic
     barriers and obstacles here.
                    I think if we ask the hard questions now, it will
     help to steer what the future will look like more
     appropriately.
                    MR. LAWLER:  Tom?
                    MR. SPACEK:  Tom Spacek from Bellcore.
                    On your comment on definition of universal service
     with respect to healthcare, is that part of what one of the
     subgroups is supposed to address?
                    It's not clear, at least in reading a few words,
     what or which or all of the subgroups is supposed to say, at
     least in the initial phase.  We're not going to be able to
     say what the evolution will be, I'm sure, right now because
     -- you know, we can speculate on that.  But at least in the
     initial set, I think we will need to determine what services
     should be available to everyone.
                    MR. LAWLER:  Yeah.  I think on the specific
     language of the law and what it means, that's certainly part
     of the question that the FCC has to answer.
                    MR. MAXWELL:  And I think in the sort of first cut
     in time to organize that, the first group that was
     mentioned, the Telecommunications in Rural Areas, would be
     focusing on a set of questions.  One of the questions would
     be, in fact:  What services or functionality is required
     there?
                    I think there is very strong links between that
     activity and the infrastructure and architecture pieces. 
     But there are, I think, some very clear questions that need
     to be resolved and to get your best thinking about.  And
     they are:  When the act talks about services or
     functionality, what do people contemplate?  Do you need to
     define specifically services that you, as experts, think
     need to be there to have the universality that's implied? 
     Or is it a functionality without specifying a particular
     service?
                    There are questions, obviously, about what is
     rural for these purposes.  Because there are a whole batch
     of definitions that are available and which commentators
     have suggested.
                    There is a question, as I said earlier, about
     rates and its comparability, because it could be an
     administrative nightmare to try to go through all of the
     comparability from urban to rural and from state to state.
                    And there are questions about eligibility and
     definition of bona fide requests.  All of which lawyers
     parse, you know, for remarkable amounts of money and
     remarkable amounts of time, but which are going to be
     important for us to set rules about at least initially so
     that we can make this work.
                    So those have to be answered.  They obviously are
     related to what exists now in terms of infrastructure,
     what's likely to exist in a more competitive environment,
     how does one get a more competitive environment in these
     places?
                    And also the questions of architecture:  What is
     it going to evolve to?  Because we don't want to set a
     definition that, obviously, is only about today and can't
     gracefully evolve.
                    So this is a big job.  It's a big job.
                    MR. SPACEK:  I was just getting additional clarity
     for the subgroups as far as, you know, you leave here and do
     something and you can miss a very important aspect of the
     job.
                    MR. LAWLER:  Can I make a suggestion?  We don't
     have coffee or anything -- did you have a question?  Go
     ahead.
                    MR. TINDALL:  Okay.  No.  I just wanted to get an
     idea out on the table that I think could be talked about and
     discussed between the physicians here at a later time.
                    As an engineer listening to this discussion of
     whether or not they should be specifically -- you know, we
     should specify or we should define functionalities, I think
     if an ideal is sufficiently important to society, then --
     for example, like giving an exemption to -- this is a very
     poor example, but it's the only one I can think of -- giving
     an exemption from some of the laws that baseball has been
     able to do so they don't get taken into court for
     misrepresenting themselves and also creating a monopoly --
     if it's socially vital enough, can some of these things
     like, here is the state line I'm going to cross, but this
     guy over here is going to die in 15 minutes, why can't some
     of that stuff just disappear and we go back to what doctors
     were meant to do in the first place, back to the hippocratic
     oath?
                    That's a tough question that needs to be
     discussed, too.  And I know I'm throwing a can of worms on
     the table; but I think this is the right body to debate it.
                    MR. LAWLER:  Well, this certainly is not as
     important as baseball.
                    I guess I'm just going to be mindful of the fact
     that if we don't set some limits on what we try to
     accomplish, we are never going to get anywhere.  Because
     every issue of telecommunications and every issue of
     healthcare and every issue of medicine is involved in this. 
     And, I mean, for better or worse, even if we are capable, we
     are not capable in this period of time in grappling with all
     of them.
                    MS. PUSKIN:  It might be helpful to know what else
     is going on.  Because these issues are all, in fact, of
     concern and certainly of concern to the Congress.
                    In January, there's going to be a report to
     Congress produced out of the Department of Commerce but
     reporting on the activities of the joint working group on
     telemedicine in which the range of issues affecting the
     diffusion and efficient deployment of telemedicine will be
     discussed with options for addressing them.
                    One of them will be, indeed, the issues of
     cross-state licensure, which I think is what you're getting
     at.  There will be a range of other issues, including the
     infrastructure.  That's why we are very actively
     participating.  And, in fact, what the Congress has asked is
     essentially that options be laid at their feet as to how to
     address some of these issues.
                    So I think there will be other venues for looking
     at these issues.  The process of the joint working group is
     to make this a very public process.  The draft report will
     be circulated in the fall.  Certainly parts of it will
     appear in the Federal Register for comments.
                    So I think there will be ample public process.
                    I do also want to take a minute to say that there
     have been a number of documents written that have come out
     coincident or prior to the excellent document produced by
     the Council on Competitiveness that addresses some different
     aspects of, essentially, the national information
     infrastructure and telemedicine and other applications of
     health.
                    Those documents can be made available to this
     group.  I think we would like to work with the staff to
     determine what would be appropriate and not give you
     information overload.  But certainly there are reports that
     go back to 1993 that, very specifically, focus on rural -- I
     mean, there are just a whole host.
                    And the question really comes down to, I think --
     and they cover somewhat different aspects -- what is really
     going to be critical for your deliberations once you narrow
     down, I think, some of the questions?  Because I think the
     issue right now is focus.
                    MR. LAWLER:  Right.  I agree with that.
                    Can I make a suggestion?  We don't have coffee
     here, for which I apologize.  We were trying, and for some
     reason we couldn't do it.  There is a cafeteria downstairs. 
     People can go to the restroom, got get a cup of coffee, and
     come back in 15 minutes, and we'll continue on.
                    What I would like to do next is try to figure out
     -- if you would look at two things:  This one-page, four
     subgroups.  And this is really the same thing, just with
     people's names in a table there -- and just talk about
     whether those are the right four subgroups.
                    We want to discuss them, at least have some common
     understanding on what they mean, if we agree on them.  If
     we're going to change them, what that means.  And then we'll
     talk specifically about what we want to try to accomplish at
     a meeting in July, knowing what our time frame is.
                    So why don't we come back at 11:40.
                    MR. MAXWELL:  You can leave your things here
     because the hardy federal employees will stay and guard
     them.
                    (Whereupon, a brief recess was taken.)
                    MR. LAWLER:  Okay.  Let's get started.  It looks
     like we lost a few.  Maybe they're wandering around the
     bowels of the Russell Building.
                    MR. MAXWELL:  But we know they are in constant
     touch telephonically.
                    MR. LAWLER:  What I'd like to try to talk about
     is, this was our cut on how to divide ourselves -- that's
     this page with the four subgroups on it -- into the areas
     that we felt that we ought to be looking at.  And let me
     just spend two seconds on it.
                    The first one, the focus of it is obvious, it's
     the provision in the law:  What are we going to say about
     it?  What is our advice to the FCC.
                    The second is -- and actually the second, third,
     and fourth are more point two of our advice to the FCC. 
     They are things that we have either had experience with or
     contemplate a need.  I think they are, frankly, directly
     related, with the exception of the International one, to the
     first one, because you start to answer questions about rural
     telemedicine and you've got to start the answer -- the
     general infrastructure question, and you've got to start to
     answer the architecture question.
                    You know, we are not going to answer this,
     especially on the rural side, one time, forever, for all. 
     But I do think when you set out a policy, when the FCC makes
     the decision on what they are going to do on the law, you
     know, you have set something in place that, for better or
     worse, when the Federal Government does something, it often
     takes a long time to undo it.  Sometimes that's good;
     sometimes it's not so good.  But that's generally at least
     my experience of how it works.
                    The infrastructure issue is simply:  What are we
     going to need out there?  And I am not the world's expert at
     telecommunications, but I have talked to enough people to
     know that there is discussion about where is telemedicine
     ultimately going?  Is it wireless?  Is it over lines?  Is it
     satellite?  Is it cellular?
                    The FCC is doing a fabulous job of selling the
     spectrum left and right.  You know, is it an issue that
     there may be, some day, something left for telemedicine or
     something else?  That's, you know, a question I do not have
     an opinion on.  But it seems to me things like that are very
     legitimate issues for us, if we have an opinion on, to offer
     that opinion.
                    The architecture one is very simple.  Somebody --
     I forget actually who it was -- told me a story where they
     had, in the last two days -- where they had purchased some
     lines -- Eric, actually this might have been you -- you know
     purchased some lines that were incompatible with equipment. 
     I assume that's a problem you can solve, but it will be a
     headache to solve.
                    MR. TANGELOS:  Well, the equipment is looking for
     1/4 T-1 at 384, and the lines were delivering 350; and it
     you doesn't work.
                    MR. LAWLER:  And, you know, whether that's
     something for the FCC to be saying, we ought to be convening
     an industry panel so we get some sort of standard method for
     this, I guess not.  Unlike what the radiologists have done
     for -- I forget who you said you did this with a couple of
     years -- but the --
                    MR. POTTER:  It's not only for radiology.  It's
     also for pathology, determatology, cardiology, et cetera.
                    MR. LAWLER:  Right.  And those are, in one sense,
     very elementary issues.  But, by the same token, if you do
     it wrong you've, at the very least, wasted a couple of years
     and a lot of money doing it wrong.
                    The fourth one is simply the international part of
     this.  And this is probably the most future-oriented of all
     of these in the sense that it is going to take more
     development.  There are people in the business currently,
     and I know DoD is doing some things on this.  And, frankly,
     it is simply a -- you know, we have the best
     telecommunications system in the world.  We've got the best
     healthcare services in the world.  It is insane of us not to
     take advantage of that to help people around the world and
     to help those two industries in this country.  And this may
     be less scientific than it is, how do we get a process in
     place so that we are talking to the rest of the world about
     what we can offer them, and what can the FCC do?
                    I know that there are international meetings --
     I'm sure Elliot doesn't miss a one -- in fabulous places. 
     At $75 a day in Paris, he goes crazy.
                    But it is an export opportunity, an opportunity to
     do good in the world that we really ought not to ignore.  So
     it's just something we thought we ought to cover.
                    What I'd like to do is try to talk about these and
     see whether people have suggestions, whether we need
     different ones, more or less, whether they need more
     definition, whether we should leave it to the subgroups to
     define them, just how people think we ought to try to
     proceed.
                    Let me give you two seconds -- again, this is just
     to start a discussion.
                    I think what we need -- we are aiming for a
     meeting some time in the middle of July.
                    Is that right, Lygeia?
                    MS. RICCIARDI:  Right.
                    MR. LAWLER:  We will get a date around to people
     as soon as we can.
                    We need to have something come back from the
     subgroups, whatever they are, at that point.  And that's
     going to mean, whoever is on them, however we structure
     them, I assume that's mostly going to be done through
     electronic communications of some sort.
                    And it seems to me what we really need at that
     meeting is, you know, not a finished product but a product
     in progress which is:  Here are the things this subgroup is
     trying to grapple with.  We have five pages of the issues we
     are trying to define.
                    An options paper would be great in the sense that,
     you know, we have looked at this; we think there are four
     choices here; this is what we're talking about; this is what
     the issues are.
                    And then we can use that meeting really for the
     subgroups to present it to the entire advisory group.  And
     if everybody says:  Great, that's the way we ought to do it,
     you know, terrific.  If you hear a roar of disapproval, you
     will know that there are other opinions.
                    And then people can go back with more direction
     that this is something that we can try to reach consensus on
     or we ought to explore two options or three options, can go
     back to work, come back to a meeting in September with a lot
     more detail, have a similar kind of discussion, hopefully a
     more detailed discussion, reach some kind of consensus, to
     the best extent we can, and then be a position to have a
     written report by the end of the month.
                    So with that sort of background -- and we can do
     it a different way, but unless we want to have a lot more
     meetings or -- you know, we cannot change the time frame; so
     that's really what we're looking at.
                    Why don't we try to talk about these four issues
     and see what your reaction is.
                    Tom?
                    MR. SPACEK:  If I --
                    MR. LAWLER:  Tom, why don't you identify yourself
     and what you do.
                    MR. SPACEK:  Tom Spacek from Bellcore.
                    If I look at the act and what it appears that the
     FCC needs -- I'm going to talk about this a little bit out
     of context of the four groups but it could very easily map
     in -- it seems like a critical thing we need is some
     definition of the minimal set of services and advanced
     services -- and let me just loosely throw out the word
     "services" -- that would be in a universal service set
     having to do with healthcare.
                    And the reason I said minimal set is because, what
     I mean by that is there's going to be loads of advances in
     different places and universities that, at least initially,
     the idea is that they would not necessarily have to be
     available to meet whatever critical healthcare needs there
     are.  So what is that minimal set of simple and perhaps
     advanced services that is needed?  Okay.  The universal
     service set that we agree and we think that the whole
     country should have availability of?
                    And the reason that needs to be done is because
     the -- and the bill basically says, if those are available
     in urban areas, then you're going to have to figure out some
     way of reaching rural areas and other areas with technology
     and so forth at an affordable price.
                    So that set needs to be defined.  It's not clear
     whether to define that set in terms of technological
     capabilities or applications.  I think we need to start with
     applications and then do a mapping into what technological
     capabilities are needed to provide those applications.
                    It's going to evolve over time.  What's the set
     now that we want to recommend?  And how to pay for all that
     later, that's separate from our task because there's some
     fund that the other people are working on.
                    Once that set is known and agreed to, at least
     it's our recommendation, then you have to define or try to
     define what is the infrastructure capabilities -- perhaps
     not in terms of specific technology but maybe in terms of
     technology properties of those technologies -- that's
     required and what you would need to reach all these rural
     areas?
                    And as part of that, you also need to define: 
     What does it mean to reach rural areas in the sense that, do
     these services -- and these may vary from application to
     application -- they have to be available to every
     hospitality, clinic, community center, doctor's office,
     home; or if it's sufficient for some subset of them that we
     define, to be available just to hospitals or just in
     community centers in rural areas, is that what it means?
                    And my guess is, for some services, that will be
     the answer because it will be too costly otherwise.  For
     others, maybe it has to go to every doctor's office.  And,
     in fact, those two things need to be defined first before
     you can really start specifying what the infrastructure
     might be that's needed.
                    So that's what I think we need to do.  I'm not
     sure how it maps into these.  And the only problem I see in
     timing is that, although the infrastructure and technology
     activities can kind of muddle a long a little bit and think
     about this, you really need to know what that set is before
     you're going to say what the infrastructure capabilities
     would be.
                    MR. LAWLER:  I agree with that analysis.  But I
     also -- and I don't want to play lawyer, and I don't want us
     to be the lawyer for this provision precisely.
                    I mean, for example, the telecom bill says
     specifically public or non-profit.  You know, what does that
     mean for doctors' offices sitting in Montana making a
     living?
                    MR. SANDERS:  He's not-for-profit.
                    MR. LAWLER:  If you can get the IRS to buy that --
                    You know, but I do think that that is the way we
     ought to be thinking about this.
                    I also think this has to be dynamic in the sense
     of what is the set today most likely is going to be very
     different in a very short period of time.  And that has to
     be built into the model, the equation, however we describe
     it.
                    MS. KING:  Joan King with AARP.
                    I just wanted to bring in a consumer perspective,
     which is complementing what he said, that my understanding
     is the subsidy would only go to telemedicine; but the
     infrastructure would serve multiple purposes.
                    So ultimately, there's going to be a cost that has
     to be picked up by other kinds of consumers of the telephone
     network.  So I think we have to take into consideration the
     balancing act when we're asking for an infrastructure, where
     is the cost allocations going to be?  How much of it will be
     paid back to the physicians?  Or how much of telemedicine is
     going to be subsidized?
                    So ultimately this is a consumer issue.  Each of
     the committees should be looking at the costs.
                    MR. PILLAR:  I'm Bob Pillar with the Public
     Utility Law Project in New York.
                    I want to continue on this theme.  And I want to
     suggest that I think this advisory board needs a little bit
     of guidance as to how far our mandate goes.  Because if you
     pick up the theme that you had started with, there is a case
     to be made out that, for every analog central office in the
     country in the rural area, that in order to provide almost
     any of these services it has to be upgraded, becoming a
     digital office and have to minimally have ISDN capabilities
     put into the switch and the line cards that are associated
     with it.
                    This is short of even the question of extending
     fiber plant.  There are applications here that require fiber
     plant.  Once you put in that huge investment, that
     investment will then be marketed for private purposes and
     for other purposes that would never have otherwise been
     brought about.  So there is a case to make out why we should
     do it.
                    But the cost implications of that are so profound
     and so dramatic, especially as you get into -- further down
     the line into fiber or even the switch over from analog to
     digital offices in any quick time frame, that we need some
     guidance as to whether or not we're supposed to, at this
     point, even take costs into account.  Or do we just come
     back and say:  This is the vision that if you were going to
     make this widely available, here's what it takes.
                    MR. LAWLER:  Elliot, you may want to respond, but
     let me just say this:  I don't know whether it is a part of
     our mission to be the cost accountants for this or not.  We
     would be insane if we came back with a grand system that
     cost 400 zillion dollars and was absurd.
                    MR. PILLAR:  But if you focus on functionality and
     you do take the approach of what does it take to make all
     rural areas comparable to the urban areas where a lot of
     companies, out of their own business plans, will invest?
                    MR. MAXWELL:  That's not what the act says.  I
     think this is a very important discussion, absolutely
     fundamental discussion.  And when we were talking about the
     composition of the advisory committee, we could have done it
     a number of ways.
                    One of the reasons why there are people who are
     either identified as consumer advocates or represent a
     consumer group is because, in fact, this is, in some ways, a
     kind of forum in which one says:  Let's understand what's
     going on now, both in terms of the access to services in
     rural areas, what we think would be important as a society
     for universality of access; what does it mean for consumers
     across the country, because, in fact, consumers will be
     paying for this indirectly insofar as there are services
     that are subsidized, because someone's going to be paying
     for them.
                    So I think the discussion of cost is a very
     important piece, though, in forming this.  And when we start
     to think about the definition, if we start and said, what
     would everybody like, that's a very different discussion
     than the discussion that says, what are those services that
     one could expect were contemplated by the people who wrote
     this that were essential for a healthcare provision in these
     areas?
                    MR. PILLAR:  That's helpful.  Is there an answer
     to this question:  What time frame, in responding to the
     questions you have asked us, should we be thinking in terms
     of?  Should we be thinking in terms of the next three to
     five years?  The next decade?
                    Because I think you come up with different answers
     about what kind of technologies you might need.
                    MR. MAXWELL:  This, again, is a personal view as
     opposed to any institutional view.  But this is, again, an
     act which I think was, in a lot of ways, a very, very
     creative act.  It said:  Look at what's going on now and
     what you think is essential now, but you should remember
     that you're going to have to come back to this because this
     will evolve.
                    So my reaction is, I think we look at a three- to
     five-year horizon and then assume that, in fact, the
     Commission is going to come back and do it again.
                    So what we're, I think, trying to create is a
     foundation from which one can build and a foundation that
     can evolve gracefully as things change.
                    And let me give one other sort of characteristic
     of this foundation.  The foundation has to accommodate the
     fact that, while in many cases there are either not the
     facilities available and where provided are provided on a
     monopoly basis, the foundation has to accommodate the
     provision of competition and, to the extent that we can,
     incentives for competition to provide facilities and provide
     services in these areas which may not be served now.
                    So I hope that's helpful.
                    MR. PILLAR:  That is.
                    MR. LAWLER:  Cindy?
                    MS. TRUTANIC:  I just have a technical question. 
     The independent telephones companies and those companies
     that are in areas that were subsidized by REA, are they
     encompassed in this whole consideration?
                    And are there going to be kind of different rules
     for them versus the other common carriers?
                    I ask it because, as you know, there's been sort
     of different paths for each of them.
                    MR. MAXWELL:  I think, in general, what the act
     said is whatever mechanisms exist have to be competitively
     neutral and leaves to the joint board and to the FCC a
     fairly substantial flexibility on how the mechanisms will
     provide subsidy.
                    There was a question raised earlier whether it's
     going to be defined in terms of the existing carriers or
     whether other people would be able to come in and get the
     subsidy.
                    That's clearly one of the questions that the FCC
     is looking at very closely.  There have been different
     treatment of small telecos versus larger telecos.  I expect
     that there will still be elements of differences in the
     treatment.
                    But for our purposes, I don't think we need to
     focus on them.
                    MS. TRUTANIC:  But the impact would be, for
     example, in a rural community where the independent
     telephone company is not necessarily subject to the same
     rules and regulations as larger common carriers and they
     maybe take acts against other carriers trying to come in
     that may be anti-competitive, which has been -- you know,
     where they were not on a level playing field in the old
     days, today it's a different story.  And it would maybe
     impact some of the services and things that are provided in
     the rural community.
                    MR. MAXWELL:  I would, again, sort of give a
     personal view.  And that is that insofar as the independent
     companies have to respond to this, they will be governed by
     the provisions of the act that says bona fide requests of a
     telecommunications provider have to do it; here's the
     subsidy mechanism.
                    As to the questions of whether others can come in,
     there will be rules that will govern entry and
     anti-competitive behavior by the incumbent that I think will
     address the questions you raise.
                    MR. LIFSON:  Art Lifson with CIGNA.
                    But we're looking at this at the margin for the
     most part.  I mean the telemedicine piece of this, as I've
     listened to the discussion, is not the driver of the
     technology and the diver of whether a community is wired or
     not wired.
                    But if it is, how can we take advantage of that
     technology and that community and provide support?  Or is
     there a thought that telemedicine could become the driver of
     entry of new technology into a rural area?
                    MR. SANDERS:  Telemedicine is the driver.
                    Jay Sanders from American Telemedicine
     Association.
                    The reality is, we can't be looking at
     infrastructure and taking a look at the technology.  We've
     got to be looking at what the needs are.  We've got to be
     defining what the rural healthcare delivery problems are and
     what's the functional realities and what the functional
     solutions to those needs would be.  That will totally
     dictate the infrastructure that we need to recommend and the
     architecture that we need to recommend.
                    I would also like to say that, given the fact that
     what we have to do is indirectly proportional to the amount
     of time that we have to do it, I'd like to underline what
     someone earlier stated; and that is, there are a bunch of
     resources that exist for the committee here that I think
     would be very helpful background homework, particularly a
     lot of the testimony that was provided by a number of us to
     the joint board, which specifically addressed issues such as
     what is the basic minimum, for instance, architecture, basic
     minimum infrastructure, that we need?
                    Those comments that we made and provided were not
     simply our own personal views but really the collective
     views of the people and the organizations that we represent. 
     And I think, I think that would be very helpful to the
     group.
                    MR. LAWLER:  If you could get those to us or get
     somebody to get them to us, we'll get them out to --
                    MR. MAXWELL:  We have them.
                    MR. LAWLER:  Oh, actually, yes, you have to have
     them.
                    MR. TANGELOS:  I think that's a very important
     piece.  I mean, that's the freshest piece out there right
     now.  And I definitely want to see that.
                    MR. LAWLER:  Sure.
                    MR. TANGELOS:  The other piece besides the Council
     on Competitiveness is the OTA work that was done, their last
     work, before Congress put them out of business; but that's a
     very nice document as well.
                    MR. SANDERS:  As well as the Augusta Conference
     and the Arias Conference which dealt with these issues. 
     Very, very comprehensive.
                    MS. DEERING:  Mary Jo Deering from Health and
     Human Services.
                    There are also documents coming through the
     administration's Information Infrastructure Task Force
     Subcommittee on Health Information and Applications that
     would also be valuable to you.
                    And I think what we could undoubtedly -- even
     though they are in draft stage -- make those available. 
     There's one on managed care.  There is one on consumer
     health information.
                    Your material, of course, is already in other
     forums, so that's available, too.
                    MR. LAWLER:  Can I ask this:  Do I hear Tom Spacek
     and Jay Sanders saying the same thing?
                    I mean, you're saying we need to know what the
     service are that people need, that will dictate where we're
     going.
                    Tom, if I hear you, you said it from a different
     perspective, but your conclusion was precisely the same.
                    Is that something they we have -- you know, is
     there general agreement on that?
                    MR. TANGELOS:  I think, again, in looking at the
     act, indeed, telemedicine was specified.  I mean, that is
     the diver.
                    MS. PUSKIN:  Another thing I want to make
     available to the committee is a book chapter that's going to
     be out on multi-use systems.
                    I want to remind people that the act also has
     libraries and schools in it.  And part of what we need to do
     is recognize that if we're looking at the needs, we're
     looking at -- especially if we look in rural areas -- and I
     know Jim and I have worked together, and a number of you --
     you can't look at healthcare in isolation of looking at some
     of those other things.
                    Now, we're not necessarily going to look at
     libraries and schools per se.  But how do you build this
     into the context of a multi-use system?  Because when you do
     that, you also change the cost function, or you can change
     the cost function very dramatically.
                    So what's the driver here?  Well the driver is the
     needs of the community.  How you meet them may be in the
     context of looking at a variety of resources in that
     community.
                    You don't want to, if you can avoid it, build
     separate infrastructures for schools and libraries,
     especially in rural areas.  You want to be able to get a
     synergy to create sufficient demand to get that competition
     in there.
                    MR. LAWLER:  Isn't that -- for us, though, that's
     a cost issue which we are not going -- I mean, we're going
     to assume that some other rationale being out there is going
     to do that.
                    MR. PILLAR:  Bob Pillar.
                    But the problem is that -- let's just say
     hypothetically that an appropriate minimal technology
     standalone is ISDN with some multi-plexing.
                    Well, you look at -- and you're going to run this
     in a rural area in a typical location for a couple of hours
     a day.  Clearly appropriate.
                    But when you add in the needs of the school
     district, if you add in the needs of the library system,
     maybe other resources within that community, if they can
     come together and then decide that it's far more efficient
     from a technology and from a cost perspective to have a T-1
     line on a closed system, private network, that's the
     smartest choice and the appropriate choice then for
     telemedicine, too, and allows for more capabilities.
                    So it's almost like you only ignore that at your
     peril.
                    MR. LAWLER:  I want to come back to what Jay and
     Tom said, which is, if we can agree on the way to approach
     this, which is, let us try to define what the services are
     that people need, if we agree on that, we then have a place
     to start from and we can address the issues.
                    If we agree on that and then we all, in our
     wisdom, say, that's great, we know what the services are,
     but it's too expensive to say, this is something we're just
     going to do with a flat out cost subsidy, you know, then we
     can have a discussion about whether other schools,
     libraries, other users can deal with the economics of this.
                    But that's not a decision we will ultimately even
     recommend, I hope.
                    MS. BROWN:  Cathy Brown with the Department of
     Commerce.
                    I'm a little concerned about what you mean by
     "service."  I think we need, then, to back up and talk about
     what the functionality of the need is in order to deliver
     that service.  Then I think we have a plan.
                    What I am worried about, though, is that we don't
     get technology specific.  It may or may not be fiber.  It
     may be wireless.  There's functionality; there's speed; and
     there's kinds of things that they're going to need in the
     healthcare community that the schools are going to need and
     that the libraries want that will be built into any network
     that is out there.  As Elliot says, when you start to look
     at that and look at what the needs of the community are, you
     then drive competition in that community.
                    There is a caveat there that this is a subsidy not
     only for healthcare but for education.  And then you
     actually start to have some reason for providers -- whether
     they be wire line providers, wireless providers, or cable
     providers -- coming in and serving a particular community.
                    So I'm with you if what we're going to do, then,
     is then sort of see what the broader need is.  And so I'm
     building on this idea.
                    MR. LAWLER:  Well, I agree with that.  But I also
     want us to keep our focus here, which is --
                    MS. PUSKIN:  -- healthcare.
                    But let me just say to you that that's -- exactly. 
     We have to focus on the needs of healthcare.  But let me
     give you an example of how this relates.
                    When you talk about physicians' offices or
     services to the home, you may not talk about in terms of
     advanced telecommunications services.  What you may say is
     that every community, as a basis of its rural needs, needs
     dial-up access to the Internet.  That's the base level of
     service.
                    When you do that, the implications for healthcare
     you can get services cost effectively to the home.  That's
     major implications.  So what you're defining is you are
     going to define a level of sort of functional need within
     the context of health implications, but it also has
     implications for the other sectors.
                    MR. LAWLER:  You're absolutely right.
                    MS. PUSKIN:  And if you think about it in those
     terms -- and that's all I was saying -- if your focus is in
     health, but if you think about the implications and how to
     build that system, you create a case that is much more
     acceptable for looking at this.
                    MR. MAXWELL:  Just kind of remember that the work
     you will be writing and providing is for a joint board of
     state and federal regulators who are looking across these
     universal service requirements, who are looking at libraries
     and schools and healthcare and affordability of service in
     general.
                    So you don't need to solve all the problems of how
     this will work.  Let's get your expertise focused on the
     healthcare piece to the extent that we have wisdom about how
     demand can be aggregated to be able to bring competition in,
     to be able to make better, more effective use of the
     technology, that's great.  And that's important.
                    But there is a kind of integrated function which
     should take this contribution and add it to the contribution
     of others in these other areas to look at this systemically.
                    MS. PUSKIN:  Can I ask you a question about the
     act?  Because it was raised in the context of physicians'
     offices and the fact that this act talks about advanced
     telecommunications for non-profit providers.  And that's why
     we also -- Mary Jo's concern about the home and the
     evolution to residential care facilities and where this is
     going.
                    If we can also, at least in the context of the
     rural discussion, talk about what a basic level of service,
     not just the health applications, to allow us to reach these
     other healthcare entity, is that within the scope as you see
     it?  Because certainly it was in the scope of testimony we
     provided.
                    MR. MAXWELL:  Let me answer that in two ways.  I
     think it would be a mistake for us to get into sort of a
     legal dialogue about what the precise meaning of the act
     would mean.  You are advisors to a process where there will
     be lots of people who are going to parse the act.
                    If there are feelings and insights in addition
     here about what should take place, that is perfectly
     appropriate to put in because, in fact, if someone said,
     well, it doesn't, you know -- we will interpret the law to
     be mean X, and that's the legal judgment.  This group can
     say, that may be a perfectly appropriate legal judgment.  We
     want you to think about this from a societal standpoint, and
     you should amend the act.  And the act should be saying this
     because that's what it should mean for rural America.
                    MR. SANDERS:  Jay Sanders, American Telemedicine
     Association.
                    I think that's very, very critical; and I really
     feel good about that comment because one of the critical
     concerns that we have -- and we addressed this in our
     testimony -- is related to the fact that it seemed to
     isolate the primary provider of healthcare, and that is the
     individual physician.
                    Many of us around the area who are involved in
     this on a day-to-day basis will tell you, even though you
     think of rural as the rural providers being proximate to the
     rural healthcare delivery system in terms of hospital, the
     reality is if you put a telemedicine wing on a hospital and
     you have a doctor who's office is literally across the
     street from the hospital, it might as well be 10,000 miles
     away.
                    The reality is, it's got to sit on that doctor's
     desktop and be as convenient as the phone, and it's got to
     go into the patient's home.  And that's where all healthcare
     is going.  It's not simply rural community.  It's urban
     community.  That's where it's happening.  That's where it's
     got to be.
                    So the fact that we can provide recommendations
     that address a very basic part of that law that basically
     says we're only talking about non-profit organizations,
     which, the way we interpreted it, that meant we could only
     put it in the hospital; and the actual provider of care, the
     individual doc in their office, is basically excluded, the
     fact that we can provide those recommendations is very
     helpful.
                    MR. LAWLER:  Perhaps a clever lawyer somewhere can
     interpret this to mean a doctor's office, but I'd be
     surprised.
                    But there is certainly nothing that says that we
     can't say, this ought to be -- you know, in the future, when
     you figure out a way to get there, it ought to include a
     doctor's office and it ought to include -- you know,
     whatever.  Home healthcare.  Whatever we think it ought to
     include.
                    MR. HOLUM:  This is the subsidy we're talking
     about.  I mean, the services, presumably, would be available
     in the community.  Are we talking about --
                    MR. LAWLER:  In theory they'd be in the community. 
     But, yes, the subsidies would be available to a primary care
     physician, whether you're a mile away or 200 miles away.
                    MR. HOLUM:  But not under this act.
                    MR. LAWLER:  Not under the existing law.  Chuck
     coming up with a great legal argument.
                    MR. SONNESTRAHL:  This is Al Sonnestrahl speaking,
     from CAN, Consumer Action Network.
                    You are talking about systems and mechanisms with
     equipment and communities and people in general.
                    And I was just wondering if you're talking about
     individuals as well?  For example, what if one individual
     who is deaf and cannot hear and is trying to communicate
     with a physician, there would need to be a third-party line
     to include interpreter services with that.
                    Would that be subsidized under the guise of
     universal service?
                    That's one example for us to consider as well, is
     the individual needs as well as the community needs in these
     systems, the needs of the program, et cetera.
                    MR. MAXWELL:  It seems to me, that that's the kind
     of question that the advisory group should be addressing and
     the kind of recommendations that are perfectly appropriate
     for this committee.
                    I think the worst thing that we would do is to set
     a very, very narrow boundary on the discussion because we're
     looking to you as experts, as people with knowledge,
     understanding, experience, and insight.  And if there need
     to be changes in the future, then people should say that. 
     If there are constraints that this is not thought through
     well, you should say that.
                    We have a responsibility under the act; we need
     your guidance and don't want to say, sort of a priori, that
     this isn't a good comment or this is a bad idea or a
     forbidden notion.
                    MR. LAWLER:  Tom, you had your hand up first.
                    MR. SPACEK:  Tom Spacek from Bellcore.
                    Tying together a few of these things, the comments
     from the woman from NTIA -- I don't remember your --
                    MS. BROWN:  Cathy Brown.
                    MR. SPACEK:  Cathy.  Putting her remarks together
     with some of Jay's comments and so forth, it seems like
     there's a few things that, you know, one is, defining this
     set of services.  And when you define them, in addition, you
     would need to define what infrastructure might be needed,
     taking cost into account as best you can and not being
     technological specific because it may turn out that, you
     know, upgrading central offices in rural areas is not a
     possibility and maybe there are satellites solutions or
     something else; but at least the capabilities that are
     needed -- you know, would need to be definitely specified.
                    One additional thought on top of that is, you
     know, we talked about the -- we're talking about this in the
     context of a national information infrastructure, which
     implies shared lease of resources, which are some of the
     comments we're talking about here, and that impacts cost.
                    And the fact that the joint board is the one who
     will integrate these things, we have to worry a little bit
     less about that.  It seems like, perhaps, in our definition
     of what this minimal set of services for the initial set of
     universal service is, in specifying those things, we should
     probably specify it in some sort of a priority order and
     even some beyond what we think should be in the minimal set.
                    The reason being is that when the joint board gets
     together, perhaps through the synergies between education
     and libraries and so forth, they could do more or less than
     we initially recommended because the cost structure will
     take that into account.
                    So we may want to add some things or prioritize
     some things.
                    MS. DEERING:  Mary Jo Deering from Health and
     Human Services.
                    I have a technical question also that sort of
     builds on that, and it does have to do with our work product
     eventually.  I'm sort of one of these task-oriented types
     that congregates and breeds in Washington I guess.
                    I'm wondering whether what I'm hearing would shape
     our input to you in the following way:  That on one hand we
     are to address the law as it is written and give useful
     guidance for doing something in the next three to five years
     based on the way the law is written.
                    On the other hand, I hear a strong feeling that,
     number one, we need to educate them about the evolution of
     healthcare and make certain points about likely scenarios in
     the future.
                    And then, thirdly, not so much on a temporal
     basis, but that there are other considerations that do not
     fall within the scope of the act itself that we feel they
     should take into account nevertheless that might result,
     either in the near term or the long-term, in amendments or
     other types of action.
                    I mean, is that a useful framework?  Are we
     limited to any other framework at all?
                    MR. MAXWELL:  Not that we have --
                    MS. DEERING:  I mean, we do need to do that first
     piece, we need to tell them -- I mean, we must tell them the
     first piece sort of clean.  That's really my technical
     question.
                    MR. MAXWELL:  There were very good comments that
     have been provided on the panels in front of the joint
     board.  I think some of the comments have been very helpful
     in the proceedings itself.
                    I was, frankly, a little surprised that we didn't
     get as much information as I had hoped.  And, again, this is
     a personal view as opposed to a Commission view.
                    Being a creature in Washington -- and perhaps some
     task orientation rubs off -- where there is money, there
     usually is comment, if not excessive comment, on how we
     should get that money.
                    Here's a situation in which a societal decision
     that there should be this kind of service available as a
     society, and yet I don't think there has been a consensus
     yet reached about what those service are, sort of what
     merits subsidy, what merits, essentially, a tax from one
     party to another.
                    And so we really need to focus very much on
     getting that answer and getting that right in the context of
     these other activities that are also determined to be
     recipients of subsidies:  schools and libraries and
     underserved areas, high-cost and underserved areas.
                    So if we do that alone, we would have accomplished
     a great deal.  If we do this in a way that it can be built
     upon, it's better.  If we do it in a way that recognizes
     where maybe people have not thought about how the evolution
     is proceeding or have missed areas that will be critical for
     this to be successful, all the better.  And if we can do it
     in a way that suggests that, in the future, one should be
     looking at this and give people some insight about that,
     then it's a home run.
                    MR. LAWLER:  Doug?
                    MR. TINDALL:  Doug Tindall from UT Houston.
                    And I hope Dr. Duke would permit me to say one
     more thing.
                    Listening to this, I would like to relate a
     scenario that developed over the last 18 months in Houston. 
     I'll keep it very short.
                    We spent a very small sum of money, especially
     with respect to those sums of money we will probably be
     talking about allocating throughout this piece of
     legislation.  And with this very, very small, insignificant
     amount of funds, we have learned many very valuable things
     that I'm not hearing in the discussion yet.
                    First of all, yes, cost to a consumer is a very
     real concern; and it should be, especially for people like
     the AARP, for example.  But I haven't heard anything about
     optimizing healthcare around telecommunications, because
     actually we'll have a net cost savings.
                    I haven't heard that yet.
                    As the devil's advocate, as well, I haven't -- for
     example, that little tiny research project that we did, we
     found many different areas within cardiology, trauma, and
     stroke that have been published from UT Houston and also
     School of Public Health documents that have been published
     from UT Houston that I think I can get for this board before
     the next meeting that address these costs, you know,
     public-service-versus-healthcare-dollars kind of thing.  And
     I'm not hearing that in the discussion yet.
                    Also about cost sharing, the whole idea about if
     you bundled education and maybe another agency together you
     can increase it from ISDN to T-1 but actually have a savings
     in installation, I submit that it's not only those.  It's
     telecommunications companies, libraries, schools, other
     public safety agencies, emergency medical authorities,
     industry in general, the worldwide web industry, wireless
     telecommunications, and computers.  And all of those really
     are -- it's just this huge maze.
                    What we saw as a reaction of that tiny research
     project is that we are generating enough support within
     Texas that we probably will get something that we can put as
     far as a, quote, unquote, subsidy for rural care, at least
     in my opinion.  This is hypothetical.  And we think the
     state might be able to do a subsidy for rural care.
                    We had a meeting also with some civic officials
     within the City of Houston, granted a much bigger pot, now
     you're talking urban and inter-city as well.  And they are
     to the point that they are also justifying potential sharing
     and allocation of resources to us for a variety of benefits,
     both political and to the constituency as helping members in
     their healthcare needs.
                    I think I've got the ball on the table.  I could
     put more examples forth, but I think I got the ideas out.
                    MR. LAWLER:  Yes?
                    MR. HOLUM:  You know, I would love to begin this
     process and to proceed on the basis of satisfying the human
     needs because I think that's what healthcare is all about.
                    But I want to express a caution at the outset.  It
     seems to me that it's easy to say that, but it's very hard
     to develop a consensus on what people's needs are in the
     healthcare arena.
                    I think the fact that we were unable to reform the
     healthcare system, in part, was a reflection of the lack of
     consensus on what people need as a basic minimum package of
     healthcare.
                    It seems to me that there is another standard
     stated in the act.  And that is that rural areas should have
     services that are reasonably comparable to what's in urban
     areas.
                    So it might be a useful start to say:  What do we
     think urban areas will have three to five years out?  And
     then try to use that as the benchmark for what we need to
     get into the rural areas without spinning a lot of wheels
     about what would be nice and desirable and even, in some
     sense, practical from a human needs point of view.
                    MR. BAILEY:  Hi.  Bill Bailey.  I'm from
     Southwestern Bell.
                    That's an important point.  Someone said earlier
     that telemedicine is moving.  It's moving within the context
     of telecommunications.  Telecommunications, over the next
     several years, is going to move dramatically.
                    Today, I think everyone agrees, that typically it
     costs less to provide telecommunications services in the
     metropolitan areas than it does in rural areas.  That's just
     a function of the density and the distance which we have to
     provide service to.
                    Competition is going to, at least in the near
     term, concentrate in the metropolitan areas where the
     margins are greater.  And what's going to happen is that
     prices of services -- and many of the prices we're talking
     about for services which are being utilized for telemedicine
     already have built into them high prices to try to keep
     local telephone rates low.
                    And what will happen in the future in the
     metropolitan areas, those rates will come down as a result
     of competition.  But those same forces will cause rates in
     rural areas to likely go up, even more than what they are
     now, to meet their cost.
                    So we can see that there are problems today in
     providing telemedicine; but the structure we're doing that
     it in is going to be even worse for rural areas.  I mean,
     it's going to be much more difficult to provide services to
     rural areas at comparable prices tomorrow than it is today.
                    MR. MAXWELL:  I think there is a potential for a
     little confusion.  Let me just go back again to the act for
     a second.
                    Again, it's on page 96 of that handout.  What we
     are thinking about in terms of healthcare services, it
     doesn't provide so much guidance, but the words are the
     words of the act.  And it is that they are necessary for the
     provision of healthcare services in the state.  So the
     underlining is a definition of what the society believes is
     necessary, not discretionary, not what one would like.
                    And it then goes back to sort of the
     telecommunication services which are necessary for doing
     that.  So it doesn't provide much sense, but we are trying
     to define a kind of set that we can all agree upon are
     required and then go to the telecommunication services which
     are necessary for that.
                    And I'm only doing that because we could spend,
     you know, from here to the first part of September saying
     what the healthcare system should be like.
                    And I think Tom was right, we have to make a stab
     at what is necessary in rural areas and then the services
     which are necessary for doing that and then look at the
     comparability issue for the costs involved.
                    There is kind of logic about it which I think
     people were talking about, and it has to be sort of very
     much on our agenda.
                    MR. DOUGHERTY:  Elliot, could I just follow up?
                    On the page before, the bottom of 94, this is
     where I was taking the language from, Number 3, "Access in
     Rural and High-Cost Areas:  Consumers in all regions of the
     nation...should have access to telecommunications
     information services...that are reasonably comparable to
     those services provided in urban areas."
                    That's the benchmark I was looking at.
                    MR. MAXWELL:  That has to do with, in general,
     telecommunications services.  And there is a provision
     overall with respect to universal service that says the
     nation should look reasonable comparable, there should not
     be a distinction.
                    When they talk about the healthcare piece, they're
     talking about sort of looking at a healthcare system in
     which rural areas should not be distinguished or deprived in
     a large measure, and then go back to the services necessary
     to make that happen, the telecom services.
                    This is kind of a multi-layer view of universal
     service, one is universal service as a whole, and looking at
     the society as a whole.  The other is just focused on the
     healthcare-related pieces in the rural areas.
                    MR. LAWLER:  Did somebody have a comment back
     there?
                    I may have missed it.
                    MR. ENGLAND:  Bill England from HCFA.
                    I was wondering about something that Jay said
     about heading down the path of who is the subsidy going to? 
     And are private physician offices non-profit?  And, of
     course, through our payment system, many of them probably
     are.
                    But the IRS very clearly defines who is
     non-profit.  I mean, Publication 17 tells us who public and
     non-profit entities are.  You know, it's a list we can hold
     in our hands.  It's fine.  And I think if we try to discuss,
     are we going to subsidize nursing homes, are we going to
     include physicians' offices, et cetera, we are going to get
     way beyond anything that can reasonably be done.
                    And I, first, would just like to suggest that for
     discussion, as it says, public and non-for-profit, that is
     defined and it's a fixed group of entities and we can limit
     what we're talking about to those entities only.
                    And I agree, absolutely, that it's going to go to
     homes and it's going to go to doctors' offices.  But
     Medicare is not, for example, planning on paying for that
     anytime in the near future.
                    This is an issue --
                    MR. SANDERS:  You don't want to get into that.
                    MR. ENGLAND:  Okay.  That's one constraint.
                    The second thing is, you know, we have this market
     system and it does efficiently price things in urban areas
     and rural areas.  And it's how much are we willing to
     subsidize where?
                    We are trying to set an objective -- maximizing an
     objective function, and we're not looking at, you know, how
     do you constrain, what are the constraints, what do you have
     to give up for subsidizing here and not here?  And the
     market does that fairly well.
                    If we just say, we want every hospital to have two
     T-1 lines, every rural hospital, well, that would be
     wonderful.  I mean, there's no way we can mandate that to
     happen.
                    So I think what we need to do is to set what it is
     -- is it 1/4 T-1 line from one of these entities, if they
     are requesting it, to say, okay, that's it, let the market
     price it, and then you provide the subsidy or figure out a
     way to provide the subsidy to pay for it.
                    MR. LAWLER:  Let's do a couple of more comments,
     and we're not going to get into Medicare reimbursement.  I
     promise.
                    Tom?
                    MR. SPACEK:  Tom Spacek from Bellcore.
                    Just a comment on your comment, and maybe it's
     inappropriate because we are supposed to be moving forward
     and not debating at this point.
                    I think what the issue is here and the purpose of
     this universal services subsidy issue is not that the market
     will set prices in these areas; but it is, perhaps, what
     Bill was talking about, that it's going to be very expensive
     in rural areas.  So what is this minimal set of potential
     things that are needed now, and that will evolve over time? 
     And then, what's the technological capabilities needed for
     that?  Then it turns out, what will it cost?
                    And by definition, if you agree, that said then,
     that this fund subsidizes those, you know, market forces
     don't create the prices for those, unfortunately; and that's
     the purpose of this whole deal, I guess.  So it's a little
     different focus.
                    MR. LAWLER:  Yes, sir?
                    MR. HOLUM:  I'm very pleased with what I think is
     some narrowing of the focus of this discussion.  I think the
     more focused and the narrower we can get, the more we're
     likely to add more value in this short amount of time that
     we all have to put in.
                    Notwithstanding that, I think we would do
     ourselves a disservice if we so limited our discussion on
     this one point to simply the words of the statute with
     regards to the public and non-profit facilities.  Because in
     that one component, I think we have to have a little broader
     vision in the sense of what the intent of this is.  And it
     may be added as an addendum or an ancillary discussion with
     respect to what has to happen.
                    If we don't constrain ourselves, we're going to be
     missing an enormous component of providing healthcare
     services and access to healthcare services in so many areas.
                    MR. LAWLER:  Let me try to declare, at the risk of
     getting tomatoes thrown at me, that we seem to have an
     evolving consensus on at least how we want to think about
     this, which is we do want to provide advise on the words of
     the statute.  We can't change them.
                    So we do want to provide advice.  I happen to
     think that Tom's sort of formulation of this is a very
     constructive one, a good way to think about it.
                    Beyond that, I do think we also have a consensus,
     that if we think there is something more that ought to
     happen, whether it's in rural areas or beyond rural areas, I
     think we ought to feel like we can say that.  And, you know,
     that's what our job is, to give people advice.
                    And we want our advice to be as narrowed and
     tailored as possible.  But we should not -- you know, if we
     think that this particular provision is great but it's only
     25 percent, we ought to say it's only 25 percent.  And
     there's, you know, a lot more we need to think about.
                    MR. HOLUM:  At the same time, I would hope that
     our focus would be on access to the communications system
     and the cost and subsidies associated with access to the
     communications systems as opposed to -- you know, we could
     go a lot of different directions in terms of what kinds of
     healthcare services we think are necessary.  You know, we
     could go a lot of different directions to get out of this
     focus on communications.
                    MR. LAWLER:  Right.
                    MS. PUSKIN:  I think actually we can do a lot,
     without getting too far away, within actually the current
     structure of the statute to apply what we think we see the
     communications needs are for the healthcare system in three
     to five years.
                    For example, if you look at the Universal Service
     Provision, which is for all consumers, which is what you
     mentioned earlier, one might argue that in that context is
     where you might put physicians's office and some other
     evolving institutions if you say, really in rural
     communities, just as in urban communities, one would expect
     local dial-up access to the Internet.
                    If that is a basic service that's available, that
     is a service that goes a long way to meeting the healthcare
     needs of physicians' offices, facilities, et cetera; and
     it's within the context of what it is your expecting in the
     universal service for everyone.
                    Then you say:  What's that basic service that you
     would expect to be out there and the implications for
     healthcare services?
                    Then you go and say:  What are the advanced
     services beyond that in the context of what we said earlier? 
     And there may be some different levels.
                    I think a lot can be done within the context of
     understanding the act.  You may end up advising some special
     things.  But I think you also need to look and say, there
     are a lot of things out there where, in three to five years,
     actually the things we'll be doing in healthcare that won't
     require any greater functionality, in some way, in terms of
     the telecommunications industry, than we would expect that
     would be going into people homes and urban areas and,
     therefore, would expect in rural areas.
                    I think you have to keep that construct so we're
     not -- and that may help you to address some of the issues
     in this act.
                    MS. DEERING:  My only observation on this -- and
     this is moving this forward, because I have a 1 o'clock
     conference call to make -- is, based on this emerging
     consensus, whether the structure of your subgroups really
     feeds into the final product that you want.
                    It seems to me that they are horizontal slices,
     not vertical slices.  And I just throw it out on the table
     as to whether or not there is any drafting process that
     might actually get us -- we've got an awful long way to go. 
     And if we do it that way, will we have an awful lot of
     re-synthesis and re-packaging to do afterwards?
                    MR. LAWLER:  Right.  Let me do one more comment,
     and then let's talk about how we go forward.
                    Did somebody have their hand up back there?
                    Yes.
                    MR. BARR:  It's a basic comment.  Rick Barr. 
     (inaudible) International, an end-user for two years of
     ISDN.
                    A very basic request, as far as being a healthcare
     provider, is the issue of connectivity in rural areas.
                    The band width is one issue.  But more importantly
     is reliability of the service.  And we fought for six months
     between the Arbachs and three different long-distance
     carriers to give us daily connectivity, which was a very,
     very rough start up just within a 200 mile radius of where
     we sit today.
                    And I think the other issue that a consumer would
     also need assistance along with the telecom piece is the
     issue of slamming.  We had many instances of being switched
     from one long-distance carrier to the next, not being aware
     that it happened at the local switches; but yet we lost
     connectivity for three, four, and five hours.
                    And in the practice of telemedicine, which is
     really a deterrent to any local clinician is that, if you
     don't have the connectivity, you don't have service, you
     can't provide what would be the rationale for why you're
     even in telemedicine today.
                    I think that's a very basic premise going back to
     some of Jay's comments about what do the people need.
                    MR. LAWLER:  We want to try to give people a
     chance to eat lunch before we go up to this demonstration,
     so let's try to move forward from here.
                    Mary Jo suggested that, perhaps, there's a
     different way to slice this.  If there is, let's see if we
     can do that.
                    MR. TANGELOS:  Well my brain has already been
     thinking along the lines of what we've got here.  So 2-1/2
     hours, 2-3/4 hours into it, with 15 minutes to go, that's a
     little tough.
                    But for the pieces that we have got lined up, I
     think that, just speaking from the architecture point of
     view, I've already got a general design that we can come
     back at the next meeting in July, quite nicely within that
     framework to give the group plenty of information.  It may,
     indeed, be horizontal.  It may, indeed, be a box.  But
     that's kind of easy to do within the time frame that we have
     remaining.
                    MR. LAWLER:  Tom, any contrary ideas?
                    Or --
                    MR. SPACEK:  Well --
                    MR. LAWLER:  Or non-contrary?
                    MS. DEERING:  The one drafting piece which is
     missing here, unless it's in your first box, which it may
     well be, is the definition of "need of services."  And to me
     that's a little bit cross cutting.
                    MR. LAWLER:  I agree with that.
                    MS. DEERING:  I think you may need a separate --
                    MR. TANGELOS:  You know, you can leave that to the
     group as a whole, though.
                    Again, the building blocks may be these four
     pieces here, and we as a committee of a whole finish the
     job.
                    MR. SANDERS:  And Jim Brick's committee could
     really address the "need" issue.
                    MR. LAWLER:  Yeah?
                    MS. TRUTANIC:  I guess what Mary Jo is saying,
     though, is that there may be, from each of these four
     sections, interaction and input that everybody can do.
                    For example, DoD is heavily doing some
     international telemedicine right now and in addition to
     infrastructure, they can give some very vital insights into
     the problems of providing telemedicine services.
                    MR. LAWLER:  There is no question that there is
     almost total overlap, perhaps with the exception of the
     International subgroup.
                    MR. TANGELOS:  But I'm convinced that there are
     pieces already in testimony that I will be getting, that
     there are pieces in the Council's report that I will cut and
     paste right into the work that we want to submit in July.
                    MR. LAWLER:  Right.
                    Tom?
                    MR. SPACEK:  I see the International one as being
     able to proceed, you know, soon.
                    Even the one that's called "Architecture," because
     if I read it and also hear what a few of you just said,
     there's a lot of equipment out there, that's your viewpoint
     on what's out there, the compatibility that might be needed
     between the equipment, among equipment and so forth.  So
     that potentially can be some useful stuff, too.
                    It just seems like the definition of the essential
     set of services now and perhaps in the future, when there is
     a longer list of those put in priority order, really has to
     occur, in some sense, before you can do something useful
     with respect to what telecommunications capabilities are
     required to meet that.
                    MR. LAWLER:  Well, let me try something here; and
     I'll dump this on the three Chairs here of all but the
     International one.
                    Is that something that the three subgroup Chairs
     can talk about and try to get a common language about and
     see if there can be a joint understanding that they can
     proceed on?
                    And maybe, Jim, you can take the lead in doing
     that.
                    MR. BRICK:  I'd be happy to.
                    MR. LAWLER:  But, you know, you will be
     communicating with the other subgroups so there is some
     development of that jointly rather than --
                    MR. TANGELOS:  Yeah, I'm really not uncomfortable. 
     Let me just -- we are winding down, and let me give you an
     idea, if I may --
                    MR. LAWLER:  Sure.
                    MR. TANGELOS:  -- what I would like from our
     group.
                    I think a two- or three-page document from every
     member of my subgroup, providing with me basic information
     that they think is important and  can be worked into a
     document that will end up being submitted by me at this next
     meeting that may be 15 to 20 pages long.
                    I think it would also be easy, with the
     architecture question, listing many of the conflicts that
     exist, many of the anecdotes that are out there.  And
     there's nothing wrong with listing them, getting the
     individual perspectives from ACR, from AARP, NTIA, and going
     forward from that.
                    Then I think it's the responsibility to have that
     information here so that we can now work up, and Lygeia can
     work up, and get it to the next step.
                    So I'm more concerned with getting something
     forward in the next six weeks than a finished product that's
     interrelated and goes together and looks beautiful.  That's
     not what I want to get to in the next six weeks.  There are
     more practical things that I hope each member of this group
     will at least give me two, two-and-a-half pages.
                    MR. SPACEK:  But that suggestion -- and maybe it's
     what you were saying before, I'm not sure -- but if the
     first one, which is called "Telemedicine in Rural Areas" --
     which in some sense is telemedicine in urban areas, too --
     if the idea is to define this minimal set, if that group is
     responsible for defining the set, perhaps the Chairpeople of
     the other groups can view themselves as members of that
     first group, so we will all focus -- you know, let the
     Chairperson of that first group be responsible for defining
     that set, the other Chairpeople having input to him.
                    With respect to the "Telemedicine Infrastructure,"
     which I would be Chairing, what we would do in addition to
     inputting into that, between now and July perhaps, is
     looking at the -- you're also asking for sort of the future
     vision here, too.  So maybe between now and the next meeting
     we could focus more on that future vision.
                    At the next meeting, once this set is sort of
     defined and we can agree to it, then between July and
     September, we could focus on the shorter term issues of what
     would be the telecommunications requirements to meet the
     agreed upon set.  So we sort of do the future before the
     present, but that's okay.
                    MR. LAWLER:  That's fine.  I also, if it's
     possible -- and that set will need to begin to be designed
     prior to our -- you know, everybody hearing about it in
     July.  Maybe you can begin the second part of that even
     before that meeting.  And that's really, you know, if you
     three can communicate on that.
                    MR. MAXWELL:  It may be useful, on the
     infrastructure side, to be also looking at sort of what
     exists today in terms of the rural infrastructure so one can
     say:  What would need to be changed to be able to do some
     set which I think there will at least be input on from the
     statements that were made at the en banc hearings in front
     of the joint board, which we will gather up and make sure
     it's available to everybody here.
                    Let me make one other comment, perhaps a process
     comment.
                    MR. LAWLER:  Sure.
                    MR. MAXWELL:  I think if we don't do as much of
     this as we can electronically, we are nuts.  People are
     dispersed.  The subgroup, in part, because it represents the
     rural areas and non-urban areas as well as urban areas,
     people beyond the Beltway, if you -- when you hand in those
     contacts sheets -- there are two things.  Not only phone
     number and fax number, but if you have e-mail, please give
     the address.  If you have a web page, please give it because
     we'll make sure that these are linked up.  And, to the
     extent that we can, I think as much of the inputs that can
     be shared across the groups so that people can participate
     as they are able to, will allow it to make much more
     progress.  And to the extent that we can deliver things
     electronically, your humble staff would, I think -- such as
     it is -- would be much appreciated.
                    MR. LAWLER:  Let me just say, on this list, we
     were totally arbitrary and ignorant when we did this.  You
     know, we looked at what we knew about people, and we put
     them in various subgroups.
                    I think the best way to try to deal with this, if
     I can impose on our Chairs here, is if somebody has a great
     deal of expertise in another subgroup and none in the one
     they're in -- although, that's almost impossible -- let's
     try to work out a way where -- each of them needs to be
     covered.  But what I don't want to do is get everybody
     saying, you know:  I don't want A.  I want C.  And we will
     start all over again, and we'll end up being equally
     arbitrary the second time around.
                    So if you have a particular need, let's see if we
     can accommodate it.  I will admit to just doing it
     arbitrarily because we couldn't figure out any other way to
     do it in the sort time frame we had.
                    MR. BRICK:  If I might, please, just don't put all
     the lawyers in one group.
                    MR. LAWLER:  All the lawyers are in your subgroup.
                    MR. BRICK:  We need everybody together so that,
     you know, we hear all the stories from everybody.
                    MR. LAWLER:  I think what we tried -- there was
     some method to our madness.  I do think we tried to spread
     people out, you know, in terms of expertise.  You know, we
     tried to put as many of the rural people on the rural.  You
     know, it was not total madness, only partial madness.
                    MS. DEERING:  Can I just ask who is here
     representing Ronald Coleman as Chair?
                    MR. BOTTS:  I am.
                    MR. LAWLER:  I talked with Ron.  He's,
     unfortunately, out of town but is eager to participate and
     will be here.
                    Joan?
                    MS. KING:  Joan King from AARP.
                    If we're on a committee, say the "Infrastructure,"
     and we have -- and AARP has a policy on rural healthcare, we
     would like to be able to make comments to that committee.
                    MR. LEWIS:  Absolutely.
                    MS. KING:  The other thing is my name appears in
     here with neither a phone number or a fax.
                    How do we handle that?
                    MR. LAWLER:  In your packet, there's a blank
     information sheet for you to fill out which is -- and we
     probably have people's wrong phone numbers and wrong
     addresses and all that.  So please, please, please fill them
     out
                    MR. MAXWELL:  And no one gets out of this room
     without turning one in.
                    MR. LAWLER:  That's right.
                    MS. RICCIARDI:  Give it to me or Thayer.
                    MS. DeMers:  Could I plead for more at least more
     notice than we had?  I ended up paying what it would cost me
     for two trips out here for this trip.
                    MR. LAWLER:  Yes.
                    Lygeia, how soon will we have another meeting?
                    MS. RICCIARDI:  Well, the reason that we haven't
     given you a date for the July meeting is that we want to
     structure it around a joint board meeting which has not yet
     been set, and that's what we're waiting on.
                    If they take too long, we will set it -- what? 
     Within -- we realize that you folks need more time to
     prepare for this.
                    Shall we just say within say a week we'll have an
     answer?
                    MR. MAXWELL:  You will have a date within a week.
                    MS. DeMERS:  Right.  As long as we get three
     week's notice, that's fine.
                    MR. MAXWELL:  Right.  What we wanted to do -- the
     joint board had tentatively scheduled a meeting about the
     third week or so in July.
                    What we wanted to do was to be able to have a
     meeting before that because that meeting's going to be in
     Los Angeles.  Lots of people would not be able to get out
     there.  So we would at least have the potential of some
     people able to join the joint board there so that we can
     keep input going in and not sort of have to run up at the
     end and do that.
                    So we will commit to having a date in --
                    MS. PUSKIN:  Can I make a plea that you not set it
     for the same time as the COMNET meeting, which is in
     Washington, which is around the 17th --
                    MS. DEERING:  The week of the 17th.
                    MR. MAXWELL:  If there are dates anywhere, let's
     say, between the 7th and 17th or so of July that don't work
     for you, could you feed them to --
                    MS. PUSKIN:  That week of the 15th of July is bad. 
     It's a pretty bad week.
                    MR. LAWLER:  That is the time frame we're looking
     at, between that really -- after that 4th of July week
     through the 20th of July or thereabouts.
                    MS. PUSKIN:  That particular week is a very, very
     bad week.
                    MR. LAWLER:  In September, we're talking soon
     after Labor Day.
                    Isn't that right, Lygeia?
                    MS. RICCIARDI:  Yeah.  We thought the third.  But
     we can change that if that's a problem for us as a group. 
     But that's what we're aiming for now.
                    MR. TANGELOS:  The Labor Day holiday is Monday the
     2nd of September.
                    MR. LAWLER:  Yeah.  We may want to -- we'll give a
     little time in between.
                    MS. RICCIARDI:  Oh, okay.
                    MR. MAXWELL:  Toward the end of that weekend is
     what we were thinking about.
                    We do apologize about the time frames.
                    MS. DeMERS:  I think it was understandable for
     this time.  I'm just making a plea for future hearings.
                    MR. LAWLER:  Yeah, you're absolutely right.
                    Any more housekeeping things that we have not
     covered, Lygeia or Thayer?
                    MS. RICCIARDI:  Yeah.  Just a couple of logistical
     things.
                    You have in your folders a schedule for today, and
     it tells you that at 2 o'clock we're going to be reconvening
     in the Dirksen Building, which is the building connected to
     this, in Room 106, to look at the demos which have been
     organized by the Congressional Ad Hoc Steering Committee on
     Telemedicine and Healthcare Informatics.
                    And if they ask you, just identify yourself as
     either a member of or a participant in our meeting here.
                    And then, as you will also see on your schedule,
     at 3 o'clock, in the same building, different room, on the
     ground floor, Dirksen Room 50, we're going to have a press
     conference at which Chairman Hunt will be speaking as will
     Commissioners Ness and Chong from the FCC and several
     Members of Congress.  They will be Senators Snowe,
     Rockefeller, Exon, Conrad, and Pressler.
                    So we'll look forward to seeing you at both of
     those events.
                    MR. LAWLER:  And after the press conference --
     and, Lygeia, correct me if this is wrong -- but after the
     press conference, if we can hang around for a couple of
     minutes, the three commissioners are just going to say a few
     minutes worth of, you know, thanks for doing this, here's
     how we look at it, in the same room, right after.  And the
     press conference shouldn't take very long.  We won't keep
     everybody hanging around too long.
                    (Whereupon, at 1:00 p.m., the hearing was
     concluded.)
     //
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                        REPORTER'S CERTIFICATE
     
     
     FCC DOCKET NO.:       
     
     CASE TITLE:      TELEMEDICAL ADVISORY COMMITTEE
     
     HEARING DATE:  Washington, D. C.
     
     LOCATION:             June 12, 1996
     
     
                    I hereby certify that the proceedings and evidence
     are contained fully and accurately on the tapes and notes
     reported by me at the hearing in the above case before the
     Federal Communications Commission.
     
     
     Date:   _06/12/96__           _____________________________
                                   Official Reporter
                                   Heritage Reporting Corporation
                                   1220 "L" Street, N.W.
                                   Washington, D.C. 20005
                                        Greg J. Poss
                                   
     
                           TRANSCRIBER'S CERTIFICATE
     
     
                    I hereby certify that the proceedings and evidence
     were fully and accurately transcribed from the tapes and
     notes provided by the above named reporter in the above case
     before the Federal Communications Commission.
     
     
     Date:   06/14/96__            ______________________________
                                   Official Transcriber 
                                   Heritage Reporting Corporation
                                   Greg J. Poss
     
                           PROOFREADER'S CERTIFICATE
     
                    I hereby certify that the transcript of the
     proceedings and evidence in the above referenced case that
     was held before the Federal Communications Commission was
     proofread on the date specified below.
     
     
     Date:   06/20/96__            ______________________________
                                   Official Proofreader
                                   Heritage Reporting Corporation
                                   Barbara Blossom