In the matter of:        )
                          )
ADVISORY COMMITTEE ON    )
TELECOMMUNICATIONS AND   )
HEALTH CARE                              )

                             
                             
                             
                             
                             
                             
                             
                             
                             
                             
                             
                             
                             
                             
                             
                             Volume:   1

                                    Pages:    1 through 238

                                     Place:    Washington, D.C.

                                     Date:     September 17, 1996
                                                                    Before the
                       FEDERAL COMMUNICATIONS COMMISSION
                            Washington, D.C.  20554
     
     
     In the matter of:                  )
                                        )
     ADVISORY COMMITTEE ON              )
     TELECOMMUNICATIONS AND             )
     HEALTH CARE                        )
     
     
                                        Suite 856
                                        FCC Building
                                        2000 L Street, N.W.
                                        Washington, D.C.
     
                                        Tuesday,
                                        September 17, 1996
     
                     The parties met, pursuant to the notice, at
     
      10:10 a.m.
                     
                     ATTENDEES:
     
                     STAFF MEMBERS:
     
                     GREG LAWLER,  Chairman
                     THAYER NELSON
                     ELLIOT MAXWELL
                     LYGEIA RICCIARDI
     
                     MEMBERS:
     
                     WILLIAM C. BAILEY, Southwest Bell Telephone
                     JAMES E. BRICK, West Virginia University
                     CANDY CASTLES, AT&T Wireless Services, Inc.
                     JOHN CLARK,
                     RONALD D. COLEMAN, Med-Tel International
                     HELEN R. CONNORS, School of Nursing, University
                        of Kansas Medical Center
                     STEVE COTTON, University Health Science Center -
                        HealthNet
                     MARY JO DEERING, Department of Health and Human
                        Services
                     JUDY L. DEMERS, University of North Dakota School
                        of Medicine
                          MEMBERS:
     
                     CHARLES DOUGHERTY, Creighton University
                     JAMES H. DUKE, Herman Hospital
                     WILLIAM L. ENGLAND, HCFA
                     DIONNE GREEN,
                     ROGER GUARD, University of Cincinnati Medical
                        Center
                     WILLIAM HAWKINS, Ethicon Endo-Surgery
                     CHARLES F. HOLUM, Attorney, Doherty, Rumble &     
                   Butler
                     GEORGE H. KAMP, American College of Radiology
                     MICHAEL G. KIENZLE, University of Iowa College
                        of Medicine
                     JOAN KING, AARP
                     JOSEPH C. KVEDAR, Partners HealthCare Systems,
                        Inc.
                     GREG LITCHFIELD,   
                     ART LIFSON, CIGNA
                     TOM LORAN, 
                     MARY JO MACLAUGHLIN, Eastern Main Healthcare
                     JIM MCCONNAUGHEY, MTIA
                     DAVID METLZER,
                     LOUISE NOVOTNY, Communications Workers of America
                     ROBERT B. PILLAR, Public Utility Law Project of
                        New York, Inc.
                     DENA S. PUSKIN, Department of Health and Human
                        Services
                     GONZALO M. SANCHEZ, Sioux Valley Hospital
                     JAY H. SANDERS, The Global Telemedicine Group
                     AL SONNENSTRAHL, Consumer Action Network of
                        Deaf and Hard of Hearing Americans
                     THOMAS R. SPACEK, National Information
                        Infrastructure Initiatives Belcore
                     EUGENE V. SULLIVAN, University of Virginia
                     ERIC G. TANGALOS, Mayo Clinic
                     CYNTHIA TRUTANIC, Office of Tipper Gore
                     REED TUCKSON, Charles Drew University of
                        Medicine and Science
                     ROBERT WATERS, Arent Fox and Center for 
                        Telemedicine LaW
                     BILL WELCH, Nevada Rural Hospital Project
                     BRIG. GENERAL ZAJTCHUK, U.S. Army Medical
                        Research Development and Logistics
                        Command, Department of Defense
                                        I N D E X
     
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     Hearing Began: 10:10 a.m.            Hearing Ended:  4:05 p.m.
     Recess Began:  12:20 p.m.            Recess Ended:   1:17 p.m.
                                  P R O C E E D I N G S
                    MR. LAWLER:  First, I want to welcome everyone and
     thank people for their hard work.  I am not going to single
     anybody out.  There has been a lot of work that's gone on
     over the past, well, really since our last meeting. 
     Normally more of it happens at the end than at the
     beginning, or at least the visible signs of it.  So a lot
     people have been working very hard.
                    I know some didn't get their, either due to the
     U.S. Mail in some cases, or errant faxes, some did not get
     the things that were sent out.  If you don't have them,
     anyone that doesn't -- let me just run through these things. 
     There is a -- Lygeia, would you just hold that up?
                    There is a memo with findings and recommendations
     that was faxed out to people.  If you don't have it we have
     got them here.  There is one that does not have it.  If you
     would just pass it around.  And another.  Let's just pass
     them around.  
                    MR. SANDERS:  Did you say errant fax or a red box?
                    (Laughter.)  
                    MR. LAWLER:  There was also, and this was sent out
     by mail, I don't know, at the beginning, like Tuesday of
     last week, which is a compilation of all the subgroup
     reports. 
                    And, Judy, I know you did not get one.  I don't
     know if you got one subsequently.  
                    MS. DEMERS:  No, I got one.  It came about three
     hours before I left.  
                    MR. LAWLER:  They are coming around, a couple
     more.
                    There is also -- where is Tom?  There he is. 
     There is also a redraft of the infrastructure subgroup
     report which I don't think anybody has.  So why don't we
     pass that around.  It's obviously going to be too long to
     read immediately, but it's some, not -- well, I will
     characterize it my way.  Tom can disagree. They are not
     major changes, but they are minor changes after discussion,
     and it is now consistent with the recommendations, findings
     a recommendations we've sent out.  
                    MR. SPACEK:  Please throw away the infrastructure
     report that's in the combined package.  
                    MR. LAWLER:  Is the other one going around?  It
     is.  And if we don't have enough of those, which we may not,
     we will make more.  
                    MS. PUSKIN:  Is it possible to get some kind of
     printed -- some of it's not very readable.  
                    MS. RICCIARDI:  Yes.  I want you to know we tried
     to do it from disks, but do to a series of computer errors,
     I made some fax copies.  We can try that again.  
                    MS. PUSKIN:  Well, does anyone have a clearer
     copy.  
                    MR. SPACEK:  I have a clearer copy, if somebody --
     it's back to back.
                    MS. RICCIARDI:  Okay.  
                    MR. LAWLER:  We will make clean copies, and
     whenever they are ready they will be ready.  All those are
     being reproduced.  Hopefully, we will have them soon.
                    When Lygeia returns there are a couple of things
     that are going to happen during the day.  I guess the staff
     of the joint board is a round Elliot, and they are going to
     join is at some point for a discussion, a couple of events
     like that, but I will wait for Lygeia to get back because
     she knows who and when.
                    What I thought we ought to try to do today is
     really going through the findings and recommendation
     attached to this document.  My memo is a cover sheet to
     what's nine pages long.  And called FCC Telecommunications
     Health Care Advisory Committee, Summary of Findings and
     Recommendations of Subgroup reports, and use this as an
     outline as we go through of where the difference subgroups
     arrived, what the actual findings and recommendations that
     we would be making are, and use that to provoke discussion,
     although before we get stared, Lygeia, if you could just run
     through or schedule for today, in terms of who is -- other
     than our discussion, who is coming and when.
                    MS. RICCIARDI:  Yes.  For those of you who missed
     the Intel SAT presentation, which Cindy Trutanic arranged
     for us yesterday, David Meltzer will be returning at noon
     and again at four o'clock to talk to us formally or
     informally and bring us up to speed on a program that they
     are beginning.
                    Also, later in the day we're going to have the
     opportunity to meet members of the state staff of the Joint
     Board.  These are the people who staff the state
     commissioners who make up the Joint Board, and they will be
     in here about three o'clock, at which time we will give them
     an update of what we have been talking about, and just get
     to talk with them.  
                    MR. MAXWELL:  Let me just piggyback onto that. 
     They are a very important group because with respect to the
     Joint Board they will be advising the state commissioners
     who sit on that board as to the recommendations, and there
     are obviously a very strong connection between what you have
     all been doing and the work of the Joint Board.
                    We plan to take the recommendations and to put
     them into the public record so there would be comment on it.
     But these are the folks who will be making a preliminary
     analysis of what other people say and what you say, and how
     it relates to the recommendations as to what will constitute
     universal service and what the particular provisions regard
     to telemedicine are.  
                    So I would encourage you to, if you have got
     concerns and ideas, to make them know to these folks.  
                    MR. LAWLER:  Let me just describe before we get
     into the findings and recommendations what has gone on that
     I am aware of anyway.  
                    The subgroup reports came in, I forgot what the
     date was, but either right before or right after Labor Day. 
     I think there was some interchange among the subgroup heads
     of those reports.  There was a lot of discussion that went
     on.  We tried to pull out from those the findings and
     recommendations like you see here.  There were several long
     phone conversations between subgroup heads about where there
     were inconsistencies or things that needed to be meshed.
                    And this document, I think, I hope reflects those
     discussions.  It is for the most part consistent, although
     as Tom's report, subgroup report changes indicate, there are
     some changes, but it is mostly consistent with the different
     subgroup reports. 
                    So what I would suggest is we go through this,
     have a discussion, I'm sure, on some of these things will be
     some disagreement, and that's what we are here for, to have
     that discussion, and see if we can arrive at a consensus by
     the end of the day or maybe by 10:30, if we're, you know,
     all in agreement.  
                    So why don't we start at the beginning.  The first
     finding is a general one.  I actually have even seen a
     comment about this -- I forgot where I saw it -- about this
     should be a -- we could add to this the fact that it will
     help reduce cost, which I think is a good point, but
     hopefully this is not going to be one we're going to spend a
     lot of time on.
                    Anybody have comments on the first finding there? 
               MS. PUSKIN:  I would be -- as much as I think it
     has a potential for reducing costs, I think that the jury is
     out on that.  So I think one might want to talk about
     potentials as well as more than realities if one ever adds
     that comment to it.  
                    MR. LAWLER:  I'm sorry.  On cost?
                    MS. PUSKIN:  On cost.
                    MR. LAWLER:  Say potential on cost.
                    MS. PUSKIN:  Right.  Because I think there is --
     the history in the health care field of new technology as
     it's been --
                    MR. LAWLER:  Always add costs.
                    MS. PUSKIN:  -- an add-on and not a substitute,
     and while there is this potential in some instances,
     certainly from the average, if we prove access from a
     system-wide point of view, we may in fact be adding costs
     that are well worth the investment, don't misunderstand me,
     from many peoples' perspectives, but I think we should not
     be glib about that.
                    MR. LAWLER:  The whole thing is couched in terms
     of potential.
                    MS. PUSKIN:  Right, right.  
                    MR. LAWLER:  So obviously it's consistent.
                    Anybody else?  
                    MR. SANDERS:  Of course, they are between per
     patient cost and --
                    MS. PUSKIN:  Right, exactly.
                    MR. LAWLER:  Right.  
                    MS. PUSKIN:  Exactly.  But since this is a terse
     finding,  I mean one.
                    MR. LAWLER:  Finding number two here, they are not
     numbered, but the rural telemedicine one is just really
     what's underway out there shows that some of these things do
     work in terms of improving access.
                    Any disagreement there?  
                    MR. GUARD:  I would add consumer health and
     patient education information.
                    MR. LAWLER:  Consumer health?
                    MR. GUARD:  And patient education information.
                    MR. LAWLER:  Education information.  No
     disagreement there.
                    Any other? 
                    MR. SANDERS:  There is another critical component
     of the education.  One of the primary impacts is to provide
     a colleague to the primary care practitioner --
                    MR. LAWLER:  Right. 
                    MR. SANDERS:  -- out there and improving the
     educational level of the primary care practitioner.
                    MR. LAWLER:  How would you say that, Jay?  Just
     that improving? -- 
                    MS. PUSKIN:  Health professional education which
     can go in a number of way, both didactic and preceptorship--
                    MR. SANDERS:  Right.
                    MS. PUSKIN:  -- things which we want to skirt that
     one a little carefully because some practitioners while it
     does do that, some of them would argue that they are also
     educating the urban practitioners at that rural practice.
                    MR. SANDERS:  I would be the first to say that.  
                    MS. PUSKIN:  I know you would.  That's why I said
     it.  
                    MR. LAWLER:  Is everyone comfortable with
     education of health care professionals?  
                    The third finding is infrastructure and costs,
     both obstacles to successful rural telemedicine efforts.  
                    Okay, the first recommendation is the definition
     of rural -- Dena, I know you had, or I didn't hear it
     directly, but I overheard you saying there was something.
                    MS. PUSKIN:  I have no problem with deferring to
     our office.  I have problems.  My staff has been working
     with the staff of the FCC, and I know there is some
     discussions about using some of the Telco definitions.  And
     we are having some problems with that.  So I don't --
     Elliot, you and I and Lygeia need to talk off-line about
     what this is.  
                    I just got this message cryptically from one of my
     staff who is working with the staff.  And so we need to just
     explore what that is and make sure we have --
                    MR. LAWLER:  Dena -- well, go ahead.  But I think
     for these purposes, the advisory committee --
                    MS. PUSKIN:  Right.  
                    MR. LAWLER:  This is appropriate.
                    MS. PUSKIN:  This is fine.  Right.
                    MR. LAWLER:  Okay.  
                    MS. PUSKIN:  And the reality is, the off-line
     reality is what happens with FCC staff later.  
                    MR. LAWLER:  Right.  Could I actually -- Lygeia
     reminds we, we have a court reporter.  So, unfortunately, we
     all need to identify ourselves before we speak just so the
     court reporter can get it.
                    Dena, can I ask this?  This is a very cryptic
     sentence and this is not a simple subject.  It might be
     worth spending a minute describing what the approach is that
     the Office of Rural Health Policy believes is the right one. 
     And then I think it's important that we have that in as --
     you know.
                    MS. PUSKIN:  We have given a little bit of
     background material, but we certainly can write up even more
     if it's needed.
                    MR. LAWLER:  Yes.  I think maybe if we -- I don't
     know what the right length is, but if we had a page
     describing succinctly precisely what it is, you know.
                    MS. PUSKIN:  Let me just say for the group, just
     to give -- we have struggled with this because we have had
     to implement programs where the ultimate person filling out
     whatever is being filled out is often a clerk. And you have
     to have definitions that are administratively reasonable for
     definitions.  
                    And really there are two questions here in
     defining rural:  which areas should be designated rural, and
     among rural areas, because of the issues of comparability,
     and there are wide variations in population density size,
     you might want to distinguish among types of rural.  And I
     think the most extreme is the frontier areas versus the
     townships of New England.  Both are rural but they have very
     different characteristics and very different needs.
                    So we, for the purpose of administering public
     programs, which we have to do all the time, we recommend
     that the in the first area that we designate non-
     metropolitan statistical areas as defined by OMB as the
     first cut on defining what is rural.
                    Now, the problem is we have within those, and
     those are county-based definitions, so they are easy to
     implement.  The problem is we have some very large counties
     in this country.  Counties are not uniformly defined.  So
     you have Pima County in Arizona, which is huge, or San
     Bernardino County which goes from the Pacific Coast to
     basically almost, almost the Pacific Coast to the border of
     Nevada.  How do you define within that where you have, you
     know, large cities the rural area where there are more road
     runners than there are people?
                    Well, we have developed something called a
     Goldsmith variation, which is basically after Hal Goldsmith,
     who is our demographer, and he basically has looked at that
     and come up with some definition for these very large
     counties to subdivide them in a way that is administratively
     simple, and we provide that based on census data.  
                    Then you have gotten now the metropolitan counties
     that are large, and you have gotten their rural areas out of
     them in an administratively simple way.  Now you have got to
     distinguish among this great variety of rural areas.  And we
     are recommending the use of Urban Influence Code, which have
     been developed by the Economic Research Service at the
     Department of Agriculture.    
                    There are lots of reasons why we think these are
     superior to anything else that's right out there, and also
     it's administratively simple.  It's again based on counties. 
     The data are easy to get at.  You can put out a list and say
     here, you know, code yourself.  
                    And so we are looking for ways of defining -- of
     getting both as sensitive a measure of rural, because these
     are going to require some sensitivity for purposes of
     administration, as well as administratively simple.  And so
     this is what we are recommending.  We can write up a one
     pager on pros and cons.  It is what we recommend for a whole
     host of reasons.  
                    MR. LAWLER:  Jim, did you have any comment?  
                    MR. BRICK:  Dena did send this information, and I
     sent it to you guys after we had sent this in, and I am
     sorry it didn't make its way into the report here, but she
     did send me that --
                    MR. BRICK:  -- describing this.
                    MS. PUSKIN:  But it may be that I -- I sent you
     something really sort of designed as background for the
     committee.
                    MR. BRICK:  Right.
                    MS. PUSKIN:  And for staff.  But maybe what they
     need is a little more lay type of write up.
                    MR. LAWLER:  Right.  Right.  
                    MS. MACLAUGHLIN:  Mary Jo MacLaughlin, Eastern
     Maine HealthCare
                    I just wanted to reinforce the fact that we --
     that Dena really put out a good explanation of rural at our
     first meeting, and we, who have very, very large counties in
     our state, were very pleased with that.  And I think that if
     we just make sure that it gets into the recommendation to
     specifically talk about how we are going to break that out. 
     That would be very helpful to states that reflect large
     counties. 
                    MR. LAWLER:  anyone else?  
                    All right.  
                    UNIDENTIFIED SPEAKER:  Greg, should we go ahead
     and change the wording to say that then we use that
     definition instead of follow the lead?
                    MR. LAWLER:  Yes.  You're right.  
                    UNIDENTIFIED SPEAKER:  I mean, just make it a
     recommendation.  
                    MR. LAWLER:  Right.  
                    MORE. MAXWELL:  And that there be some brief
     description of what that recommendation is.
                    MR. LAWLER:  Absolutely.  Yes.  
                    MS. PUSKIN:  Yes.
                    MR. LAWLER:  We need, as I think Dena used, a lay
     description of what it is, but enough so that someone
     reading it knows what it is, and if they need more detail
     precisely where to look. 
                    MS. PUSKIN:  And if you want, we could actually
     list, you can list the counties that fall under each.  It
     gets pretty complicated.
                    MR. LAWLER:  All the counties in the United States
     that qualify?
                    MS. PUSKIN:  Yes, but in fact what you end up
     doing in the end is -- administratively that's what you give
     a clerk, and you give a clerk with a -- 
                    UNIDENTIFIED SPEAKER:  We can just attach that as
     part of a record --
                    MR. LAWLER:  Sure.  
                    UNIDENTIFIED SPEAKER:  -- for this, so that if
     there is any question, it will be in the record.  But for
     the purposes of the committee it can just be the
     recommendation is that the Goldsmith variation as played by
     Van Gould --
                    MS. PUSKIN:  And the Urban Influence Code.  
                    UNIDENTIFIED SPEAKER:  You can tell that Elliot
     and I have been working together.  It's now an attachment
     rather than a footnote.  
                    MR. LAWLER:  Okay.  The next recommendation, and
     this is really a series of them. 
                    Why don't I do this, Tom, if you are willing, this
     is from your paper, do you just want to go through and give
     us a brief description sort of bullet by bullet.  
                    MR. SPACEK:  Sure.  
                    MR. LAWLER:  And how you arrived there, and start
     the discussion that way.  
                    MR. SPACEK:  Okay.  For the minimal package
     basically the approach that was taken that was sort of joint
     between two of the subcommittees was actually -- we actually
     ended up defining a marketbasket of services, and we did
     that not by an approach that you will in the further
     recommendation about what to do in the future, which is
     actually to take a survey, but using members here as a proxy
     for that survey.
                    So in the report, and I think this is probably
     pretty much the same in both the old one and the revised
     one, there are seven different telemedicine items listed
     that seem to me to be the most important items that you
     needed to do.  
                    And so given that marketbasket, what we then
     attempted to do is say what is the band width that would be
     needed to accomplish that at reasonable speeds.  And there
     are footnotes in the report where how long x-rays would take
     and how long other things would take.
                    And what we had come up with is that 384 kilobits
     per second was sufficient to do these kinds of things, but
     that's clearly open for discussion.  
                    And I guess in addition to that we had some
     footnotes that if, for example, someone had a higher speed
     line, or even 384, depending on what you were doing, you
     could use those same lines for other things.  For example
     you could use a T-1 or a quarter T-1, which is 384, for your
     telephone service.  So, okay, somehow it would have to
     distinguish that if you use something for things that are
     not covered by the act, that they should not be given
     discounted rates.
                    In any case, 384 is what we had come up with,
     although I know there are some people in the room here who
     would prefer T-1, and we can have that discussion and you
     buys can decide, okay. 
                    Secondly, there was internet access, including
     electronic mail, information access, cooperative
     applications and so forth.  We didn't cover the pricing of
     that in this recommendation cause pricing is really a
     separable issue and comes up later.  And I think when you
     see the pricing differential recommendations later, I am not
     aware of any urban area in the U.S. at the moment where you
     can't get flat rate internet access via a local call.  That
     could change over time, of course, but at the moment that
     will get covered later.
                    But internet access as a service is also in the
     recommendation.  And on that same issue, internet access
     could also be done using your T-1 or 384 line also.  In
     fact, some of the larger areas -- well, people who want to
     use more, do more video or imaging on the internet might
     chose that as a preference, and that would be another valid
     use of that line that would be covered.  
                    That's actually about it on this particular
     recommendation.  The -- there is two things that, in sort of
     working on this and thinking about this over the weekend,
     there is actually two things that should change compared to
     what is written here, and I think it doesn't change the
     proposal.  But basically in this particular recommendation
     it says what the 384 is used for.  It should not say that. 
     Rather, we should have a footnote and have the marketbasket
     listed, you know, that we have in the report, because, you
     know, these are the things.
                    And then another item is that something that we
     say at the bottom of the fourth bullet is that although we
     have this marketbasket there is no intent that your use of
     telemedicine would be limited to that marketbasket.  In
     other words, you are getting this telecommunication services
     at a discount rate.  Any telecommunication application is
     okay to use.  Okay?  So that sentence should probably get
     moved up to this recommendation.  
                    So basically we are saying there is a marketbasket
     which has these seven or eight things in it.  You are not
     limited to that 384 kilobits, internet access.  That's the
     minimal package to meet the marketbasket in the
     recommendation.  
                    MR. LAWLER:  Tom, also, why don't we get to all of
     these bullets at once, and then I will ask Jim and Eric, who
     also participated in various parts of this if they have
     comments.  
                    But the emergency services, you have a
     recommendation.  What else?  Home health care. 
                    MR. SPACEK:  Yes.  Why don't we just cover those
     now.
                    MR. SPACEK:  Okay.  
                    MR. LAWLER:  And have a full discussion on this.
                    MR. SPACEK:  Okay.  On emergency services, and
     especially for mobile units like helicopters and ambulances
     and so forth, the recommendation here is to have a minimum
     of 9.6 kilobit data transmission to enable reports to
     emergency departments, urban trauma centers and so forth on
     vital signs and things of that sort.  Relatively low speed. 
     Cost-wise, it probably, you know, urban and rural, probably
     not much difference in that except when we get later into
     infrastructure development there probably will be a
     difference in getting the infrastructure further out into
     the rural areas to do that.
                    This is the -- this is what's recommended in the
     minimal package.  And as you will see when we get to
     advanced services later, we are recommending that in these
     biennial reviews of what the minimum package is over time as
     you move advanced services and you consider that the Joint
     Board and the FCC consider many additional types of services
     as costs get reduced and infrastructure gets built and so
     forth, such as you can potentially video or, you know,
     imaging and video from ambulances and helicopters.
                    Okay, so the recommendation though here is 9.6 for
     mostly vital sign information, available to any rural area
     that requests it. 
                    Yes?  
                    MR. SANDERS:  Just one thing, Tom.  In this
     bullet, just from a semantics standpoint, the first sentence
     says, "Based upon experience," et cetera, et cetera, "80
     percent of the casualties are occurring in rural areas.  To
     reduce this imbalance," well, we're not reducing the
     imbalance in terms of the casualties.
                    MR. SPACEK:  Casualties, yes.  
                    MR. SANDERS:  Really what we are reducing is we
     need a sentence in between there which, and this is the
     data, that there is a four to one greater morbidity and
     mortality to rural casualties in Texas.  This was a study
     done by the University of Texas about six years ago.  
                    MR. SPACEK:  Could you mail or provide the details
     on that?  
                    MR. DUKE:  Hey, Tom, it's also in other places
     too.  I mean, the same -- the disparity and distance from
     where it is in the country -- I am Duke.  But they -- it's
     the far out, that's why -- the travel faster, and they are
     harder to find, and when we find them, you still got that
     period between the time they find them and the time they get
     them back where you can do something effective, and that's
     where I'll be -- and time goes get to be important, you
     know, when that -- you know, when you are watching that
     blood run out on the highway, it does -- time becomes
     imperative.  
                    MR. MAXWELL:  Is the four to one, or approximately
     that, pretty consistent?
                    MR. DUKE:  Those are just number of guesses. Those
     studies have been done all over everywhere, and it's kind of
     following a gillion different states.  I just happen to be
     in Texas.  But the first one ever done was in California,
     and then just different people looked at the same thing, and
     it's just kind of a principle.  I wouldn't live by that
     exact ratio, but you may die by it.  
                    MR. LAWLER:  Jay is correct on the grammar though. 
     He is also right about the merits, but there does need to be
     a different --  
                    MS. PUSKIN:  In order to improve this something
     about -- that's what you're looking at, right?  
                    MR. LAWLER:  Right.
                    MR. DUKE:  That's the whole point.  If you can
     get, if you can get someone out there -- if you have some
     person or responder out there who is communicating with a
     knowledgeable person at a center.
                    MS. PUSKIN:  That's right.
                    MR. DUKE:  You've therefore extended the physician
     care to the same, which beats the thunder out of variously
     trained, wonderful, but variously trained first respondent.
                    MR. LAWLER:  Right.
                    MS. PUSKIN:  Now, let me just say that w have done
     a study in North Carolina which supports this, a very
     detailed study in looking at the problems of rural emergency
     rooms as well.  And what you are trying to do is beef up the
     emergency response system both at the first responder level
     and the emergency room.
                    MR. DUKE:  I couldn't agree more.
                    MS. PUSKIN:  And I want to talk a little later
     about why there is some inadequacies here in some --
                    MR. DUKE:  You are absolutely correct.  
                    MS. PUSKIN:  But, in fact, we have problems in
     both, of which this technology can be a major difference.
                    MR. LAWLER:  Just anybody who can get us
     references to the studies  or the studies themselves it will
     help, again, you know, bolster the report in terms of this
     is something that the --
                    MR. DUKE:   You want a bunch of references?
                    MR. LAWLER:  -- yes, the Joint Board and the FCC
     can actually look at and say, you know, there is data here,
     we're not making this up.  I'm going to first go here.  
                    MR. KIENZLE:  Mike Kienzle. 
                    You know, the magnitude of the rural/urban
     disconnect, I think, is the basis for the emergency medical
     services statewide kinds of things that are happening in
     many states.  I mean, the fact that there is a rural/urban
     discordance has given rise to the kinds of state-generated
     legislatively mandated emergency medical services acts, and
     those are in place in many, many states.  So I think that's
     been recognized for some time.  
                    MS. PUSKIN:  Unfortunately, that -- it's nothing
     compared to what was in place in the seventies in the
     Emergency Act.  We have real problems and holes.
                    MR. SULLIVAN:  Eugene Sullivan with a question.
                    Does 9.6 then meet the needs of the emergency
     services?  I wonder if we are setting our target maybe a
     little bit too low there.  Obviously, the ER is going to
     want a lot more information, and we can't give them
     everything, we may not be able to give them everything, but
     I think we need to look higher than 9.6, and maybe your
     studies show that.  
                    MS. PUSKIN:  Right.  Well, that's what I was
     getting at.  It's one thing to talk about 9.6 for the first
     responder at the scene, and the other issue is what do you
     need at the emergency room once you get someone there or
     once they are there in terms of relationship to follow up
     with in fact a tertiary center in terms of follow-up care
     and what you need.
                    And I'm not sure about the 9.6 for the first
     responder, but I can tell you on the emergency room level or
     the rural emergency access community hospitals which people
     are talking about, which is a whole different model that
     we're talking about here, I am not -- I am convinced 9.6
     won't work, and I certainly am very skeptical about 384. 
                    MR. LAWLER:  We have another comment here, Tom.
                    MS. CONNORS:   Helen Connors.
                    I would just say that since I am hearing people
     say that there are studies that have been done out there,
     that we change that first part of that sentence instead of
     saying, "Based upon experiences in Houston," because it
     sounds like it's too local, and it sounds like there is
     other broader studies done.  
                    MR. DUKE:  That it goes down to local.  
                    MR. LAWLER:  Tom, did you have a -- yeah, I agree
     with that comment.  You are absolutely right.  We should get
     the other studies references, and it should be broader than
     Houston.  
                    MR. SPACEK:  Yes, and on your comment, there are
     two separable issues. The 9.6.6 is the -- you know, the
     first arrivals and so forth.  And once you are in the
     emergency, you know, in an emergency area, clinic or
     something of that sort, then the telemedicine services
     available would fall under the other items, which would be
     the 384.  
                    MS. PUSKIN:  And I think we need to talk about
     that separately.  
                    MR. SULLIVAN:   But I think Dena and I said the
     same thing.  Does the first responder need more than 9.6?
                    MR. SPACEK:  Oh. she didn't --
                    MR. SULLIVAN:   And I think if there hasn't been a
     study done, maybe a study needs to be done cause 9.6 would
     probably give them about the same capabilities as they have
     now, which is the voice saying blood pressure, et cetera. 
     Why not look to more tools to aid them out in the field? 
     Pick a number, 14.4, 28.8, something up there that maybe
     they can take a picture and send a high quality image even
     though it takes a little bit of time?  
                    MR. SANDERS:  But Picasso does that now.
                    MR. SULLIVAN:   Right.  At what speeds?  
                    MR. SANDERS:  I don't know.  And the question I
     was going to ask is what modality are we talking about?  Are
     we talking about cellular capability?
                    MS. PUSKIN:  We are talking about that.  
                    MR. SANDERS:  Now, I know there will be a quarter
     of the T-1 within the next 12 months on cellular, but it
     doesn't exist now.  What can we get from cellular?  That's
     what we're talking about.
                    MS. PUSKIN:  But 20., we can get now, and that
     does give you a lot more capability.  I mean, I would agree,
     I mean, I didn't want -- since this is -- the area, first
     responder, is not my specialty area, and I think we do have
     someone here who it is.  I think we should really defer.
                    But I would say base on our experience with our
     outreach grants, which we have funded some of them, we go to
     a higher band with those.  We use 28.8 modem capabilities
     and that's questionable too.  
                    MR. DUKE:  Duke again.
                    I can 'tell you about the cellular.  We had a lot
     of tough experience with that.  We tried it, we tried
     compression.  Now understand, I don't understand what I'm
     saying.  If you talk about 9.6, you can tell me anything and
     I'd believe you, you know.
                    (Laughter.)
                    But I am talking about trying to make it work out
     in the field, and we used -- we tried cellular transmission
     by using phone lines, and somebody from Oklahoma had a
     technique or some technology to compress it, and they were
     using it, selling it to new stations to show people
     tornadoes.  Well, the hooker is if you go -- if you have a
     new authority, particularly tension pneumothorax, and for
     you that don't know what that is, you've got too much air
     pressure in one lung, you've blowing along and you've got
     more pressure in there than you've got blood coming back to
     the heart, you're going to die if somebody doesn't fix that.
                    And it doesn't work.  If you move and you go from
     one cell to the next, and it goes dead, and you can't find
     it again, you know, or it -- also, it's too slow.  It
     doesn't give you -- you either get a slide show, you know,
     or you're so far behind the guy is already dead anyway.
                    It's interesting you said you would do a study on
     this thing about whether -- what impact it has.  The only
     study that I can tell you, and I don't how else you would
     get it, but Dr. General Zajtchuk, who is a member of this
     task force, told me not long ago that out of the 8,000 odd
     autopsies done, complete autopsies done among the Vietnamese
     men in the Vietnam War, 80 some odd of those men died of
     tension pneumothorathine because they had --
                    MR. SANDERS:  Head and thorax, the closed head
     wound and closed chest wounds are the one major casualties.
                    MR. DUKE:  So that is one of them.
                    MS. PUSKIN:  So what would be needed?  I mean,
     it's just that -- what would be needed?
                    MR. DUKE:  Don't ask me the number, but ideally we
     perfected the -- I say "perfected," I haven't done anything. 
     We have worked with people that are a lot smarter than I am,
     and they got this little bitty cameras, you know, and doing
     this stuff trying to transmit this stuff back if you can get
     some band width to do it on.  You know, I don't know how
     many bits, bytes or anything else it takes to do that.  You
     know, but if you can see it -- I mean, I can tell a
     paramedic out there better put a chest tube in, put it down
     one rib place lower, and so forth.  
                    MR. LAWLER:  Jay.  
                    MR. SANDERS:  Well, I feel somewhat credible in
     discussing this.  I helped start an EMS system in Dade
     County, Florida.  The reality is that in the example that
     you give, tension pneumothorax, the real need is for the EMS
     personnel to be able to, you know, identify tension
     pneumothorax, and that's listening to the lungs and feeling
     --
                    MR. DUKE:  Well, they do this all the time, and I
     defy you -- I mean, I know what the books say, and I know
     what everybody teaches, but in the emergency room you can
     listen to one of those buggers and he will have plenty good
     breath sound, and be all dead as a hammer.  
                    MR. SANDERS:  I know, so what then is -- 
                    MR. DUKE:  You can tell by the way -- it's the
     look you can get on their face and the way they are
     breathing, and also if they start getting a lot of
     subcutaneous emphysema and they're not breathing right, that
     sort of thing.  You can pick them up.  And the thing, you
     know, that we teach them now, you know, to stick needles in
     there. This last year I had three people come in dead with
     needles in place because the needles stop up.  
                    MR. SANDERS:  I actually think, and it's probably
     for another time, if you actually look at the trauma cases
     that you are dealing with, it's not going to be the picture
     that is going to give you the information.  It's going to be
     the training of the EMS personnel and their audio capability
     and their hand capability that is critical.
                    But with that said, my feeling is we ought to
     provide as much band width as possible to EMS in rural
     areas.  
                    By the way, the sentence that I would stick
     between the first and the present second sentence in that
     second bullet would be, "However, the trauma expertise that
     exists," I would say, "There is a great disparity between
     the trauma expertise in rural areas versus urban areas,"
     something to that effect.  Then I would say "to reduce that
     imbalance."  
                    MR. MAXWELL:  Just a question.
                    There is a difference between getting as much band
     width as you are able to get and going back to at least the
     injunction from the law, which is to say establish a kind of
     comparability, listings that are essential.  And so I have
     no expertise in this, but to the extent that we are talking
     about it, we're talking about this is to what is deemed
     essential in urban areas, not sort of what we are capable of
     getting.  
                    So with respect to whatever recommendation the
     committee makes, it should be thinking about what is
     available in urban areas as a basis for determining what's
     essential for health care, and therefore the services need
     to be available at comparable rates.  
                    MR. KIENZLE:  Mike Kienzle.
                    I think the committee has to be a little bit
     careful about defining applications and band width that
     might be in some circumstances essential.  I mean, from the
     perspective of someone who is very familiar with the
     problems of rural hospitals, who are often somewhat
     vulnerable to vendors of certain types of hardware and
     software, that there is a problem in holding out in a public
     forum a certain application that may be helpful, but it may
     not be helpful.  But one thing is certainly true, it is
     expensive. 
                    And so I would just hope that we can be reasonable
     about what we're defining as being essential, and try to
     recommend those things that are clearly been shown to be
     helpful and valid.  
                    MR. LAWLER:  Cindy, did you have a comment?
                    MS. TRUTANIC:  I'll wait.
                    MR. LAWLER:  Okay.  Eric, hold up.
                    Tom, why don't we finish running through this set
     of bullets, and then we will have this entire discussion,
     and Eric and Jim, if you have comments we will -- when Tom
     is Done.  
                    MR. SPACEK:  Okay.  The next item is a
     recommendation with respect to nursing homes that several
     people thought was very important that not-for-profit
     nursing homes be considered to be covered by the act.  It
     turns out that, in reading Section 254(c)(1), where it
     defines -- I'm sorry, I have the wrong page.  But anyway --
     let me find the right --
                    MR. LAWLER:  Here you go, Tom.  
                    MR. SPACEK:  I have it.  Okay, it's 5(b), as
     health care provider, it defines health care provider in
     5(b).  
                    And no matter how you try to stretch your
     imagination you can't -- I mean, it's hard to say that
     nursing homes are covered there, okay.  So they are not.  I
     mean, we were hoping that there would be some category that
     say, ah, it falls under that.  
                    So what the recommendation basically is, is that
     the FCC consider either a mending the act or new legislation
     or something, however one would change something, to get
     nursing homes included.  That's that recommendation.
                    The next one has to do with this marketbasket of
     essential services, and that is, even though this group sort
     of as a proxy came up with the seven items that make up the
     marketbasket, in addition to the fact that you can do
     anything else within -- within the telecommunication service
     that is discounted as long as it is telemedicine, that that
     should be reviewed every two years, cause applications
     change.  They may have greater requirements, or in some
     case, less requirements if there is better technologies and
     compression techniques or something of that sort.
                    But in any case, it should be reviewed with a
     group that has the characteristics of this group, in the
     sense people who do rural telemedicine, people who know
     telecommunications, and other health care -- government,
     health care providers and so forth.  
                    And the idea is to continue, you know, equalizing
     telemedicine services in rural and underserved urban areas. 
     And we also recommend, based on some of the members of the
     committee,that the revised marketbasket perhaps come up with
     taking a survey of sort of well served areas.
                    Okay, I guess that's really it.  The last sentence
     there, you know, I already suggested moving that up to the
     band width recommendation.  So that's the marketbasket
     approach, and this method also -- this is put here also,
     this review, so that we really review the applications and
     what you need to do in telemedicine; that the idea is not to
     review band width.  Once you review that and decide what is
     essential, and if the -- you know, the bar moves up for what
     is essential over time and what is affordable over time,
     that you -- then you figure out what that is, and then
     translate that somehow into telecommunications and with
     requirements.  So we are just recommending a similar
     approach in the future that was used by this committee
     except for the serving.
                    Okay, there is a lot said here about home health
     care, and how to expanding and becoming more and more
     important and why it's becoming more important.  It's
     covered in the next recommendation.  And the idea here is
     that we are recommending that services for home health care
     be identified and potentially be included in the first
     biennial review, and we look at that to see the status of
     technology at the time, the costs and so forth, to see
     whether not-for-profit home health care providers would be
     included in the next round of marketbasket.
                    MR. LAWLER:  I just wanted Jim Brick and Eric
     Tangalos, they -- sort of a joint effort in this one.  
                    MR. BRICK:  I guess the only comments I have about
     this is I am concerned, as Dena is, about the 384.  The
     folks that responded to me in my group in the multiple
     surveys that we did, I don't think that there was a single
     person that said that -- that used a number that was as low
     as 384 for the service in the rural hospitals.  
                    I think that the practice around the country that
     is going on as people moving when it's available and when
     they can afford it, and those are two important issues to
     the higher band width services in those small rural
     hospitals, and I am very concerned that we will set a
     standard here that will become not a minimum, but a maximum,
     and that because of that, if folks have the money, and they
     have the wherewithal and they have the need, that they are
     willing to make the investment in a higher band with
     service, that they are going to have difficulty obtaining
     services.
                    That's my major concern about this.  The issue
     about the other end of the spectrum, about the emergency
     services and the ambulances and with the first responders, I
     don't think we have enough information to -- we have even
     less information on that end of the spectrum, about what is
     needed and what's necessary and what people are using across
     the country.  But I think on that end we also need to set a
     standard and we need to -- and then in the biennial reviews
     that this can be evaluated, not just leave it open-ended. 
     And from what I am hearing from Jay and from other people
     that have some familiarity with what's the capabilities at
     that end of the band width, I'm not even sure that 9.6 is
     enough to do anything other than tell the doctor in the
     emergency room what the patient's blood pressure and pulse
     and that kind of thing is.  And that's not, I don't think,
     what they are talking about.
                    I think they are looking to have a little more
     information than that.  How much is necessary, I'm not sure. 
     That's an end of the spectrum where we haven't done very
     much work.  But if we're going to -- if we want that end of
     the spectrum to expand, I think we should give them enough
     band width to be able to use it for something, and get
     something out of it.  And maybe we can learn something that
     in these biennial reviews can be used to change standards.
                    MR. LAWLER:  All right.  Eric.  
                    MR. TANGALOS:  I think the chair struggled with
     two issues that needed to be resolved here, nd it was
     interesting to see everybody lock on 9.6. But that's one of
     the issues.  We need a discussion of 384.  The question is,
     is that a minimum, is that a maximum, where do you want to
     go with those things.         
                    And that relates to the other issue here, which is
     the marketbasket.  And Chuck Dougherty in our group, I mean,
     in our report, eloquently described the difficulties in a
     marketbasket, and that's again what we have already started
     to discuss; that as you define elements, you are putting
     things in and leaving things out, and the closer you define
     what those services are, the less likely you are to allow
     other services later on to be in there, and the more you are
     really defining the max rather than the minimum.
                    And so I think that a discussion -- we need
     guidance and direction as to, one, what the minimums are
     going to be; and then how closely or clearly do you define a
     marketbasket.  How much do you want to say this is what's in
     that versus saying these are the services that we think, you
     know, are kind of out there that that help gauge what the
     proposes are?  
                    So that's the two issues that have to be resolved
     before we go forward.
                    MR. LAWLER:  Let me just add, and this keeps
     hitting me, and if people think this is irrelevant, so be
     it.  But, and it really appears later on, actually it's the
     next section, the backbone infrastructure.  I think it's
     important to keep in mind exactly what we're talking about
     here.  We are talking about two things that the law says
     will happen.
                    The first is that you get a comparable rate to an
     urban area.  So, you know, a hospital in West Virginia, you
     set up a telemedicine network, I don't know what the urban
     rate will be in  West Virginia, but whatever it is in that
     state you get the comparable urban rate.
                    But we are also talking about something more than
     that, which is sort of what I call the build out of the
     rural infrastructure.  It also means that if that
     infrastructure is not there in the parts of West Virginia
     that your telemedicine network is covering, whatever the
     term in the act is, the eligible telecommunications carrier,
     whoever is either going to volunteer or be drafted to build
     that infrastructure, they are going to have to build it to
     whatever we -- whatever the Joint Board and the FCC decide
     is the -- you know, the minimum that they are going to have
     to build it to. 
                    So it's not only an issue of, well, are we going
     to give them a cheaper rate, it is you've got to go build
     the infrastructure.  And I just think it's important to keep
     that in mind when we're talking about all this, because, you
     know, somebody is going to go spend a lot of money doing
     this, and the Universal Service Fund is going to put out a
     lot of money to support it.  And obviously, you know, if you
     go -- I don't know what the most sophisticated thing you
     could build in the world is, but if you say ever rural area
     has got to have it because we might want to use
     telemedicine, we would quickly run out of money.  So we need
     to keep that in mind.  
                    Tom, did you have a -- and I will be right over
     here.  
                    MR. SPACEK:  Yes, I have two comments.
                    One, Eric, with respect to the marketbasket, I
     think that's -- you know, it's an excellent point.  You
     don't want to try to define what's in it and say you can
     only do those things.  And I don't think that's what was
     done this year, nor are we recommending in two years.  I
     think what we are doing is saying defining a marketbasket as
     a guide, and that's how it was used.  In other words, these
     are the things that people are claiming are the most
     important things that need to get done, essential things.
                    And then as a guide use that to determine, or to
     estimate what some band width requirement would be, because
     that's the thing you are getting the discounted service for. 
     You have to specify what the service is that is going to be
     cheap, okay.  And then specify that you cannot -- that that
     marketbasket was just a guide, and any valid
     telecommunications application can be used on that service,
     okay.  And that's a little different approach, and I think
     that makes it a fairly amount more flexible.  
                    Just one comment on your --
                    MR. LAWLER:  Sure.  
                    MR. SPACEK:  In building out the infrastructure,
     that's sort of, you know, technically -- you know, it is
     costly and all that stuff.  But in some sense it's a little
     bit less of an issue than the 384 is or the 9.6 is in the
     sense that this is the -- the 384 and 9.6 is what you get to
     use at your site.  The infrastructure development most
     likely will have facilities -- you know, when people are
     burying cables and all this stuff, it's much less expensive
     to put in more than you need, okay.  And that typically is
     done and all that.  
                    MR. LAWLER:  I agree with that.
                    MR. SPACEK:  So that would be less of a problem.
                    MR. LAWLER:  Yes, I agree with that completely.
                    Let's go over here.  Judy?
                    MS. DEMERS:  I am Judy DeMers from the University
     of North Dakota, and I served on the infrastructure
     subcommittee and I was the one hold out who opposed the
     recommendation of 384 and supported the T-1 as the minimum.
                    And I did want to comment on that in terms of,
     first of all, I am not infrastructure expert, but for that
     reason I developed a group of about 12 to 15 people that I
     talked to consistently as this information came across, and
     to a person, they feel that the T-1 is the minimum that we
     need to use for a number of reasons.
                    First, if you look at what's available in urban
     areas, the infrastructure committee report says very clearly
     that T-3 is available in most of those areas, and yet we are
     wiling to say for rural areas we will go with a quarter T or
     a 12 volt difference.  I guess I don't think that's
     particularly appropriate.
                    Second, if you're going to build a system, you
     don't underbuild a system, you overbuild a system to begin
     with because the technology is going to catch up very
     rapidly.
                    Thirdly, you can't buy 384 in my state.  So we can
     provide subsidizes rates for 384, but the fact is if a rural
     hospital is going to use that system they are going to have
     to go out and buy T-1 and pay full rates for three-quarters
     of that T-1.  Folks, that doesn't make sense.  I think
     that's extremely discouraging, if not prohibited, to many
     rural hospitals that we are trying to reach.  
                    I also called my U.S. senator.  I have been
     working with his staff as well as we have received these
     reports.  And they talked to the VA for me.  And the chief
     information officer at the VA, Dr. Robert Collander, said
     that the VA Hospital also selected T-1 as their minimum for
     all of their hospitals basically because of significant
     clinical implications; the ability to split, the ability to
     use four quarter T-1s for different purposes and different
     kinds of transmissions.
                    For that reason I think that, even though I have
     great respect for what my subcommittee has done, I am still
     in disagreement with the 384 and would urge us to consider
     the T-1 as the minimum.  
                    MS. MACLAUGHLIN:  Mary Jo MacLaughlin.
                    One comment about the home health care bullet
     that's been inserted.  As a matter of fact, I spoke with Jim
     Brick several weeks ago about including the point about home
     health care.  
                    It talks about during the first biennial review to
     consider home health care for possible inclusion in the
     minimum package.  I wonder if this is a wise thing to do, to
     wait two years to address this issue.  Because as we know,
     more and more people are being forced to go home earlier or
     stay home longer.  And therefore if we can't even address
     this issue for two years, I am afraid that the marketplace
     is going to push people into the homes, and even to a
     greater extent than they are now, and those folks attending
     to them won't have the opportunity to have some of the
     advance technology that even EMS has, or some of the small
     rural providers.  
                    MR. LAWLER:  If I, and this is really just a
     comment on what the law says.  If you read the seven
     categories of people who are eligible under the law, I don't
     know how you get home health care in there, but somebody
     smarter than I, cleverer than I may be able to figure out a
     way.  So I think the only other recommendation we could make
     would be that the Joint Board and the FCC ought to consider
     recommending a change in the law.  
                    If we are going to do that, I think we ought to
     have some evidence to suggest that there is a -- here is the
     reason you ought to do it, and, you know, we may have that. 
     I have not seen it.  We may have that.  And, frankly, I
     wouldn't suspect that this is going to be changed
     immediately no matter what we suggest.  So, you know, I
     think we ought to think carefully about, you know, do we
     have the evidence at any point in time to suggest this, and
     have it taken seriously.  
                    I think at least we ought to pay the attention due
     it to see whether or not this might not be a recommendation
     made to them, to include home health care, because to
     exclude them, I believe you are leaving out a huge chunk of
     the world population, and will cause greater expense because
     that rural population will then have to seek services at the
     hospital.
                    MR. LAWLER:  Right.  
                    Chuck?  
                    MR. HOLUM:  Yes, I have a question related to that
     and also to the nursing home question.
                    Is there talk already of some kind of a fix bill
     for the Telecom Act.  I mean, is there going to be some
     legislation?
                    MR. LAWLER:  How long did this one take, Elliot? 
     Twenty years.  So.  
                    MR. HOLUM:   But that doesn't mean you wait two
     years to start the process.  If you start now, it will take
     four years or 20 years.
                    MR. LAWLER:  Right.
                    MR. HOLUM:  And maybe you want to start putting
     these ideas into the report.
                    MR. LAWLER:  Sure. 
                    MR. HOLUM:  The nursing home language is similar
     and troubles me just because the more I learn about these
     different reasons the more I am troubled by saying nursing
     home because that probably includes things and excludes a
     lot of other long-term care facilities.  And I would
     recommend saying, for instance, nursing homes and other
     long-care facilities in rural and underserved areas so that
     you don't exclude some whole category of facilities.  
                    MR. LAWLER:  Just while those words are on the
     table, anybody have any objection to that, other long-term
     care facilities?  
                    Cindy?
                    MS. TRUTANIC:  Cindy Trutanic.
                    First, I would just like to express my gratitude
     as a member of the infrastructure subcommittee for Tom and
     Sid Hussain who really put in a lot of work trying to really
     pull together a lot of various and different thoughts from
     subcommittee members, and I think they did a very good job. 
               The marketbasket of services language has been a
     difficult one for us to manage because while I think the
     services is important to identify services that are used to
     serve as an illustration for the types of -- the kinds of
     band width that we are recommending, it is a slipper slope
     because they you, as Eric said, you get stuck in an
     application-centered approach which is limiting and may not
     keep up with the technology.
                    One of the things I think that we can do, which is
     it's mentioned as a guide indirectly in our infrastructure
     report but not in the list of recommendations, and I think
     if we just specifically state that this is by no means an
     inclusive list, but a guide for the infrastructure
     recommendations that we have made.
                    The one thing I disagree with, though, is that to
     compare the applications -- to use the service applications
     in an urban context to compare them to service applications
     in the rural context to achieve some sort of parity, I'm not
     sure that's the way to go because the applications in an
     urban community may be very different than the health
     applications required in a rural community.  And the Act
     really talks about the parity of the rates and of the
     skeletal structure or the potential to get the
     infrastructure there.  And I think you get into trouble
     trying to compare urban and rural services, you know,
     service by service.
                    I don't know if anybody has any other thoughts
     about that, but it seems to me kind of difficult.  
                    MR. LAWLER:  Jim?   
                    MR. BRICK:  I just wanted to make one more comment
     about the home health care issue.  I had a lot of
     conversations with Mary Jo back and forth about that during
     the last month, and she is very eloquent in her -- in her
     pleading for us to do something about that.  And I think
     there is an issue there that maybe we could say is more
     strongly in here.  I'm not sure how to say it, a
     recommendation, that this needs to be looked at and it needs
     to be looked at soon if it can't be covered under the bill.
                    And the reason why it is is because there are
     other people believe that this is a valid thing.  The
     industry is interested in this.  At my place we have had
     several folks come in there looking for people to partner
     with as a way to use telemedicine, to be able to deliver
     home health care.  I know that -- I think that Hewlett
     Packard has a project with the Mayo Clinic, and also the
     folks at Duke looking at that specific issue.  
                    And, you know, I think this is an area that is
     going to expand, and I think if we can put -- make some more
     stronger language in here that we recommend that this be
     pursued, maybe it can't be done under the provisions of the
     law now, but I think that is an area that is going to
     expand, and that we should go on record as saying that we
     are aware of that, and that we think it should be pursued.
                    MR. TUCKSON:  There is a related point on all of
     these that I don't want to introduce a third issue in terms
     of the diad that we are dealing with.  Maybe we can come
     back to it.  But what we have is we continue to talk about
     underserved as well.  There is this language in both the
     second and third bullet that talk about underserved
     communities being distinct from rural, and being distinct
     from purely urban environment.  So there is a whole another
     set of issues.
                    And what we haven't done in the record as I read
     it is to describe what that means, what is an innercity or
     urban underserved area and the special challenges therein
     both for nursing homes and home health care, as well as the
     marketbasket issues.  And this is probably a little
     different discussion than the one we have been having on
     these two points, and so I just urge us to put a footnote to
     that and come back --
                    MR. LAWLER:  Okay.
                    MR. TUCKSON:  -- to what does that mean.
                    MR. LAWLER:  Sure.  
                    MR. MCCONNAUGHEY:  Jim McConnaughey, MTIA.
                    A couple of points on the third bulleted
     paragraph.  Maybe I have been inside the Beltway too long,
     but I think we may want to clarify the language, the third
     sentence talking about the objective of equalizing
     telemedicine services.  I think the act points more towards
     similar services on a reasonably comparable basis.  It's a
     bit of a nitpick, but it's -- we may want to show that this
     group is in sync with the act, not blazing a different
     trail.
                    The second point is I would share the concerns
     that a number of folks have said about this marketbasket
     process.  As an economist, sort of my instant knee-jerk
     reaction is how about if a rural health care provider needs
     a service, they get it, and then they get a discount in the
     sense of the reasonable comparability with the urban
     provision of it.  That could be fraught with difficulties
     too.  I mean, in terms of the size of the fund, well, and
     just trying to keep track of that sort of thing would be a
     nightmare as well.
                    But it seems to me there should be sort of a cost
     benefit type of look at this sort of thing; that it is
     probably the right way to go though.  There are some
     concerns but perhaps it should be mention in the report that
     we realize that a marketbasket is not a panacea that, I
     guess guide was the word that was used along the way here, 
     I think that would serve us well.
                    On the subject of the biennial review, I was just
     curious about why two years was chosen, and why -- not why,
     but what group would be constituted to do this sort of
     thing, and would it be under the auspices of the Joint Board
     which would, I guess, have to be reconvened, or would it be
     under the umbrella of the FCC?  
                    MR. LAWLER:  Well, I think I -- I don't know where
     two years came from, but I suspect it was, you know,
     carefully considered.  One or three, how about two.
                    MR. MCCONNAUGHEY;  I don't have a glib answer.  
                    MR. LAWLER:  But I do think -- I mean, there was
     in fact a recommendation, I think, Tom, it was in yours,
     that the advisory committee continue.  Actually, I will take
     responsibility for suggesting that that might look somewhat
     self-serving to say that we ought to continue our existence,
     you know, forever so we can provide you advice.  
                    (Laughter.)  
                    MR. TANGALOS:  We did not have the hubris to do
     that.
                    (Laughter.)
                    MR. LAWLER:  And the thought was, you know, it
     didn't have to be this group, but there ought to be a group
     out there of, you know, representing similar interests with
     similar expertise that was available to say, yeah, we have
     moved, you know, the technology has moved, the rural
     medicine has moved, something has moved, you know, so you
     ought to look at it this way as opposed to that way.  
                    And my recollection is, Elliot, and you correct
     me, I think that, you know, this would ultimately be
     something that the FCC would continue.  The Joint Board is
     got at some fairly quick point.  So I think, you know, it
     would be up to the FCC in the future to update any of this
     that needed updating, and I think a lot of it probably
     would.
                    MR. MAXWELL:  Elliot Maxwell.
                    I expect that also the Joint Board would make a
     recommendation about how this should be reviewed in the
     future as well.
                    MR. LAWLER:  Right.  Let me start here and then we
     will go. 
                    MS. DEERING:  I want to get back to the
     marketbasket question as well.  And without trying to come
     to closure on exactly what we put in, I think it's clear
     that everyone agrees that it will be illustrative.
                    We had also talked earlier on that as a matter of
     process it was at least the effort to address what
     constituted this marketbasket that would then indicate what
     types of services that were needed.  
                    I wonder if we couldn't get around some of our
     difficulty by putting the marketbasket in a preamble or an
     introductory, moving it up front with the clear statement
     that it is illustrative.  After all, the state/federal board
     will not know exactly what it is we are talking about, and I
     think that it might be helpful and important for them to see
     the array of specific functions that can be carried by these
     services to illustrate the importance of it, and that gets
     around the issue of recommending a specific marketbasket.
                    MR. LAWLER:  Just so I understand what you are
     saying, you are suggesting that wherever, earlier on than
     this there actually be a description of the different
     services that would be available under whatever the --
                    MS. DEERING:  What is it that it does.
                    MR. LAWLER:  Right.  
                    MS. DEERING:   Who does what with it.  
                    MR. TANGALOS:  Having looked at Chuck's comments
     again, it doesn't get into what the pieces are, but it's a
     very nice discussion that he carried out earlier on, on that
     concept, and you might want to use some of the language that
     we've got.
                    MR. MAXWELL:  Just a comment.  I think that one of
     the interesting things about any advisory committee like
     this and the people who are getting the advice is that
     sometimes you get so far down into what you are doing that
     you forget the audience knows far, far, far, and I can --
     dot, dot, dot, less than you do, and will have less ability
     to understand why you came to that conclusion.  
                    So I think any comments about the process, sort of
     what you were assuming and what the process was for getting
     to this conclusion will be helpful so that when they have to
     make a decision about, you know, do I have to say this or
     that, you've taken them through it in a way that they can
     say, oh, I'm comfortable with the notion that they have
     looked at it, they have looked at the act, they have seen
     what the charge is, they have made a right decision, and I
     can do that.  And so I think those are good suggestions to
     improve sort of the understanding that your readers will
     have.  And we can work on that as we short of reach
     consensus about the recommendations, about how to present it
     in a way that makes it accessible to the audience.  
                    MR. SULLIVAN:  Gene Sullivan.
                    For Greg and Elliot both if I may, I think -- I
     applaud the idea of an extension or a continuation or a
     reforming of the advisory board.  There is a lot of issues
     that we're not going to finalize today.  Just as a quick
     example, Jim and I, Dr. Brick and I were talking about the
     act and who is considered a health care provider, and who is
     then afforded this act's protection, if you will.
                    What if a not-for-profit hospital has a nursing
     home affiliated with it that's also not for profit, does
     that nursing home gather the same benefits as the hospital? 
     And then what about the not-for-profit nursing home that's
     across the street that's not affiliated?     And then we go
     into the home health care.  So that could be a whole session
     or two for a group like this --
                    MR. LAWLER:  Right.  
                    MR. SULLIVAN: -- to further discuss.
                    MR. LAWLER:  I agree with that completely, and I
     think the fact that there is a list in here and it is a
     limited list, this is going to be -- some are going to get
     an advantage out of it.  But frankly I don't know what we do
     about it other than say you ought to look at, you know,
     changing it for these other things because --
                    MR. SULLIVAN:  But we may need to do that because
     of the -- again, the market forces, if you will, from those
     that aren't benefiting starting to ask for changes to the
     Telecom Act, and it's not going to take 20 years this time
     to make some of those changes.
                    MR. LAWLER:  Right.  There is a recommendation
     later on, I forget precisely where it is, about, and we
     talked about this in the last meeting, that, you know, this
     is not available to physicians in their offices in rural
     areas, whatever percent people said, health care delivery in
     individual offices.  So if it's not there, you know, people
     are not going to get it.
                    And my recollection is we recommended that that is
     something that the FCC should look at to change, but it does
     open -- you know, it becomes very complicated.  You have a,
     you know, successful practice in a rural area.  They are
     making plenty of money.  Do they need a subsidy?  So they --
     but I agree with you, that just shows the need for
     continuing review of this.
                    Let me go over to this side.  
                    MR. ENGLAND:  Bill England.
                    I just want to make sort of a technical comment
     first on the 9.6.  As an engineer, my guess is that that the
     band width for -- we're talking wireless on that issue -- is
     pretty well defined.  I mean, the Motorola engineers that
     are designing transceivers, the cell phone people, have
     already defined the band width.  My guess is it's
     substantially, it's a round 28 probably.  
                    So if we go out with anything less than what's
     currently standardly available, it would be just wasting the
     rest of the band width.  So I am not sure what that is, but
     my guess is it's more than 9.6, and I don't think we should
     pick something less than what's out there.
                    Secondly, on the home health issue, This is to be
     a subsidy to nonprofit providers.  And for the same reason
     that Medicare has a problem dealing with home care, not that
     it's not needed, and all our demonstrations show that it is
     wonderful, but as soon as we make the service available it
     can easily get out of control.  And we are now talking about
     not 8,000 hospitals and maybe a limited number of nursing
     home that can well be defined.  But as soon as we talk home
     health we have got every potential rural home in the country
     possibly involved.
                    And I think if we -- if we put that in here, we
     are loading this potential subsidy with something that could
     just completely drag the whole thing under, and I would be a
     little scared about putting that out there.
                    Now, if it's not needed, I just don't think this
     is the way to address that.  They have already got 288
     available just by virtue of the phone lines in the house,
     and I think that for now is quite adequate.
                    MR. LAWLER:  Dena.
                    MS. PUSKIN:  Well, I would sort of like to respond
     on a number of levels here.  
                    It's Dena Puskin.
                    First of all, very quickly in response to the home
     health, the real issue we have out there in getting services
     to the home for a lot of different things, and I would argue
     this is also true to private doctor's office, is dial up
     access to the internet.  For many of the things we need to
     do, we need local dial up access to the internet.  And we
     can do an awful lot with that kind of capability into the
     home.  And I point to what's going on in Hayes, Kansas, and
     a number of examples where we already have demonstrations at
     home health.
                    If we get the first part of this defined as to
     what is a reasonable universal service in rural areas period
     in terms of the kind of band width, I think we go a long way
     to addressing it, and then raise the question as home health
     as something that needs to be very carefully looked at over
     the coming year with a specific time frame on it.  
                    I think we get around, because Bill has raised a
     lot of very good points, but other points have been raised. 
     This is a growing area of immense importance in the health
     care system, and especially in rural areas.  But that would
     be my recommendation, which is, again, to make sure that we
     get the equivalent of local dial up access for all rural
     people, and I think we go a long way to solve it.
                    The other issue that I have is, and it goes back
     to this definition of nursing homes, and who should be a
     provider here.  The law is very vague.  As I said in my
     testimony, I don't know what a community mental health
     center is.  There is no definition of that that we use any
     longer in the federal government.  A community health center
     with a small "c", small "h," small "c" again, is that one
     that gets federal money?  What do we mean?
                    We need a recommendation or we need to begin to
     deal with defining who are the providers, even as specified
     in the current statute.  And I think we need clarification,
     and I think the FCC ought to go for it because no matter
     what decision you make you're going to get some congressman
     mad as hell at you if you don't get clarification, and this
     is a very important issue.  
                    We could make recommendations here.  This group
     has -- I mean, I can talk to you about FQHEs.  I can tell
     you who I would include.  But I am not sure that makes sense
     politically.  I think you need to get clarification from
     Congress as part of a dialogue, and I think that should be
     part of a recommendation that I don't see anywhere here, and
     I was hoping that I would see it.
                    MR. LAWLER:  But, Dena, do you agree that that
     list of seven does not include home health care no matter
     how you read it. 
                    MS. PUSKIN:  I agree --
                    MR. LAWLER:  And it doesn't include nursing homes.
                    MS. PUSKIN:  And I agree, and I think we need to
     have -- there are two issues here.  What it doesn't include
     that we need to have it include, and I think nursing homes,
     we have had now a number of grantees in which the ability of
     this technology to improve the care of patients in nursing
     homes and long-term care centers is enormous.  
                    I don't necessarily think, you know, I am not
     going to argue what band width you need, I don't -- it's not
     the same as you need in a rural hospital.  Let me leave it
     at that and we can discuss that a little later.  But we have
     experience with it, and it is enormous, and the law is
     remiss in not including it, okay.  
                    So I think we have what's not in there, and then
     what is in there not being well defined and very
     problematic.  And I think we need, and I think those are two
     issues here.
                    In terms of underserved which was raise earlier,
     which indeed the statute addresses, I think the question is
     what do we mean by underserved.  Do we mean underserved in
     terms of the telecommunications infrastructure, or in terms
     of the providers in the community, because there is a
     difference?
                    I can have an area that is underserved, I don't
     have primary care docs out there, I don't have psychiatry,
     but in fact they may have an infrastructure out there that's
     pretty decent.  I think that it is very important that we
     define that and deal with that very carefully.  I think the
     staff is dealing with underserved in terms of actually the
     infrastructure and not in terms of the providers, but I
     think that's what the intent is.  
                    MR. LAWLER:  Right.  
                    MR. KIENZLE:  I'm Mike Kienzle.
                    Would some of the problem -- would some of the
     problem that's been expressed of what is intended to be a
     floor becomes a ceiling, would it be actually improved by
     inserting the words "or higher" after each of the band width
     specifications to explicitly indicate that that's -- that
     there is a range above that that's also at least potentially
     eligible for subsidy.  
                    MR. LAWLER:  And this, I guess, is how the reader
     reads it, but my own opinion is anytime you put a number in
     there, then that's the number even if you put a bunch of,
     you know, words around it, that becomes the floor and the
     ceiling.  Others may differ.  
                    MR. SPACEK:  In this discussion, when we get back
     to it of 384(d)(1), you may very well want to consider that
     because you really have to specify something that some
     service that you get the discount for, and you've got to --
     it has to be essential, so, you know, you can't make it too
     high, but you need it because you can't just say "and
     higher" because that's anything that's available for
     discount.  And I think that that, you know, the guidance
     that -- my understanding of the guidance that's needed is
     what is available for discount.  And it gets reviewed, you
     know, over time.  
                    MR. WATERS:  This is Bob Waters, The Center for
     Telemedicine Law.
                    I do think on the issue of whether, you know,
     nursing homes or home health agencies are covered, Jim
     raised a pretty legitimate point, which is that even under
     the existing definition it may be possible for those
     entities if they are owned by a covered institution to also
     get coverage, particularly in those components where I think
     we could easily see applications like a nursing home.
                    I think we need to make a recommendation that that
     be addressed so that there is sort of a level playing field
     out there because that can cause, I think, some real
     distortions in some areas.
                    To that end, I think it would be helpful in terms
     of the way we present this to sort of group together those
     areas where we believe there ought to be an expansion
     statutorily of the covered services, whether it's nursing
     home, home health, or underserved urban areas, but just 
     organizationally I think that would make the report a little
     clearer to folks because we have sort of skipped around a
     little bit on that.  But I think our intent is to have
     certain categories of things that ought to be added, and
     then other categories where we are making recommendations
     within the statute.  
                    MR. LAWLER:  Right . Let me just, and I think
     there is going to be -- you know, assuming that the
     subsidies, if I can call them that, are significant to
     people, who gets covered I think is an issue that is going
     to be incredibly important as we go forward.  Frankly, I
     don't know how to address it.  
                    I mean, does a rural hospital that -- pardon my
     phrase, but owns the doctors, you know, they have an HMO or
     whatever, but the doctors also have independent offices, you
     know, they are paid a salary for a not-for-profit that
     clearly qualified, do they get the advantage of this?       You
     know, probably.  You know, the competing doctor across the
     street who, you know, for whatever reason is on his own
     practices at the hospital but on his own, does he get it? 
     No.  
                    But other than describing that and saying this is
     something that you've got to look at on an ongoing basis,
     and that's the easy example, there are probably of them that
     are more complicated, I, frankly, don't know how we address
     it other than to say this is something you've got to look at
     it.  
                    MR. SPACEK:  Later, again the organization of this
     is -- you know, this may not be the best, but we are getting
     into a lot of issues that also will come up later because
     there is the resell recommendation later which touches on
     this issue; at least gives guidance.  You know, it won't
     resolve all the individual situations one can come up with,
     but it least it will give the FCC and the Joint Board
     guidance as to the intent. 
                    MR. LAWLER:  Right.  Cindy?
                    MS. TRUTANIC:  Just one last comment on the health
     care issue.  Cindy Trutanic.
                    I do think that there is a growing trend towards
     taking care of elderly, chronically ill and home bound
     mentally ill individuals in their home.  And I think that we
     just need to recognize for the record that there are other
     ways of providing home health care services that are less
     costly than, you know, laying new fiber out to every home in
     the country, and that the second generation of cable modems
     that are being explored may be an inexpensive way of doing
     it, and there are other pass-throughs into homes.  
                    So I think by not acknowledging that this may not
     be a great tax on the subsidy fund, you know, the Universal 
     Fund, that we have to just acknowledge that there are other
     ways to skin this cat, and that it may be worth pursuing in
     the future.  
                    MR. LAWLER:  Let me try -- let me find the one on
     physicians.  Actually, it's not on physicians.  It's on
     health care professionals, which is on page 6, and maybe
     there is a way to try to deal with all of these in one
     recommendation, which I may fail in this attempt, but let me
     try.  
                    This is a general statement.  It says, you know,
     most people get their health care in an individual's office
     in a rural area.  You know, they are wonderful people.  To
     the extent that the patients don't have access to this
     telemedicine through them, you know, it does not benefit the
     patient.  And then the last  sentence is, you know, what our
     suggestion is or our recommendation, which is that the FCC
     look at this.
                    Let me just try to throw out as a -- you know, as
     a possibility to this.  We have got what I will call a
     competitive equality issue, which is, you know, is this fair
     and whether it's the nursing homes example or the physician
     example, you know, across the street from each other.  One
     gets availability of it, one doesn't.  We have got nursing
     homes.  We have got home health care.  
                    Is it worth putting all of those in one and making
     a -- Dena, actually this corresponds with the point that you
     made, and really making a suggestion that who is eligible
     for this is something that needs to be addressed, and can't
     be addressed simply by -- my own belief is it can't be
     addressed simply by the FCC.  As wonderful as you are and as
     clever and as much as you can interpret regulations, Elliot,
     I'm not sure you can make this one work, to address these
     issues.  And that way we get the opportunity to say, you
     know, you have got to look at this.  Obviously, you go
     forward with what you've got, but you've got to look at
     this.  You have got a competitive issue.  You've got an
     access issue.  You've got all these things covered.  And try
     to cover them all in the -- you know, in one sort of
     category, and, you know, tell the Congress this is -- we
     want this to work, it's a good thing, but you've got to pay
     careful attention to who gets it and who doesn't, and then
     they will shoot us for dropping this, you know, for raising
     this issue with them.  
                    MR. SPACEK:  I think that was the same thing that
     I kind of thought I heard over there, the recommendation,
     which is really a matter of, you know, how the report is
     organized.  I mean, in making our decisions today about
     which category or what we want to make things is to look at
     in two years, or to change it, for example, to say we
     recommend that this, you know, be looked at for potential
     change, that's just -- I think we can take those one by one.
               But when you organize the report, you probably
     want to put all things of that ilk, you know, together in
     one spot in the report, and all others in -- I think that's
     what you are recommending.
                    MS. PUSKIN:  But I think there are some things
     that they have to address now or very soon.  You need
     guidance now as to -- on some things.  
                    MR. LAWLER:  but, Dena, that's what we need to try
     to figure out right now though.  Some of these things I am
     suggesting that you can't deal with them; that Congress has
     got to deal with them if they are going to deal with them at
     all.  
                    MS. PUSKIN:  But Congress needs to know that they
     need to deal with some of them now.
                    MR. LAWLER:  Fine, and we -- yes, and we can say
     that as clearly as we can write it down.
                    MS. PUSKIN:  Right.  And some things may require
     some study, and I think you need to distinguish between
     those very clearly.  I mean, the ambiguity in some of the
     current designations I know cause Elliot's staff calls me
     and we have been working on it, and there are no easy
     answers for them.  
                    MR. LAWLER:  But that's not -- well, this is the
     question.  I don't believe that's in the category of
     something that Congress has to address.  You can take
     whatever it is, a community health center which does not
     refer to anything in another statute, and the Joint Board
     and the FCC can interpret that, you know, to include some
     things and not include some things.  If we have an opinion,
     we can recommend it.  I'm not sure we do.  
                    MS. PUSKIN:  Right.  Well, I do.  
                    (Laugher.)
                    MR. LAWLER:  Jay?  
                    MR. SANDERS:  I think, in listening to all the
     comments, that we have three issues that really can come to 
     closure on right now.
                    MR. LAWLER:  Right. 
                    MR. SANDERS:  Number one, I would just echo the
     comments that Bob made and that you made, and that is that
     we have got to at the very least identify critical
     constituencies within the bill, within the law that have
     really been excluded that we consider to be very, very
     critical, and we have named them. 
                    And I think at the very least we have got to state
     that we recognize the fact that this is an inadequacy as we
     see it at the present time with the present legislation.
                    Number two, one of the things I think that we are
     all having angst with is reviewing this in many respects as
     the last meeting.  And one reality or one recommendation we
     need to really very strongly underline is that this is a
     dynamic living process, and there has got to be this review.
     Whether it's a year or biennial or every three years, it's
     got to be reviewed.  And whether it's this body and these
     individuals or whatever other mechanism, it's got to a
     dynamic, living re-review process.
                    And I think, third, I have heard a lot of comments
     about the issue of 384 versus T-1, but I really haven't
     heard a lot about -- I haven't heard a lot of people
     standing up and saying, well, it's got to be a quarter of T-
     1.  So I would like to recommend that we take the minority
     view and that we recommended full T-1 access.  
                    MR. LAWLER:  Can I -- I want to try to close one
     issue at a time here.  
                    MR. SPACEK:  Do you want to close one in order,
     and I think that was the first one?  
                    MR. LAWLER:  Do we have agreement on the
     recommendation for the three groups, nursing homes, home
     health care, health care professionals, that that's
     something that we recommend that Congress has to look at?  
                    Do we also have agreement that the competitive
     issue is something that we have to look at covering not-for-
     profits the way health care is changing.  When you say "not-
     for-profit," there are a lot of -- I don't know what the
     right word is, people earning a profit under not-for-profits
     who are competing with people who are for profit, that
     that's something that needs to be looked at, and we can't
     address with the language that is here?  
                    Is there any disagreement with that?  Done.  
                    Now, for the noncontroversial part of it.  384
     versus T-1, let's continue the discussed because I think
     there is a little more?  Bill?
                    MR. ENGLAND:  In terms -- Bill England.
                    In terms of the law, I thought the standard was
     going to be urban areas, and I guess I am wondering do we
     have to define it, but simply to say that the subsidy makes
     available at a reasonable cost similar to the urban area,
     however you want to define it.  So if you want a T-1, it's
     what a T-1 would cost in an urban site, not at your rural
     site.  And you can -- or T-3 would also get a subsidy.  We
     don't have to specify a specific band width for the subsidy.
                    MR. LAWLER:  Well, let me again, again, not to
     rely entirely on the word of the act, but what it literally
     says is a telecommunications carrier provide whatever is
     necessary for the provision of health care services for
     people, for an institution which is providing service to
     people who reside in a rural area.  So it doesn't say you
     get whatever you get in an urban area.  It says whatever is
     necessary for health care in the rural area.  And I think
     that's why everyone is saying, okay, you know, what the hell
     does that mean.  
                    MR. TANGALOS:  Bill, part of the issue on the low
     side was that Mayo has hooked up with providers that were at
     12, and that's a disaster to try to communicate at that
     level.  And so we don't want to it below a certain minimum
     because you can't -- you can't work with it.  
                    So we were looking at it not from the high side. 
     Indeed, if somebody wants to provide -- if somebody wants to
     buy T-1 at the urban rate, that's what they are going to do,
     but we know that with each increment you are paying more and
     more.  And we heard from plenty of rural providers that with
     each jump it's going to cost us more, and there are only a
     certain amount of dollars that we're going to allocate to
     this anyway.  
                    So there is a lot of reasons on the low side and
     on the high side why we compromise to 384.  
                    MR. SPACEK:  Yes, this is not the 384/T-1 issue,
     but it's the issue of saying another reason, I think, why we
     have to specify, in addition to like what Greg said, is that
     Section 102 of the act also requires the eligible
     telecommunications provider to give you whatever service is
     recommended in the minimum basket.  So, you know, if
     somebody in some island somewhere wants, you know, off the
     coast in a rural area wants some, you know, an OC-12, and we
     don't specify that T-1 is it for now, you know, they get it,
     and that would be sort of an unrealistic thing to do.  
                    MR. KAMP:  George Kamp, College of Radiology.
                    Related to this discussion, I also am surprised
     that it hasn't been mentioned the changes in data
     compression technology.  In my own practice, we work with
     everything from the 112.  I absolutely agree with you, Eric,
     it's awkward, it's difficult.  We work all the way up to T-1
     lines.  But data compression technology is changing so
     rapidly with the wave length compression of up to 30 to 
     one, I think, now has FDA approval.
                    But this emphasizes the point Jay makes.  This is
     a rapidly moving target, and whatever we say has got to be
     looked at again and soon.  
                    MR. SPACEK:  Do you want to try to reach closure
     on T-1 versus 384, whatever represses you would like picked?
               MR. MCCONNAUGHEY:  Not to beat a dead horse here,
     but given the statement he just made about how dynamic the
     industry is, could there be two or three years and then
     perhaps, or a petition from interested group?  I mean, if
     there is some incredible breakthrough maybe two years isn't
     soon enough to reconvene the group and do a new batch of
     surveys.  
                    MR. LAWLER:  Well, I mean, the easy part of this,
     and I -- you know, I think two years was the number and they
     picked it, and it wasn't immediate and it wasn't too far
     away, I mean, we could certainly recommend, for example,
     without, you know, saying you have to keep us around
     forever, that this being an ongoing -- this being an ongoing
     process of consultation, whatever the right words are,
     advice from, you know, people with the same expertise as the
     people in this room.  I don't have any problem with that at
     all.  And, you know, when there is a -- it doesn't have to,
     you know, we don't even have to recommend that they, you
     know, who they are or when they meet.  But if there is, you
     know, a breakthrough or for some reason the experience says
     get together and tell the FCC they ought to change
     something, they don't have to wait, you know, for two years.
     They could do it in two weeks.
                    MR. SPACEK:  Yes, you may want to say that there
     should be a formal review at least every two years, and by
     petition or by some organization or whatever in the interim
     that, you know, could be called for another review based on
     a breakthrough or whatever else.  
                    MR. LAWLER:  I guess I'm -- it just seems to me we
     have got to look at this in terms of what we think is
     realistic in terms of cost.  You know, I happen to believe,
     and Tom and I have had this conversation, that we ought to
     recommend T-1.  People are using it, it's out there.  But I
     also think that -- I don't know whether people remembered
     this, at one point, I think it was in your last paper, Tom,
     there was a distinction between the different providers. 
     Rural hospitals were going to get 384, and I forget what
     others were going to get, something less than that, which  I
     don't -- you know, just in terms of the law I am not sure it
     works.  And then distinguishing between the seven categories
     of providers, you know, we will have everybody gone made
     within a short period of time.  
                    But I do think we have got to look at what the,
     you know, there is a cost to this.  And even though, yes,
     people overbuild -- you know, you put home health care in,
     and you say -- we say T-1, and anybody who want home health
     care, you know, you put in T-1 to every home in a rural area
     where someone is getting home health care.  I mean, I have
     no idea what that number is, but I suspect that we can't
     afford it.  So I do think there has got to be some context. 
               Jay, you are shaking your head in disagreement
     over there.  
                    MR. SANDERS:  Yes, because I think one of the
     things that we, and I have fallen into this trap many times,
     I get so hooked into the idea of health care as the use of
     the telecommunication infrastructure that I forget about the
     fact that the telecommunication infrastructure you put in,
     once it's in place can be used for all sorts of things.  
                    MR. LAWLER:  Right.  
                    MR. SANDERS:  So when we talk about cost, what
     happens when we get interactive entertainment and shopping
     and banking and commerce coming into the home on that same
     telecommunication infrastructure.  Our costing for that is
     going to be a lot less.  
                    MR. LAWLER:  Well, Jay, I agree with that
     completely, but I don't -- you know, we can call Time Warner
     or somebody else and ask them, I don't think they are
     putting that in rural Colorado right away.  
                    MR. SANDERS:  No, they are even having trouble in
     Orlando, Florida.  
                    MR. LAWLER:  Right.  So I do -- to the extent that
     we put in, you have an instant mechanism and an immediate
     mechanism in place to say that you get this, you know,
     eventually it's going to get there cause it's going to get
     everywhere, but I do think we're saying do it here sooner,
     and, you know, there is a cost to that.  
                    MS. DEMERS:  Judy DeMers from the University of
     North Dakota.
                    I just want to remind us all that we also in this
     report endorse the sharing concept between public schools
     and libraries and health care facilities.  And I guess in my
     state, and I would guess in many more states, you know,
     that's what is going to happen.  We are going to see that
     joint kind of approach.  And that's why I think the T-1 is
     minimal at this point in time when you talk about the
     ability to split and use and who has priority and all the
     other kinds of issues that you are going to see out there.
                    I can't imagine that the school system and the
     public library and the hospital are not going to work
     together because this is something they all --
                    MR. LAWLER:  Right.
                    MS. DEMERS:  -- very badly need.
                    MR. LAWLER:  Let me, in the interest of trying to
     split this baby, and, Tom, listen to this, what would people
     feel about recommending T-1 with the condition that it is
     found to be affordable under the Universal Service Fund?  
                    MR. SPACEK:  I would go for it.  If I were going
     to put it, I would just go for T-1 or 384, and not say that
     because part of the determination of the size of the
     Universal Service Fund in some sense will be what we
     recommend.
                    MR. LAWLER:  Okay.  
                    MR. SPACEK:  So, you know, I would go for, you
     know --
                    UNIDENTIFIED SPEAKER:  Do it or not do it. 
                    MR. SPACEK:  Yes, go for one or the other.  The
     only caveat I would have is if you were going to say T-1, or
     that you would say something about that the intent of that
     is for telemedicine services, and if you are lumping your
     voice and other things onto that, that, you know, the
     discount is appropriately allocated.  
                    MR. LAWLER:  Jim?   
                    MR. BRICK:  May I am misunderstanding, but is what
     we are saying here is up to T-1 or are we saying that's all
     the subsidy is for is for T-1?  
                    MR. LAWLER:  Well, that was a question I raised,
     which Tom said he's not enthusiastic about, which he says
     prick a number,  T-1.  If you want T-1, you get a subsidy
     for the urban rate for T-1, and you get it built to your
     facility.                     
                    MR. BRICK:  But I think that's -- correct me if
     I'm wrong, Tom, that's not quite what I heard.  I heard him
     say that we need to pick a number, okay, but I didn't hear
     him say that it wasn't okay to say up to a level, because it
     may be that's all you're requiring.  
                    MR. SPACEK:  Up to T-1, up to 1.54 or whatever.
                    MR. BRICK:  I misunderstood.  I'm sorry.  
                    MR. SPACEK:  I don't know if I said it, but that's
     what the intent was.  
                    MR. MAXWELL:  Let me see if I am understanding
     that and maybe make one clarification.
                    It seems to me that for the purposes of what the
     advisory committee is saying, you've already dealt with the
     question of sort of who gets it, and what anomalies there
     exist in the act, or what ambiguities exist in the act, or
     what things you think you should not -- you restrict it the
     way it is in the act, and the second is what services are
     included to this group.  
                    And it is, it is for the purposes of this subsidy
     a ceiling that you can get up to --
                    MR. BRICK:  Okay.
                    MR. MAXWELL:  -- this data rate for -- at a
     subsidized rate.  That subsidy being the comparable rates
     with urban areas.  That provides the flexibility to the
     taker of the service as to what they were asking.  It
     doesn't necessarily mean that the fund is going to be
     required to provide this to every potential user, and the
     shift is to put the burden onto the user to determine what
     they believe is necessary, and the group has said that up to
     this data rate is necessary for health care and people will
     use it for those purposes.
                    MS. PUSKIN:  Can I --
                    MR. LAWLER:  Wait a minute.  Stop there.
                    Did I hear you say the fund doesn't necessarily --
                    MR. MAXWELL:  Well, I mean, in thinking about what
     the size of the potential subsidy is one could sort of say
     let's imagine having a T-1 facility to every rural health
     care provider as defined in the act.  
                    MR. LAWLER:  Right.
                    MR. MAXWELL:  That's not necessarily what would
     happen.
                    MR. LAWLER:  Right.  
                    MR. MAXWELL:  What was being described here is
     that the user would say this is what I would need to provide
     heath care, but the service provider would provide that
     facility, and we're then talking about the delta between --
                    MR. LAWLER:  Right.
                    MR. MAXWELL:  -- the urban rate and the rate
     that's charged, and going further to something we will
     discuss a little bit more, the infrastructure that we are
     required to provide if it were not always available.  
                    MR. LAWLER:  But the maximum exposure to the 
     fund --
                    MR. MAXWELL:  The maximum exposure would be
     defined as --
                    MR. LAWLER:  -- is everyone of those seven
     categories would be able to say we want T-1, and here is
     where our network is, and we want the urban rate, and build
     us the infrastructure.
                    MR. MAXWELL:  And would have to pay the comparable
     rate for that service --
                    MR. LAWLER:  Right.
                    MR. MAXWELL:  -- to the provider.  
                    MR. SANDERS:  With that clarification, I don't see
     how we could -- we wouldn't go up to T-1.   
                    MR. HOLUM:  I think the provider is still going to
     have to -- this is Chuck Holum.  The provider is still going
     to have to demonstrate or show that they need the full T-1
     as opposed to a quarter T-1.  A full T-1 is going to cost
     more maybe.  
                    MR. LAWLER:  They don't.  They have to -- they
     have to say we want T-1, and they would be silly to, you
     know, they are not getting it free.  They have to pay for
     it.  All they get is the differential between the urban and
     the rural.  
                    MR. HOLUM:  But if they don't need the whole --
                    MR. LAWLER:  They would be silly to buy it.
                    MR. HOLUM:  They would be silly to pay the whole
     thing.  I think there is a natural check on how much demand
     they are going put on -- 
                    MS. MACLAUGHLIN:  Mary Jo MacLaughlin.
                    I would have to say that that's absolutely true. 
     From the point of view of rural health care, we are going to
     have to outlay money in order to have T-1, and therefore
     it's not like it's a free ride.  We are still going to have
     to contribute, and therefore the market will control itself
     because if I can't afford even what an urban hospital pays
     for T-1, I am going to get along with 384, and therefore
     it's going to control itself, and therefore why wouldn't we
     say up to T-1, and let the hospitals and health care
     providers control what they can afford and what's necessary
     in their practice.  
                    MS. DEMERS:  Judy DeMers.
                    My argument has always been for up to T-1.  When
     we started talking about this, we were talking about
     hospitals, rural clinics and others.  And I have very strong
     feelings that hospitals ought to be able to have the T-1
     line, the rural hospitals.  I didn't have as strong a
     feeling about others because I think that there is a really
     varying kind of need out there. 
                    And so I think if we talk to subsidies up to T-1,
     and we don't put too many strangle holds, i.e., federal
     regulations on those hospitals for having to document the
     fact that they want to use T-1, then we are really right in
     the ballpark.  
                    MR. LAWLER:  Keep moving down the line.
                    MR. KAMP:  George Kamp.
                    I like that also for two reasons.  One, it deals
     with my earlier point about changing technology and the
     interaction of the band width requirements and the data
     compression.  And, two, the tremendous differences that I
     see in my own practice of the needs of the outlying
     facilities. 
                    We have got one outlying hospital who has a small
     bed capacity, and at the intersection of two very busy
     interstates, and their needs are very different than the
     more isolated community on the through roads.  So I would be
     supportive of that also.
                    MR. LAWLER:  Cindy?  
                    MS. TRUTANIC:  Cindy, just for the record, there
     exists an anomaly today in that networks that require maybe
     only a half T or a quarter T are being forced, because of a
     lack of a band width on demand system, to pay for a full T-1
     capacity, which is what's killing them.  You know, they can
     cost out their equipment over time, but the line access
     charges and the fact that they have to pay for more capacity
     than they are actually capable of having is a real problem.
                    So whatever we do in that regard we have to be
     careful that that doesn't continue.  
                    MR. SPACEK:  On that issue, I mean, one thing you
     can do, and a rural hospital is likely to have some number
     of telephone lines too.  You can lump those telephone lines
     onto the T-1, reducing the cost of the other telephone
     lines.  So you can handle that to some degree.
                    With respect to, you know, T-1 versus 384, I mean,
     in some sense it's just -- I think, you know, I don't know
     whether -- you know, there are kind of arguments on both
     sides.  It doesn't make much difference, you know, I don't
     care.  I mean, I care in the sense that I want to get the
     right, you want to get the right stuff out there, we want to
     make the right recommendations.  
                    You know, it's really a matter of where our
     subcommittee came out with an exception that up to 384 was
     probably okay to meet these applications, and there is a lot
     of other people in other groups who think up to T-1 is
     necessary to meet those obligations.  So, you know, it's
     really just a matter of, you know, are there more of one
     than the other, which is the right thing to do.  We can
     argue it forever.  
                    MR. LAWLER:  Let's keep going here for a minute. 
     I have a feeling we are getting somewhere.  
                    MR. MCCONNAUGHEY:  Jim McConnaughey, MTIA.
                    It seems to me if we package all of these
     together, we might have a solution.  You cap it out at T-1,
     which is Elliot's point.  Then you mention in the report 384
     seems to be the minimum level for adequate performance for
     telemedicine.  I think it's mentioned in a footnote here
     someplace it will be a self-policing process.  I mean,
     people are with budget constraints.  They are not just going
     to go crazy in terms of how much band width they get.  And
     it would have to be necessary for medical purposes pursuant
     to the act.
                    I think the puzzle pieces, thanks to everybody
     around the table, are on the table.  It's a matter of
     putting them together.  
                    MR. LAWLER:  Right.  Mary Jo.
                    MS. MACLAUGHLIN:  I am glad you spoke before me
     because it actually clarifies something that I wanted to say 
     And my concern is about the remarks that have been made that
     it is the provider who is going to have to request this.
                    Well, how is the provider going to know what they
     need?  And certainly if we think to the thrust of the
     consumer movement overall, we have an obligation to help
     them understand what capacity will do what.  And I am
     wondering, without throwing this in too much in advance, I
     don't know what function the clearinghouse was supposed to
     play or what function our report was supposed to play in
     helping identify specifically what capacity did what so that
     people have some guidelines.  
                    That gets me onto the other point that I am even
     more concerned about and yet nobody else seems to be, which
     is normally in this day and age people would hate like heck
     to ever specify very precisely exactly what technology and
     lock it in.  We have made that comment numerous times, and
     therefore we are going to allude to the need for review.
                    All I am wondering is whether we can accomplish
     the goal that we seem to be moving toward on a consensus
     basis by modulating the language somewhat that -- and
     perhaps we can't -- that specifies what we are trying to
     accomplish, and then saying that currently that capacity is
     illustrated between the band widths of 384 and T-1.  
                    In other words, I am just saying as a matter of
     avoiding unintended consequences I would be -- do we need
     any concerns about being so precise about the technology
     now?  And is there anyway we can accomplish that without
     boxing ourselves in?  
                    MR. LAWLER:  Well, isn't the -- and correct me,
     people if you hear different, but I think what everyone is
     saying that whatever number we pick we are saying it is up
     to the provider to make the choice.  
                    MS. MACLAUGHLIN:  And they have to know how to
     make that choice.  
                    MR. LAWLER:  Well, but that's for a different
     moment here.  They do have to know how to make that choice,
     but we are saying under the act you get a subsidy, you get
     the discounted urban rate anything from nothing up to T-1 or
     384, wherever it comes out, and you make the choice.  You
     may not want to pay for it.  You know, whatever technology
     you are going to in your wisdom or ignorance pick and pay
     for, and the service that goes with it, that's your choice.
                    MR. SPACEK:  Yes.  And by the way, I don't think
     we do actually want to say T-1, even if you pick that.  We
     want to say 1.5 megabits or equivalent, because we want to
     be technology independent.  
                    MR. LAWLER:  Let's keep going here.
                    MS. CONNORS:  And I think the provider knowing
     what they want to do with it can give what band width they
     need.  
                    MS. PUSKIN:  I just -- with studying that sort of
     floor that was suggested at 384, I have a problem with that
     because then you are going to have to say it's appropriate
     for what kinds of application, and there really is a great
     difference clinically in peoples' views about what 384 is
     adequate for versus what you need T-1 for in terms of the
     time it takes to transmit an image, whether store and
     forward is a capable application.  And I would simply like
     to leave it at up to T-1 and not get the floor in there
     because, in fact, I think that it would lead people to say,
     well, what is one good for and what isn't it good for.  And
     I believe that gets us into the specificity we don't want to
     be in.  
                    So I would say if you just say "up to," you in a
     sense let the market determine a lot of things. 
                    MS. KING:  I just want to follow up on a comment
     that was in my earlier, which there should be really some
     sort of clearinghouse for information because however you
     are going to deliver up to 1.5 megahertz, it would be based
     on engineering studies.  It might be done in a variety of
     ways, given, you know, your particular locality.
                    And I don't know if the FCC is going to be doing
     this, to offer clearinghouse information to a particular
     rural site or some government agency, but it seems as though
     by pooling or aggregating demand in a particular area, then
     you can interact better with the telecommunications provider
     on how to engineer this particular service at the most cost-
     effective rate.  
                    And the other issue, of course, is what kind of
     cost studies are going to be done to determine the
     difference between a rural and urban rate.  That will depend
     on what the Universal Fund will be, and that's another piece
     of the pie.  But I would think that up to T-1 would be
     appropriate or 1.5 megahertz.  
                    MR. BAILEY:  I just have a clarifying point I want
     to ask, and we have been talking about T-1 versus 384.
                    Are we talking dedicated or are we taking switch?
     I assume we're talking dedicated because switch could be a
     real big problem.
                    MS. KING:  You mean it's a lot more expensive.
                    MR. BAILEY:  Yes.  Well, it just doesn't exists
     everywhere, so it would be very expensive to make it exist
     everywhere.  
                    MR. SPACEK:  We should probably put the term
     "dedicated" in there?
                    MR. BAILEY:  I think so, dictated, or point to
     point, or some phase like that.  
                    MR. SPACEK:  Yes.  
                    MR. LAWLER:  Cindy?
                    MS. TRUTANIC:  One thing that Mary Jo alluded to
     that wasn't responded to, and it's something that came up in
     our infrastructure discussions, about training the consumer
     or helping the consumer determine what technology is out
     there so that they could make their networks more efficient
     rather than less efficient in the future.  And whether that
     comes under our discussion of peripheral or on-premises
     equipment, we never really resolved it, to my understanding.
                    But I think it's an issue that's going to -- that
     the FCC should address because if you don't support that
     training or on-site training or network training, what you
     are doing is encouraging inefficiencies for people who don't
     understand the communications component of their network.  
                    MR. LAWLER:  Mike.  
                    MR. KIENZLE:  The one other, the one other perhaps
     unintended impact of defining a floor is that it would also
     discourage research and development in areas in which lower
     band width applications are being developed.  And I don't
     think we would want to do that.  I think we would want to,
     with new compression technologies and other things, kind of
     encourage some of the lower band widths to be explored
     further in the future.  
                    MR. SPACEK:  And you also want to make sure that
     somebody who doesn't need that band width, or can't afford
     it, you know, below the floor can get something and can get
     it at a discount if they are eligible.  
                    MR. SULLIVAN:  Did something just get slipped in
     here?  James Sullivan.
                    We just mentioned dedicated service and point to
     point?  I think we need to really, really address that
     because if you're doing a point to point, you're going to
     have multiple connections at one hospital to multiple sites. 
     You are going to be paying multiple charges.  We need to
     look to the providers of the telephone service to give us
     switch service, as they do in urban areas.  
                    MR. LAWLER:  Bill, do you want to elaborate on the
     distinction?  
                    MR. BAILEY:  Well, we have been talking about
     transmission at different speeds, and most of what we have
     been talking about can be carried over copper cables up to
     T-1, typically can be carried over copper cables.  However,
     if you are talking about switching something other than a
     voice grade line, that requires a different switch than what
     you typically have in a network for voice communications. 
     Those exist.
                    I will give you an example in Missouri.  We have
     two.  We have on in St. Louis and one in Kansas City.  So if
     I want to provide a switch to digital service at three or
     four RT-1, it has to go all the way back to St. Louis or to
     Kansas City in order to do that.  
                    Now, in order to -- in order to dictate that
     you're going to provide switch connectivity at those speeds,
     you're talking about a huge investment in order to make that
     possible.  
                    MR. SULLIVAN:  If you don't do that, I think
     you're going to defeat the purpose of telemedicine, and I
     think I had an agreement with Dr. Sanders there that point
     to point is just -- it's hard, it's expensive.  What do you
     do for multi-cast or educational purposes if you want to
     broadcast three or four or five different rural health
     practitioners at a particular session?  You are really
     encumbering the system when you -- you are making it easier
     for the phone companies, for the providers, but you are not
     helping the cause of telemedicine by saying that. 
                    MS. DEMERS;  I thought that we dealt with this
     switching issue in the infrastructure report, but I think
     that's the other issue that we need to address.  I will give
     you one example.  St. Alexus Hospital in Bismarck has, it's
     a city -- we will call it a city, that's what we call it, 50
     to 60 thousand people.  They serve by telemedicine nine
     rural communities.   They have to have nine separate T-1
     lines and pay for them because the phone company will not
     switch.  
                    MR. LAWLER:  Right. 
                    MS. DEMERS:  And I think that that's another issue
     that we just have to address if we are going to make this
     work for our mid-size city providers and for our rural
     communities.   
                    MR. LAWLER:  Can I, at the risk of saying that we
     are arriving at a consensus, is do I hear a T-1 consensus
     building out there?  
                    MS. PUSKIN:  Do you want a show of hands?
                    MR. LAWLER:  I don't if we -- 
                    MR. BAILEY:  Let me say this, if you are saying T-
     1 switch, then I think I have a problem with that.  If you
     are saying T-1 dedicated, then that probably is reasonable
     from my standpoint.  But T-1 switch, you're talking about a
     huge increase in the cost of this, and I agree with you that
     there are circumstances where it would be fine, but the fact
     of the matter is if you're going to have T-1 every point on
     that network has to be connected to a T-1 switch someplace.
                    Now, if you have got four locations in Bismarck,
     and you don't have a T-1 switch, I don't know what the
     nearest city is that has a T-1 switch, but then everyone of
     those are going to have to be truncated to that nearest city
     in order to switch them.  That's a whole lot more expensive
     than putting in dedicated connections between those
     locations in that city.  
                    MR. LAWLER:  Bill, do you have the same problem
     with 384 switch?  
                    MR. BAILEY:  Sure.  
                    MS. DEMERS:   Can I ask what's the -- what's the
     difference though?  
                    MR. BAILEY:  Let me explain. 
                    MS. DEMERS:  I mean, can't you pick and choose
     which is the most reasonable, whether, you know, it is a
     switch or a dedicated for a particular situation?  
                    And that's an honest question.  I don't know. 
                    MR. BAILEY:  I mean, I guess there are -- I think
     if you can split a standard out there, then you are saying
     that's what we want.  And all I am saying is, for example,
     if I have -- if I have, and I will use some areas I'm
     familiar with, but if I have three -- I have a couple
     hospitals in Columbia, Missouri, which is in the center of
     the state.  It happens not to be our territory, but I will
     just use it as an example.  And they want to be connected
     with T-1 connections.  Then there would be direct
     connections to each of those hospitals.  
                    But if they wanted switch connectivity, each of
     those hospitals would have to be connected back to St.
     Louis, or in that case, Kansas City, all the way with T-1,
     because there is no switch available in Columbia that could
     perform that.
                    So the cost of making that switch in that
     circumstance may be a whole lot more than the cost of making
     dedicated facilities in that circumstance.  
                    MR. LAWLER:  But isn't that really the issue?  And
     I don't know whether this is possible, but is that something
     that can be worked out between the -- the person who pays
     for it is going to be of significance to both sides.  But
     isn't that something, I mean, to use your example, if
     Columbia has four sites that it wants to go to, and what
     they want is the cheaper rate, the rate as if it were a
     switched rate, but other than that they probably don't care
     whether it's dedicated or switched at that point in time. 
     They may a year later when they have 10 more sites they want
     to add on.  
                    MR. BAILEY:  Well, the problem is that we are
     making things the same price in rural areas as metro areas.
                    MR. LAWLER:  Right.
                    MR. BAILEY:  Right?  And, I mean, if I make things
     the same price, there is no incentive for anybody in
     Columbia to choose dedicated when that's certainly for the
     entire country it's a whole lot cheaper to provide --
     connect those locations in Columbia on a dedicated basis
     than to haul everything 200 miles back to the nearest city.
                    MR. LAWLER:  Well, unless they are indifferent.
     I mean, if they have a network that they've created, and
     they say we want, you know, our center location is Columbia
     and we have five sites wherever they are around there that
     we want to communicate with T-1.
                    MR. BAILEY:  Well, let me clarify something
     because I may be -- there may be a -- we have a telemedicine
     trial which is being operated in Missouri.  It's in central
     Missouri.  Columbia is in fact one of the main locations on
     that, and they are connected to another hospital in
     northeast Missouri, and then there are, I think, 13 rural
     health care facilities are connected to those two.  
                    They, in essence, have their own switch.  Any
     point can look to the other, okay.  But that's different
     than having them have the ability to call anyone else in the
     world.  
                    MR. LAWLER:  Right.
                    MR. BAILEY:  Okay, using 384 or T-1, and that's
     what I was talking about with switch.  You can set up a
     circumstance where you have the ability within a small
     network to make connections on a time-sensitive basis.  But
     going anywhere is a problem.  
                    MR. SULLIVAN:  But why not?  Let's go back to the
     doctor's example there.  General Zajtchuk, tension
     pneumothorax scrape.  We have got a patient down at UVA that
     we need to consult with Dr. Zajtchuk.  Why shouldn't I be
     able to use my telemedicine system to connect to Dr.
     Zajtchuk at Walter Reed Army Medical Center?  Why should I
     be limited to limited to my own network or my own world?
                    Dr. Tangalos gives a great lecture at the May
     Clinic.  Why shouldn't I be able to dial into the Mayo
     Clinic, pay his fees for his CME class, and have my
     physicians attend his class?  
                    What you are doing is you're setting up little
     fiefdoms that are never going to talk to each other by doing
     a dedicated network.  That's fine for one hospital and the
     five outlying clinics, but this hospital is not the center
     of the universe.  There is expertise all around this table
     and all around the country that I want to connect with.
                    MR. LAWLER:  Mary Jo.
                    MS. MACLAUGHLIN:  It seems to me that that's
     something that have got to earlier reminding ourselves that
     we are not dealing with health care in a vacuum either.  And
     I am wondering whether this concern can be addressed under
     other provisions of the law, because clearly the intentions
     of the law will be served by making the backbone, making the
     overall infrastructure as fully switched as possible.
                    Is there any way that we can play -- that would
     fit in?  I'm not -- not now, but talking about the goals and
     the act and what the act overall is trying to accomplish,
     clearly also support this goal of a fully switched network.
                    MR. LAWLER:  Jay, did you have a comment?  
                    MR. SANDERS:  Yes.  I agree with everything that's
     been said and I think once again it's a problem that we have
     as to what the first step is and what the real goal is. 
     There is absolutely no question that the real goal is the
     switching capability, and the real empowerment of the
     telecommunications, particularly to health care provider and
     the patient, is being able to "pick up their telemedicine
     system" and access anybody any place in the world.  That is
     what our goal is.  That is the seamless net work.
                    MR. LAWLER:  Right.
                    MR. SANDERS:  What we were forced to do in the
     State of Georgia in developing our seamless telemedicine
     system is to have multiple point to point T-1 connectivity,
     but it's switching within that network so that any site can
     go to any other site, but that's just within that network we
     developed.
                    I think that has to be, and that is what most of
     our starting points are.  And I think, once again, we have
     to say that our intent is to have seamless infrastructure
     and the switching capability, but it's got to be within the
     economic realities of what exists as to what that rural
     hospital can afford. 
                    If you're telling me that it's going to cost, you
     know, three times the amount with a switching network as
     opposed to a point to point network, and that cost is going
     to be the responsibility of the rural network or the rural
     hospital to pay for, I mean, we can't do it.  
                    MR. LAWLER:  But, Jay, isn't that the -- and I
     suspect this is Bill's worry, the urban rates, comparable
     urban rate in that situation is switched, which means you're
     going to get where the switches are already there ,and I
     assume the fear is that's what you're going to get in terms
     of what the subsidy is.  
                    MR. BAILEY:  Well, we have -- we have a service
     which is switched T-1, and I mean, if you compare that to
     the number of services that are dedicated, we probably have
     less than probably a tenth of a percent.  I mean, very few
     people are using switched T-1 these days because there is no
     one to switch to.
                    MR. SANDERS:  But I think as you find more and
     more people doing it.  
                    MR. BAILEY:  I don't disagree with you, but I
     guess what I -- I guess what I would recommend is that this
     is something that in two years or four years, however often
     we are going to relook at this thing, that that be one
     things considered.  But initially let's talk about dedicated
     because I think the example you gave, you can have a network
     that in essence does its own switching so they don't have to
     have dedicated connections between each point in the
     network, and it's also possible to go outside of that
     network if need be to get to other locations.  You don't
     have to have ever point on that network have switch
     capability to go anywhere else, because I think more often
     than not, at least the way I -- what we have talked about
     here, most of those points are going to be talking to one
     another.  There may be occasion for them to go outside.  But
     do you fund everyone of them so they can go outside?
                    MR. SANDERS:  Well, on your point-to-point service
     are you offering that dedicated service to pay on a usage
     basis?
                    MR. BAILEY:  No.  
                    MR. SANDERS:  Okay.  Then you get them again. 
     You're paying 24 hours a day, seven days a week for a
     dedicated point-to-point service, and that's not what we
     need.  That's not what we want.  We want to be able to
     contact the clinic in Danville, Virginia, for 30 minutes on
     Wednesday afternoon, and not have to pay for the other --
                    MR. BAILEY:  Well, my switch service is you pay
     for a dedicated facility, and then you pay usage on top of
     that. 
                    MR. SANDERS:  But it's still much less than your
     dedicated point-to-point service.
                    MR. BAILEY:  No, it's not.  It may be if you have
     a network, you may have some savings, but the connection
     itself is not less.  
                    MR. LAWLER:  Let me go to Eric here.  We have to
     obviously keep discussing this for a moment.
                    MR. TANGALOS:  I would like nothing better than
     dial up service from around the country and around the
     world.  I mean, if we want to talk about how to get a
     competitive world of health care going, that's how to do it. 
     But in my wildest stretch I cannot believe that there would
     be enough money in the Universal Service Fund to essentially
     rebuild our telecommunications infrastructure.  And I
     honestly think that that's what you are asking for.  
                    That in the next two years if there were enough
     people that came forward and said we want switched services,
     and that's what is specified in the law, there ain't enough
     money in that Universal Service Fund no matter how you cut
     it to rebuild the system in that period of time.  
                    MR. SANDERS:  You're going to have point-to-point
     services for your hospital and the five clinics.  Then the
     schools are going to have it for -- point-to-point services
     from the schools to the K through 12 to maybe a magnet
     school in one location.  You are going to have so many
     overlaying point-to-point lines that you might as well build
     phone closets the size of this room to handle all the
     individual switching between points.  
                    It may be expensive, but if we don't at least
     articulate it I think we are going to be stuck with what the
     providers are going to give us.  
                    MR. LAWLER:  Let's keep going here for a minute.
                    Do you have a comment?
                    MR. KVEDAR:  Yes.  Joe Kvedar from the Mass.
     General in Boston.  
                    Just to bring this back to the reality of the
     comparison with the urban marketplace, which is something
     that I have a little bit of experience with, in the merger
     between the Mass. General and the Bringham and the formation
     of Partners Healthcare we have laid our own infrastructure
     because we can't get the kind of switching that we need.  We
     put in our own switches. 
                    So I think the urban community, at least in
     eastern, northeastern United States, doesn't have the kind
     of capability that we are talking about.  And just to
     underscore Eric's comments, that really does require a
     complete overhaul of the telecom infrastructure.  I don't
     think that's the purpose of this group to recommend that on
     this legislation.  
                    MR. LAWLER:  Tom.
                    MR. SPACEK:  I agree with those points too. 
                    What we are hearing from a lot of folks, and
     especially when we're talking about education in health care
     and so forth coming together, and the ability to communicate
     with all other systems and applications throughout the
     country and perhaps throughout the world, this is the
     Clinton-Gore and Commissioners Council on Competitiveness
     and CSPP's vision of a national information infrastructure. 
     You have got to take steps along the way to get there.  I
     want that vision.
                    In fact, my job is to try to make that vision
     happen worldwide when I'm not doing this stuff.
                    (Laugher.)
                    UNIDENTIFIED SPEAKER:  It used to be his job.
                    MR. SPACEK:  And we are a long ways off.  We have
     got to take steps in the right direction.  The direction
     here, if you had this sort of T-1 mesh that we have been
     talking about that's not switched, I mean, it's only
     available in a tenth of the country or something, or at
     least a tenth of that region, you know.  So making it
     available in the other nine-tenths, it's not even available
     in cities in a lot of cases, apparently.  
                    But, you know, you can mix things.  You can have
     that available with T-1s, and then in addition a lot of the
     other communications we're also recommending, it was a
     reason for it, access to the internet, and it might be on
     your T-1 line too, or to the hospital and then from there it
     can go out to the rest of the internet.  You can do many
     other things that way. 
                    Now, you are not going to do things at high speeds
     right away and so forth.  But some of your communications
     and educational and transfer of data files and stuff can be
     handled in that way.  It's not as good as the NII Is going
     to be some day.  
                    MR. SULLIVAN:  You can't do that if it's a
     dedicated point to point.  You cannot access the internet
     under a dedicated point to point.  
                    MR. SPACEK:  Yes, you can.  Yes, you can.  Yes,
     you can.
                    MR. LAWLER:  Can I suggest this?  We have --
     unless someone jumps up and down and screams, we have
     reached a consensus, I hope, that T-1 is what we are talking
     about.  We need to continue this discussing about dedicated
     or switched when we return from lunch.  
                    Lygeia, we have someone you are going to introduce
     from Intel SAT was here, who is available if people want.
                    MS. RICCIARDI:  Yes.  David Meltzer is in the back
     there.  Do you want to stand for a second, David?  
                    David held a meeting for our group yesterday in
     Intel SAT, which only a couple of us were able to attend, so
     he has offered to come back today and tell us about a pilot
     program that Intel SAT is organizing in order to increase
     demand for telemedicine and teleducation services.
                    David, if you want to take just a couple of
     minutes to give a really broad overview of what you are
     doing, then people can talk to you on an informal basis
     during lunch, and then you will be available, as I
     understand it, later in the day when our meeting breaks up
     at about four as well.
                    MR. LAWLER:  Okay.  This is, however, our lunch,
     so --
                    MR. MELTZER:  I'll keep it brief.
                    MR. LAWLER:  -- why don't we return at 1:00 to --
     I'm sorry, go ahead. 
                    MR. MELTZER:  Can I just also assume that the
     conversation that I also need us to have about what needs
     are underserved in an urban environment, that that also is
     on the agenda when we come back from lunch?
                    MR. LAWLER:  Yes, we did not -- the only things
     that are off is what we -- no one puts up too much and
     screams about.  
                    David, come on over here and sit here, and we will
     be back to switch versus dedicated at one o'clock, so eat
     hearty.  
                    Elliot, where can one eat here other than --
                    MR. MAXWELL:  There is a passable place right down
     on the first floor.  
                    MS. RICCIARDI:  They provided your coffee and
     Danish and stuff.  
                    MR. MAXWELL:  Or you can make your own judgments,
     and there are about like 4,000 places within two block
     around ranging from the well-known brand names to a whole
     see of take-outs.  There are many choices.
                    MR. MELTZER:  Okay.  Well, thank you for the
     opportunity.  I will keep it very brief.  
                    As you may have heard, Intel SAT, in conjunction
     with a number of other public and private sector
     organizations, is helping put together what we view as a
     two-step process to promoting the establishment of a global
     network on distance education.  Briefly, distance education
     we take to mean telemedicine, vocational training, K through
     12, university.  And essentially the two steps are:
                    Step number one is what is being called a global
     summit on distance education, which will be held here in
     Washington October 23rd and 24th.  We have enjoyed a
     wonderful response both from organizations that would like
     to sponsor such as AT&T SkyNet, Hughes Communications,
     COMSAT World Systems, as well as advisory committees.  We
     have the University of Virginia, Texas Tech Health Medical
     Center, and a number of other universities already on
     advisory committee.
                    Essentially the purpose of the summit is to try to
     get people under one roof, not just the U.S. but the
     international government, private sector, as well as
     consumers of this education, all under one roof.  We are
     aware that there is a great need and a great amount of
     interest in distance education worldwide, but unfortunately
     there isn't a whole lot of coordination.
                    So we are offering our facility basically as a
     roof for people to get together.  We have a number of
     excellent speakers.  
                    The second part of the two-step process that we
     are particular excited about is what we are calling a pilot
     program for the Americans where Intel SAT as committed to
     provide satellite capacity at no charge for a one year
     period of time starting some time in 1997 for distance
     education network.  That will focus solely on the Americas
     initially.  We hope to have other communications providers,
     services, goods make similar donations in kind for a one
     year period of time, and we hope at the end of the year we
     will at least have demonstrated what works and what doesn't
     work on a regional basis.  And then the hope is we can
     expand it to an international basis and make it viable.
                    We don't expect that Intel SAT nor the other
     contributors would be able to provide the capacity or goods
     or other telecommunication services for free for an endless
     period of time, but the idea is let's make our mistakes on a
     relatively small scale.  We look forward to the involvement
     of the U.S. sector, both telemedicine education and
     vocational.  
                    But I am here with a number of materials.  If
     anyone would like to talk to me during the lunch break, I
     will be right in the back, and I welcome anyone's attendance
     as well as participation.
                    Thank you.
                    (Applause.)
                    (Whereupon, at 12:20 p.m., the meeting was
     recessed, to reconvene at 1:00 p.m., this same day,
     Thursday, September 17, 1996.)
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          //                  A F T E R N O O N   S E S S I O N
                                                                (1:17 p.m.)
                    MR. LAWLER:  If we're missing anyone who cares
     deeply about this issue.  
                    If I can just restate where I think we are.  We
     have reached a consensus that the up to T-1 is something we
     ought to recommend and we are discussing the issue of
     dedicated versus switched, and we have had a couple comments
     from this side of the room saying, well, I guess agreeing
     with Bill that switch is not available even in metropolitan
     areas, and we have some disagreement that dedicated is
     satisfactory.  So let's see if we can proceed from there and
     try to reach some kind of recommendation on this, and then
     we've got more to go here.
                    Dena?
                    MS. PUSKIN:  It seems to me that what we are
     hearing is that it's not out there and it would be
     extraordinarily costly to envision being put in place in the
     next year or two.  But on the other hand, we have a problem
     of a system in which we build a series of stovepipes and how
     do we move from a stovepipe basically system of dedicated
     networks to moving to what ultimately we would like to see,
     which is a national information infrastructure with switch
     system. 
                    So I really think we need a recommendation here,
     or at least a statement that talks about the fact that we
     are -- our ultimate goal is to move from essentially where
     we are now to that system, and that part and parcel in
     planning and moving out there we need to create a transition
     or the ability to transition, and figure out how to
     transition, and that part of the issue in planing, because
     you have a lot of sort of generic recommendations there in
     building that infrastructure or backbone, is planning the
     transition for how we move essentially from a stovepipe
     systems, which inevitably will be built right now, to that
     information infrastructure, and that essentially the
     recommendation be put forth within two years on that.
                    And I know Tom and I have discussed this.  
                    MR. SPACEK:  Yes, we had talked about this, and
     actually we're, you know, this sort of recommendation is
     further along that we haven't got to yet.  And there is a, 
     you know, particular places where we talk about alternative
     infrastructure technologies where it's sort of very
     appropriate, in fact, to make, you know, statements of that
     sort, and to recommend transitioning from the initial
     capabilities and the stovepipe-like stuff to a national
     information infrastructure capability which may or may not
     include switch T-1.  
                    I mean, it's possible it will be a routed network,
     you know, using IP services.  Who knows where that will
     evolve to that will provide the same functionality.  That's
     like undecided yet on, you know, what technologies will win
     out.  But there are appropriate places to talk about that
     transition and to say that it should be addressed.  
                    MR. LAWLER:  Mary Jo.
                    MS. MACLAUGHLIN:  Well, again, to go back to what
     I stated earlier, which has been picked up on, is there any
     way that this general statement can be framed in such a way
     as to urge schools and libraries and medical facilities to
     look at this jointly so that they perhaps can collectively
     identify ways to facilitate this building a little bit
     faster?  
                    MR. LAWLER:  I mean, I think the answer to that is
     absolutely yes, but I'm still not sure that's going to get
     us over the hurtle that we've got immediately.  
                    MR. TANGALOS:  Actually, I would like to come back
     to that because Dena has brought it up, Mary Jo has brought
     it up.  It's been brought up a couple of times.  
                    The Texas law, which is precursor to the Telecom
     Bill has within it a reporting outreach requirement for the
     industry to display that these services are there.  And
     Steve Cotton has given me plenty of information with model
     language, but we've got to get over this hurtle before we
     can get to this.  
                    MR. LAWLER:  Right.  
                    MR. MCCONNAUGHEY;  Jim McConnaughey, MTIA.  
                    I think maybe part of the transition, I don't
     know, it's coming from a wild-eyed economist, I guess.
                    MR. LAWLER:  That's an oxymoron.
                    (Laughter.)
                    MR. MCCONNAUGHEY:  I was afraid you were going to
     say redundant.
                    (Laughter.)  
                    Perhaps dedicated seems to be the way to go, at
     least in terms of affordability at this point in time.  
                    Would it be possible to come up with a scheme
     where you take the delta, the amount that's gotten from the
     fund and apply that or give the user the option to apply
     that to a switched T-1?
                    I mean, it would be a sweetener of some sort that
     might make the switch T-1 more affordable, and perhaps be a
     way to word that capability into the area.  It's just a
     thought.  I mean, that wouldn't be a total solution but it
     might be part of the puzzle.  
                    MR. BAILEY:  One point I think -- my concern was
     that you would by setting a standard cause people to take
     the most costly mechanism to solve a problem, and there may
     be circumstances, depending upon where you are and what the
     circumstances are, where the switch would be the cheapest
     way to do something in one circumstance.  In another
     circumstance it may be more expensive, and I don't know how
     to do that.  
                    But I think what you are saying is if you have the
     technology there to provide services to -- the types of
     services, greater service that health care providers want,
     then we ought to be trying to at the same time incent people
     to get those services in the most cost-effective manner.  I
     don't know how you do that, but I recognize that there are
     circumstances where dedicated would be the most cost
     effective way to do it, a dedicated mini-network let's say
     that may have the ability to go outside of that network if
     need be.  Or it may be cheaper in some circumstances to just
     offer primary rate interface, ISDN, between several
     locations.
                    A lot of that has to do with where -- how the net
     work currently exists and so forth, and I don't know how --
     I'm not sure how you do that.  
                    MS. DEERING:  I just have a quick question.
                    From the point of view say individual rural
     hospitals that -- or some other entity out there that might
     be faced with creating multiple stovepipes, can you give us
     any indication of at what point it becomes from that
     institution's point of view more effective to straight to a
     switch from the beginning?
                    I mean, is there a three-year scenario if they can
     anticipate them doing X, Y and Z, then they may as well do
     it now?  Is there anything like that? 
                    MR. BAILEY:  Well, unfortunately, you know, you
     can look at the way that my company, for example, prices its
     services today, and there probably is a tradeoff point.  
                    The problem you have got is there are a number of
     companies that may price their services somewhat
     differently, and as you introduce competition it's going --
     right now I don't charge a different rate between rural and
     metropolitan areas.  It doesn't matter where you are.  It is
     a mileage sensitive rate, but at least it doesn't matter.
                    I think what may happen though is as you get
     competition in the metropolitan areas you will see rates
     come down in the metropolitan areas, and they won't come
     down in rural areas.  So you will create a difference that
     is hard -- you know, it's hard to predict today what the
     tradeoffs will be given the changes that are happening in
     the network.  
                    MR. MAXWELL:  You know, part of the -- if one
     wanted to try to go up to 100,000 feet on this, you would
     say one of the goals that the Congress is suggesting is to
     ensure the availability of these services in rural areas,
     and in the most cost-effective way possible.  And so that
     says something about technological neutrality.  It says
     something about the introduction of competition.  And to the
     extent possible, it says what should be coming out of your
     recommendation, how do I get these things out there and how
     do I get them out there in a way that's going to be
     reasonable for the health care providers, and how am I going
     to get them out there in a way that's reasonable for the
     health care providers in as quick and as efficient way as is
     possible across the society.  
                    So some of -- one of the questions that I think
     takes off from both your question and your earlier comment
     is how are we going to help people know what services are
     available?  How are we going to help them know what will be
     cost effective for them?  How are we going to make sure that
     there is the -- that the learnings that each one of you
     bring to this are more widely available than in your own
     houses?  We have got to figure out something, and we can
     talk more about that later, but that in the end is going to
     be a very important part of this.  
                    MR. LAWLER:  Jay?   Sorry, Bill.  
                    MR. BAILEY:  I just want to interject, I just
     thought of this.  Several people asked me what does it cost,
     and I can't give you a number.  But there was a -- about two
     years ago there was a proposal by, I think it was then
     called the REA, or maybe it changed right in there, I'm not 
     sure, to dictate, and I think that was basic rate ISDN
     throughout, and there was such a huge cry from the industry
     and all of the states who regulated the industry that it was
     such a huge cost associated with that.  
                    MR. HOLUM:  It was a totally bizarre way of
     getting a result.  
                    MR. BAILEY:   Yes, that I think it collapsed under
     its own weight.  And that was for, I think, if I remember
     correctly, that was for basic rate ISDN, not primary rate
     ISDN, which is probably what we are talking about here.  
                    MR. LAWLER:  Jay?  
                    MR. SANDERS:  Based on the number of comments
     about the need for, and I think probably everybody would
     raise their hand in the affirmative for some type of
     educational resource that would exist for the providers.  
                    I would just like to make an offer, and hopefully
     it's an appropriate one, the American Telemedicine
     Association can function as one of those educational
     resources.  We have task forces dealing with the clinical,
     the technological, the infrastructure, a specific task for
     on rural telemedicine, and the constituency of those task
     forces are made up in most respect similar to the
     comprehensive constituency that's here.  So that as sort of
     an ongoing resource, I would like to volunteer that the ATA
     provide some of that educational input. 
                    MR. LAWLER:  Sure.  Can I try, again just to see
     if we can move along here, see if we can get agreement.  And
     I will start very grand, which is, is there general
     agreement that the technology is not there at the current
     time so that anybody who says, you know, I would like switch
     T-1 should not be able to on demand get it?  Any
     disagreement with that?  
                    If there is any disagreement, they are disagreeing
     silently.  
                    MR. MAXWELL:   What you may want to -- I think
     what people have said and where there is more maybe
     agreement about, which is a kind of precursor statement, is
     that in the best of all possible worlds people would like to
     avoid stand-alone systems or non-connected systems, and they
     would prefer to be able to have switches which would enable
     them to request band width on demand, to switch in each and
     every --  
                    MS. PUSKIN:  Have the capabilities.  I think we
     have to put in --
                    MR. MAXWELL:  So maybe we can start with where
     people would like to be.
                    MR. LAWLER:  Right.
                    MR. MAXWELL:  And then to go to --
                    MR. LAWLER:  Well, let me try, and we will get
     there, but let me try another one because I do think this is
     relevant to what the law says.
                    It says you get those or you get the comparable
     rates, you get the build out for things which are necessary
     for health care services in that state.  And, you know,
     maybe Boston is not the center of the universe, but if it
     isn't available in Boston, and I heard someone else say it's
     not available in Manhattan.  I don't know what the most
     sophisticated technological city in the country is.  But if
     it's not available in those places at this point, it's hard
     to imagine that it's necessary for the provision of health
     care services in the state. 
                    Is there any -- is there any disagreement with
     that?  Are we talking bets on whose got the best technology? 
               (Laughter.)
                    Because if there is agreement on those two things,
     I think then we are where Elliot just suggested we are,
     which is, you know, it is whatever the proper words are, it
     is the goal, it is desirable and someday we ought to get
     there, but in the context of what we have today, you know,
     it's not an issue at least for the next, whatever is next,
     before our next review, which is somewhere between tomorrow
     and two years from now.  
                    MR. WATERS:  And Greg, I think if we can also make
     sure that that is put on the review list for two years.
                    MR. LAWLER:  Sure.  Yes.
                    Is there any disagreement with that?  
                    MR. SANDERS:  Could we also put on the list HCFA
     reimbursement?
                    (Laughter.) 
                    MR. SANDERS:  I couldn't resist.
                    MR. LAWLER:  Jay, I've been timing you to see how
     long it took for that to come up.
                    (Laughter.)
                    MR. LAWLER:  You did quite well.
                    MR. SULLIVAN:  Not a disagreement, but then along
     the same lines, Bill and I spent the lunch hour discussing
     switch and dedicated.  If we could jump back then to the
     service for the emergency services people that we talked
     about.
                    MR. LAWLER:  Yes  
                    MR. SULLIVAN:  Are we talking about what's in
     place today, or are we talking about that there should be
     universal service at 9.6 or whatever for an ambulance
     anywhere?  
                    MR. LAWLER:  The latter.  
                    MR. SULLIVAN:  The latter.   
                    Then Bill probably has a little problem with that.
                    MR. BAILEY:  I don't work for a cellular company.
                    (Laughter.)  
                    MR. LAWLER:  Well, there may be a problem but it's
     not mine.
                    (Laughter.)  
                    MR. SPACEK:  I assume part of the problem with
     that -- I don't work for a cellular company either or a
     wire-link company, but they own us today.
                    (Laughter.)  
                    But, I mean, part of the problem, we will get to
     it later in this meeting, is that the infrastructure is not
     out there, and you may need additional cell sites that cost
     money.  But part of what the infrastructure recommendations
     will be is to build those sell sites that cost money and
     reimburse those providers, and we will ge there.  
                    MR. SULLIVAN:  Then the same thing applies to the
     switch services.  They are not there now, but put the switch
     services in, and we will reimburse the providers.  
                    MR. LAWLER:  There are a lots of things that
     aren't there now that we could recommend that we are not
     recommending.  The question, I think, here is what is
     necessary for health care services in that state.  What we
     have before us is a recommendation that, you know, you need
     T-1, you need something on emergency services which is what
     we need to talk about next.  
                    But I think we have a consensus that switch T-1 is
     not something you need today for health care services in the
     state.  
                    UNIDENTIFIED SPEAKER FROM AUDIENCE:  Which point
     would you connect to?  Just about say three hospitals, but
     also from one of those to the necessary --
                    MR. LAWLER:  You are going to have to speak
     louder.
                    UNIDENTIFIED SPEAKER FROM AUDIENCE:  Yes, I think
     that's clearly something that's happening within cities --
                    MR. LAWLER:  Can we go back?  I think the last
     bullet left in this series of bullets is the emergency
     services and any other issues that -- yes.
                    MR. PILLAR:  I think the --
                    MR. LAWLER:  You have to, for the court reporter
     you have got to identify yourself. 
                    MR. PILLAR:  Bob  Pillar from the Public Utility -
     - This is kind of transition comment.  Are we being
     consistent in terms of the 9.6 on the emergency services,
     and I think you want to make a distinction here and say that
     while the 9.6 service may not actively being utilized in the
     cities, that there is a comparable system of access of the
     ambulance team to being able to get to the expert services,
     and this then would become kind of the equivalence.  So I
     think there is a distinction between saying that this is
     something that's comparable to these even though it's not
     the exact technically same service then we would have to get
     to switch T-1.  
                    MR. LAWLER:  Right.  On the emergency services do
     we want to recommend something other than 9.6?  And what is
     it?  
                    MR. BRICK:  This is Jim Brick.
                    Bill made a point about what is there, you know,
     which I think was -- you know, kind of like what's there
     and, you know, why should we change that?  Isn't that right,
     what you said?  
                    MR. ENGLAND:  I just think you buy -- the band
     width is already out there.  I don't know how Motorola
     designs their communicators, but my guess is it's greater
     than 9.6.  So I mean, you don't want to specify something
     less than the equipment currently out there.  And I don't
     know what it is.  But I suspect it's more.  
                    MS. PUSKIN:  Is the standard moving to 28.8?  Why
     don't we ask people who know.  
                    MR. SPACEK:  Well, is there anyone in the room how
     knows whether -- if the cellular site is out there, you
     know, can it handle 28.8 in all cases?  
                    MR. LORAN:  Tom Loran, Highpoint Rural Health.
                    The answer is we're talking apples and oranges. 
     The cellular sites are analogue in reality, and the analogue
     runs at 25 kilohertz per channel, but it's all designed for
     voice.  So there is recall not an equivalent.  
                    They are developing standards, and there are about
     three standards that are on the table right now.  They
     really don't know which way they are going to go.  So, you
     know, you have got GSM, CD, PD, things like that.  But those
     are all up in the standard, and that's just a complete wide
     open area.  There is no standard.  They are not going to --
     there are cell sites being put up for experimental reasons
     to use a whole variety of different technologies, and they
     don't interrupt.  So that's an issue.  So it's a wide open
     field.  
                    MR. MAXWELL:  Maybe I can make a comment.
                    Just as the notion of doing T-1 equivalence as
     opposed to saying T-1 lines or some such, it may be worth
     doing something off-line before these are finalized, to take
     a look at what is available in the urban areas, because
     urban areas do use radio.  It's not only cellular -- I mean,
     it's not only digital.  People do use analogue circuits.  We
     are looking at really daily rates as much as anything else,
     and it's not a question, again, of what technology we use,
     but looking for some kind of equivalent, whether it's the
     moral equivalent or some other equivalent for this.  You
     know, we can talk about it.  But why don't we do some work
     off-line and not have this ceiling piece be driven by sort
     of our own ignorance and look toward what's available, and
     come back to the group.  But I think it may well differ from
     the 9.6, but we can figure that out.  
                    MR. SPACEK:  And in some cases it will be using
     cellular with modems, and that's okay.  And that's sort of
     at the moment has a max of 28.8, but you don't really get
     that either.  You only get about, you know, 20 or so.  So
     why don't we do this off-line, and what the number will be
     probably is somewhere between 9.6 and 20, or whatever, at 
     least for the initial kind of what's there
                    And, yes, there are different technologies, but
     there is nothing we can do about it.  I mean, we can't just
     say that, ah, the world has a lot of technology, so we don't
     want to say anything.  We have to give a little bit of
     guidance as to a minimal capability, you know, recognizing
     that it's going to change.  
                    MR. LAWLER:  Agreement on that?  
                    All right, are there any other issues within this
     overall heading that we need to talk about now?  
                    MR. TUCKSON:  Well, I have been raising this issue
     about getting clear about -- this is Reed Tuckson.  This
     issue about the underserved communities.  And I think what I
     need is a little guidance from what our assumptions are
     about the relative difference in infrastructure availability
     between urban, rural and then underserved.
                    And the point made earlier, which is an important
     one, that underserved can be viewed from the context of
     underserved from a health care delivery perspective, and
     clearly that is real.  
                    The work that we are doing in South Central Los
     Angeles with public housing developments, and those
     communities surrounding that suggests to us that those
     communities are also underserved infrastructure-wise; that,
     you know, the public housing developments don't have cable. 
     They don't have any wiring.  And that's not just only for
     public housing, but for innercity challenged environments.  
                    So I just think if that be the case, and if my
     assumption is correct that if we are going to meet the
     demands of the act, which is fair and equitable for all
     Americans, then I think we are going to need to make special
     recommendations for underserved communities that permit them
     to have access just as anyone else.
                    And the way we are doing it now is sort of we
     throw it into various sentences, at the beginning of
     sentences, and then there is no recommendation that goes
     with it so it's really just kind of inadequately dealt with. 
     But let me stop and listen to how others view it.  I am just
     a little concerned.  
                    MR. LAWLER:  Cindy?
                    MS. TRUTANIC:  Actually, I think it's a point was
     mentioned for -- can everybody hear me?  Especially for
     underserved populations in urban communities.  You can
     actually identify the point at which they are coming into
     the health care market either improves or worsens the onset
     of whatever disease it is that they have, because it is a
     fact that children in urban areas do not see a physician
     early enough in the progression of a disease, and that
     oftentimes by the time the disease has progressed fairly far
     the cost of treating them is much greater in the urban
     communities.  So in that respect I think Mr. Drew is -- I
     have thought what he ways.
                    There are also communities like home-bound
     mentally ill, home-bound chronically ill individuals and
     whatever, which is where the home care issues, I think come
     into play.  
                    MR. TUCKSON:   This is Reed Tuckson again.
                    Let me just extend that because what we are -- we
     are seeing is big difficulty when we try to establish
     telemedicine capacities in underserved housing developments
     and other such communities.  There is no infrastructure with
     which to link in.  So that if you really try to do all the
     things that make sense for our rural conversation, you know,
     if you realize that folks don't get access to
     ophthalmologists and we want to then provide
     teleophthalmological services, there is no infrastructure
     that allows you to be able to do that, and so you are
     basically back -- you might as well be in rural America even
     though you are sitting in the middle of urban America.  And
     so it's both, it's those issues, and then it's the sense of
     how do we then extent all the technology i.  
                    MS. PUSKIN:  Can I raise a question in terms of
     parallels though?   
                    In terms of the infrastructure you would not
     necessarily need any different infrastructure.  I mean, if
     we say up to T-1, Reed?
                    MR. TUCKSON:  Yes.
                    MS. PUSKIN:  That wouldn't be any different in the
     innercity.  We are saying that we need to subsidize in
     communities that are underserved up to certain standards.
                    MR. TUCKSON:  Oh, no, wonderful point.  I am not
     suggesting anything different.  My only concern is that it's
     just not -- if you read the report from the point of view of
     an innercity community, it's as if they don't exist except
     they get sort of thrown out there every once -- you kind of
     dangle it, and then you take it away  
                    MR. LAWLER:  Just let me, and I'm looking back
     through this to make sure I don't miss it, and I may still
     have missed it.  In terms of the subsidy that's available,
     the law only talks about rural areas.  I mean, I don't think
     it could be any clearer.  It says, you know, serves persons
     who reside in rural areas in that state at a rate.  So I
     don't think that there is any contemplation in the law, and
     we can recommend what we want to recommend, but we have to
     recommend that it be changed in order for the Joint Board or
     the FCC to include something more than rural areas.  
                    MR. SANDERS:  And, one, I think, in reading the
     law you are absolutely correct.  But once again I think it
     needs to fit into the basket of critical constituencies that
     we need to at the very least recommend to Congress be
     readdressed in the same way that we are talking about the
     nonprofit primary care provider, the way we're talking about
     the nursing home, the way we are talking about home health
     care, that we need to recognize that you don't define
     underserved by geographic isolation; that underserved are
     underserved by whatever definition you choose to define
     underserved, not by -- it's geographic as well as socio-
     economic isolated, and that's really what we are dealing
     with.
                    MR. LAWLER:  I don't have any disagreement with
     that.  I guess I am trying to look for a hook here.  I mean,
     there is more general language in the universal service part
     of the law.  It just doesn't go to the rural subsidy.  And I
     know far less about this than, Elliot.  I won't put you on
     the hook, but you may have a better perspective on this, you
     know, and these are -- the Joint Board, in recommending
     definition of service is supported by universal service are
     essential to education, public health or public safety.  I
     mean, clearly that is a hook big enough for something, but I
     am just not sure where it gets you from here because there
     is then no specific provisions that says you get X, or, you
     know, you get -- 
                    MR. MAXWELL:  Let me make a suggestion.  I think
     that from the beginning we have talked about some parallels
     between rural areas and underserved areas in urban areas. 
     This advisory committee, because of its emphasis on health
     care in general, can clearly, I think, make the point that
     you are making, which is either way you cut it, whether it's
     the telecommunications infrastructure or the health care
     infrastructure, either way there are underserved areas that
     are not rural, and that --
                    MR. LAWLER:  Right.
                    MR. MAXWELL:  -- the Joint Board needs to pay
     attention to this in its overall concern and in its overall
     implementation of the health care provisions, both 254 and
     advance services, to think about this in ways that serve the
     broadest view of the congressional intent, which was to
     ensure that health care goes -- general level of health care
     be raised.  And I think that would be perfectly appropriate
     for the committee to do because of its own expertise.
                    MR. LAWLER:  Right.  Jay, this may be a nit in the
     sense that it's, you know, disagreeing with you for no good
     reason, but the -- I mean, it seems to me that this is in a
     different category than the -- you know, the health care
     professionals and the nursing homes and the home health care
     because those, you know, you've got a list of people that
     are in rural areas, it's targeted at something.  It's just a
     question of whether they are eligible or not.
                    Here, we are talking about something that, you
     know, is sort of mentioned in the act but there is no real
     mechanism to get there, and we are trying to say, you know,
     you have got to come back and look at this in a different
     way.  Just don't throw, you know, underserved urban areas
     into the rural structure cause, you know, it may not be
     relevant.  I mean, the subsidy, to some extent, is the same
     as in an urban area while you're giving subsidy to people in
     an urban area, you now.
                    So I guess while agreeing with you I think it
     ought to be just a little bit different.
                    Cindy?
                    MS. TRUTANIC:  Just to elaborate, I think maybe --
     what about the provisions for schools and libraries because
     it is a fact that many of these underserved people could be
     serviced if it's housed in a school nurse's office or
     whatever.  I mean, there are health care services that can
     be provided in moving trucks in the neighborhood.  It's not
     necessarily -- it doesn't mean that the infrastructure has
     to go to each individual home.  You really want to go where
     you can get the most people taken care of the most
     efficiently.  
                    MR. MAXWELL:  And that's why I think that a group
     that has been looking at health care, again, primarily in
     the context of these rural requirements --
                    MS. TRUTANIC:  Right.
                    MR. MAXWELL:  -- can clearly make the statements
     about health care in underserved areas.  It's not
     necessarily restricted.
                    MS. TRUTANIC:  Okay.  Yes.
                    MR. LAWLER:  I do -- Elliot, you may kill me for
     this, but there is a provision in here which at least I had
     not paid attention to before which says, "In addition to the
     services included in the definition of universal service,
     the Commission may designate additional services for such
     support for schools, libraries and health care provider."
                    So the way that reads you can pretty much do
     whatever you wanted.  So we will just say this is your
     problem.
                    (Laughter.)  
                    MS. PUSKIN:  Can I just raise a question because
     it seems to me we have a section in this report on global
     international that really doesn't deal with the subsidy.  I
     mean, there is a sort of inconsistency in our position here,
     and I hate to point that out right now.  But we have a
     section here in the report on global competitiveness and
     issues relating to that, which would argue that since this,
     and I agree, I know I sit here with one hand representing
     rural, but I do representing the Joint Working Group on
     Telemedicine that deals with both urban and rural, and I
     feel very strongly that the points being make about urban
     innercities, underserved in terms -- need to have some
     emphasis in this report.
                    And that if we are going to give emphasis to
     global competitiveness, we ought to give at least a couple
     of pages to the underservice, and I think that we ought to
     perhaps think about that, and urge someone doing that.
                    MR. LAWLER:  I don't hear any disagreement.  Why
     don't we work together to try to come up with something that
     says we ought to, you know, this needs to be addressed, and
     we will tell the FCC and the Congress, you know, we tell you
     you've got to do it.  You better do it.
                    (Laughter.)  
                    MS. DEMERS:  I just have one concern, and that is
     that we appear to be looking as access to telemedicine as a
     standard of health care, and I don't think that's
     necessarily true.  I think you need to look at how health
     care is accessed in urban areas, and whether that's the best
     method for doing it. 
                    I think health -- I think telemedicine is a God
     send potentially to rural communities because of the
     distance factor.  I think there is also a lot of problems
     with it.  You lose a lot of personal contact, a number of
     other things.  And so I don't think it's the end all in
     health care delivery, but it's an answer to a particular
     problem caused by distance, and I'm not sure I see that in
     some of the urban underserved areas.  
                    I am wondering if there might be better ways to
     increase the access than telemedicine, and it's just a
     thought.  I have worked with both urban underserved and I
     have lived in the rural area now for the last 20 years or
     so.  
                    MR. LAWLER:  Bill?
                    MR. ENGLAND:  Bill England.
                    I want to go back to something Mary Jo mentioned
     awhile ago about including schools and libraries and
     hospitals all together.  And I am wondering, and I don't
     know whether the FCC is just going to have to deal with this
     or whether this committee should, we're talking about the
     subsidy from the effect of how much the hospital -- tex
     receiver is going to pay.  From Telco's perspective, if I am
     not in the community and the hospital says I want a T-1
     line, and my lines out in that area are absolutely stressed
     to the max and there is no way I can make T-1 available
     without going out to the poles and putting another line in. 
               So I do that, and then next year a school comes
     and says, well, now, we have read this and we would like a
     T-1 line, or two of them, and you keep tacking on.  And
     whether we could ask for some sort of coordination in the
     community, that the hospital talk to the other entities so
     you all will come in at the same time.  That may make a bid
     difference in terms of what the Telco is going to put in. 
     Are they going to put in a fiber if there is enough demand
     they sense they are going to have to meet out there?  They 
     may want to lay a fiber line out there if there is not one
     there.
                    And then the next question is how much is -- if
     they decide we would like to lay a fiber line to get that T-
     1 out there, even though that gives us far more than we
     need, is the subsidy going to pay for laying that line, or
     how -- what is the equivalent?  I mean, that is their cost
     to make that available.  So is that how much they are going
     to subsidize for that capital expenditure or what?  
                    MR. LAWLER:  If I can suggest to your second
     point, we're going to get there, I think.  Let's wait till
     we get there.
                    On the first one, I think there is --
                    MS. DEERING:  And it's actually an editorial
     suggestion again, and that seems to me, getting back to the
     underserved issue, that there are -- and under the
     overlooked, other constituencies, and that perhaps it would
     be quite appropriate to have an introductory section our
     understanding of what the intent of the law was.  And based
     on our understanding of the intent of the law, there is
     this, that and the other that was not appropriately
     addressed, and that that is a way of educating them saying
     we heard you, we heard what we thought you wanted to do, and
     just for your information this is why we are raising these
     issues.  And perhaps that would be a more persuasive way of
     bundling an awful lot of this stuff.
                    MR. LAWLER:  Sure.  
                    MR. TUCKSON:  And finally, just to point out,
     which is a good one.  I don't think anyone would suggest
     that this is the end all and be all of the solution to those
     problems, but they are certainly important interventions. 
     The use of teleradiology in these environments is very cost
     effective.  We are finding very efficient use of
     teleophthalmology, and a bunch of other things.  So I think
     we don't want to oversell it, and I think you are absolutely
     right.  
                    And what I particularly appreciate about your
     point is when it comes back to the notion again that I heard
     here in the sense that we don't want to put underserved
     innercity environments in the same paragraph as the rural
     because they are different issues, and they are different
     sets of challenges, and maybe some of the, even the
     infrastructure issue as much as the application issues are
     going to be different, and I think they need to be dealt
     with differently.  But I think your moderating point is a
     good one.
                    MR. LAWLER:  We have -- Bill?
                    MR. BAILEY:  Just a comment on your idea.  I'm not
     sure I know what the right answer is.  I do know that over
     the last couple of years in Missouri we did establish a
     number of community advisory boards around the state to try
     to do just what you suggested, and we may have done it right
     but it was a failure.  
                    I suspect that to the extent there is some for of
     subsidy for health care, there is some form of subsidy for
     education, libraries and so forth, the providers will go out
     there, recognize where they can get subsidies, and try to
     bring those things together because they can reduce their
     costs in doing that.  I think the problem might take care of
     itself.  
                    MR. LAWLER:  Right.  We do -- I mean, I think
     there -- everybody has said from day number one we want to
     try to make the different -- the libraries or the schools,
     the health care providers, everybody work together.  I think
     that is a focus of the Joint Board and the FCC because it's
     money, and there is a limit to the Universe Service Fund. 
     We ought to mention it, but I also think it is something
     that's going to be -- you know, we can tell them, but they
     already know. 
                    Can we move -- Chuck.
                    MR. HOLUM:  One point just on that idea.  Again,
     you're talking about consolidating the demand in an area to
     benefit the telecommunication companies who have to go out
     and build the facilities to serve them.  I want to emphasize
     that there is also a great benefit to consolidating demand
     from the user side.
                    MR. LAWLER:  Sure.
                    MR. HOLUM:   Which is the comparability standards.
                    MR. LAWLER:  Right.
                    MR. HOLUM:  If you can consolidate the libraries
     and the hospitals and clinics and all these people into one
     user, it's going to look more like a large industrial
     customer and get a lower rate.
                    MR. LAWLER:  Right.
                    MR HOLUM:  And we want to encourage that, and I
     think we ought to say something about that in our report.
                    UNIDENTIFIED SPEAKER:  A real quick question.  On
     page 2, you have internet access, number one.  Does that
     imply internet access up to T-1 rate or whatever this
     percent is?
                    MR. LAWLER:  No.  Did we lost Tom for a minute?
                    I think the answer is that is a no, that it says
     internet access, not at T-1.  
                    MR. TANGALOS:  When the work group chairs got
     together, it was access.  We stopped there.
                    MR. LAWLER:  Right.
                    MR. TANGALOS:  We did not want to specify rates.
                    MR. MAXWELL:  What is the T-1 rate?  In other
     words, between hospital and hospital, they have the T-1
     rate?
                    MR. LAWLER:  Whatever the network is, yes.  I
     mean, it may be between a hospital and five different
     clinics or whatever the -- however it's configured.  
                    UNIDENTIFIED SPEAKER:  How much would be it to
     connect that network to an internet service provider?  
                    MR. LAWLER:  It's not only --
                    UNIDENTIFIED SPEAKER:  Why don't you just put them
     in there and then ask for 1.5408 if there is no difference?
                    MR. LAWLER:  Yes.  
                    MR. PILLAR:  What driveS it is generally demand
     and how much -- how many lines may be going into that cost
     and whether or not they are graphic intensive, and our
     system and the large system even for existing school systems
     and hospitals, those will be connected into -- rather than
     T-1.  So you may have to be creating a limited to each
     rather than something desirable here.  It's an normal
     aggregation issue as to how you do the example here once you
     are on a network.
                    MR. LAWLER:  Right.  Let's move on here, if we
     can, to the next recommendation, which is on page 3, which
     is backbone infrastructure development, and there are three
     bullets here.  Should we do these separately or together?  
                    Well, let's do them separately.  The second one, I
     think, is just what we have all said all along, that
     everybody ought to -- Tom, do you want to handle the first
     bullet there?  
                    MR. SPACEK:  Sure.  The idea here is that
     universal service -- we talked about two uses of the
     universal service.  One we have talked about today, but we
     will talk about later as far as a recommendation, and that
     is the -- you know, difference in  urban and rural rate for
     services and that comes later, but we also know what the
     implications of that are.
                    This goes to -- another use of the universal
     service lines and that's to get the backbone infrastructure
     out there.  Okay, it doesn't help too much to say, hey, I
     can get it cheap on line if I can't -- you know, if there is
     no telecommunication infrastructure anywhere near where you
     are, you know, anywhere near your rural community to be able
     to get it.  So how do you get that infrastructure out there?
                    And what the recommendation here is, is that --
     and it's not just getting it out there.  It's upgrading it
     in some cases.  In some case it's there, but it's analogue
     and it would have to be upgraded to digital, okay.  So it
     covers both build and upgrade.
                    And the idea here is that the eligible
     telecommunications provider, per Section 102 of the act,
     gets to use the Universal Service Fund to build out or
     upgrade the infrastructure to reach the rural communities so
     you can offer these other services.  Otherwise, you just
     can't offer them.  And that's what the first recommendation
     is.  
                    There are several safeguards with respect to that
     though.  One safeguard -- well, first of all, there isn't
     necessarily one eligible telecommunications provider. 
     Section 102 says the FCC will look at the people who apply,
     and they appoint more than one, so there might be two or
     three in competitive situations.  I find that in most cases
     probably highly unlikely, but, you know, there will be out
     in a lot of rural areas.  You will see several provider
     vying for the business.  
                    But, in any case, if there are more than one, they
     will -- you know, they will be competitive with each other. 
     In some case you may not get a telecom provider or other
     provider to come out there, or apply to the FCC to become
     eligible.  In that case, Section 102 says the FCC will
     appoint somebody to be eligible.  
                    I would imagine in the selection criteria the FCC
     uses if people apply to be eligible would probably look at
     the existing infrastructure these folks have, so you have
     the last necessity to add more costs and develop more
     infrastructure.  That's just my guess of what the FCC would
     do.
                    So anyway, this gets at building the backbone. 
     This is the infrastructure, not to get to your site.  This
     is just the basic telecommunications infrastructure to get
     somewhere close to your site.  
                    And secondly, there were concerns that the
     telecommunications provider would look for profitable
     purposes other than education, telemedicine and those kinds
     of things.  In other words, the sold it to rural businesses.
     And so I am getting into the third one anyway because it's
     really tied in.
                    MR. LAWLER:  Go ahead.  
                    MR. SPACEK:  The third bullet basically says to
     the extent that that's the case, that the same
     infrastructure that was subsidized via the first bullet
     gains for-profit money from businesses and so forth, that
     the FCC would come up with a mechanism that would use those
     profits to reimburse to whatever degree possible the subsidy
     that was given in the first place.
                    Now, a caution is -- that sounds like a wonderful
     idea.  The caution is there is probably not a whole lot of
     big business opportunities out in rural areas.  But to the
     degree that there, and maybe in some cases there will be,
     any such profits would be used to reimburse this funding
     that would come out of number one.  
                    MR. LAWLER:  Tom, I just didn't, and I really
     didn't even pay attention to this till now.  The way this is
     worded, it's just a wording thing.  Put in place a mechanism
     to recover some of the cost to partially repay, you know,
     that's sort of viewed aside what it is.  Don't we want to
     say to the extent that there is a profit made, you ought to
     get the profit back to replay the fund?  
                    Eric?
                    MR. TANGALOS:  Part of this, and we have struggled
     with this.  This is another area that the work group chairs
     discussed at some length.  An example would be there are two
     rural telcos.  One has spent time and money over the last
     five years upgrading the system, and when the request comes
     into to provide telemedicine services at a given band width,
     they are able to do that at a modest increase in cost.  The
     telco across the state line or cost accounting border hasn't
     done a darn thing, and indeed now it sees the Universal Fund
     as an opportunity to tap into a resource that it didn't have
     before.  So it convinced a rural health care provider that
     they need telemedicine service.  
                    So they make the request of telemedicine to be
     there, and this telco that hasn't done anything to upgrade
     its equipment or over five years now reaches into the
     Universal Fund to do that.  A year or two down the line they
     may have a competitive advantage over the telco that has
     done its job over time.  And what equities can we put into
     place that will assure that any profits that are accrued go
     back to the Universal Fund.  This was the best way we tried
     to do that, but it doesn't get to all the nuances.
                    And if I as a health care person can come up with
     this way to gain the system, I am sure that there are telcos
     out there that will be able to do the same.  
                    MR. SPACEK:  Eric, I think there are lots of
     scenarios we could come up with about, you know, these are
     the bad guys and these are the good guys and stuff.  And we
     probably can't handle them all.              This was the best approach
     we had to try to handle that.  
                    But, secondly, with respect to your scenario, I
     think there is an additional way in the sense that the FCC
     is going to -- is going to appoint, based on application, an
     application to them, who the eligible provider is.  And my
     guess is that if both of these companies came along and the
     FCC saw one had build outs in most areas and the other had a
     very sparse infrastructure, they probably would not choose
     the one that has the sparse infrastructure to be eligible. 
     So I think that's a second -- another safeguard.  
                    MR. LAWLER:  But, Tom, back to the point I raised.
     The point you are trying to make here is if we give you $100
     to build out the infrastructure, 50 of it you use for
     telemedicine, libraries, schools, and you make 50 bucks, you
     ought to pay that 50 bucks back to us because we gave you
     the money to build the infrastructure.  Once you have repaid
     the fund you can do whatever you want, but you ought to
     replay the fund.
                    Is that an accurate description?  
                    MR. BAILEY:  I don't recall where, but it's
     someplace you suggest how you're going to actually refund,
     and as I recall it's a credit for the difference between the
     rural and the urban rate.  
                    MR. SPACEK:  That's an issue on the service
     itself, not the backbone.  That comes up later.  
                    MR. BAILEY:  Okay.  So you are saying you're going
     to get subsidy for the service, and also subsidy for the
     backbone?
                    MR. SPACEK:  Yes.  That's right.
                    MR. BAILEY:  There is another important issue
     here.  If over the long term there is a hope that there will
     be competitors in the rural areas, and that that will
     improve the infrastructure available, unless there is some
     mechanism for recovery of sorts, you would have a situation
     where the person designated as an eligible provider and
     subsided for infrastructure development would essentially
     have a plan without any capital investment.  And it's tough
     to imagine that someone is going to come in and compete with
     someone who has no capital costs, and you may -- if
     something like this isn't done, you have a situation where
     the long term might be defeated, and the best term and the
     long term might be defeated.  
                    MR. TANGALOS:  And have we spelled this out
     enough, that's what you are saying.  
                    MR. SPACEK:  I think, I think what he is saying is
     that the words "some" and stuff shouldn't be there, but
     rather, it should be -- 
                    MR. LAWLER:  I don't even care whether we describe
     the mechanism, but if we --  
                    MR. SPACEK:  No, we can't describe the mechanism.
                    MR. LAWLER:  -- get money from it, replay it.
                    MR. SPACEK:   Yes, if it's used for other
     profitable services.
                    MR. LAWLER:  Yes, absolutely.  
                    MR. SPACEK:  Yes.  Fair enough.
                    MR. LAWLER:  Jay?  
                    MR. SANDERS:  Let me approach that question in a
     different way, Tom.  Let's assume -- well, let's start
     without the new telco act, without this committee.  I am a
     rural community and I go to you and I say, look, I want T-1
     connectivity into my community.  And you look at you
     situation and say,  well, look, I'm going to have to build
     out to it to give that to you.                         You have figured out the
     cost of building it out.
                    Is your monthly rate to me using that T-1
     connectivity include a depreciation cost on the build out?  
                    MR. SPACEK:  Well, historically I'm sure that
     varies from place to place, and sometimes it does.  The idea
     here, of course, would be that the state commissioner or
     whoever is determining rates urban versus rural does not
     double charge the customer.  I mean, you're right, that
     could happen.  But we are sort of assuming here that they
     are smart enough to realize that we paid for something and
     we're not going to recover that -- we are not going to let
     the company recover that money twice.  
                    MR. SANDERS:  Yes.  Well, the flip side, my
     suggestion was going to be that rather than get into this
     complication of paying back, that in fact the cost to me as
     the community end user would be less because the Universal
     Fund has paid you to put in that connectivity into my
     community, that my monthly rate for that T-1 use should be
     less.  
                    MR. LAWLER:  Jay, you are building in a -- that
     means where someone uses the fund to get infrastructure
     built.  
                    MR. SANDERS:  So it's the flip side.  
                    MR. LAWLER:  Yes, you are just -- you get
     different levels of subsidy for different rural areas for no
     reason other than where the money came from.
                    MR. SANDERS:  Okay.
                    MR. SPACEK:  Yes.  
                    MR. SANDERS:  That's why I'm in medicine.
                    (Laughter.)  
                    MR. PILLAR:  I think I have some doubts about how
     this can be set up.  I take it that in the optimum scenario,
     the marketplace would take care of this and service would be
     provided, but we're talking about a situation where a
     company's own business plan says we're not going to build
     it.
                    On the other hand, generally speaking that
     business plan did not anticipate from the get-go that there
     is going to be no other customer that' using these
     capabilities.  And if the company is a telecommunications
     company of any size, we're talking about five forms and sub-
     five forms and the like.  So we are talking about adding
     capability at the switch and various points along the way,
     and probably the installation of fiber or other plant in the
     ground.
                    So, I think the first thing is that the Commission
     shouldn't be saying, or shouldn't be forbidden from this
     fund that, gee, if you build it, we'll pay 100 percent of it
     and then reimburse you as you in fact get customers.  What
     would be reasonable, I think, in the competitive marketplace
     is that you decide at that point, you project the business
     case on the competitive customers, and that that should be
     the risk of whoever the provider is.
                    Now, you want some sort of true-up mechanism to
     deal with the projections later on.  You might need to do
     this, that as it's build out they may be adding customers,
     and the subsidy may in fact have been too large.  The notion
     that this will come out of profits, I think, is wrong.  I
     think the notion is that a certain amount of it the company
     should be at risk for from its competitive customers having
     added the capabilities, because once you have this
     capability not only will, you know, to some extent you will
     have your rural customers come in, but to some extent some
     of the plans will be closer to urban areas and will be used
     for multiple services.
                    So I think that the construct perhaps that we have
     here, while it's not conceptually wrong, it's a little too
     simplistic.  
                    MR. LAWLER:  You're suggesting we pay for the
     increment above what they would be doing on their own?
                    MR. PILLAR:  Yes, and I think it's not out of
     profits per se.
                    MR. LAWLER:  Yes, I agree with that.  
                    MR. PILLAR:  It's talking about sharing risk in
     the marketplace versus sharing that is and continues to be
     subsidized.  
                    MR. SPACEK:  Well, I disagree with you in the
     following sense.  
                    One, with respect to overall objectives, the idea
     here is, at least for health care and for other things, but
     it's to get that infrastructure out there as quickly as we
     can so that something happens, okay.  And we need to incent
     that to happen, otherwise it's just not going to happen. 
     Okay.
                    And the idea also then is not just to build the
     infrastructure and wait for companies to come, this is in
     response to customer demand in the sense that the act,
     Section 102 of the act requires that if a telemedicine
     health care provider requests the service in this minimal
     package that we just talked about this morning, that the
     eligible telecom provided has to provide it.  Okay, so that
     s that starts the build out of the infrastructure.
                    Okay, now, that build-out may be based on a very,
     very small number of customers.  And if you are talking
     about putting the risk then on the provider, you're talking
     about a huge risk over a huge -- you know, many, many years 
     unless this rural population just happens to -- you know, to
     grow.  
                    MR. PILLAR:  But what if these areas needs it just
     the way you've described it now.  
                    MR. SPACEK:  It could vary.  And coming from
     profits, I think, is the economically efficient way to do
     it.  We have an economist there.  I am not one, but I have
     loads of them who worked for me, and I learned a little bit
     from them.  
                    You know, I think if you look at economic
     efficiency and measures, I think you will come out that
     taking it from profits is really the most economic,
     efficient way to do it.  
                    MR. PILLAR:  But you wasn't want to build beyond
     what is economically necessary to that --
                    MR. SPACEK:  Right.
                    MR. PILLAR:  I guess the logical approach is that
     you don't have to pay for 100 percent up front in order to
     do that.  
                    MR. SPACEK:  I think you need to pay for 100
     percent to get something close enough to fulfill the
     telemedicine person's request.  And there is nobody else out
     there doing it, and then you want to make the guy -- if
     indeed it's close to an urban area or whatever, and the
     person can make profits, other profits from that same
     equipment, then the third bullet says you pay it back. 
     Okay, I think you are putting a tremendous -- doing it the
     other way, I think it's putting just a tremendous risk on
     providers and may very well cause providers not to apply to
     be eligible telecom providers, and I think we want to
     encourage providers to apply.
                    MR. LAWLER:  She had her hand up there for a long
     time.  Did you have your hand up?  Do you have a comment?
                    MS. KING:  We had commented on that through E-
     mail.  Our idea was, and this goes back to the Universal 
     Service Fund, the universal -- of the other committee, which
     is to the Joint Board, which is going to set a rate in order
     to determine subsidy.  You base the rate on the costs of
     providing that service in a forward looking cost rather than
     historical cost.  And then that subsidy is offered to
     different providers.  The one who has already got there is
     going to make a lot more profit than the one who is building
     it from scratch.  
                    So if you take it from profits, you've got a
     problem there.  I mean -- am I clear?  
                    MR. SPACEK:  No, I'm missing the point.  
                    MS. KING:  Okay, you want to set a price for doing
     this, and you want to find a cost for building the
     infrastructure, and it's got to be based on engineering and
     lease cost studies.
                    MR. SPACEK:  Yes, but there are two different
     issues.  One is getting the infrastructure built and the
     cost of that.  And then there is a separable cost of getting
     from whatever this infrastructure point is --
                    MS. KING:  Right.  
                    MR. SPACEK:  -- to the site, and so those are sort
     of separable issues, separate facilities, separate trenches
     in the ground or satellite, whatever, you know.
                    MS KING:  But it's real.
                    MR. SPACEK:  Yes.
                    MS. KING:  I mean, you've got to figure out what
     you're going to subsidize.  It can't be an inflated thing.
                    MR. SPACEK:  Right.
                    MS. KING:  It has to be based on engineering
     studies and a real cost.
                    MR. SPACEK:  Right.
                    MS. KING:  So that could be offered to anybody who
     is willing to provide the service.  
                    MR. SPACEK:  Yes.  I mean, the idea is too is
     people don't just build stuff willy-nilly.  I mean, they
     have to apply to the FCC for this money, and I am sure the
     FCC will require them to show some plan that this is for the
     purpose of meeting the request of this particular rural
     area, that I'm not overbuilding and so forth.  
                    MS. KING:  If the subsidy is available for any
     provider to bid on, then you have a competitive equity
     there.
                    MR. LAWLER:  Well, the subsidy can be.  I mean, it
     depends on what it shows.  You can have more than one
     telecommunications carrier in the area.  
                    MR. SPACEK:  But that's where Section 102 sort of
     gets at.
                    MR. LAWLER:  Right.  
                    MR. SPACEK:  And hopefully there will be multiple
     ones, but there may not.  In some cases they will and then
     it will be more competitive, and others, there may not be. 
                    MR. LAWLER:  Bill, and then Dena.  
                    MR. ENGLAND:  If I could just offer as an example,
     Medicare tried this with hospitals a number of years ago and
     obviously it didn't work very well.  If you offer
     essentially, you know, if you build it, we'll pay for it, at
     least as far as our share goes.  And if you use it to serve
     Blue Cross, then we are going to have cost reports and we
     will figure out how much of it went for who.  It's just a
     hopeless morass, and eventually we went to prospective
     payment as a way to try to solve it.  And even that has a --
     and I just worry slightly if the FCC is going to have to
     come up with something of the equivalent of a cost report to
     try to sort out what is going on out there.  
                    MR. LAWLER:  The prospective billing thing is not
     an option for it.  
                    MR. ENGLAND:  Well, I know.
                    MR. LAWLER:  You're really talking about whether
     you make them do this cost reporting at the front end or at
     the back end, and whose money it is.
                    MR. SPACEK:  And some level of reporting needs to
     be done, and to some degree it may not be a morass, at least
     beyond the morass they are going to get themselves in
     anyway.   
                    (Laughter.)
                    Because they are going to have to at least make
     sure that the lines that go to providers are eligible
     providers.  They need a list of those.  Any service that
     goes to anybody else but those people are for-profit
     providers by definition.  So, you know, it's there.  Whether
     that hard to do or not, I don't know.  They have to do it
     for case number one, and the other is only A minus B.  So
     it's not like it would be a morass to do it.  
                    MR. LAWLER:  If there is money involved, I am sure
     it will be a morass.
                    (Laughter.)
                    MR. LAWLER:  Dena.  
                    MS. PUSKIN:  If I understand what you are saying,
     you are saying that if you provide the services to anyone
     else but a nonprofit provider, therefore that counts as
     profits.  
                    MR. SPACEK:  Your profits from that.
                    MS. PUSKIN:  But it would be profits from that.  
                    What happens, and this is a technical question to
     anyone who runs a rural telephone cooperative, they don't --
     the may not make profits per se.  I mean, it's -- how do we
     handle places that supposedly don't make profits?  They have
     different lines of business but they presumably don't have
     bottom line profits?
                    MR. SPACEK:  If there are such, I am not aware of
     such places.  But if there are such, my guess is, is that
     they would not repay.  They would have an advantage, but
     it's not clear whether the FCC would approve -- you know, if
     the FCC approved them as the eligible provider, they would
     know this up front.  
                    MR. LAWLER:  Right.
                    MS. PUSKIN:  I just want to point out to you that
     you will be building out maybe differentially, and there are
     a lot of rural telephone cooperatives out there.  I don't
     know what their pricing structure is, but they are
     cooperatives by nature and I believe they are nonprofit in
     nature, and therefore they operate differently.
                    MR. LAWLER:  Yes.  
                    MR. TANGALOS:  The committee needs to be very
     aware also that I think the infrastructure subgroup spent
     the most time with this, but we all made the decision that
     the monies would not go to the physician, the medical
     service side of things ;that indeed the FCC, with regards to
     the infrastructure and with regards to the service rate
     differentials, would pay the telecommunications provider
     directly.
                    You have to accept that in both instances because
     that was something we came to a couple weeks ago.  And
     indeed up until a couple of weeks ago we weren't certain
     whether or not we would give the money to the medical side
     to say now you pay the differential cost.  No, we chose not
     to do that.  We would leave all the responsibility between
     the FCC and telecom.  
                    MR. LAWLER:  Are there any other comments on that
     before we --
                    MS. DEMERS:  I just wanted to comment that the
     question is a valid question.  For instance, in my state
     AT&T just sold off everyone of its rural exchanges to the
     Association of Telephone Coops, everyone of them. And so you
     are -- 
                    MR. LAWLER:  U.S. West?
                    MS. DEMERS:  U.S. West -- no, no -- okay, U.S.
     West.  It was U.S. West.  I'm sorry.
                    But the deal was approved by the legislature in
     '95, and it was sealed this summer.  So I think we need to
     look at how those for-profits are reported in terms of this
     recommendation.  
                    MR. LAWLER:  Are they not for profit, the coops?
                    MS DEMERS:  They are not for profit.  They are a
     different tax status, which is causing us a lot of grief on
     how to support local school districts that had been
     collecting property tax.  
                    MR. LAWLER:  Right. 
                    MS. DEMERS:  Et cetera.  So I do think it's a real
     issue.  
                    MR. LAWLER:  Right.  
                    MR. SPACEK:  I agree it's a real issue, but I
     think it's covered in the sense that if the FCC chooses that
     cooperative to be an eligible provider --
                    MS. DEMERS:  It's the only game.
                    MR. SPACEK:  Okay, it's the only game in town, and
     let's say they approve it.  I think they can assign somebody
     else. They are allowed to do that too.  But if they don't
     and they choose that game, than that cooperative would be
     given under this revision money to build the infrastructure
     to meet the demands that are asked by telemedicine
     providers.  And if they are indeed not for profit, they 
     wouldn't have profits, so they wouldn't replay.  
                    MS. PUSKIN:  No, they wouldn't replay but they can
     have for-profits that -- see, the issue is really how you
     implement this.  This is all we are talking about.
                    I can do that and I can then sell to a for-profit,
     and essentially make "profits."  Presumably I will plow it
     back into more services, but it won't be paying back the
     Universal Fund.  You need to recognize that the way they are
     going to operate is that you're not going to get any
     revenues back even though they may in fact have for-profit
     providers as other lines of business.  
                    MR. LAWLER:  Can we agree on the concept here,
     which is, to the extent you make profits from the
     infrastructure service that you have been subsidized to
     build, however that is described, and we are not going to
     become the IRS of the FCC here, but that is something that
     should be repaid to the fund.  And leave that to someone
     else to figure out how we're going to deal with coops and do
     they make a profit from this or this and all the rest of it,
     which -- 
                    MS. PUSKIN:  I think they always do it.  I think
     it's just a recognition.  I think that we understand that we
     have different models out there.  
                    MR. LAWLER:  Any other comments on this section so
     we can just -- I am going to point out it's 2:20, we are on
     page 3.  We have 9 pages.  
                    MR. PILLAR:  If I can point out on this point that
     even on this limited point, I have problems when we're
     talking about profit because to the extent that you are
     using 10 percent, let's say, just for capacity, or your
     private customer, you should be at risk to 10 percent of
     that cost, whether or not you make a profit from that other
     10 percent.  You are going to extend this service in the
     competitive marketplace where others may be joining private
     markets.  It shouldn't depend on whether you can make a
     profit.
                    As a matter of fact, in this case the more profit
     you may be able to distort the marketplace and manipulate
     it.  So I think -- while I think the concept is that if you
     are selling to others, you have got to pay back in some
     broad sense, I agree with that.  But when you say just out
     of profits, I think you are starting to have some
     marketplace distortion. 
                    MR. LAWLER:  I guess I -- I mean, we can go on for
     a long time on this.  If I really thought there was going to
     be a rush to the FCC or to the state commissions to say, "I
     want to build to these rural areas where there is no
     business," I think this might be a more serious worry.  But
     I just -- Elliot, unless you tell me otherwise, I think the
     anticipation is we will be lucky if there are people saying,
     "I want to go do business in these places."  
                    MR. MAXWELL:  I think they -- I think this can be
     worded in a way that (a) doesn't get this group trying to
     make cost allocation decisions about the investment, and
     looks to the principal. But if there is money drawn for
     infrastructure development, and if it's used for providing
     services to other than the party that made the request that
     led to the infrastructure development, there should be a way
     of recapturing money for the fund, and that principal is
     recognized, then the Joint Boar can make recommendations
     about how it can be done in the most economically efficient
     way.  
                    MR. SPACEK:  I guess I'm not but the point is
     regardless of whether the Joint Board, the Joint Board can
     do whatever it wants regardless of our recommendations.  I
     am just saying what I think is the most appropriate
     economical recommendation for, you know, for us to make.  If
     the Joint Board doesn't like that, they can --
                    MR. LAWLER:  Do whatever they want to.
                    MR. SPACEK:  -- do whatever they want.  
                    MR. KIENZLE:  A lot of these plans using the term
     profit, both for-profits and not-for-profits have revenue,
     and that's -- if you just  use the word "revenue" instead of
     "profit," it gets at the kind of -- you know, the kind of
     problem that we are having.  It's revenue but it's derived
     from the business.  It may or may not be profit.  
                    MR. SPACEK:  If it's profit for the carrier,
     that's what we are talking about.  We're talking about
     profit for the carrier, not just revenue.
                    MR. KIENZLE:  Well, it may not be a profitable
     venture, but there still may be revenue coming in that could
     be recovered.  
                    MR. SPACEK:  Yes, but if they are losing money, if
     it's not profitable and they are losing money on it, I don't
     think that's an appropriate place to pick up something from.
                    MR. MCCONNAUGHEY:  This plan has short-term appeal
     in the sense that it would serve the needs immediately, or
     for a very short term for a particular area.  Long term, I
     would be very concerned about the prospects for competition. 
     This is greatly distorting the signals that would be
     necessary to bring in competitors.  If somebody has their
     infrastructure given to them for free, I mean, that's got to
     be a huge incumbent advantage further down the road that
     just wouldn't bring in the competition that everybody, I
     think, agrees to would be the way to go in the long run, to
     the extent you can do it wherever, rural areas included.  I
     would be very concerned this would stifle. 
                    MR. LAWLER:  Well, I am missing a loop here. 
     Nobody is talking about doing it for free.  The whole point
     here is that if you earn a dollar beyond the health care and
     the library and school, we want a portion of that dollar
     above your cost to come back to the fund.  
                    MR. MCCONNAUGHEY:  But that takes time.  I mean,
     if you give somebody a large amount of money.  
                    MR. LAWLER:  That's what the law says that's how
     they are going to -- I mean, I'm not sure we can change
     that.  
                    MR. SPACEK:  Yes, we can not do this, but the
     problem is my guess is you are going to delay infrastructure
     development for years, and get -- and not -- you know, you
     can want all the T-1s that you want, but nobody can get them
     to you.  
                    MR. MCCONNAUGHEY:  It has short-term appeal to it,
     but perhaps something like competitive bidding might solve
     the same thing. 
                    MR. SPACEK:  See, in the longer term, though,
     hopefully -- you know, hopefully the thing will get paid
     back.  
                    MR. LAWLER:  But there is competitive bidding. 
     The whole point -- the way the law works, the hope is that
     30 people line up and say, "I want to build the
     infrastructure for this rural area."  That would be
     terrific.  It's just nobody thinks it's going to happen. 
     Nobody want to serve it.  Otherwise it wouldn't be here, we
     wouldn't have a provision.  They would just say, you know,
     everybody go to town.
                    THE HOLUM:  The whole notion of the Universal
     Service Fund is because this is a real problem.
                    MR. LAWLER:  Right.
                    MR. HOLUM:  Because nobody is doing this on their
     own.  
                    MR. MCCONNAUGHEY:  No, I agree.  Once you prime
     the pump it's a good idea.  I would just be concerned that
     you wouldn't get other people continually in there.  
                    MR. BAILEY:  If you don't have T-1 available
     today, it's not very profitable.  Why don't we just say that
     it's the intent that companies not use this subsidy to
     subsidize entrance into the non-health care and other
     fields, and that the Joint Board will have some mechanism to
     put --
                    MR. SPACEK:  You can do that for the service
     itself, but for the backbone you really can't.  
                    MR. LAWLER:  You want it to --  
                    MR. SPACEK:  I mean, I think it would be great if
     you find some for-profit companies out there so you could
     repay this back.  That would be better.  
                    MR. LAWLER:  I think we are talking about utility
     accounting and how the hell you recover the money, not
     anything of any significance here.  
                    But one more.
                    MR. ENGLAND:  To the extent you are nonprofit and
     you sell services to businesses, for-profit business, the
     revenue that you are getting from them, unless you are
     subsidizing them, it better be including depreciation of the
     equipment.  And to the extent that you are charging a fee
     that would allow you to recover depreciation, that ought to
     be going into this Universal Service Fund, whether you are a
     nonprofit or not.  Otherwise, if you charge a market rate,
     you are getting money that ought to get plowed back in.  I
     think revenue is what you want to look at, not -- I mean, I
     don't see how you can look at anything else but revenue.  
                    MR. SANDERS:  I never thought I would be in
     agreement with you.
                    (Laughter.)  
                    MR. LAWLER:  Well, today is a milestone for
     someone.                      
                    Can I suggest this?  Can we move along?  I really
     do think what we are talking about is how utilities are
     regulated in this country, you know, across the board.  I
     didn't like in law school, and I still don't, if there is --
                    MR. SPACEK:  The point is here let's -- the
     mechanism is going to be up to the FCC or the Joint Board to
     figure out what the right -- you know, the details of that.
                    MR. LAWLER:  And we have a concept which is you
     want to pay back something that we are not going to describe
     in any detail.
                    (Laughter.)  
                    MR. LAWLER:  All right, with that can we move
     along to recommendation of the next one, advanced services
     on the bottom of page 3, top of page 4.  
                    Tom.
                    MR. SPACEK:  Advanced services, the idea with
     advanced services is if they don't get subsidized, they do
     maybe over time as, you know, something gets cheaper, and in
     the review of the minimal package something gets advanced
     today is not considered advanced in the future.  
                    Okay, but for today the advanced services are not
     subsidized, but the FCC is supposed to come up with some
     competitively neutral rules that hopefully would say if
     somebody is going to put advanced services out there in
     these rural areas, that at least they would do it in some
     fair way.  That will be a challenge for the FCC to figure
     out what those rules are.
                    We do define what some of these advanced services
     are.  For example, it's like the same stuff in the
     marketbasket, but with no delays.  You know, so you are
     talking about real high band widths, for example, or in the
     emergency case situation it's talking about, you know, real
     time video from the helicopter and so forth.  So those are
     the kinds of things that require a lot more that don't get
     subsidized.
                    And I guess that all we are recommending here, I
     mean, our guess is that nobody -- I mean, even with
     competitively neutral rules early on, nobody is going to be
     rushing to put these, you know, real high services out
     there.  If they do, fine.  
                    But the idea is that to recommend that in these
     biennial or one year or three year reviews, whatever they
     may be, that these what are advanced services today get very
     carefully looked at with respect to new technologies that
     are coming along, or reduced cost of exiting technology and
     so forth, so that, you know, we don't -- we do get -- so
     that an increasing set of capabilities out there over time. 
     That's what the --  
                    MR. LAWLER:  Let's hold on the second one.  Is
     there any comments, discussion, disagreements, agreement?
                    MS. CONNORS:  I just have a question.  Is there
     any reason why we view this physician consultation and
     physician/patient interaction?  
                    I would bet a lot of those consultations would be
     other health providers to physicians.  
                    MR. SPACEK:  It probably should say, "For example"
     here.  I mean, we tried to give an example of what would be
     more capable than what we're saying before, and I don't
     think we need to list the whole marketbasket again.  But you
     are right, the way it's worded it sounds like it's a couple
     specific things, and those would be just be examples.  
                    MR. LAWLER:  Did you, I'm sure, was your comment
     that this ought not be physician to physician, it ought to
     be health care professional to health care profession?
                    MS. CONNORS;  Health care professional, or just
     for health care professional connotation.  
                    MR. LAWLER:  Tom missed your point.
                    MR. SPACEK:  I missed your point. 
                    MS. CONNORS:  Yes.  Well, putting it in as
     examples may be all right, but I would bet like in a lot of
     rural areas it's not going to be physician to physical.  It
     would be the other health care providers too.
                    MR. LAWLER:  Yes.  We ought to do both things
     actually, yes.  
                    Any others?  Somebody else had their hand up.  I'm
     not encouraging it but --
                    (Laughter.)         
                    MR. BRICK:  Just a fast one.  Down here with the
     number, the 1.544, maybe it ought to say service indications
     beyond.
                    MR. LAWLER:  It should, it should.  And then down
     below there is another grammatical fix  
                    MR. SPACEK:  It definitely has to say "beyond." 
     We just didn't predict the outcome.
                    (Laughter.)         
                    MR. BRICK:   That's right.  I understand it.
                    MR. LAWLER:  Anything else there?
                    Okay, Tom, the next bullet.
                    MR. SPACEK:  Okay, the next bullet was here
     because we were asked to address this issue of state
     networks and how they relate to all this.  And there is lots
     of them but we took, you know, two that may be extremes, at 
     least, from an economic perspective on how they are handled.
     And just -- and we just gave them as examples actually.
                    I mean, North Carolina has a statewide network
     that's, you know, a very high capacity and it could
     certainly lead to advanced services more quickly than a
     state that didn't have such.  Okay, Iowa did the same sort
     of thing.  
                    The concern here, and the recommendation is that
     the providers of the -- let's see, of this guidance with
     competitively mutual rule for advanced services should be
     aimed and encouraging competition from private sector firms. 
     And in order not to discourage competition the competitively
     mutual rule should ensure that government subsidized
     networks are not used to provide commercial services in
     competition with the private sector.  
                    So the whole idea there is that if you want
     another company to come in and you have -- you know, if you
     try to -- for advanced service and you try to spur on
     competition, and you have a government subsidized network,
     nobody else is -- you know, you can use that.  But if you
     are competing with the private sector using that, nobody
     else is going to come in to try to to price a service that's
     going to be underpriced by the government.
                    So the footnote to building these things, it's
     just competitively mutual rules is all it's saying should be
     aware of this situation, and try to do it competitive, as I
     assume that the word "competitive mutual rule" is supposed
     to be.
                    MR. WATERS:  I have got a question.  I'm Bob
     Waters.  I have got a question on that point, because at
     least from the provider's side it would seem to me that
     their interest, and I think one of the goals of this is to
     get, you know, health care providers access to the
     communication system as inexpensively as they can provide
     access in those rural areas.  
                    And it seems like we are getting involved in
     another issue here, which is concern about whether the
     states have erected their own structure and what, you know,
     how that might impact in terms of telephone companies'
     competitiveness in those areas.
                    I don't know that we need to address this point. 
     I'm not sure how it relates to the mission of this group. 
     Maybe somebody can explain that to me, in terms of what -- I
     am just saying like the Iowa example where they build out a
     system.  
                    MR. SPACEK:  Okay, the idea here was to say, it
     was, you know, specific questions that was asked of the
     infrastructure committee to say how do state networks like
     this relate to the provision of telemedicine, does it help
     or hurt or whatever.  So that's sort of the segu into why
     it's being addressed.  
                    The idea is that there is no -- there is no intent
     of this statement to say what the state's rights are or what
     the state's rights are not to build their own infrastructure
     with whatever money they want.  The only intent here is to
     say that in the advanced services section of this, which we
     were also asked to comment on in the report, to talk about
     the competitively neutral rules that the FCC is supposed to
     provide for telecom carriers.  
                    MR. WATERS:  But it's almost like the discussion
     we just had.  We are looking for ways to reduce the costs
     associated with subsidizing private health care institutions
     to get access to rural areas.  
                    We had a long discussion about we ought to recover
     some of the costs associated with private businesses that
     might build on that network.  
                    In a situation where a state had developed its own
     structure, and I think most of the states that have are not
     allowing private access for some of the same reasons, but
     that's a local battle that's being fought.  But let's say
     they would decide, hey, we have built this out and we made
     it available to educational institutions and health care
     institutions, and we also want to reduce the costs
     associated with those health care and educational
     institutions accessing the network, so we want to make the
     same facility available to the private sector.
                    Why do we want to get into that?  It's almost
     flipping around in a different direction than what we just
     talked about.  I just think that's an issue for -- 
                    MR. SPACEK:  I don't feel it's slipping around. 
     It isn't inconsistent because in one case we're coming back.
     This is just recommending to the FCC that when they
     establish competitively neutral rules they be careful, and
     the be careful is that you want competitively mutual rules
     that will allow competitors to compete and encourage that as
     opposed to the potential, and with us recommending that they
     look at this, but the potential for coming up with rules
     that would actually discourage competition.  
                    MR. LAWLER:  Tom, at the risk of causing more
     discussion here, but the last sentence really says more than
     that.  It says, "The FCC in its competitively neutral rules
     should ensure that government subsidized networks are not
     used by commercial service."  It's saying don't do this.
                    MR. WATERS:   Right.
                    MR. SPACEK:  Okay.  
                    MR. LAWLER:  And I guess I'm -- in fact, I would
     have to go back and look at what the law said.  I'm not sure
     why we are telling them as a health care telemedicine group,
     why we are telling them what they should do with respect to
     advanced state funded, state-owned advanced
     telecommunication networks.  
                    I mean, if we are restating competition is good,
     which as I recall is in the act in several places, that's
     fine.  But this is saying more than that.  It's saying, you
     know, don't let the states do it. 
                    MR. TANGALOS:  The great State of Iowa would like
     to respond.
                    (Laughter.)  
                    MR. LAWLER:  Sorry.
                    MR. KIENZLE:  Well, again, it's one of these deals
     where you can't have it both ways.  In 1987, the State of
     Iowa could offer an RFP process a statewide fiber optic
     network that they could not get using our tried and true
     and, you know, competitive mechanisms.  So it went ahead and
     built it, and then went on to define what is in the state's
     best interest from an access standpoint.
                    And so this language would, I think, ask to have
     it both ways.  Okay, you get it built the best way you can
     but then at the same time don't use it for things that the
     state finds in its best interest.  
                    MR. SPACEK:  But there certainly were mechanisms
     like in North Carolina where they found a cooperative
     arrangement to be able to create a state infrastructure.
                    MR. KIENZLE:  Well, in actual fact in Iowa, when I
     set up the site, I used the Iowa communications network, and
     I ran circuits from the private sector.  So it is in fact a
     private and public venture in the sense that in order for me
     to do something in Iowa City that shows up in Peasaguah,
     Iowa, requires an accommodation of the Iowa
     telecommunications network and tail circuits I ran from both
     sides from U.S. West or whoever happened to be the provider.
                    MR. MAXWELL:  One of the questions under that
     circumstance if GM came to you or to the Iowa network
     manager and said, "I want to have a statewide network to
     link my plants and say my dealerships," is the state network
     able to offer that?  
                    MR. KIENZLE:   Not currently.  
                    MR. WATERS:  Yes.  Currently, and Mike would know
     it too, but currently the State of Iowa only permits access
     to certain types of providers, which actually very much
     mimics this.  It's educational institutions, the community
     colleges and health care institutions. 
                    What I don't know is -- and so right now it's not
     available, but I don't know that at the federal level we
     want to constrain what states can do in that regard.  It
     might be that at some point in the future Iowa would decide
     it would want to open that up, and it's a battle they will
     have to have with their own phone companies, and maybe they
     will sell off the network to the private phone companies.  I
     mean, there is a lot of things that could happen out there.
                    But I just don't see that if our -- it just seemed
     to me that this was a non sequitur to everything else we
     were doing.  
                    MR. LAWLER:  Maybe this resolves it, maybe this is
     a different point, but the last sentence really says
     something more than you should have a competitive network. 
     It says, government, you may not compete with the private
     sector.  And if Iowa says we've got excess capacity, the
     only thing we can do with it is open it up to General
     Motors, that's competition.  It's not -- you know, you can't
     compete.  It is saying, you know, somebody says this is what
     it costs, this is -- you know, we will even build in a
     profit for the State of Iowa, that's competition.  This is
     saying you can't do it even if it is competition.  
                    MR. SPACEK:  But that's competition with the
     private sector.  
                    MR. LAWLER:  Yes.  
                    MR. SPACEK:  Using a subsidized network, which
     means you can charge lower than the --
                    MR. LAWLER:  But that's an entirely different --
                    MR. SPACEK:  We don't need to give competitive, we
     don't need to give competitively neutral guidelines to the
     FCC.  So we don't need this point.  However, I think, you
     know, personal opinion is that we should give them rules,
     you know, some guidance with respect to --
                    MR. LAWLER:  I don't have any problem, for
     example, saying that there ought to be some competitively
     neutral.  I think this says more than competitively neutral. 
     I think it says you can't compete.  
                    MR. WATERS:  Yes.  In fact, it's interesting -- I
     could easily see what's going on in this area will actually,
     it's not inconceivable that the private sector could be more
     competitive for some of the communities in providing the
     services.  It may actually force the ICN to drop its rates.
                    MR. KIENZLE:  The ICN does not stymied development
     of fiber optic networks in the State of Iowa.  In fact, a
     lot of the competition in around areas of the state, more
     along the whole communities and final mile kinds of things
     that the ICN doesn't have rates.  
                    MR. SPACEK:  I think there is enough in the media
     that maybe we should drop this point.  One of the longer run
     issues with respect to this is when you look at it in the
     large as opposed to, you know, in the small of this
     particular state network or local government's network or
     something of that sort, you discourage the development of a
     national information infrastructure in the sense that you
     get, you have firm -- private sector firms that will not go
     to a particular rural community or other community to
     compete because they know there is a network out there that
     was subsidized with government funds and undercut their
     price.
                    Now, in the small, it's a great idea.  If I was a
     local school district and I had excess capacity, I would
     want to sell it to the drugstore or anybody else to make up
     my, you know, pay for maintenance fees and stuff like that. 
     So now you have every community or whatever becoming a
     telephone company, and I don't think that whole idea is good
     for the country, and you stifle the overall development of
     an NII, which this morning is what we all wanted to create
     in the sense of being able to have telemedicine go to
     anybody in the country or use their applications and so
     forth.
                    So this sort of stifles that.  
                    MR. LAWLER:  But, Tom, I think there is probably a
     word that we could come up with to solve all these concerns.
                    I mean, take Iowa, nobody wanted to build it. 
     They built it.  They then have a need.  They have got excess
     capacity, they have a need.  They didn't build it with the
     intention of undercutting somebody else.  They built it
     because nobody else would do it.  And now to say to them you
     can't compete, meaning that you can't even play in the game,
     that's not fair either.  They put money into it.  You know,
     the network is there.   You tell them they have to sell it.
                    MR. KIENZLE:  We looked at the issue of selling it
     just because it is -- continues to be a contentious issue.
                    MR. LAWLER:  Right.
                    MR. KIENZLE:   What we found was we couldn't -- we
     couldn't because it is an ad hoc mixture of federal, state,
     all kinds of people have right of way, they have money in
     it, so we decided to continue as we are, and kind of go with
     the flow.  But you have to go back to first principles as to
     why we did it.  
                    MR. LAWLER:  I mean, for example, if the -- my
     only objection to this is the last sentence.  The rest of
     the bullet and competitive neutral rules, all the rest of it
     is we want competition, we want, you know, a fair fight. 
     But I don't think the last sentence does that.
                    Bill?
                    MR. BAILEY:  I don't know what you do with the
     existing circumstances, and the circumstance that I am
     familiar with in Springfield, Missouri, the city owned a
     utility company that provides electric throughout the city,
     owned its own fiber network, and it put it in before control
     mechanism, and it is now reselling that in competition with
     telecommunication providers in that area.  The bottom line
     is we may not install more fiber in Springfield because we
     can't compete with them.
                    So in the long run, they are going to damage the
     availability of the competitors in their area by doing what
     they are doing.  And I think the -- from my standpoint,
     either it's a public good or it's not a public good.  And
     going forward you shouldn't be stimulating public networks
     in the future.  
                    Now, that doesn't say what you do with existing
     ones.  I don't know.  But if you decide that competition is
     the way to go, then you shouldn't have future public
     networks being created.  Maybe it doesn't belong here but.
                    MR. KIENZLE:  Well, again, there is a lack -- one
     of the issues is resale, you know, and we are really not
     talking about resale in the state of Iowa.  It's really used
     for education and other public issues, and the actual number
     of purchasers is relatively small.  
                    MS. DEMERS: I just want to comment as a state
     legislator.  Most states are hurting for money.  There is a
     lot of movement of federal programs on the state levels, and
     I can guarantee you no state is going to get into the
     venture of investing millions of dollars unless that's the
     only way that it can be done, or it can be done
     significantly cheaper without subsidies.
                    I mean, we're not going to invest millions of
     dollars in order to beat out competitive private company. 
     That just doesn't make one bit of sense.  So I object to the
     last sentence because the only way states will get into it
     is basically if in fact they can do it cheaper without
     subsidies.  
                    MR. SPACEK:  I -- yes, any private -- I would say
     anybody, state government, the for-profit company, anybody
     who wants to build a private network because their economic
     study or whatever says that it's cheaper to do that, more
     power to them.  Let them do it, okay. 
                    The point is that if they do it, and they use
     public funds to build that network, then you don't let that
     network compete for services to businesses and so forth. 
     That's the bottom line.
                    MS. DEMERS:  Why not?
                    MR. SPACEK:  Because --
                    MS. DEMERS:  The private companies are going to
     use public funds.  
                    MR. SPACEK:  No, using -- 
                    MS. DEMERS:  They get a level playing field.  
                    MS. PUSKIN:  This is all subsidized.  
                    MR. WATERS:  If the private companies can get
     public funds, why can't the public companies get private
     funds?  
                    MR. BAILEY:  What public funds --
                    MR. WATERS:  I am kidding.  
                    (Simultaneous conversation.)  
                    MR. WATERS:  Believe me, this isn't public funds
     they are getting.  It's monies from private companies.
                    MR. SPACEK:  Well --
                    MR. LAWLER:  All money starts in the same place.
                    MR. BAILEY:  It's a tax any way you look at it.
                    MR. SPACEK:  Yes, but the idea of this universal
     service business is not because there is a bunch of telcos
     out there who are trying to make a whole bunch of profit and
     they said, "Let's have universal service and let's got the
     rural areas," okay?  
                    So, you know, don't confuse the proffered
     opportunities here.
                    MR. LAWLER:  But, Tom, the other point is --
                    MR. SANDERS:  Back in Texas they have done exactly
     that.  In fact, the telcos were the ones who lobbied for a
     senate bill, I think it's 2124 that assesses them $150
     million a year for the next 10 years, and they were the
     biggest lobbying group to get that bill passed because they
     recognize that once that infrastructure was laid, that over
     the years the amount of hits on their system by users would
     be more than enough to pay them back for those
     infrastructure costs.  They went through that rationale, and
     they came up with a business plan that in fact it would be
     good for them to tax.  
                    MR. LAWLER:  Let me just trying to -- Tom, you
     react to this.  Does this bullet do any good from your
     perspective without that last sentence?  
                    MR. SPACEK:  Yeah, it's certainly not strong, but
     the next to the last sentence certainly says you should come
     up with things to encourage competition.  
                    MR. LAWLER:  Which everyone agrees with.  
                    MR. SPACEK:  And if the FCC --
                    MR. LAWLER:  I think we are on agreement on that.
                    MR. SPACEK:  If the FCC agrees with the last
     bullet, they will insert that themselves in their own
     recommendation without us telling them.  And I believe that
     the FCC and many U.S. government agencies actually do agree
     with the last bullet.  
                    MR. LAWLER:  Can we agree to drop the last
     sentence?  
                    MR. SPACEK:  Sure.  
                    MR. LAWLER:  Done.  Next bullet or next -- this is
     alternative infrastructure?  
                    MR. SPACEK:  Yes.  The whole idea of the next
     bullet is that we won't be technologically specific, number
     one, but your recommendation says however it best gets done
     is the way it gets done regardless of technology.  But even
     more than that, that the chances of us getting heterogeneous
     technologies out -- I'm sorry -- homogeneous technologies
     out here in the U.S. is really slim, that all over the place
     we will all get ATM, or we will all have ISDN or something
     like that.  It just never going to happen.  Maybe a lot of
     some of those things.
                    So since that's the case, we want to make sure
     that the FCC establishes policies that at least encourages
     interconnection standards for interoperability among
     networks with heterogeneous technologies.  There is no laws
     right now or things that actually encourage that, so we are
     just encouraging the Joint Board and the FCC to do that.
                    The next two sentences give some potential
     guidance of what might do that well.  Okay, the internet
     protocol, I am not calling it the internet because it may be
     the internet and it may be the way it evolves a little
     differently from the way it is today or so forth.  But the
     internet protocol is a strong standard for such -- a strong
     candidate for such a standard because of the fact it's just
     about the only standard out there in use that allows
     heterogeneous networks to talk to each other.  That's the
     whole idea of it.  
                    Okay, so we are giving guidance to the FCC to say,
     hey, we think you should push that or encourage that.  And
     similarly, using that standard over various technologies
     like ATM, or any other technologies, over-frame relay, over
     whatever else is also a way that allows differing
     technologies to be built, and we are not pushing one or the
     other, whatever people think should get built, and using IPO
     allows those technologies to also work together.  So that's
     the bottom line of the recommendation.
                    The missing link here is I think we should add
     what we were talking about earlier, about we should address
     the issue here -- it seems like this is the most appropriate
     place -- of the transition from, you know, the existing
     technologies into a future interoperable technologies, and
     shooting towards a national information infrastructure that
     meets the goals where, you know, all these telemedicine and
     education applications can all kind of work together over
     the same network, and meet some of the goals we were
     discussing this morning.  End of bullet.
                    MR. LAWLER:  Any discussion, disagreement,
     agreements?  No hands.  Bravo.  Oh.
                    MR. MAXWELL:  Just I'm sure this is something that
     you meant to do.  
                    MR. SPACEK:  We're supposed to give you guidance.
                    MR. MAXWELL:  Right, right.
                    (Laughter.)  
                    MR. MAXWELL:  Just inadvertently, it's cellular
     and other wireless technologies, I would assume you mean
     because it could be PCS, it could be other --
                    MR. SPACEK:  Yes.  Yes.  And other wireless
     technologies.  
                    MR. MAXWELL:  And technically ask people to kind
     of keep in their minds that this question of
     interoperability may be another things we talk about in
     terms of clearinghouse or ways or vehicles for doing this
     because there may be things that the committee wants to talk
     about.  
                    MR. LAWLER:  The next bullet, well, it speaks for
     itself.  Find a partnership if you can find one.  
                    (Laughter.)
                    UNIDENTIFIED SPEAKER:  What did you do with the
     next one?
                    MR. LAWLER:  We're done.  
                    All right, I don't remember whether this next one
     here was yours or Tom's.  
                    MR. SPACEK:  Some combination.  
                    MR. TANGALOS:  It's a combination.  
                    MR. LAWLER:  Well, whoever wants to speak.
                    MR. SPACEK:  Let Eric.
                    MR. TANGALOS:  Well, you can read the bullet.  We
     stopped short of making a recommendation with regards to too
     strict standards because we heard from both sides that the
     issue that too strict standards was going to stifle
     development of new technologies and the development of the
     protocols, et cetera.  
                    And so we were torn between saying these are the
     minimis that we have to operate on versus these are where we
     want you to go, and then no one is going to develop
     proprietary stuff that takes us any further.  And so it's
     kind of a weak recommendation with regards to architecture. 
     But the struggle that we had was indeed we couldn't make up
     our mind hearing from both sides of the issue whether
     proprietary systems should be allowed to go on their own,
     which in some peoples' mind would accelerate the development
     of programs and systems, versus setting standards that would
     at least let everybody have interoperability but might take
     you to a low common denominator, and that's the essence of -
     - I think that's the essence of this particular bullet.  
                    MR. LAWLER:  Eric, and this is not disagreement
     with it, can we make this more -- is there anything we can
     say which makes this more in the form of a recommendation to
     the FCC that they should --  
                    MR. TANGALOS:  Well, one piece that came out in
     our discussion and it's not in here, was that perhaps the
     FCC would like to serve as the foundation for standards
     discussion, much like the American College of Radiology has
     done for only -- only Diacum has been able, only radiology
     has been able to carry on a high level discussion that's
     gotten both provider community and the supplier involved in
     this.  All the other medical applications, 25 of them, just 
     don't have the size, the numbers to do that.
                    If you wanted to make a recommendation, it might
     be along those lines, that the FCC would take --
                    UNIDENTIFIED SPEAKER:  When you say 25 other
     applications, you're talking about -- 
                    MR. TANGALOS:  Twenty-five other specialties.  We
     are not talking about anything that would -- well maybe we
     are talking about things that --
                    UNIDENTIFIED SPEAKER:  I believe we are if we are
     talking about this if it includes not all medical
     applications, but it include veterinary medicine -- so it
     goes beyond it.  That's a recent development and something
     that may not be widely known.  But in addition to that
     problem, Diacum would be moved as an ANCI standard for
     application of the standards.  It's expanded out much beyond
     radiology.
                    MS. PUSKIN:  I have an objection to that being
     placed in the FCC.  I think that -- I think there is a real
     need for standard development, and it goes multi levels.  We
     are talking about this because we are talking about
     producing a report to Congress in which we have to write
     about standard development.   And I think the issue is that
     obviously we need to create a forum that may help promote
     better communication between the specialty societies and the
     manufacturers.  But I think there may be better venues for
     that, and I think --
                    MR. LAWLER:  Well, Dena, without treading on the
     perilous territory of which government agency does what --
                    MS. PUSKIN:  I think that's a -- that's why I was
     going to suggest that --
                    MR. LAWLER:  We can certainly suggest that the FCC
     ought to play a role along with other appropriate government
     agencies, but make sure that it gets done is the bottom
     line.
                    MS. PUSKIN:  I think defining the need and
     suggesting that it need to get done as opposed to suggesting
     at this point in time the venue, because there will be a
     report --
                    MR. LAWLER:  Well, we should certainly suggest to
     the FCC, the body that we are reporting to, that they ought
     to participate in seeing that this happens, whether they are
     a lead agency or whatever role they play, not our job.  But
     we are reporting to them, we are giving them guidance.  They
     do have a role in this.
                    MS. PUSKIN:  Oh, absolutely.
                    MR. LAWLER:  Whatever it is, go see that it gets
     done.  We don't really care who takes the lead.  
                    Is that a fair characterization?
                    MS. PUSKIN:  I think that's fair.  
                    UNIDENTIFIED SPEAKER:  As long as it gets done.
                    MR. LAWLER:  Well, so is every other part of this.
                    MS. PUSKIN:  Yes, right.  
                    UNIDENTIFIED SPEAKER:  To a certain extent, I
     think it's being done under the auspices of ANCI.  
                    MR. LAWLER:  If it's being then, then the FCC will
     have succeeded marvelously riding the coat tails of success. 
     But in the event that it's not, let us urge all deliberate
     speed.  
                    All right, the next one is a finding really, and I
     forget again whether this was Tom or Eric's.  
                    MR. TANGALOS:  This is the follow up of that
     particular part, that indeed, you know, when we look at the
     act it doesn't really get into some of these particular
     issues with regards to what we have to have in terms of
     equipment. 
                    But when we do look at equipment, it's going to
     cost -- equipment costs are going to be the same whether
     you're in the city or in a rural area, and so we didn't
     think it was a particularly big issue, this part of it.
                    MR. LAWLER:  Right.  But there is the suggestion
     here which, you know, we are perfectly capable of making, I
     guess, but it seems of a different sort.  That what we are
     suggesting here is that maybe there ought to be a mechanism
     for a subsidy for equipment.
                    Is that wrong?  
                    MS. PUSKIN:  There is a lot of subsidy out there
     already under different auspices for equipment.  I am not
     sure that you want to really get into that.  
                    MR. TANGALOS:  I don't think we have really said
     that.  
                    MS. PUSKIN:  I mean, there is a whole lot of
     subsidy out there one way or another for equipment.  And it
     actually turns out that the equipment, if you look at the
     systems, it's not the major barrier to implementing these
     systems.  It's been the ongoing operational costs that's
     been the major issue.  
                    MR. LAWLER:  Well, if it isn't, I'm lost as to
     what we are saying if we're not saying that.  
                    MR. TANGALOS:  Well, we can rewrite this, I guess. 
     It's, again, a finding rather than a recommendation.
                    MR. LAWLER:  Right.  
                    MR. TANGALOS:  So we are not in big trouble.  I
     think the simplest thing to say is that equipment costs
     haven't been the barrier, aren't the barrier, and that
     indeed subsidy probably is not appropriate.
                    MR. LAWLER:  Okay, I got it.  
                    MR. TANGALOS:  There is no difference between the
     cost in the urban or rural.
                    MR. LAWLER:  Right.  Just the truck to get it
     there.  
                    All right, financial incentives.  And, Tom, I
     think this is back to you.
                    MR. SPACEK:  Okay.  Yes, actually the first one
     Eric covered this morning in one of your comments actually.
     But what the idea here is that in the difference between the
     urban and rural rates, which is what we are recommending,
     and actually I think what the act calls for, that the health
     care provider who is asking for the T-1 line or whatever
     else they would be billed under this scenario at a lower
     rate.  Okay, they would be billed the discounted rate.  And
     then the sum of all those discounts, you know, the
     difference would be given by the FCC to the telecom provider
     to make up the difference, okay.
                    There were just two alternatives we looked at. 
     There was that alternative and the other alternative was
     every time a health care provider used the service that the
     Universal Service Fund and the FCC would provide, you know,
     keep providing money every month or whatever to the provider
     for the use of that service.
                    And we after talking about it for awhile, we
     decided that both of these were just about equivalent, and
     the latter was much more costly and harder to maintain, and
     therefore would add to cost.
                    The reason they are equivalent is because the
     telecom provider is not deciding what to do here at all. 
     It's totally market demand.  The only things that are
     getting subsidized are the services as requested by the
     health care provider.  So the demand is identical.  It's
     just a matter of how do you give the subsidy out.  
                    MR. LAWLER:  First, any -- we have talked about
     this already, but is there any other further comment on it,
     just how it works mechanically?  
                    MR. SPACEK:  Okay, the next -- oh, the next bullet
     actually -- well, you can read it.  
                    MR. LAWLER:  It says be fair.  
                    MR. SPACEK:  It doesn't need a lot of explanation
     in that area.
                    MR. LAWLER:  Any comment on the second bullet?  
                    The third one.  
                    MR. SPACEK:  You can just read the third one too.
                    MR. LAWLER:  Chuck?
                    MR. HOLUM:  I had some concern as the lack of
     detail in how the comparable rate is calculated.  It sounds
     like a good ground for fights.  
                    MR. LAWLER:  We wouldn't want to miss one.  
                    MR. SPACEK:  In a recommendation later we are
     going to say that the FCC do some studies to figure that
     out.  We don't give them the details of how to do it.  But,
     you know, I mean, in the sense they have to -- they have to
     figure that out.  I don't know what to tell them.  I mean,
     you know, we do have a foot note in here saying that we
     recognize that, you know, things vary from, you know, from
     state to state today, and prices are different and all that
     stuff.  But you know, at the end we just sort of recommend
     that they do some studies to figure that out.  
                    MR. LAWLER:  But Chuck's point is correct.  
                    MR. SPACEK:  Excuse me?  
                    MR. LAWLER:  We don't say here is how you should
     do this.
                    MR. SPACEK:  Right.  
                    MR. LAWLER:  Or we don't get into it.
                    MR. SPACEK:  Right.
                    MR. LAWLER:  And, frankly, I'm not -- I mean,
     there are 20 hard parts of this but what's the comparable
     urban rate, you know.  
                    MR. SPACEK:  Yes.  
                    MR. LAWLER:  We are wonderful and smart but I
     don't know how we figure that out, and I know the Joint
     Board people and others are looking at it, and I guess our
     decision was we didn't have any particular expertise in that
     area and didn't get into it.  You're right, it's a ground
     for disagreement.  
                    MR. LORAN:  I just have one quick point here or
     area of concern.  Now, are we talking about the total cost
     of -- let's say T-1 if that's what we decided to do -- are
     we talking about the total costs or are we talking about the
     costs per mile?  Because I mean, that was brought up, and
     that's a major area for us, you know, like the T-1s would go
     hundreds of miles.  
                    MR. SPACEK:  It's whatever -- it's whatever states
     through their Public Utility Commission with guidance from
     the FCC in the future or whatever would need to charge as
     the normal service cost, service price for that service in
     the rural area versus what, you know, somebody figures out
     that this cost in some urban area; whether it needs to be in
     the same state or the closest urban area, whatever.
                    MR. LAWLER:  I think the law says --
                    MR. SPACEK:  So, you know, if it's mileage
     dependent or not, whatever, that's just base don what
     tariffs are and how they want to do the study.  
                    MR. LAWLER:  But I think, Tom, and tell me if this
     is a restatement of your question, I am out in -- you pick
     the rural area, wherever your clinics are.  
                    MR. LORAN:  Colorado.
                    MR. LAWLER:  Colorado.  And I have a distance
     sensitive T-1 rate that is, you know, $3,000 a month or
     whatever it is, and in Denver it's, I don't know, $1,000 a
     month.  
                    MR. LORAN:  Or approximately 396.
                    MR. LAWLER:  Approximately 396, and I guess this
     is -- I have the same question.  The discounted rate that
     they are getting is the $396.  They are getting the Denver
     rate.
                    MR. LORAN:  I crunched all kinds of statistics. 
     My cost per mile is substantially less in the rural area
     than in the urban area.  However, if I look at what the cost
     of connecting that urban clinic is, it's 10 times as
     expensive because my distance is well over 10 times the
     distance.  So this is a very major point to me, whether I'm
     going to be paying $396 a month or am I going to be paying
     $3100 a month.  
                    MR. SPACEK:  The intent is to pay the -- the
     intent is to pay what they pay in an urban area.  
                    MS. PUSKIN:  So do you want distance-sensitive
     rates?  Is that what you want?
                    MR. SPACEK:  No, I don't think we -- I don't think
     we can specify whether rates are distance-sensitive or not
     distance-sensitive because I don't think we should be
     specifying tariff structures or anything.
                    MR. LAWLER:  Okay, but you are saying something. 
     By definition, the urban rate implies, if nothing else, that
     you are not going 1,000 miles or 500 miles.  
                    MR. SPACEK:  Right.
                    MR. HOLUM:  The whole point of this, it seems to
     me, is to make up for the distance.  
                    MR. LAWLER:  Right.
                    MR. HOLUM:  Therefore, how can you have a
     distance-sensitive rate?  
                    MR. LAWLER:  But I think Tom is saying we don't
     want to say that but in fact we are accomplishing the same
     thing.
                    MR. SPACEK:  Yes.  
                    MR. BAILEY:  But it can be very complicated
     because you may have an urban area.
                    MR. LAWLER:  That's right.
                    MR. BAILEY:  I mean, an urban area may be 50 - 60
     miles across.  That's longer than some other -- so, I mean,
     what is an urban rate?  I don't know.  
                    MR. LAWLER:  Right.
                    MR. BAILEY:  But I think that's obvious is that,
     to the extent competition creates price differentials
     between urban and rural that don't exist today, that needs
     to be addressed.  I suspect that the FCC, in what you
     recommend on page 7 here, has to define what is an urban
     rate.  
                    MR. LAWLER:  Right.
                    MR. BAILEY:  And I don't know.  I don't think that
     it's an easy answer.  I don't think you can say that you're
     going to force everybody to do distance-sensitive rates
     because face it, there is a cost relationship between
     distance and cost.  
                    MR. LAWLER:  Cindy?
                    MS. TRUTANIC:  The thing that is killing some of
     these rural networks -- can you hear me?  
                    MR. LAWLER:  Yes.
                    MS. TRUTANIC:  Is the distance-sensitive rates. 
     You know, a lot of Dena's projects in eastern Montana and
     Oregon and some of these other projects, they tell us that
     what's killing them is not the cost of the equipment.  It is
     a combination of the distance that they have to travel and
     the rates they have to pay for the distance, in addition to
     having to pay for capacity that they are not even getting,
     like having to pay for a full T capacity when they are
     getting a quarter T.  
                    And I guess the intent was that part of the
     subsidy from the Universal Service Fund would help remove
     that issue, which is the primary issue for real rural
     telemedicine networks.  
                    MR. LAWLER:  I mean, just for -- let's go back to
     Colorado.  I don't know how many urban areas there are in
     Colorado, but there is at least one, and say there are a
     couple and say the methodology is, you know, you take an
     average.  I don't know how it will be done.  But say you
     take the three or four urban areas in Colorado, figure out
     what the T-1 rate is.  Some of them may be 60 miles across.
     You may have a rate for them.  
                    But you come up with what that number is, and
     whatever it is is whatever the rural people get.  
                    MR. SPACEK:  Right.  And in the rural area if the
     state PUC or whatever decides that the normal rural rate for
     businesses -- nothing to do with this thing, you know, with
     health care -- is distance-sensitive, and would charge so
     much, that would just mean that differential is a lot
     bigger.
                    MR. LAWLER:  Right.  
                    MR. SPACEK:  More money comes out of the Universal
     Service Fund.  The intent is to overcome this --
                    MR. LAWLER:  But I think the answer to your
     question is, whatever words we use, you get the urban rate
     in the fact that it is not traveling a great distance, no
     matter how many miles your network is traveling.
                    Chuck?
                    MR. HOLUM:  I know we don't want to get into cost
     calculations, and precise applications of how you do this. 
     On the other hand, we are supposed to be giving the Joint
     Board some guidance on how this is supposed to work.  If you
     don't give them some guidance on this, who is?  
                    MS. TRUTANIC:  Can I just say that --
                    MR. LAWLER:  But let me just -- Chuck, what you
     are saying here, this is a question.  Are you saying here
     that what we need to do is be more specific about the
     general approach in calculating what the comparable rate is?
                    MR. HOLUM:  I think we should say as much as we
     can without coming up with a formula.
                    MR. LAWLER:  Right.  
                    MR. HOLUM:  I think we should say, for instance,
     that rates should not be mileage-sensitive.  
                    MS. TRUTANIC:  That's what I was about to say. 
                    MR. LAWLER:  Mileage-sensitive.  
                    MR. HOLUM:  Distance-sensitive.  
                    MR. SPACEK:  I don't think we can say that.  I
     mean, we are telling state PUCs what they can do and can't
     do and all that.  But you come out -- the way it's worded,
     or the intent, maybe the wording isn't clear, and that could
     be clear.  The bottom line comes out to be the same.  The
     bottom line is --  
                    MR. SANDERS:  We're just making a recommendation,
     Tom?
                    MR. SPACEK:  Excuse me?  
                    MR. SANDERS:  We're just making a recommendation. 
     They can choose to take the recommendation or not.
                    MR. SPACEK:  Okay, I --
                    MR. SANDERS:  But I think we need to determine as
     a group whether or not we feel that's the strong message to
     provide, and I think it is, and I think there are people
     here who have worked in the rural areas think it's the most
     critical message to provide because these rural hospitals,
     are not going to use telemedicine if their rate is going to
     be distance-sensitive.  
                    MR. SPACEK:  But we're -- I think Greg mentioned
     this before, I think we have covered that, and you're going
     to get the urban rate in this situation.  
                    MR. SANDERS:  But we just want to make sure that
     they understand that.  
                    MR. LAWLER:  Let's be clear about what the urban
     rate is --
                    MR. SPACEK:  Right, we don't know.  
                    MR. LAWLER:  -- I think is what people are saying.
                    MR. SPACEK:  Yes.  Right. 
                    MS. PUSKIN:  Maybe we are saying the urban rate
     should be distance-sensitive.
                    I mean, the key is if you say you are going to get
     the urban rate, and it is reflective of a distance, it
     doesn't -- what everyone is saying is it doesn't do you any
     good.  So you have got to be clear enough to say what it is
     that's going to do some good.  And if you feel it is clear
     enough, but everyone else around the table doesn't see that,
     maybe you can help us to see why you think it's clear enough
     here, because I too am very confused.
                    If the problem -- as Cindy made it very clear,
     there are two problems that you hear most often.  You have
     got to buy more capacity than you need, and you have got to
     pay at rates that are sensitive to distance.  Those are the
     two problems you hear.
                    Now, we are dealing with the second problem here,
     and you feel it's taken care of here.  But I don't think we
     know how it's taken care of.  
                    MR. SPACEK:  Okay, this is sort of getting into if
     I was the FCC, what I might do mechanism as opposed to -- I
     might, you know, if I am trying to figure out what an urban
     rate is, and let's say the urban rate is distance-sensitive,
     and I look at the average T-1 line in the urban rate -- in
     the urban area is six miles long -- I'm just making all
     these numbers up -- then that -- you know, the typical
     person then in the urban area pays a six mile distance-
     sensitive tariff, and that's the rate that you pay.  Then
     that's what you pay in the rural area.
                    I mean, if I were the FCC, that's what I would do.
                    MR. LAWLER:  But that's why Tom is saying, you
     know, we don't want to say distance-sensitive rates because
     they may be distance-sensitive in, you know, your base.  
                    MR. SPACEK:  But there may be more clarity needed
     to make it read so it will be interpreted as the way I just
     said it.
                    MS. PUSKIN:  Yes.  
                    MR. SPACEK:  And obviously it's not worded that
     way because several people have -- you know, bring that up.
                    MR. LAWLER:  Yes? 
                    MR. PILLAR:  Bob Pillar.  I think you may want to
     say that you want it no higher than the highest health care
     comparable urban rate that applies to the state.  And the
     reason for that is that under the construct, for example,
     that was just set up, you can have a distance-sensitive rate
     in an urban area that in fact might be a dozen miles, that
     will be higher than what you would pay with a 200 mile
     distance, and you don't want that to happen.
                    And to complicate this further, that within urban
     areas, certainly in my state, New York, that depending upon
     how your T-1 service is configured, you will have different
     mileage rates.                
                    So to put it another way, you are able to get, if
     you have a closed network with several T-1 lines, and you
     were able to get a silent ring, you will pay buck less for
     most of your T-1 lines that if it was purely a single line
     back to a base without that silent ring.  
                    So there are all sorts of mileage sensitivity.  We
     get into a morass at this level if we want to try to give
     any specific instructions to the FCC.  
                    MR. LAWLER:  Right.  
                    MR. PILLAR:  So I think that the point people want
     clarified that in the rural areas that certainly nobody
     would pay more under any construct that they might set up
     than the most expensive line that is comparable in an urban
     area.  
                    MR. SPACEK:  That's almost giving too much
     guidance too because they may want to use some average as
     opposed to the most expensive.  
                    MR. LAWLER:  In fact, the law contemplates an
     average.
                    MR. PILLAR:  -- that it can't go beyond that
     because I agree with you that this is yet another reason,
     your objection, as to why we tried to make this point and
     still remain pretty vague.
                    MR. LAWLER:  I mean, the law says similar services
     in urban areas in that state.  There is no reason for us to
     suggest something that differs from that.  
                    I guess I am still -- Chuck, you are still not
     satisfied?  Are you more satisfied with Tom's explanation
     when there is a --
                    MR. HOLUM:  Could we say something like users
     shall not be penalized for the distance of their connection.
                    MS. TRUTANIC:  Why don't we just state in the
     sense that these are some of the pitfalls that rural
     networks are -- or some of the problems that they are facing
     with the rate structure, the current rate structure, and
     hopefully whatever new rate structure the Joint Board comes
     up with will address those.  
                    MR. LAWLER:  Is there anything other than
     distance-sensitive that is the problem here?  Because it's
     easy to say the rate shall be distance-sensitive only if
     they are distance-sensitive in the urban area, and then you
     get the urban area sensitivity only.  
                    MR. SPACEK:  But that's implied though.  
                    MR. LAWLER:  It may be implied, but I think people
     are looking for more comforts.
                    MR. BAILEY:  Well, I'm not sure about everybody
     but in our circumstance you apply so much per mile.  So that
     if it's -- while a distance-sensitive rate in an urban area
     might be 10 or 12 miles, it's not that much.  But if you are
     going out 60 or 70 miles, it's more expensive.  
                    MS. TRUTANIC:  Why not state the problem and then
     say let's avoid it in our new rate structure, however they
     choose to avoid it.  
                    MR. LAWLER:  Right.
                    MR BAILEY:  Well, I have an objection to the use
     of the word "rate structure," because I don't think we want
     to tell them how they have to charge for rates.  They just
     want to know what type of subsidy you are trying to get.  
                    MR. LAWLER:  Right.  I mean, I agree we have a
     definitional problem here, but I am not sure there is any
     disagreement in terms of what we are trying to say.  
                    MS. PUSKIN:  What's being said is that whatever
     subsidy is put in place, it should obviate the problems
     introduced by distance.
                    MR. BAILEY:  Well, no.  
                    MS. PUSKIN:  Is that what you are saying?
                    MR. BAILEY:  No, let me clarify that.
                    It should obviate the differences between rural
     and urban applications created by distance.
                    MS. PUSKIN:  Okay, that's fine.  
                    MS. TRUTANIC:  Ditto.  
                    MR. BAILEY:  Because you may still have distance-
     sensitive rates in an urban area.
                    MR. LAWLER:  Right.
                    MR. BAILEY:  As somebody suggested awhile ago, you
     can come up with the average rate in the area and then
     nobody in the state pays more than that, and that may be a
     solution.  
                    MS. PUSKIN:  There is another problem which Bill
     has pointed out just now, and that is, I remember when I
     first reviewed this legislation, and correct me, but doesn't
     the legislation say between urban and rural within a state? 
     Because the problem --
                    MR. LAWLER:  It's a single state, yes.  
                    MS. PUSKIN:  -- comes down to, and I don't know
     how to deal with it.  This is maybe one of those things we
     put as another issue.  But the across state problem, how it
     might -- where your nearest urban area is actually across
     the state line.  It's not within the same state, and your
     networks for health care do not follow geopolitical
     boundaries.  And as a result --
                    MR. LAWLER:  But they do, and somebody correct me
     if this is wrong, and I do not know why they did it this
     way, but most of the state regulatory structures do follow
     the state boundaries.
                    MS. PUSKIN:  Right. 
                    MR. LAWLER:  And I suspect that was the motivation
     in saying, yeah, we have got independent --
                    MR. BAILEY:  There are some exceptions to that.
                    MS. PUSKIN:  But then --
                    MR. BAILEY:   But generally speaking.
                    MR. LAWLER:  Right.
                    MS. PUSKIN:  But then that becomes an issue if you
     are trying to basically create what is going to be your
     nearest urban area or your urban area for comparability when
     it -- you know, what are you going to be looking at.  
                    MR. BAILEY:  I don't know how you solve that
     problem because the nearest area of comparability might be a
     different state, different company, different, you know. 
     How do they --
                    MS. PUSKIN:  I just raise it.  We can move on
     because you are way behind schedule, but I think it's an
     issue that might require some further discussion.
                    MR. LAWLER:  If I can take one second, we have a
     couple of the staff, state staff people for the Joint Board
     here, and they may be contacting individual people here.  We
     did have a brief discussion at lunch about where they are
     and what their needs are, and I think the expressed a desire
     to talk to some people individually, especially those
     engaged in telemedicine around the country.  So I might
     introduce them just so they are here and you can see them. 
     I don't know if it's worth our doing around the room and
     introducing ourselves or what, and I will probably
     mispronounce your names so forgive me.
                    But John Clark is here.  Deb, is it Creetie, and I
     don't have your name?
                    MS. GREEN:  Dionne Green.
                    MR. LAWLER:  Dionne.  
                    MR. MAXWELL:   And John is -- John works for the
     FCC, and is working with the state board members, and Deb
     and Dionne are working with the state staff and are the
     liaison with health care, and are sort of, I think, probably
     intensely interested in the last part of the discussion
     because this is a real tough issue that they are facing.  
                    MR. LAWLER:  Deb, you are from Pennsylvania; is
     that right?
                    MS. CREETIE:  Yes, I am.  It was really good that
     we walked in on this portion of the discussion because we
     have been talking about it.  I just want to emphasize, to
     the extent that you want to make a recommendation or weigh
     in on these issues, it might be helpful.  And you are right,
     the geographic boundary issue, we have been grappling with
     this problem as well as the other.  Thanks.
                    MR. LAWLER:  Thank you.
                    MS. CREETIE:  Thanks for having us.  
                    MR. MAXWELL:  Let me say we did something that
     maybe was -- I maybe did something that was out of line,
     Greg didn't, and that is, I --
                    MR. LAWLER:  Thank you, Elliot.
                    MR. MAXWELL:  I volunteered that my experience and
     Lygeia's experience with the group here has been that you
     have been extraordinarily responsive to questions that we
     have had and to what we are trying to do, and offered to the
     state folks the opportunity to, if there were questions that
     they have or things where they would like some feedback from
     practitioners and experts in the area, that you might all be
     willing to respond, whether we do it electronically or
     telephonically.  And so I went out on your behalf and said
     that you would be wiling to give your advice to these folks
     as they struggle with it. 
                    And if I was wrong, you should tell me later and
     not embarrass me now.  But if I am not wrong, then I expect
     that we will continue a dialogue over the next couple of
     months as they try to form recommendations for the state
     staffs and the federal commissioners about what to do about
     these things.  And I have found it real helpful, and I am
     sure they will as well.  Hearing no objection.  
                    MR. BRICK:  I just want to --
                    MR. LAWLER:  Jim.   
                    MR. BRICK:  -- say that's fine as long as they
     don't send us any attachments.
                    (Laughter.)  
                    MR. MAXWELL:  Having received one voice mail from
     you about meetings, I would also caution them about
     scheduling meetings.  
                    MR. LAWLER:  Bill.  
                    MR. ENGLAND:   I hope this -- maybe this is a red
     herring, but if there is more than one urban area in a
     state, this sort of subsidy could result in two rural areas
     that are 400 miles apart paying $400 a month, and if two
     major medical centers in those two urban areas want to call
     each other, and the urban rate is rate-sensitive, they might
     spend 2,000.  And I don't know if there is any intent to --
                    MR. LAWLER:  Well, I think, again, at the risk of
     reading the law, I think what they --
                    (Laughter.)  
                    MR. LAWLER:  It says reasonable comparable to rate
     charts for similar services in urban areas in that state. 
     And, you know, that to me means some sort of averaging kind
     of thing.  
                    MR. ENGLAND:  No, my point is if two hospitals in
     the urban area wants to talk to each other, it may because
     they are widely separated, although they are both urban,
     they would not be eligible for the subsidy. 
                    MR. LAWLER:  Right.
                    MR. ENGLAND:   So they might be spending a large
     amount and couldn't get subsidized.  
                    MR. HOLUM:  Unless they are serving rural --
                    MR. ENGLAND:  Unless they are serving rural
     people.  
                    MS. PUSKIN:  Or undeserved, maybe, depending what
     happens.
                    MR. LAWLER:  But you're right.  
                    MR. HOLUM:   All they need to do is get one little
     rural network in there.  
                    MR. LAWLER:  Or a rural clinic.  Tell them you
     want T-1 and off you go.  
                    Do we have any suggested wisdom on this?  
                    MR. SPACEK:  I would just like -- the think the
     words that you would obviate this distance thing and then
     give an example is probably the best way to do it without
     getting into recommending rate structures.  You recommend
     what you are trying to accomplish.
                    MS. PUSKIN:  Your objectives.
                    MR. LAWLER:  Chuck, can I volunteer you and Tom
     and Dena to try to come up with some language on this in
     short order?  That if anyone else is desperate to
     participate, they are welcome, but smaller is better.  
                    MR. MAXWELL:  There is one -- there is one
     interesting kind of the way this had been dealt with,
     distance has been dealt with in a related area.  When the
     issue came up about comparability of new providers and
     competitors came in to compete with the incumbent providers 
     and enhance services, and basic services, there was a notion
     that you would establish essentially a boundary, and say
     within a certain mileage bank, you took the same rate as the
     incumbent, and so you didn't have to locate right next to
     the incumbent central office, or it was sort of an averaging
     effect.  
                    One of the ways of dealing with this is to say
     that there is a certain distance band around services that
     would be assumed to be the rate for urban and rural
     providers equally so that you have an averaging effect, and
     you do it in a similar way, and just assume away the mileage
     problem.  So there are things I think one can do to obviate
     that.
                    MS. PUSKIN:  Is it possible to give some examples
     of that?  Would that make some sense?
                    MR. SPACEK:  I don't know.  I think there are some
     examples we can give but the issue that you just brought up,
     I mean it seems like the FCC is sort of, you know, on top of
     what these different mechanisms are, and, you know, we want
     them to do it in a fair way.  
                    You know, we can come up with 50 different ways of
     doing it.  
                    MS. TRUTANIC:  Well, all we have to do is take the
     difference between in one network, in one rural state, the
     difference in cost between an urban connection, considered
     urban connection in the state and then the difference
     between a center presence out to a community center, you
     know, 100 miles away.  And it will be as much as a thousand
     or --
                    MR. LAWLER:  But as I hear the real concern here
     it is that we be clear in a way that this is not clear that
     if the rate is distance-sensitive within the urban area,
     that's fine, but it is limited to the urban area, and it is
     not distance sensitive in the rural area.
                    MR. SPACEK:  Well, yes and no.  You are right in
     the sense that the most the health care provider would pay
     would be whatever this distance-sensitive rate is in this
     urban area.  The rate in the rural area might be distance-
     sensitive.
                    MR. LAWLER:  You are absolutely right.
                    MR. SPACEK:  But these guys don't pay it.  
                    MR. LAWLER:  Right.  Everybody else will pay that
     rural distance-sensitive rate.  
                    MR. SPACEK:  They will pay the difference, and
     then the Universal Service Fund makes up the difference.
                    MR. LAWLER:  Right.  Right.
                    But I don't think there is any disagreement -- you
     know, we haven't gotten the words to say it yet, but I don't
     hear any disagreement on the principle we're trying to -- 
                    MR. LORAN:  I'm sorry.  A 15-second clarification.
                    Let's say, for example, and these are pretty close
     real numbers, that it costs about 28 cents a mile to hook up
     an urban hospital to my central office, but let's say it
     costs about 26 cents, which is less, to hook up my -- 26
     cents per mile to hook up a rural hospital. 
                    Are you saying that there would be a subsidy of
     two cents difference between them, or are we looking at the
     total?  
                    MR. LAWLER:  You're -- well, I'm not quite sure
     about your -- 
                    MR. HOLUM:  You're saying that if the urban
     hospitals are 10 miles apart, it costs $2.80?
                    MR. LORAN:  Yes.  
                    MR. HOLUM:  That the connection to the rural
     hospital should be $2.80? 
                    MR. LORAN:  And the only reason I am raising this
     issue, because I've crunched these numbers many, many times,
     and it's actually cheaper per mile --
                    MR. LAWLER:  We got that.  
                    MR. LORAN:  Just wanted to -- 
                    MR. LAWLER:  Where are we here?  
                    I guess the next is the -- we've finished all
     three bullets. 
                    MR. SPACEK:  We are on the finding.  
                    This is something that's probably goes very early
     in the report with the rest of the findings.  Everything is
     not particularly in order here.  It's just one of the areas
     that was asked to be addressed.  
                    MR. LAWLER:  It's actually quite significant, but
     it is --
                    MR. SPACEK:  Yeah.  
                    MR. LAWLER:  -- not a recommendation.  It's only,
     you know, this is what's going to happen.  
                    Top of page 6, I actually think we have covered
     the for-profit health care providers, so we are on to resell
     where we have a recommendation and two findings.
                    Tom, you want to --
                    MR. SPACEK:  Okay, yeah.  It turns out that the
     way the for-profit one above, which is basically some --
     would require new legislation or changes of some
     legislation.  It's a real important issue.  
                    MR. LAWLER:  But, Tom, as far as I'm concerned, we
     have done that one.
                    MR. SPACEK:  Yeah.  No, I'm not covering that one.
                    MR. LAWLER:  All right. Sorry.  
                    MR. SPACEK:  I am just referring back to that
     because the way -- the way for-profit people would be
     handled would be by some new legislation or by some change.
                    MR. LAWLER:  Okay.
                    MR. SPACEK:  Change in current legislation.  Okay?
     Not by having eligible providers resell to ineligible ones,
     okay.  So we are not saying we want to subvert the law.  We
     are saying there is an issue.  That's what the top of the
     page says.  Somehow we want to get that issue addressed, and
     it's not covered by the bill.
                    Okay, and then the resell recommendation
     basically, I mean, is just saying that, you know, you don't
     subvert the law and have eligibles resell to non-eligibles. 
     That's it, and then there is two findings after that that
     are related.  It just gets into -- okay, it's just two
     findings that lead up to the recommendation actually.
                    MR. LAWLER:  They are sort of -- it's not Tom's
     fault, it's my fault that we did this.  They show up in the
     wrong place.  
                    MR. SPACEK:  Yes, they should be before it instead
     of after it, but, you know, in general, that's the idea. 
     These are some of the background information that leads to
     it.
                    MR. MCCONNAUGHEY:  Jim McConnaughey of MTIA.
                    Would this rule out consortia?  I'm more familiar
     with the education side where it's pretty common where
     elementary schools and universities and the government might
     all get together and realize economies by being on the same
     shared network.  
                    MR. LAWLER:  I think the intention is clearly not,
     on the health care side it's actually in the seven providers
     consortia are specifically provided for.  They are included. 
     So you certainly could do that.  And on the education and
     library side, I mean, I suppose we could say that that's
     clearly not retail, but I think that's probably clear.  
                    MR. BAILEY:  It would rule out, wouldn't it,
     though, a for-profit institution being a member of a
     consortia? 
                    MR. HOLUM:  Unless you could allocate the process. 
     You could charge the not-for-profit based on this kind of
     rates but not give the for-profits the benefit.  
                    MR. LAWLER:  I think, though, Chuck, that the act,
     or the law actually says the opposite.  I think you get your
     subsidize -- you will get your infrastructure, you get your
     subsidy, it says you can't resell it.  It doesn't say, you
     know, if you resell it, you have to give up part of your, if
     I remember correctly.  
                    MR. WATERS:  This is Bob Waters.
                    I just have a question in terms of how this might
     work.  I am thinking in the case of let's say a rural
     hospital where you would have a private radiologist who
     would contract with the hospital to provide the services.
                    Does that mean that private radiologists can't use
     the hospital telemedicine equipment, or discounted
     equipment?  
                    MR. LAWLER:  You have raised a very good point
     that we have not addressed.
                    MR. WATERS:  And, see, I think in some respect
     diving in -- I mean, I appreciate the fact in terms of
     resell into, you know, GM who wants to -- or locate their
     credit card company or something like that out in the rural
     area, that's different from even trying to parse out the
     health care part of the equation.  
                    MR. HOLUM:  Who is charging for the use of the
     network?  
                    MR. WATERS:  What? 
                    MR. HOLUM:  Is the hospital charging for the use
     of the network?  
                    MR. WATERS:  Well, the radiologist is going to
     submit -- I mean, in some cases our pathologist might be
     reimbursing under a certain code.
                    MR. HOLUM:   But not for use of the network.  The
     radiologist is going to charge for the radiologist service,
     and the hospital is going to charge for the ---
                    MR. LAWLER:  Generally, that's right.  
                    MR. WATERS:  Well, I don't think that distinction
     is -- I think the key one is sort of defining here, you
     know, what is an extension of the hospital service, the
     presence at the hospital, because in many hospitals, I mean,
     the radiologist is really part of tex hospital, but it's a
     private physician who is contracted to provide the service
     to the hospital.  He may work three or four different
     hospitals.  
                    MR. LAWLER:  But why isn't that a distinction?  
                    I mean, I go to have a MRI or whatever I have
     done.  It is the hospital's equipment.  I get charged by the
     hospital.  I also get a bill from the radiologist, which is
     whatever they are, under contract to the hospital.  For some
     reason there is, you know, a telemedicine application, they
     are billed by the hospital, which is a not-for-profit
     subsidized hospital.  
                    Why isn't that a distinction between the two?  
                    MR. WATERS:  Well, I think this is where it gets
     difficult.  Then you get back into drawing in other types of
     health care services that are within, you know, say owned by
     the hospital.  The hospital owns a home health service, you
     know.  I think there is ---
                    MR. LAWLER:  But isn't that the issue that we
     raised earlier, that there are competitive implications from
     this that --
                    MR. WATERS:   Right.  
                    MR. LAWLER:  -- perhaps haven't been sufficiently
     considered, but we can't go back and monkey with that
     without simply --
                    MR. WATERS:   And my view would be we would bring
     up, okay, the private side sector up to the level of what
     might be admittable under the current statute, rather than
     anyway drawing down the public side to the other end.  
                    I mean, it may be that the language of the statute
     would permit, you know, some other applications by the not
     for profit hospitals, and I think we want to permit that.  I
     don't think we want to draw the --
                    MR. LAWLER:  I agree with that, and I think this
     ought to be couched in terms of these are additional
     providers that you will look at, including, and you ought to
     look at the fact that they are -- you know, you may be
     creating competitive disadvantages by not allowing certain
     health care providers in who are doing exactly the same
     things, not suggesting that hospitals, you know, not cover.
                    MR. SANDERS:  I think that is very different than
     the non-health care end of it.
                    MR. LAWLER:  Right.  
                    MR. WATERS:   Right.  
                    MR. SANDERS:  But is a very important question
     because the majority of rural hospitals are going to be
     contracting telemedicine with for-profit providers at
     distance sites.  
                    MR. HOLUM:  Sure.  
                    MR. SANDERS:  And by definition you are increasing
     the marketplace for that for-profit radiologist as an
     example using a subsidized network.  
                    MR. HOLUM:  But the radiologist does not make any
     money off the -- 
                    MR. SANDERS:  Sure, he is.  Sure.  Oh, of course
     he is.
                    MR. LAWLER:  He's not charging, but for that
     network he would have less business. 
                    MR. SANDERS:  Exactly right.  
                    MR. LAWLER:  But in a way that's -- at the same
     time that's exactly what we want to have.  That's what this
     is all about.  If we can't do that, they can't do anything.
                    MR. HOLUM:  We don't want anybody to have service.
                    MR. LAWLER:  We want telemedicine but no services.
                    MR. SANDERS:  And, of course, the only reason they
     do teleradiology is that's the only thing HCFA reimburses
     for.  
                    MR. PILLAR:  Bob Pillar.  I want to get back to
     the thought here too because I have seen a number of these
     consortia starting to develop, and sometimes they are groups
     of not-for-profit care providers.  And you have a situation
     where the relationship between the umbrella groups and the
     telecommunication provider is one or more had contract, and
     then they, in essence, pay a contribution to their members.
                    This seems to me to be at least on the border of
     resale from one to another.  And I think we will contemplate
     that that's not a violation here, but I think that it may
     require in the last paragraph some reworking of the
     sentence.  This probably is a kind of form of resale
     allowable providers.
                    MR. SPACEK:  What sentence are you referring to?
                    MR. LAWLER:  This is the third sentence of the
     second finding under resale, is that right?  "In addition"?
                    MR. PILLAR:  Yes.  Where it says there is no need
     to resell eligible health care providers since they are all
     eligible.  
                    MR. LAWLER:  Yes.  
                    MR. PILLAR:  In fact, it's the umbrella group that
     will have the sale in a matter of speaking in the internal
     accounting among the members it will be a resale or
     reimbursement from the umbrella group.  
                    MR. SPACEK:  I think the intent is the way it's
     stated in the sense that, you know, only eligible providers,
     according to the law, and we are recommending above maybe we
     want to change the law, have access to the reduced fee -- to
     the subsidy.
                    Yeah, there are complications that I don't think
     we can solve other than letting the FCC know that there are
     complications in sorting and stuff like that with strange
     arrangements.  
                    MR. PILLAR;  I would suggest that this isn't
     permissible.  I mean, the alternative that each of the
     members of the consortia would have to be subfield by the
     provider, and then they are clearly qualified, and you don't
     have a resale.  And I think to make people jump through that
     hoop --
                    MR. LAWLER:  You lost me at least.  Could you give
     us a brief description of your example again?
                    MR. PILLAR:   Yes.  You have a trade association
     of health care -- not-for-profit health care providers
     located in several locations.  They decide to buy an ATM
     switch and to interconnect them on the wall, and they do
     this with facilities through a telecommunications provider
     like one of the R-BOCs.  The R-BOC would typically set this
     up and build a consortium with the umbrella trade
     association, who would then in turn allocate among the five
     members in this example.  The alternative is, I guess, that
     you could ask the R-BOC to build each of the five, and then
     they quality, but that would be a --
                    MR. SPACEK:  But they are all not for profits.  
                    MR. PILLAR:  Yes.
                    MR. SPACEK:  Yes, that's a nonissue.  We are not
     saying how it's billed.  
                    MR. PILLAR:  Yes, but otherwise you have -- the
     way this is worded it would appear that because of this
     billing that there is a resale because you have the trade
     association, in essence, sending out a bill for so much.  
                    MR. SPACEK:  But the resale is only -- okay, it's
     only -- it's prohibited from eligibles to noneligibles. 
     That's the only prohibition.  Ignore findings or information
     that leads to it in the recommendation, it doesn't say -- it
     just says that an eligible provider is prohibited from
     selling to an ineligible.  
                    MR. MAXWELL:  You're talking past one another
     because you are -- you are talking, I think, past one
     another because of the way the sentence in written.  I think
     you are agreeing with each other about the facts of it.  
                    MR. SPACEK:  Okay.  
                    MR. MAXWELL:  And I think we can fix that because
     yours is more an explanatory sentence, and you are reading
     it as an injunctive sentence, which we can fix this.  
                    MR. LAWLER:  All I can say is you have left me in
     the dust.  
                    MR. SPACEK:  That's all right.  Me, too.  
                    MR. LAWLER:  Let's work on fixing this sentence if
     we don't have a disagreement.  
                    MR. WATERS:  In terms of my original point, I mean
     the two findings, I have no problem with the way they are
     worded.  I think that's fine.  I think that's consistent
     with the statute. But it's under the, you know, the one
     sentence right at the beginning that may unwittingly
     constrain applications that I think the act was intended to
     cover.  I think the act intended that the radiologist be
     able to utilize the hospital facilities to provide
     telemedicine.  
                    MR. LAWLER:  I haven't heard any disagreement with
     that.  But, frankly, the sentence only restates what the act
     says.  I don't know how we can be -- especially when the
     word "subversively" is in there.  It's not only contrary to
     the act, but it's contrary to the national security.
                    (Laughter.)  
                    MR. WATERS:  Well, not the word "subversion," but
     I think it implicitly goes a little bit further.  
                    MR. SPACEK:  It does just state what the act says.
               MR. MCCONNAUGHEY;  Just to follow up the line of
     discussion here.  Could there be a possibility there would
     be volume discounts involved?
                    If you had  this umbrella trade group that Bob
     mentioned, by the statement in here you would say, well, you
     don't want to permit them to get together.  Would it be
     possible that there would be volume discounts that would
     exceed the Universal Service discount arrangement for which
     they would want to get together?  
                    MR. SPACEK:  I don't know if I can answer that,
     but I suppose there could be where somebody had, you know, a
     good enough deal to negotiate with somebody their rates even
     cheaper than the discount rate.  Well, go for it, you know. 
               MR. LAWLER:  But if that's the case, none of -- I
     mean, they are outside of this structure and they can do
     whatever they want or whatever the regulatory system allows
     them.  
                    MR. MCCONNAUGHEY:  And we're saying aggregate
     demand, I guess we said that earlier,  Coalition, buying
     thins like that wouldn't be discouraged.
                    MR. LAWLER:  Absolutely not.  No, I would be,
     frankly, surprised --
                    MR. SPACEK:  You just wouldn't get a double
     discount or something.  You can't make profits out of your
     discounts.  
                    MR. LAWLER:  Bill?
                    MR. ENGLAND:  We have some problems with some of
     the demos we're running, and we are a little worried that
     some of them may run afoul of this.  In particular, the one
     we are about to start in Medicare, we explicitly are
     assuming that the hospitals are going to subsidize the
     physicians, and we talked about the fact that the hospitals
     may begin to get their services, their communication
     services less expensively.  We are probably underpaying
     physicians with the idea that the hospitals will provide the
     facilities and use of the lines to the doctors, who will
     then bill Medicare for services, and we are not paying them
     quite as much as they probably would need to get from us to
     really deliver this if they were having to go in and buy the
     services at cost because we assume under our demo we are
     giving grants and the FCC is subsidizing the hospitals, so
     we want to pass that along to the doctors.  
                    MR. LAWLER:  I think the only way to look at this
     without driving ourselves insane is pretend that we don't
     care what Medicare does.  I mean, that this is -- you know,
     we are not subsidy on top of subsidy.  
                    MS. PUSKIN:  Can we try some other statute?  
                    MR. ENGLAND:  We have to waive STARK, for example.
                    MR. LAWLER:  All we care about, all we should care
     about in that situation is not the fact that it's Medicare
     or anything else.  All we care about is if there is a --
     let's assume the hospital goes and applies and says, you
     know, we got a network and we want to do this, and we
     qualify.  We're not for profit, we're doing this, and we're
     serving people in rural area.  The fact that they have, and
     I don't know what relationship these doctors have.  They
     have a teleradiology network.  Assuming that your worry is
     not a correct one, we don't care how they get reimbursed or
     whether you give them five cents on the dollar or $1.20 on
     the dollar.  
                    MR. ENGLAND:   But you care if the doctors in the
     hospitals have a financial relationship that doctors are
     paying the hospital for use of their facility, for example. 
     That's one of the things that we also going to encourage
     them to do.  
                    MR. LAWLER:  I am not an expert on hospital/doctor
     relationship, but I think that happens all the time anyway
     outside of Medicare.  
                    MR. ENGLAND:  But the rate that the hospital
     charges the doctor reflects, for example, the subsidy that
     the hospital is getting.  
                    MR. SPACEK:  And my guess is nobody at the FCC or
     nobody else would --
                    MS. PUSKIN:  Okay.  Well, let's talk about
     something else.  Let me just talk about the other demo
     problem.  There is another problem.  Our demos, and we talk
     about tying legislation in other kinds of for-profit
     providers.  But our demos include, and we are going to have
     under Kasenbaum's bill actually an expansion of it, and my
     job is to try to harmonize federal policy guys.  That's part
     of what I am here for.  
                    We are going to have under Kasenbaum's bill, which
     I think is going to pass, I think, I think, I think, we are
     going to have consortium that are going to be authorized,
     and we already fund them, that include essentially
     hospitals, physicians, social service agencies, not schools
     but other groups that it felt will be a part of the
     consortium that will take advantage of this infrastructure. 
     And they may be not for profit, but they are not necessarily
     listed under your schools. 
                    How does that count?  
                    MR. LAWLER:  I hate to say it --
                    MS. PUSKIN:  Is that resale?
                    MR. LAWLER:  -- it doesn't count.  You don't get
     it.  I mean, if you literally have a consortia that includes
     people who are not eligible, you're not eligible.
                    MS. PUSKIN:  But I think that raises a question
     about trying to build essentially multi-use systems that are
     viable out there.  Subsidies, which is what Mary Jo is
     getting at and others here, when you have one piece of
     federal legislation trying to encourage the essentially
     sharing of resources, and sharing of the infrastructure. 
     And you have another piece saying but in fact you're
     prohibited from sharing it, or at least sharing the subsidy
     under the resale provision.
                    MR. LAWLER:  Well, but it isn't -- I mean, if you
     have education, library and health care providers, you are
     fine.  But if it's outside that -- I mean, that's what the
     law says.
                    MS. PUSKIN:  I know, but just as we have said
     suggesting there may be some inadequacies in the law in
     terms of harmonizing public policy, I would argue that there
     are social service agencies and others as you're trying to
     provide these services, that you might want to argue need to
     be looked at in terms of harmonizing federal policy.
                    MR. LAWLER:  I got you.
                    MR. WATERS:  My one last comment on it and I will
     try to be quiet about it.  But if the purpose of this
     section is simply to restate the statute and nothing more,
     then I would recommend we delete it, because it doesn't add
     anything to the statute.  It doesn't attempt to interpret
     the statue.  There is no need to be included in there as 
     part of our advice.
                    MR. SPACEK:  Well, what was asked by the FCC was,
     was the question, try to interpret what that -- what it
     means, okay, and it wasn't necessarily totally clear.  And
     the combination of the two findings and the statement is
     what was -- you know, our interpretation of what that meant. 
     And so, you know, the whole idea is -- I mean, you are going
     to get leakage no matter what.   And you are not going to
     come up with laws that prevent some leakage.  
                    You know, there was an issue several years ago
     about, you know, about the higher education community when
     internet became commercial still doing E-mail on the
     experiment backbone with the new federal.  Well, heck, you
     know, sure.  If they were just doing E-mail to somebody that
     wasn't really a research project, that shouldn't be on that
     backbone.  I mean, that's a little leakage that you don't
     worry about, you know.  It's just the basic principle that
     you don't want to subvert the law, and that you don't want
     to have eligible people, you know, intentionally reselling
     stuff to ineligible ones.  
                    MR. WATERS:  And I think the primary leakage that
     you're talking about is dealt with in terms of the findings,
     which is going to clearly take care of
     private/commercial/non-health care applications to try to
     parse out in the not-for-profit side in terms of who goes
     into those eligible institutions all of the different
     applications that might involve private/for-profit
     individuals is a very sticky question that would take us
     many more hours of a day to really come to a good
     recommendation.  
                    MR. LAWLER:  I'm missing something here.  There is
     something that I am just not clicking on.  I mean, the
     reason that this is in here and where it is is because, you
     know, we said, look, and this is the original motivation for
     it, we think physicians, you ought to look seriously at
     bringing physicians into this thing because so much health
     care is delivered in physician's offices, and, you know, it
     isn't only physicians.  There is more than that.  We've got
     nursing homes.  We have got home health care, all of which
     are legitimate, but then it was -- but let's do this right
     up front, address it, address the whole thing.  Don't find
     some way to say, okay, we are going to come up with a
     mechanism where a not-for-profit can resell, and, you know,
     it's in the law already.  Yes, it is restated in one
     sentence, but it's restated in the proper place.  You know,
     you could argue we devoted too much space to it.  
                    MR. SPACEK:  And the top piece of it goes together
     with the bottom piece.  
                    MR. LAWLER:  Right.  
                    MR. SPACEK:  So there is one story.  You know, the
     piece on the top of the page.
                    MR. LAWLER:  Right.  
                    MS. TRUTANIC:  Are we going to talk about the
     international telemedicine?
                    MR. LAWLER:  Yes, let's move on.  We have one last
     recommendation here, which I think we have already covered,
     which we are going to -- this is just the urban/rural, it's
     just  recommending a study that we are going to try to
     provide a little more.  Chuck, I see has been busily
     scribbling, so maybe we have got some additional words.
                    The international, yes, I don't see Rick here.  I
     don't know whether he left or not.  So why don't we just get
     into it.  
                    I mean, the easiest way to do this is just to
     reach, especially in the findings, there are one, two,
     three, four findings that I think have been from the
     subgroup.  Hopefully, they are without a great deal of
     controversy, but people should read them and speak if they
     have -- Cindy?  
                    MS. TRUTANIC:  I just wanted to say that I think
     that the last recommendation in terms of the coordination
     among the agencies and the private sector groups that are
     doing international telemedicine is really needed.  And
     whether or not it's housed at the FCC or housed at some
     other agency, right now there is just  a lot of potential
     for replication of infrastructure and human resources in the
     international market, and there are a lot of activities that
     are going on internationally, some of which you may or may
     not be aware of, but I think this is an important
     recommendation.
                    MR. LAWLER:  Right.  
                    MS. PUSKIN:  Can I make a comment on that, because
     I agree, I think it's very important.  And the Joint Working
     Group on Telemedicine, which covers a lot of issues, the
     actual issue of international applications and the role of
     the federal government in working with the private sector is
     only an agenda for the working plan starting January.
                    And I don't know whether that would be a vehicle
     for at least beginning this activity, but it has all the
     representation of federal agencies, and has the capability
     of pulling together that. 
                    So I don't know if that would be a mechanism, but
     I think it might be a start.  
                    MS. TRUTANIC:  Can I just follow up?
                    I just think that that's probably, whatever
     mechanism is started, I think that should include private
     sector representatives, whether it's the communication
     companies or representatives, or universities or medical
     facilities, because uniformly in every meeting that I go to
     that has something to do with international telemedicine,
     and it's like who is in charge, what's going on, and there
     may be 10 projects to St. Petersburg, Russia, that no one
     knows about. 
                    MS. PUSKIN:  Right.  And I think one way to do
     that is spin off a subgroup which has essentially a joint
     partnership with it.  But it is a mechanism for doing it in
     which you have essentially an administrative mechanism that
     already has a core to it.  
                    MR. LAWLER:  Right.  
                    MR. SANDERS:  Just a point of information.  I have
     just been asked by Donna Shalala's office to be the U.S.
     representative for B-7 nations to help us, so they are now
     in the planning stage of what U.S. participation will be in
     the international telemedicine initiatives.  So obviously
     there are a bunch of joint --
                    MS. PUSKIN:  Well, maybe that's the first step is
     to figure out --
                    MR. MAXWELL:  It seems to me we can at least
     recognize what in fact is going on in this area here rather
     than not saying what's going on, and pointing at least some
     place to begin.
                    MR. BAILEY:  I have a clarifying question for
     myself anyway.  With regard to the recommendation, we are
     not recommending that whatever funds, whatever come from the
     Joint Board, whatever happens here happens, but it's not
     part of the funding mechanism of the Joint Board?
                    MR. LAWLER:  No.  Unless you would like to.
                    MR. BAILEY:  No.  
                    UNIDENTIFIED SPEAKER:  Just a brief comment
     related to maybe this issue and the infrastructure issue. 
     In addition to the debate on international telemedicine is
     an ongoing on, and it's obviously telemedicine is a public
     safety application, but people here, especially the
     emergency medical services, they are going to have a little
     smaller application or something of the service funds.
                    MR. LAWLER:  Do we have anymore comments on the
     international side of this?  Terrific.
                    Here is what I would like to suggest.  We're done. 
     Oh, sorry, Eric, we're not done.
                    MR. TANGALOS:  Oh, no, we're not.  Remember we
     talked about this morning about clearinghouse stuff.
                    MR. LAWLER:  Yes, we did.
                    MR. TANGALOS:  And we talked about --
                    MR. LAWLER:  Sorry, I --
                    MR. TANGALOS:  -- a House bill, 2128 from Texas,
     the model legislation there.
                    MR. LAWLER:  Right.  
                    MR. TANGALOS:  It came up a couple times.  Let me
     just give this to you.  This is what the telecom providers
     are required by law to do because the Texas bill specifies
     far more things for them to do.  That indeed they have to
     advertise to the health care providers in the state that
     these are services that individuals can petition for right
     now.
                    MR. LAWLER:  Right.  
                    MR. TANGALOS:  And so the suggestion from Steve
     Cotton and from around this table is should we make a
     recommendation even though it was not in the federal law --
                    MR. LAWLER:  Right.
                    MR. TANGALOS:  -- that indeed somebody be required
     to say that these services are available, and to help people
     find those services and get to those services.
                    And you will see from the attachments that are
     included that indeed Bell South has a full brochure that
     they have produced as to what services are available, how to
     get these services.  Here we are to help get those services,
     et cetera.  So I am fulfilling my obligation to Steve.  
                    MR. LAWLER:  Any discussion, disagreement,
     agreement?  Jay?  
                    MR. SANDERS:  This is hopefully a philosophical
     note.  I have a feeling that 20 years from now we  are going
     to look back at what we did here in these three sessions and
     our report as ending up being the first step of a process
     that didn't simply address deficiencies that presently exist
     in rural communities, but in fact will have totally changed
     what we identify as a rural community.  I really think this
     is going to end up being the urbanization in the good sense
     of the rural community.  I mean, there is going to be a
     regrowth of rural community populations, and economics.
                    MR. LAWLER:  Somebody -- Mary Jo, did you have
     your hand up?  
                    MS. MACLAUGHLIN:  No.  I was just going to say
     that I think it's very important, coming from a rural state
     where people do not have the time to talk to each other or
     get to meetings to find out what's going on, I think it's of
     the utmost importance that we provide a clearinghouse for
     information for people to know what's available so they can
     take advantage of it.
                    MR. LAWLER:  Any disagreement with having a
     recommendation on a clearinghouse?
                    No.  I would be before -- if we go on long enough,
     there won't be anybody left so they won't get a chance to
     raise it.  Are there things that are not in here that people
     think should be addressed?  Have we failed to address
     something?  No.
                    Why don't I suggest this, what we  will try to do
     in very short order, meaning in the next couple of days, is
     take this nine pages and redraft it to reflect what we did
     today.  We will get that around to people, I guess, by fax
     is probably the most efficient way.  And then if anyone has
     comments on that, brief comments on that, you know, we will
     work from there, but hopefully we will hit the mark and
     there will not be any.
                    The hope is, and, Elliot, you correct me, or
     Lygeia, if this is not accurate, that the Joint Board staff
     and the Joint Board itself is very anxious for our input
     because they have a time table that they have to meet.  So
     we want to move as quickly as we can. 
                    In terms of -- we may find a legal unofficial way
     for them to have available to them the comments or the
     recommendations that we make, but we also need to have a
     formal, I believe we need to have a formal report that has
     more than just findings and recommendations, and as soon as
     we get -- we finish with putting the findings and
     recommendations together, we will try to take the subgroup
     reports and, you know, the greater length and explanation is
     there and try to combine that in some organized fashion to
     reflect the background for the findings and recommendations. 
     And, frankly, I don't know how long that will take. 
     Hopefully, not too long.  But until we get started, it's
     hard to tell.
                    MS. PUSKIN:  In that light, if we have comments on
     the subgroup reports, I assume that we should send them to
     the subgroup chairs with copies to Lygeia and to Elliot?
                    MR. LAWLER:  I think that's -- yes.  
                    MS. PUSKIN:  Because there are some comments I
     think that we might have.
                    MR. LAWLER:  Absolutely.
                    MS. PUSKIN:  Depending on the redrafting of Tom's
     section, in particular.
                    MR. LAWLER:  Sure.  
                    MR. SPACEK:  Yes, there were obviously some
     inaccuracies that we were able to point out and something I
     can fix up.
                    MR. LAWLER:  Right.  And obviously they need to be
     changed to reflect, you know, the things that we talked
     about changing to day.  
                    MR. TANGALOS:  and again, in the subgroup reports
     there are area that conflict with one another.
                    MR. LAWLER:  Right.  
                    MR. TANGALOS:  Not that it's particularly bad, but
     our final recommendation should be a synthesis of those
     things, and of mutual agreement, but MTIA really pointed out
     to me that there were things of conflict.  I'm not sure that
     they just shouldn't stay.
                    MR. LAWLER:  Right.  
                    MR. SPACEK:  But that's actually an issue though
     in the following sense.  I realize that, you know, the
     report of -- you know, the architecture committee had a lot
     of inputs from a lot of people, and they are all attached in
     the report, and there is a lot of good work, and therefore
     since there is a lot of different input they conflict.  
                    The only problem that I would be concerned about,
     unless it can be covered somehow in a cover to the report or
     the introduction or something, is that once this whole
     report becomes public, and you have these attachments which
     are part of the record, then people, you know, can quote
     from the report, and you have these conflicting things, no,
     I like that one.  You know, the U.S. Advisory Committee on
     such and such said, and that will be my only concern.  
                    MR. LAWLER:  Tom, shouldn't it be that -- first,
     we're going to have findings and recommendations, and the
     report itself ought to support those.  I mean, we shouldn't
     be having findings and recommendations and then giving 15 on
     the other hands in the body of the report.  We ought to, you
     know, use the examples that we have and the work that's been
     done to support that.
                    That doesn't mean, however, and I am just thinking
     of the work that Steve Cotton did, for example, which is a
     survey, there is no reason that that, I don't know whether,
     whatever it is, an appendix, an attachment or something. 
     You know, he did a lot of work.  He got a lot of opinions. 
     They are good opinions.  They don't reflect where we came
     out after a lot of discussion and decision-making, but it is
     valuable information for people.  It is not the report.  It
     is just, you know, an appendix or.
                    MR. SPACEK:  Yes.  If it's positioned
     appropriately land says it's a survey that was taken and
     used as input by the committee, yes.  If it says all that,
     that will be fine.
                    MS. RICCIARDI:  Exactly.  There is a lot of
     information that we shouldn't lose.
                    MR. LAWLER:  That's right.  
                    MR. MAXWELL:  In that sense, those things will not
     be in the findings of the advisory committee --
                    MR. LAWLER:  That's right.
                    MR. MAXWELL:  -- on the recommendations.  They
     will be input to that, and what is officially the work will
     be in some way a kind of preamble to this, the findings and
     the recommendation, and the rest is, as they say,
     commentary.
                    MR. LAWLER:  Right.  
                    MR. LAWLER:  Any closing?  
                    Those who are still left are anxious to go.  
                    Again, thank everyone very much.  We are not done,
     but we're close to done.  People have worked hard and I hope
     we are making a contribution.  I think we are.  
                    MR. MAXWELL:  It ain't over yet .
                    MR. LAWLER:  Right. 
                    MR. MAXWELL:  We do appreciate enormously what's
     gone on so far.  There will be more questions,m ore
     interaction, and so appropriate closing way of doing this
     when we get this all together. 
                    MR. LAWLER:  Any other comments?
                    If not, we're adjourned.
                    (Applause.)
                    (Whereupon, at 4:05 p.m., the advisory committee
     meeting was concluded.)
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          //                        REPORTER'S CERTIFICATE
     
     
     FCC DOCKET NO.:       N/A
     
     CASE TITLE:    ADVISORY COMMITTEE
     
     HEARING DATE:  September 17, 1996
     
     LOCATION:             Washington, D.C.
     
                    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:   _09/17/96_            _____________________________
                                   Official Reporter
                                   Heritage Reporting Corporation
                                   1220 "L" Street, N.W.
                                   Washington, D.C. 20005
                                   Bonnie J. Niemann
     
                           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:   _09/25/96_            ______________________________
                                   Official Transcriber 
                                   Heritage Reporting Corporation
                                   Joyce Boe
     
                           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:   _09/25/96_            ______________________________
                                   Official Proofreader
                                   Heritage Reporting Corporation
                                   James E. Maxfield