[Federal Register Volume 87, Number 50 (Tuesday, March 15, 2022)]
[Proposed Rules]
[Pages 14421-14439]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-05191]


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Proposed Rules
                                                Federal Register
________________________________________________________________________

This section of the FEDERAL REGISTER contains notices to the public of 
the proposed issuance of rules and regulations. The purpose of these 
notices is to give interested persons an opportunity to participate in 
the rule making prior to the adoption of the final rules.

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Federal Register / Vol. 87, No. 50 / Tuesday, March 15, 2022 / 
Proposed Rules

[[Page 14421]]



FEDERAL COMMUNICATIONS COMMISSION

47 CFR Part 54

[WC Docket No. 17-310; FCC 22-15; FR ID 75595]


Promoting Telehealth in Rural America

AGENCY: Federal Communications Commission.

ACTION: Proposed rule.

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SUMMARY: In this document, the Federal Communications Commission 
(Commission) seeks comment on revisions to the Rural Health Care 
Telecommunications (Telecom) Program rules to ensure that rural 
healthcare providers receive funding necessary to access the broadband 
and telecommunications services necessary to provide vital healthcare 
services; proposes to modify the applicability of the internal funding 
cap on upfront costs and multi-year commitments in the Rural Health 
Care Healthcare Connect Fund Program, proposes to streamline the 
invoice process in the Telecom Program, and seeks comment on ways to 
further increase the speed of funding commitments.

DATES: Comments are due on or before April 14, 2022 and reply comments 
are due on or before May 16, 2022. If you anticipate that you will be 
submitting comments but find it difficult to do so within the period of 
time allowed by this document, you should advise the listed contact as 
soon as possible.

ADDRESSES: You may submit comments, identified by WC Docket No. 17-310, 
by any of the following methods:
    <bullet> Electronic Filers: Comments may be filed electronically 
using the internet by accessing the ECFS: https://www.fcc.gov/ecfs/.
    <bullet> Paper Filers: Parties who choose to file by paper must 
file an original and one copy of each filing.
    <bullet> Filings can be sent by commercial overnight courier or by 
first-class or overnight U.S. Postal Service mail. All filings must be 
addressed to the Commission's Secretary, Office of the Secretary, 
Federal Communications Commission.
    <bullet> Commercial overnight mail (other than U.S. Postal Service 
Express Mail and Priority Mail) must be sent to 9050 Junction Drive, 
Annapolis Junction, MD 20701.
    <bullet> U.S. Postal Service first-class, Express, and Priority 
mail must be addressed to 45 L Street NE, Washington, DC 20554.
    <bullet> Effective March 19, 2020, and until further notice, the 
Commission no longer accepts any hand or messenger delivered filings at 
its headquarters. This is a temporary measure taken to help protect the 
health and safety of individuals, and to mitigate the transmission of 
COVID-19. See FCC Announces Closure of FCC Headquarters Open Window and 
Change in Hand-Delivery Policy, Public Notice, A 20-304 (March 19, 
2020), https://www.fcc.gov/document/fcc-closes-headquarters-open-window-and-changes-hand-delivery-policy.
    People with Disabilities: To request materials in accessible 
formats for people with disabilities (Braille, large print, electronic 
files, audio format), send an email to <a href="/cdn-cgi/l/email-protection#91f7f2f2a4a1a5d1f7f2f2bff6fee7"><span class="__cf_email__" data-cfemail="6e080d0d5b5e5a2e080d0d40090118">[email protected]</span></a> or call the 
Consumer & Governmental Affairs Bureau at (202) 418-0530 (voice), (202) 
418-0432 (TTY). For detailed instructions for submitting comments and 
additional information on the rulemaking process, see the SUPPLEMENTARY 
INFORMATION section of this document.

FOR FURTHER INFORMATION CONTACT: Bryan P. Boyle, Wireline Competition 
Bureau, 202-418-7400 or by email at <a href="/cdn-cgi/l/email-protection#3371414a525d1d715c4a5f56735550501d545c45"><span class="__cf_email__" data-cfemail="480a3a312926660a2731242d082e2b2b662f273e">[email protected]</span></a>. Requests for 
accommodations should be made as soon as possible in order to allow the 
agency to satisfy such requests whenever possible. Send an email to 
<a href="/cdn-cgi/l/email-protection#b9dfdada8c898df9dfdada97ded6cf"><span class="__cf_email__" data-cfemail="5d3b3e3e686d691d3b3e3e733a322b">[email protected]</span></a> or call the Consumer and Governmental Affairs Bureau at 
(202) 418-0530.

SUPPLEMENTARY INFORMATION: This is a synopsis of the Commission's 
Further Notice of Proposed Rulemaking (FNPRM) in WC Docket No. 17-310; 
FCC 22-15, adopted on February 18, 2022 and released on February 22, 
2022. Due to the COVID-19 pandemic, the Commission's headquarters will 
be closed to the general public until further notice. The full text of 
this document is available at the following internet address: https://docs.fcc.gov/public/attachments/FCC-22-15A1.pdf.

I. Introduction

    1. In the FNPRM the Commission proposes and seeks comment on 
several revisions to the Commission's Rural Health Care Program (RHC 
Program) rules designed to ensure that rural healthcare providers 
receive funding necessary to access the broadband and 
telecommunications services necessary to provide vital healthcare 
services while limiting costly inefficiencies and the potential for 
waste, fraud, and abuse. The RHC Program provides vital support to 
assist rural health care providers with the costs of broadband and 
other communications services. Reliable high speed connectivity is 
critical for rural health care providers to serve patients in rural 
areas that often have limited resources, fewer doctors, and higher 
rates for broadband and telecommunications services than urban areas. 
Recent years have also seen an explosion in demand for telehealth 
services, a trend accelerated by the COVID-19 pandemic, that has 
increased the bandwidth needs of rural health care providers. The 
Commission seeks comment on proposed revisions to the RHC Program's 
funding determination mechanisms and administrative processes in an 
effort to improve the accuracy and fairness of RHC Program support and 
increase the efficiency of program administration.

II. Discussion

    2. In the FNPRM, the Commission seeks comment on options for 
determining support in the Telecom Program and propose revisions to 
Telecom Program forms to improve the quality and consistency of Telecom 
Program data. The Commission also seeks comment on an alternative rate 
determination mechanism to the Rates Database to improve the accuracy 
of rates in the Telecom Program. Additionally, it proposes to limit the 
applicability of the internal funding cap on upfront payments and 
multi-year commitments to instances in which demand exceeds available 
funding; to target funding for the current funding year over future 
years when the internal cap is exceeded; and to simplify the invoicing 
process in the Telecom Program while strengthening protections against 
waste, fraud and

[[Page 14422]]

abuse. The Commission also seeks comment on ways to expedite and 
streamline the application and funding commitment process.
    3. Determining Accurate Rate in the Telecom Program, Defining cost 
factors and service technologies for a rate setting mechanism. As an 
initial matter, the Commission examines how to classify the inputs used 
to determine rates in the Telecom Program. To determine rates that 
reflect the cost of delivering service to health care providers, the 
data inputs used to determine rates must capture, consistent with 
section 254(h)(1)(A) of the Telecommunications Act of 1996 (Act), which 
health care providers are in ``comparable rural areas,'' as well as 
which Telecom Program supported services are ``similar.'' The 
Commission seeks therefore comment on several inputs related to 
rurality classifications for health care providers and categorization 
of eligible services.
    4. Rurality classifications for health care providers. The 
Commission seeks input on how to evaluate rurality to determine what 
areas are comparable for purposes of determining rates. First, 
examining how the Commission defines rurality for the RHC Program, 
proposing to maintain the current standard for ``rural'' used to 
determine whether a health care provider may participate in the RHC 
Program. Then seek comment on what factors to consider to differentiate 
rural areas.
    5. Defining ``Rural Area'' for the Purposes of Program 
Participation. Support under section 254(h)(1)(A) of the Act is limited 
to services provided to persons who reside in ``rural areas.'' The RHC 
Program employs a definition of ``rural area'' that relies upon a 
healthcare provider's location relative to the Census Bureau's Core 
Based Statistical Area designation. In the 2019 Promoting Telehealth 
Report and Order, 84 FR 54952, October 11, 2019), the Commission 
declined to adopt a new definition of ``rural area'' for the RHC 
Program because the existing definition served the needs of the 
program. The Commission also explained that changes to the definition 
could cause uncertainty and eligibility issues for program 
participants. The Commission believes these justifications for 
maintaining the existing definition of ``rural area'' remain applicable 
today and therefore propose to maintain the current definition of 
``rural area'' for the RHC Program.
    6. Despite the Commission's belief that the existing definition of 
``rural area'' remains applicable today, the Commission seeks comment 
on whether the proposal to maintain the current definition of ``rural 
area'' is appropriate for purposes of RHC Program participation. Does 
the current definition meet the needs of the RHC Program for purposes 
of eligibility? Are there any alternative definitions that would be 
more appropriate? For instance, should the Commission adopt a 
definition that does not rely (or does not exclusively rely) on a 
healthcare provider's location in relation to relatively densely 
settled areas, and would such a definition capture areas that 
reasonably could be viewed as ``rural'' within the meaning of section 
254(h)(1)(A) of the Act? Until 2004, the Commission followed the 
definition used by the Federal Office of Rural Health Policy (FORHP) 
located within the Health Resources and Services Administration. Are 
there any definitions used by other government agencies, such as FORHP, 
or medical organizations that would be more appropriate at this time 
for the RHC Program? Are there definitions that take into account the 
geographic features that are unique to Alaska? Commenters are 
encouraged to describe the effects on Program participants of any 
potential modifications to the current definition. After the Commission 
adopted a new standard for ``rural area'' in 2004, it permitted health 
care providers that were participating in the RHC Program under the 
previous definition but did not qualify as rural under the new 
definition to continue to participate in the RHC Program. If the 
Commission maintains the current definition, should the Commission 
continue to allow health care providers that do not fall under the 
current definition, but who were grandfathered under the old 
definition, to participate in the RHC Program? In the event the 
Commission adopts a new definition of ``rural area'' that does not 
encompass health care providers that fall under the current definition, 
should the Commission permit those providers to continue participating 
in the RHC Program?
    7. Identification of Geographic Cost Factors. The Commission next 
turns to how to identify methods for further classifying gradients or 
tiers of rurality and what already-existing tools might be used to 
differentiate gradients or tiers of rurality for the purpose of setting 
rural and urban rates in the Telecom Program. Under section 
254(h)(1)(A) of the Act, carriers must be reimbursed using rates for 
similar services provided to other customers in ``comparable rural 
areas'' in the state. In the Promoting Telehealth Report and Order, the 
Commission amended its definition of ``comparable rural areas'' from 
just the areas immediately surrounding the health care provider to also 
include similar rural areas. The Commission proposes to maintain a 
definition of ``comparable rural areas'' that includes the areas 
immediately surrounding the health care provider and also similar areas 
within the state and agree with the Commission's previous determination 
that such an approach reflects a faithful interpretation of the 
statutory obligation to reimburse carriers for similar services for 
other customers in ``comparable rural areas'' in the state. The 
Commission seeks comment on this approach.
    8. The Commission also seeks comment on the factors to consider in 
determining what are ``comparable rural areas'' when establishing rates 
for telecommunication services. Under the existing Commission rules, 
rurality tiers are used to determine the comparable rural areas in a 
state or territory. In the Promoting Telehealth Report and Order, the 
Commission decided that the determination of what rural areas are 
``comparable'' should be based on the factors impacting the cost to 
provide services, and adopted rurality tiers based on the assumption 
that the costs to provide telecommunication services increases as the 
population density of an area decreases. The Commission continues to 
believe that grouping health care providers by geographic area is the 
best way to ensure that carriers are compensated based on services 
provided to health care providers in ``comparable rural areas'' and 
that it is appropriate to consider comparability of rural areas by 
looking at the factors impacting cost and seek to identify what those 
factors might be. In addition to population density, distance to the 
nearest metropolitan area, topography, and existing infrastructure may 
impact the cost to provide telecommunications services as well. The 
Commission seeks comment on the extent to which population density, 
distance, topography, and existing infrastructure could be factors to 
consider when determining ``comparable rural areas.'' To what extent 
may these factors affect rates for telecommunications services? Are 
there other geographic cost factors the Commission should consider that 
affect telecommunication service rates? Are there geographic cost 
factors specific to Alaska that should be considered if elected to 
establish specific rules for ``comparable rural areas'' in Alaska?
    9. The Commission seeks comment on whether establishing specific 
rurality metrics for each health care provider based on multiple 
geographic cost factors could more accurately determine

[[Page 14423]]

prices available to health care providers in rural areas. Specifically, 
the Commission seeks comment on whether measuring a combined set of 
factors such as population density, distance to a nearby urban area, 
topography, and existing infrastructure would be effective in 
establishing levels of rurality that more accurately reflect the cost 
of service. How can the Commission account for variances in health care 
providers' location and topography? Are there any other specific cost 
factors to consider based on the existing data that are more closely 
related to or affected by rurality? Finally, given the unique geography 
and topography of Alaska, are there specific cost factors that impact 
rates in Alaska only?
    10. Applying Geographic Cost Factors to Rurality Tiers. Next, the 
Commission considers whether there are methods to delineate rurality 
that are preferable to the rurality tier system based on Core Based 
Statistical Areas adopted by the Promoting Telehealth Report and Order. 
One of the primary reasons for adopting the rurality tiers in the Rates 
Database was to ensure that rates increased as the level of rurality 
increased, to reflect a presumed increase in cost of providing service 
as rurality increased. However, outputs of the Rates Database revealed 
examples of lower median rural rates in more rural tiers than in less 
rural tiers (i.e., higher rates in the Rural and Less Rural tiers than 
in the Extremely Rural and Frontier tiers), and higher median rural 
rates in less rural tiers than in more rural tiers (i.e., lower rates 
in the Extremely Rural and Frontier tiers than the Rural and Less Rural 
tiers). These anomalies raise questions about whether the rurality 
tiers based on Core Based Statistical Areas accurately group comparable 
rural areas for purposes of determining telecommunications rates. The 
Commission seeks comment on whether the current rurality tiers used to 
determine ``comparable rural areas'' are appropriate for determining 
accurate and reasonable rates. Despite the anomalies, did the Rates 
Database deliver rates that are ``rates for similar services provided 
to other customers in comparable rural areas in that State'' as 
required by the Telecommunications Act of 1996? Could the current 
rurality tiers be improved by subdividing them? If so, how could the 
Commission do so in an objective and administratively feasible way? Are 
there other explanations besides the classification of rurality tiers 
for these anomalies? For example, would these anomalies disappear or 
dissipate if the Commission had better controls for different services 
or for different service level agreements?
    11. With respect to anomalies in Alaska, rates for the Rural tier 
are consistently higher than rates in the Extremely Rural tier due 
primarily to the state's Census Bureau categorizations. Most of Alaska 
is not part of a Core Based Statistical Area (CBSA) and therefore 
Extremely Rural. Juneau and Ketchikan are located in a CBSA and are 
defined as Rural under Telecom Program rules because they do not 
contain any Urban Area with a population of 25,000 or greater. However, 
these areas are isolated in the southeast portion of Alaska, are not 
necessarily connected by roads despite being located in a CBSA, and are 
therefore relatively expensive to serve. Would adjusting rurality tiers 
so that health care providers located in the Juneau and Ketchikan CBSAs 
fall into the Extremely Rural tier resolve some anomalies? Are there 
other adjustments that can be made to address this issue?
    12. The Commission also seeks comment on replacing the current 
rurality tiers with alternative methods of determining degrees of 
rurality, such as the Index of Relative Rurality (IRR). The IRR is a 
``continuous, threshold-free, and unit-free measure of rurality.'' IRR 
addresses degrees of rurality instead of simply designating an area as 
urban or rural. The IRR focuses on four dimensions of rurality, which 
include size, density, remoteness, and built-up area, and has three 
major advantages over typology-based rurality measures. First, it is 
``spatially flexible'' in that it is not confined to a particular 
spatial scale such as counties but can be designed for any spatial 
units such as townships or census tracts; second, it is a relative and 
continuous measure and thus treats rurality as a concept rather than a 
traditional classification; and lastly it is easier to analyze than 
threshold-based typologies. The Commission seeks comment on using the 
IRR to replace the current rurality tier system. What would be the 
advantages and disadvantages of using the IRR to evaluate rurality? 
What groupings of IRR scores would be appropriate for evaluating 
rurality tiers? Is the IRR spatially flexible enough to account for 
Alaska's unique geography? If not, do commenters have specific ideas on 
how the Commission might build off the IRR to accommodate Alaska?
    13. Alternatively, would the Rural Urban Commuting Area (RUCA) 
codes be preferable to determine rurality tiers? The RUCA codes are a 
census tract-based classification scheme that uses measures of 
population density and urbanization in combination with commuting 
information to characterize all of the nation's census tracts regarding 
their rural and urban status and relationships to one another. One of 
the reasons the Commission stopped using FORHP's definition of ``rural 
area'' in 2004 was because part of FORHP's methodology changed to 
incorporate the RUCA methodology which at the time failed to 
incorporate the most recent census data. Since their creation, the RUCA 
codes have been updated several times with new Census data. The most 
recent RUCA codes were created by the FORHP, the University of North 
Dakota Center for Rural Health, and the United States Department of 
Agriculture (USDA) Economic Research Service and are based on data from 
the 2010 decennial census and the 2006-10 American Community Survey. 
The Commission seeks comment on using the RUCA codes to replace the 
current rurality tiers. What would be the advantages and disadvantages 
of using the RUCA codes to evaluate rurality? Are the RUCA codes 
granular enough for Alaska given its unique geography and topography?
    14. The Commission seeks comment on other known methods that could 
more accurately determine degrees of rurality. Are there any other 
objective and administratively feasible methodologies that should be 
considered? If so, are these methods appropriate for all states, 
including Alaska? If the Commission maintains the current definition of 
``rural'' for eligibility purposes, how will these new methods interact 
with the current definition? For example, are there any scenarios in 
which a particular area is rural under the current definition but would 
not be sufficiently rural under one of these other methodologies to 
receive funding? The Commission asks that commenters describe alternate 
ways to evaluate rurality and, when possible, provide data showing 
whether these alternatives accurately reflect geographic cost factors 
in telecommunications rates.
    15. The Commission also seeks comment on whether to eliminate 
rurality tiers altogether and establish rates based on an applicant's 
census tract information. Examples of such information could include 
population and business density, measures of terrain and topography 
such as elevation and slope, measures of distance from urban areas, 
percentage of built-up areas, etc. Such an approach would be similar to 
the IRR approach, but instead of producing an index, would directly 
estimate the impact of various dimensions of rurality on

[[Page 14424]]

service prices in a given location. The Commission seeks comment on the 
feasibility of using specific census tract information to evaluate 
rurality and determine rates. What are the benefits of using census 
tract information to determine rates? Do commenters believe that moving 
away from rurality tiers and relying on census-tract information would 
more accurately determine reasonable rates? If so, should such an 
approach be incorporated into the nationwide pricing model that seeks 
comments.? The Commission also seeks comment on how to use specific 
census tract information to determine rates if the Commission adopts 
such an approach. Should the Commission average rates among all 
``rural'' census tracts within a state to determine rates? Should the 
Commission group census tracts that have similar data to evaluate 
rurality without using specific tiers? How should the Commission group 
the data? The Commission encourages commenters to suggest creative ways 
to evaluate rurality and establish rates based on an applicant's census 
tract information.
    16. Alaska-only Rurality Tiers. In light of Alaska's unique 
topography, the Commission seeks comment on whether establishing 
distinct tiers for Alaska is appropriate for purposes of the Telecom 
Program. If the Commission adopts one of the alternate methods, will it 
be appropriate for Alaska, even if it is functional for other states? 
Should an entirely different method be implemented for evaluating 
rurality for Alaska than for other states? What specific dimensions of 
geography and rurality are unique to Alaska that would need to be 
accounted for in any Alaska-specific methodology? In the 2019 Promoting 
Telehealth Report and Order, the Commission created a Frontier tier 
unique to Alaska, comprised of off-road areas in the state. The 
Commission declined, however, to further sub-divide off-road 
communities in Alaska for determining comparable rural areas. The 
Commission recognizes that, even in Alaskan off-road communities, 
different levels of communications infrastructure may exist resulting 
in different costs for providing and obtaining services. If the 
Commission maintains the current rurality tiers, should the Commission 
further sub-divide Alaskan off-road areas to capture these variances in 
service deployment? If so, what methodology could be used that is 
objective, administratively feasible, and transparent?
    17. Funding Prioritization. In the event the Commission adopts a 
new rurality tier system or an alternative to rurality tiers 
altogether, the Commission seeks comment on whether the new system 
should also be used for prioritization. When program demand exceeds 
available funding, the Commission's current prioritization system 
prioritizes health care providers in Medically Underserved Areas and 
health care providers in more rural rurality tiers using the 
Commission's current methodology for evaluating rurality. If the 
Commission changes the current methodology for evaluating rurality, 
should that new methodology replace the current rurality tiers in the 
prioritization system? Commenters that oppose using the same 
methodology for evaluating rurality and prioritization should provide 
viable alternative ways to prioritize funding.
    18. Categorizing service technologies purchased by health care 
providers. The Commission examines the categorization of services 
supported by the Telecom Program. The Commission first seeks comment on 
approaches to analyzing existing data that would result in more 
accurate urban and rural rates. The Commission then seeks comment on 
potential changes to the Telecom Program's categorization of service 
technologies that could further improve the accuracy of urban and rural 
rates in future funding years.
    19. The Telecom Program subsidizes the difference between the urban 
rate for a service in the health care provider's State, which must be 
``reasonably comparable to the rates charged for similar services in 
urban areas in that State,'' and the rural rate, which is ``the rate 
for similar services provided to other customers in comparable rural 
areas'' in the State. Correct categorization of ``similar services'' is 
therefore critical to ensuring that the rates charged to rural health 
care providers and supported by Telecom Program funds align with the 
cost of delivering those services and that health care providers 
receive equitable, consistent funding. Accurate categorization also 
helps to eliminate the potential for waste and gamesmanship in the 
Program by, for example, removing incentives for service providers to 
mischaracterize lower cost services as similar to higher cost services 
in order to increase Telecom Program funding.
    20. The Commission currently analyzes the similarity of services 
based on whether the services are ``functionally similar as viewed from 
the perspective of the end user,'' rather than assessing similarity 
based on technical similarities of the technologies used to deliver 
service. If a rural health care provider purchases a service that 
provides a similar user experience to another service, then regardless 
of underlying media, protocol(s), implementation, or commercial sales/
product name, the Commission considers the two services to be 
functionally similar. For example, if a rural health care provider 
purchases a satellite service, that service is functionally similar to 
a DS3 service or Ethernet service from the health care provider's 
perspective because the services offer features and functions that 
provide a similar user experience. The Commission proposes to maintain 
this approach of viewing functional similarity from the perspective of 
the end user for the purpose of determining urban and rural rates, 
while also seeking comment about improving the service details 
incorporated into the rate determination consideration, and the 
Commission seeks comment on this proposal.
    21. In the Promoting Telehealth Report and Order the Commission 
decided to consider services to be ``similar'' if the advertised speed 
is 30 percent above or below the speed of the service requested by the 
health care provider. The Commission explained that a 30 percent range 
would ``provide a sufficiently large range of functionally similar 
services to enable reasonable rate comparisons.'' The Commission also 
recognized that factors other than bandwidth such as reliability and 
security are important to accurately characterizing the functional 
similarity of services and that these enhanced functions may not be 
part of a best efforts service. The Commission therefore instructed 
Universal Service Administrative Company (USAC) to take into account 
whether a health care provider requests dedicated service or other 
service level guarantees when grouping similar services for the purpose 
of rate determination. The Commission further instructed USAC to expand 
the scope of its inquiry into similar services beyond 
telecommunications services to include all services that are 
functionally similar from an end user perspective regardless of 
regulatory classification. The Commission proposes to continue this 
technologically-agnostic approach because it is consistent with 
determining functional similarity from the end user perspective. The 
Commission seeks comment on maintaining this general approach, 
including considering advertised speeds within a 30 percent range to be 
similar.
    22. Existing service category data. The Commission seeks comment on 
how to conduct more effective analysis of Telecom Program data which 
has been previously reported, or will be reported

[[Page 14425]]

using the current FCC Form 466, to calculate more accurate urban and 
rural rates. In the Promoting Telehealth Report and Order, the 
Commission did not elect to consider FCC Form 466 data beyond 
bandwidth, whether the service is dedicated or best efforts, and 
whether upload and download speeds are symmetrical or asymmetrical when 
grouping services within each rurality tier in a State. Is there other 
data currently available to USAC, or other data that could be provided 
to USAC such as contract term or volume discounts, that should be 
factored into rate determination to improve the accuracy of urban and 
rural rates? Are there adjustments to how USAC groups similar services 
or otherwise applies data from FCC Form 466 to rate determinations that 
would improve the accuracy of urban and rural rates?
    23. The Commission also seeks comment on recategorizing or refining 
categorizations for existing Telecom Program service data so that the 
data more accurately identifies the services being purchased by rural 
health care providers. The Commission's initial analysis of FCC Form 
466 submissions reveals that services reported as ``Ethernet'' or 
``MPLS'' that have similar bandwidths frequently have significantly 
different monthly rates that likely reflect a wide range of customized 
bundled services and functionalities that can directly impact total 
costs. These differences are likely attributable in part to overly 
broad terminology. Telecom Program forms treat multi-protocol label 
switching (MPLS) as a service when in fact MPLS is a networking 
technique for routing packets on the internet. There is no standardized 
meaning of the commercial term ``MPLS,'' and therefore it is possible 
for service providers to label very different services as MPLS. 
Furthermore, service providers use a wide variety of pricing models for 
``MPLS'' service that make it complicated to compare offerings. 
Similarly, ``Ethernet'' services are often generic constructs used to 
create a broad range of services. As a result, it is likely that some 
of the significant differences in monthly rates for ``Ethernet'' 
services with comparable bandwidths are due to significant differences 
in the actual services purchased. A health care provider that selects 
MPLS or Ethernet service may choose specific security, network 
management systems, performance guarantees, or technical support that 
in sum cost significantly more than the basic transmission component of 
the telecommunications service. Factors beyond the components of the 
selected service, such as geography, distance, and local exchange 
carrier channel termination rates can impact the rate for end-to-end 
service. These non-bandwidth related components of the delivered 
service may be a significant source of the irregular behavior of the 
Rates Database, creating anomalies from an inappropriate grouping of 
rates within a bandwidth or rurality tier that reflect services that 
are not functionally similar despite having similar bandwidths. 
Consequently, the medians calculated using these groupings are likely 
to be unreliable. The Commission seeks comment on this analysis. To the 
extent these non-bandwidth components impact rates, how should the 
Commission reconcile its definition and treatment of end-to-end rates?
    24. Revision to service categories. The Commission seeks comment on 
updating the Telecom Program's categorization of services to more 
accurately reflect the functionality and cost of services purchased by 
rural health care providers by incorporating certain key data points 
into the similar service determination. For example, one rural health 
care provider might purchase point-to-point transmission services only, 
while another's purchase might include, at an additional charge, 
network management services. Failure to control for such a difference 
could lead to price anomalies. A more rural low-bandwidth transmission 
only service could be less expensive than a less rural higher-bandwidth 
service that includes substantial network management. Similarly, 
Commission staff's analysis of service and rate data submitted by rural 
health care providers in recent Telecom Program funding years indicates 
that many rural health care providers choose to purchase 
telecommunications services with different service level agreements 
(SLAs). Distinguishing between basic transmission and enhanced services 
and between services with different service level agreements should 
more accurately group similar services from the perspective of the 
functionality delivered to the end user.
    25. One potential approach to service categorization could be to 
first separate data transmission from more comprehensive service 
offerings and then collect a limited, defined set of data points about 
the service purchased to enable similar services to be more accurately 
grouped together when determining rural rates. Different services would 
be comparable if they provide a comparable user experience, regardless 
of each service's underlying transmission media, protocol(s), 
implementation, or commercial sales/product name. This approach would 
classify services based upon functionality of the service provided, 
regardless of its commercial name. For example, rural health care 
providers completing the FCC Form 466 could identify their service 
functionality based on three factors: system type, system scope, and 
additional services. System type covers whether the network is a 
private network, a managed performance network, or a best effort public 
network. System scope covers network endpoints, i.e., how many separate 
facilities are to be connected, and if more than one endpoint, whether 
there is a hybrid mix of transmission media (fiber, microwave, 
satellite) or service (MPLS, SD-WAN, Ethernet). For each endpoint the 
following factors would be considered: Connectivity, i.e., whether it 
is point-to-point (1:1), point-to-multipoint (1:N), and multipoint-to-
multipoint (N:N); facility type, i.e., copper, cable, microwave or 
other terrestrial wireless, fiber and satellite; bandwidth/speed, 
separately for download and upload; and billable distance if 
applicable. Additional services would allow for reporting of premises 
equipment (managed router service administration); priority maintenance 
support; security; redundancy/diversity options; availability; failover 
options; overflow options; data CAP; peak/non-peak options; VoIP; and 
service level agreements.
    26. The Commission seeks comment on questions related to this 
approach. When considering service level agreements, what should be the 
focus? For example, is it enough to distinguish from all other 
contracts, contracts that guarantee a minimum amount of downtime and 
provide liquidated damages or penalty payments when that guarantee is 
violated? If so, should the Commission distinguish between different 
downtime minimums and how? If not, what other service level guarantees 
should be taken into account? Should the Commission ignore any service 
level guarantees which do not come with material liquidated damages or 
penalty payments?
    27. The Commission also welcomes recommendations for alternative 
approaches to service categorization. Proponents of an alternative 
approach should provide an analysis that seeks to demonstrate why their 
preferred approach will yield more accurate rural and urban rates than 
those produced by the Rates Database prior to its waiver. Commenters 
should also discuss whether their alternative approach would be 
consistent with viewing the

[[Page 14426]]

similarity of services from the end user perspective as proposed.
    28. Improving reporting requirements and data quality. The 
Commission seeks comment on proposed revisions to Telecom Program forms 
and corresponding USAC online portals to improve the quality and 
consistency of Telecom Program data. The Commission seeks comment on 
revisions to the FCC Form 466 as well as any other RHC Program forms, 
including Healthcare Connect Fund Program (HCF Program) forms, that 
would allow the collection of more detailed service information to 
allow for more accurate comparisons of rates for similar services 
consistent with the revised rurality classifications and service 
categories proposed in the FNPRM. The Commission also seeks general 
comment on the data collected for the Telecom Program. Is there 
additional data that could improve the accuracy of urban and rural rate 
determinations? Is there additional data that would be helpful to 
ensure program integrity and to minimize waste, fraud, and abuse? Is 
any data collected on FCC Form 466 unnecessary for evaluating the 
efficacy of Telecom Program expenditures? How should the Telecom 
Program balance the importance of data quality with concerns about 
overburdening health care providers with reporting requirements? The 
Commission also seeks comment on adding a process for updating, 
correcting, or removing unreliable or inappropriate rate observations. 
Should a process exist for validating the rate data that is included in 
the Rates Database, and if so, what should it entail?
    29. The Commission also seeks comment on revisions to current 
sources of urban and rural rates that are used to populate the rate 
determination mechanism, be it a database or some alternative. In the 
Promoting Telehealth Report and Order, the Commission established a 
``broadly inclusive'' list of sources for urban and rural rates 
including rates from ``service providers' websites, rate cards, 
contracts such as state master contracts, undiscounted rates charged to 
E-Rate Program applicants, prior funding years RHC Program pricing 
data, and National Exchange Carrier Association (NECA) tariff rates.'' 
The Commission seeks comment on the benefits and drawbacks of 
continuing to compile rates from multiple sources as opposed to 
limiting rate data to rates paid by disbursements from the Telecom 
Program. Does relying on a large sample of rates actually available in 
the market increase the accuracy of median rates? Would limiting the 
relevant rates to those submitted by health care providers on FCC Form 
466 result in too narrow a sample that is skewed by the lack of 
competition in many rural areas? How should the Commission balance the 
benefits of increasing the pool of sample rates with concerns about 
whether services purchased by other commercial customers are comparable 
to those purchased by health care providers participating in the 
Telecom program? If FCC Form 466 reporting requirements are revised to 
better identify the service being offered, will it still be feasible to 
compile rates from other sources that do not have similar reporting 
requirements? The Commission seeks comment on whether, if continuing to 
collect data from a large range of sources, statistical tools could be 
used, such as indicator variables in the proposed nationwide regression 
model, to control for data sourcing.
    30. The Commission also seeks comment on whether there is certain 
information regarding the technical details or components of 
telecommunications services that rural health care providers cannot 
access or lack the technical expertise to report to USAC and should 
therefore be reported by service providers. How can the Commission 
ensure that health care providers, who may not have technical expertise 
over the telecommunications services they receive, accurately report 
the services they receive in the RHC Program? Should the Commission 
require service providers to submit service information to USAC? How 
should the Commission balance the value of detailed service data with 
the importance of minimizing burdens on health care providers and 
service providers, and also avoiding redundancies in data submissions?
    31. Selecting a rate determination mechanism. The Commission seeks 
comment on the most effective method for determining urban and rural 
rates in an objective, transparent manner that can be uniformly applied 
to all Telecom Program applications. The Commission also seeks comment 
on whether, and if so how, to factor market competition into the rate 
determination mechanism. Are there areas where rural healthcare 
providers that receive Telecom Program support have competing service 
alternatives sufficient to enable the Commission to rely on competition 
to establish reasonable rural rates? If an area has multiple service 
providers but only one bidder offers to provide service to the rural 
healthcare provider, should a rate determination mechanism consider the 
market to be competitive? How should the rate determination mechanism 
factor in rates for deregulated commercial services that may be similar 
to services sought through the Telecom Program but are not publicly 
available?
    32. Modifications to the current urban and rural rates database. 
The Commission first seeks comment on whether to retain the requirement 
that health care providers and service providers use a modified version 
of the Rates Database to determine urban and rural rates when the 
current waiver expires. Pursuant to the Nationwide Rates Database 
Waiver Order, DA 21-394, Sec. Sec.  54.604(a) and 54.605(a) of the 
Commission's rules are waived for funding year 2021 and funding year 
2022, delaying implementation of the Rates Database. Should the 
Commission revise the Rates Database to incorporate the modified 
rurality classifications and service categorizations? Will the 
revisions to those key data inputs be sufficient to resolve the 
anomalies that resulted in the waiver?
    33. The intent of the rate determination process is to establish 
transparent, predictable, easy-to-administer rural and urban rates that 
also fulfill the requirements of section 254 of the Act so that Telecom 
Program subsidies result in rural health care providers paying rates 
that are reasonably comparable to rates for functionally similar 
services in urban areas of the health care provider's state and 
universal service support to service providers that is based on ``rates 
for similar services provided to other customers in comparable rural 
areas.'' The Commission seeks comment on whether modifications could be 
made to a future iteration of the Rates Database to enhance 
transparency, predictability, or efficient administration.
    34. Wireline Competition Bureau's (Bureau) waiver of the Rates 
Database was due primarily to significant anomalies in median rural 
rate outputs, specifically instances where median rural rates were 
lower in more rural areas of state when compared to less rural areas 
and several instances where median rates for higher bandwidth services 
were lower than lower bandwidth services in comparable areas. If more 
effective collection of rates and service descriptions significantly 
reduces the anomalies found in the current approach, the Commission 
seeks comment on whether the resulting Rates Database, or some similar 
set of rate comparisons, should be used for setting urban and rural 
rates. The Commission seeks comment on whether the modifications to 
rurality tiers and service categorizations discussed in the FNPRM, or 
any further modifications

[[Page 14427]]

identified by commenters, will sufficiently address those anomalies.
    35. The Commission also seeks more general comment on the Rates 
Database. What are the overall benefits and drawbacks of the Rates 
Database? How, if at all, have those benefits and drawbacks changed 
since the Commission adopted the Rates Database in the Promoting 
Telehealth Report and Order? Is a Rates Database framework the best 
solution for Alaska? Are there alternative methods for determining 
rates in Alaska that would be objective, independent, and 
administratively efficient?
    36. In the event that the Rates Database is retained for future 
funding years, the Commission seeks comment on whether to take further 
action or rescind the guidance previously issued to USAC by the Bureau 
regarding administration and implementation of the Rates Database. The 
Commission seeks comment on further guidance or clarifications that 
would further the goal of promoting transparency and predictability in 
the rates determination process. Are there additional changes to the 
Rates Database that might resolve the anomalies the FNPRM? Would 
determining rates using the average, rather than the median, of inputs 
provide sufficient and predictable funding?
    37. Alternative rate determination methods. The Commission seeks 
comment on potential alternative rate setting mechanisms to the Rates 
Database. The Commission seeks comment on the benefits and drawbacks of 
these alternative approaches.
    38. Pricing model with nationwide rate data. The Commission seeks 
comment on creating a nationwide regression model to estimate rural and 
urban rates and determine Telecom program reimbursement on a state-by-
state basis. As with the Rates Database, with a regression model, 
health care providers would enter information about the services for 
which they seek support. A regression model would estimate the rural 
and urban rates for Telecom Program-eligible services as determined by 
the characteristics that are reasonably expected to affect those rates. 
While the Commission does not know exactly how providers, including 
providers of Telecom Program services, set prices, certain 
characteristics are expected to influence a service's price, known as 
explanatory variables for the purposes of this analysis. For example, 
based on data submitted by health care providers on the FCC Form 466, 
the Commission has an indication of the service type (e.g., Ethernet, 
MPLS, satellite), bandwidth, the health care provider's location, and 
whether there are service-level agreements associated with the service 
contract. Using the same data that is used to construct the Rates 
Database or any new data that may be collected, a Telecom Program 
regression model would analyze how these explanatory variables 
influence price, and it would then estimate the rural and urban rates 
for the particular service purchased by a health care provider in a 
particular state. The Regression Model Technical Analysis, provides 
details on the relationship between explanatory variables and the 
estimated rates (the outcome variables). The Commission seeks comment 
on the regression model analysis.
    39. Model inputs. The Commission seeks comment on the appropriate 
set of explanatory variables for use in such a model. The data used to 
construct the current Rates Database contain a range of information 
about both the services that are eligible for Telecom Program support 
and related services. The Rates Database categorizes services by three 
sets of characteristics: bandwidth, rurality tier, and the presence or 
absence of a service level agreement (i.e., whether the service was 
dedicated or best efforts). A regression model would account for the 
same or an expanded set of characteristics by analyzing a large number 
of existing rural and urban rates. The Commission seeks comment on 
using the same characteristics from the Rates Database as explanatory 
variables in a regression model. The Commission also seeks comment on 
whether it is beneficial to identify and include in the regression 
model a broader set of characteristics that are likely determinative of 
rates. The Commission anticipates that using an expanded list of 
characteristics would be superior to a model that only relies on 
bandwidth, rurality tier, and presence or absence of a service-level 
agreement, because staff review of the data used to construct the Rates 
Database suggests that other characteristics could significantly 
contribute to the variation in rates. Further, it is possible to revise 
the existing set of explanatory variables to better specify the 
relevant factors that drive rates. For example, modifications to 
rurality tiers and service categories on which the Commission seeks 
comment in the FNPRM could improve the model estimates by improving the 
quality of those key variables and strengthening their relationship to 
how services are priced.
    40. A regression model could also be applied to a subset of the 
data used to construct the Rates Database based on the underlying 
source of data (for example, the FCC Form 466 versus E-Rate forms), or 
alternatively, it could easily account for new data that are 
subsequently collected. The Commission seeks comment on the best 
immediately available data that should be included in a regression 
model if the Commission were to adopt such an approach. Should the 
Commission include the universe of rates used to determine medians in 
the Rates Database? Should records used in the regression model be 
limited to RHC Program rates from FCC Forms 466? How many years of rate 
data should the regression analysis include? Regression models can 
control for relatively simple time trends. For example, including data 
year as an explanatory variable can capture price movements from one 
year to another. In such cases, using all the available years of data 
is to be preferred to excluding some of them. However, ensuring time 
effects are appropriately modeled becomes increasingly difficult when 
the effect of other explanatory variables on prices also varies with 
time. In such instances the use of old data may confound, rather than 
reveal, more recent relationships. The Commission also seeks comment on 
the type of data to include in a nationwide regression analysis going 
forward. Would newly collected data stemming from changes to reporting 
requirements proposed in the FNPRM improve the regression model 
results? What other data should the Commission consider that could 
improve the model's ability to estimate rural and urban rates? Beyond 
conventional regression analysis, should other data-driven approaches 
be considered, such as machine learning?
    41. State-specific analysis. Section 254(h)(1)(A) of the Act 
requires that urban rates be ``reasonably comparable to rates charged 
for similar services in urban areas in that State'' and that rural 
rates be ``rates for similar services provided to other customers in 
comparable rural areas of the state.'' The Commission seeks comment as 
to whether it would be consistent with the statute to use nationwide 
inputs as a part of a regression analysis that determines the urban and 
rural rates within a state. A nationwide regression model would 
distinguish the independent effects of a range of explanatory variables 
that influence rates in a statistically coherent fashion, while taking 
into account the influence of state-specific factors that are not 
accounted for by the other explanatory variables. Thus, if rates in a 
given state are higher than other states, the regression model would 
account for

[[Page 14428]]

these differences. Furthermore, additional local factors that influence 
rates beyond those used by the Rates Database, such as the terrain of a 
given location or existing network density, could be included within 
the regression model to further refine state-by-state results.
    42. A regression model considers how any explanatory variable the 
Commission could measure (service type, bandwidth, rurality, state, 
etc.) affects rates holding the other variables constant. Such an 
approach separates out the independent effect of each variable on the 
rate. Thus, the Commission can account for effects on rates that are 
constant within a state but vary among states, such as state laws that 
affect construction, labor or other costs, or unique geographic or 
demographic conditions, by using the state as an explanatory variable 
in the regression model.
    43. In addition, a regression model gains accuracy with more data. 
Knowledge about how bandwidth or service type affect rates in one state 
can assist the model in determining how these same factors affect rates 
in another. Could the use of nationwide data in a regression framework 
improve the Commission's capacity to set reasonably comparable rates 
for similar services in any state? The Commission also seeks comment on 
how to account for factors that are unique to each state.
    44. Rurality-based discount tiers. Alternatively, the Commission 
seeks comment on whether to adopt discount rates based on the rurality 
of the health care provider for the Telecom Program as a way to satisfy 
the statutory requirements for establishing rates under section 
254(h)(1)(A) of the Act. Under a discount rate system, the amount of 
support would be a percentage of the price of the service listed in the 
contract, and the percentage paid by the Universal Service Fund would 
increase as rurality increases. In the E-Rate program, schools and 
libraries may receive discounts ranging from 20 to 90 percent of the 
pre-discount price of eligible services and equipment based on 
indicators of need. The Commission seeks comment on whether an 
analogous approach establishing discount tiers based on the health care 
provider's rurality would be an effective, reasonable, and workable 
method of determining rates for the Telecom Program.
    45. The Commission seeks comment on whether a discount rate 
approach could meet section 254(h)(1)(A) of the Act's requirement that 
telecommunications carriers provide services to rural health care 
providers at ``rates that are reasonably comparable to rates charged 
for similar services in urban areas in that State.'' Historically, the 
Commission has implemented this statutory mandate by allowing health 
care providers to report their exact urban rates on their own. Section 
254(h)(1)(A) of the Act, however, does not require that the rate 
charged to the health care provider be equal to the rate charged for 
similar services in a state. It merely requires that the rate charged 
to the health care provider be ``reasonably comparable'' to that rate. 
Section 254(h)(1)(A) of the Act also requires that the level of support 
be the difference between rates charged in urban areas and ``rates for 
similar services provided to other customers in comparable rural areas 
in the state.'' Would the amount that a health care provider pays in a 
discount rate system satisfy the requirements under section 
254(h)(1)(A) of the Act given that the costs incurred by the health 
care provider under such a system would change depending on the price 
of the service?
    46. The Commission also seeks comment on the advantages and 
disadvantages of a discount rate system in the Telecom Program. Under 
current program rules, the health care provider does not receive any 
financial benefit from a reduction in its rural rate because it pays 
the same urban rate regardless of what the rural rate is. Would a 
discount rate system incentivize healthcare providers to search for or 
negotiate lower priced contracts? Would this mechanism consequently 
apply competitive pressure on telecommunications carriers to submit 
more competitive bids during the bidding process?
    47. The Commission adopted the E-Rate program percentage discount 
mechanism as recommended by the Joint Board on Universal Service. The 
Joint Board's recommendation was based on its finding that percentage 
discounts would ``establish incentives for efficiency and 
accountability'' by both requiring schools and libraries to pay a share 
of the cost and encouraging schools and libraries to seek out the 
lowest pre-discount cost in order to reduce their post-discount cost. 
However, the Joint Board recognized the importance of focusing the 
highest discounts on the most disadvantaged schools and libraries and 
set discounts for those schools and libraries at 90 percent. The 
Commission seeks comment on potential discount percentages for the 
Telecom Program as well as whether discount percentage tiers could be 
determined strictly by the health care provider's rurality or if other 
data points should factor into discount tier determination. What level 
of discount would be necessary to ensure reasonable comparability 
considering the very high cost of services in remote areas, 
particularly regions of Alaska currently classified as Frontier, and 
the limited resources of many rural health care providers? Due to the 
unique challenges that Tribal health care providers face, should Tribal 
health care providers receive a higher discount rate than non-Tribal 
providers in comparable rural areas? Would providing a higher discount 
rate for Tribal health care providers or considering factors other than 
rurality in determining discount rates comply with section 254(h)(1)(A) 
of the Act? Are there any other considerations beyond rurality that 
should be factored into a discount tier approach?
    48. Cost curves. The Commission also seeks comment on whether 
independent, reliable cost curves might be used in a future rates 
determination process to account for the relationship between bandwidth 
and rates. Although rates generally increase as bandwidth increases if 
all other factors are unchanged, cost on a per megabit per second basis 
generally decreases as bandwidth increases. A pricing curve shows how 
the relationship between cost and bandwidth changes as bandwidth 
increases. Using a pricing curve might make it possible to increase the 
sample size of inputs that are used to calculate the rates used to 
determine support in the Telecom Program beyond inputs 30 percent above 
or below the speed of the requested service, thereby improving 
reliability. The Commission could use the pricing curve to establish a 
baseline per megabit per second rate for inputs consisting of rates 
that are actually charged, use those inputs to calculate a per megabit 
per second rate, and then extrapolate the rate for the requested 
bandwidth with the pricing curve. This option would not be viable 
without an independent, pricing curve that accurately reflects the 
relationship between bandwidth and price and can be verified by 
interested parties. What, if any, independent cost curves reflect the 
relationship between bandwidth and price? Do these cost curves 
accurately reflect the relationship between bandwidth and price across 
all parts of the country? Would a single cost curve be appropriate for 
all technologies, or does the relationship between bandwidth and cost 
vary depending on the technology used to deliver the service? Would a 
single nationwide cost curve produce accurate rates across all 
geographies? Would the unique

[[Page 14429]]

geographic characteristics of Alaska require a separate cost curve? 
Would the use of a cost curve allow for support that is ``reasonably 
comparable to rates charged for similar services'' in urban areas? What 
other aspects of the use of a cost curve should the Commission 
consider?
    49. Other potential rate determination methods. In addition to the 
alternatives, the Commission seeks comment on any other alternative 
rate determination methods that would increase rate transparency while 
ensuring program integrity and promoting program administration. SHLB 
suggested that the Commission change the ``amount of the subsidy in the 
Telecom Program from 100 percent of the difference between the urban 
and rural rate to 95 percent of the difference between the urban and 
rural rate,'' while requiring health care providers to pay the 
remaining five percent. SHLB claimed at the time that such an approach 
``would ensure that HCPs are price sensitive to the total cost of the 
services.'' The Commission seeks comment on such an approach. If the 
Commission adopted such an approach, would five percent be an 
appropriate portion of the urban/rural rate difference for health care 
providers to pay, or should another percentage be adopted? Should 
health care providers always pay the same percentage of the urban/rural 
rate difference or should the percentage vary depending on the 
circumstances of the health care provider? If the latter, how should 
the Commission determine when and how the percentage varies? Should the 
Commission consider capping the total amount that a health care 
provider would pay under such a system? Would this approach be workable 
for health care providers in Alaska given the higher costs of providing 
service in that state? In the 2019 Promoting Telehealth Report and 
Order, the Commission declined to follow this approach, finding that 
``it would be inconsistent with the goal of section 254'' of the Act. 
Are there reasons for the Commission to reconsider that analysis?
    50. Potential transition period. The Bureau's waiver of the use of 
the Rates Database expires at the end of funding year 2022 and the 
current Telecom Program rules and forms will govern the rate 
determination process and Telecom Program data collection at least 
through funding year 2022 and potentially further into the future 
depending on rulemaking and implementation timelines. The Commission 
acknowledges that competitive bidding for funding year 2023 is 
approaching and may begin as early as July 1, 2022. The Commission 
seeks comment on how to manage this transition period. To the extent 
that the new rules established for determining urban and rural rates 
are not in effect in time for use in funding year 2023, the Commission 
seeks comment on how to determine urban and rural rates during any 
transition period that may occur. Should the current waiver of 
Commission rules governing the Rates Database be extended to permit 
time for implementation of new rates determination rules and any 
associated modifications to RHC Program forms and systems? Are there 
viable alternatives to extending the waiver? If the Commission 
implements changes to Telecom Program rules and forms, should the Rates 
Database waiver also be extended for an additional funding year so that 
USAC can collect one funding year of data under the new rules to 
repopulate the Rates Database? If the Commission retains the Rates 
Database, should the reinstated Rates Database continue to rely on rate 
data collected under previous Telecom Program rules? Should older rates 
be phased out gradually?
    51. Reforming the Internal Cap on Multi-Year Commitments and 
Upfront Payments. In 2018, the Commission increased the annual RHC 
Program funding cap to $571 million, annually adjusted the RHC Program 
funding cap to reflect inflation using the Gross Domestic Product 
Chain-type Price Index (GDP-CPI), beginning with funding year 2018, and 
established a process to carry-forward unused funds from past funding 
years for use in future funding years. In the 2019 Promoting Telehealth 
Report and Order, it further directed the Bureau to adjust the $150 
million funding cap on multi-year commitments and upfront payments in 
the HCF Program (internal cap) pursuant to the same index established 
for adjusting the overall RHC Program cap, the GDP-CPI inflation index. 
Any increases to the internal cap is accounted for within the overall 
RHC Program cap, i.e., an increase in the internal cap on multi-year 
commitments and upfront payments will not increase the overall RHC 
Program cap. In each of the funding years 2018, 2019, and 2020, gross 
demand for multi-year commitments and upfront payments exceeded the 
$150 million internal cap, and the Commission took actions to avoid 
proration or prioritization reductions of the support for those funding 
requests. With this history in mind, the Commission proposes reforming 
the funding cap rules to more efficiently and effectively handle the 
internal cap on multi-year commitments and upfront payments in the HCP 
Program by having the internal cap apply only when overall demand 
exceeds available funding and, if it does apply, targeting funding for 
equipment and services needed in the funding year at issue.
    52. First, to promote the efficiency of the RHC program and reduce 
delays of funding commitments, the Commission proposes amending the 
rules to limit the application of the internal cap to only funding 
years for which the total demand exceeds the total remaining support 
available. In other words, when the total support available for the 
funding year, which is the sum of the inflation-adjusted RHC Program 
aggregate cap in Sec.  54.619(a) of the Commission's rules and the 
proportion of unused funding determined for use in the RHC Program 
pursuant to Sec.  54.619(a)(5) of the Commission's rules, could satisfy 
the total demand, the internal cap would not apply. Specifically, in an 
initial filing window, the internal cap would apply only when the total 
program demand during the filing window exceeds the total support 
available in the RHC Program for the funding year. In the unlikely 
event that there is an additional filing window in a given year, and if 
the total demand during the additional filing window exceeds the total 
remaining support available for the funding year, funding for upfront 
payment and multi-year commitment requests submitted during the 
additional filing window will be capped at the remaining support 
available within the internal cap.
    53. This proposed amendment to Commission rules would preserve the 
internal cap's intended purpose of preventing multi-year and upfront 
payment requests from encroaching on the funding available for single-
year requests, because the internal cap would still apply in the same 
way as before when the total demand exceeds the total remaining support 
available. The Commission seeks comment on this proposed new rule. In 
particular, will it have any negative impact on the RHC Program? The 
Commission recognizes there might be concerns that a very large demand 
for upfront payments and multi-year commitments could consume a 
significant amount of the unused funds, and consequently could impact 
the available funding for single-year requests in the next funding year 
because there would be less unused funding available to be carried 
forward to the next funding year. The more likely result of fully 
funding a large demand for upfront payments and multi-year commitments, 
however, is that less funding would be required for

[[Page 14430]]

single-year requests in the next funding year. This would be the case 
because there likely will be fewer single-year requests in the next 
funding year given that some of the multi-year commitments may have 
their second-year requests filed as single-year requests in the next 
funding year if not fully funded. Thus, the full-funding of a large 
demand for upfront payments and multi-year commitments would be 
unlikely to cause single-year request prioritization in the next 
funding year. Nevertheless, the Commission believes that this proposed 
new rule will not result in all or most unused funding from prior 
funding years being exhausted in a single funding year because the 
Bureau, in consultation with the Office of the Managing Director, 
controls the proportion of unused funding to be used in the RHC 
Program. Are these assessments reasonable?
    54. Second, when the internal cap applies and is exceeded, the 
Commission proposes to target funding for upfront costs and the first 
year of multi-year commitment requests and to fund the second and third 
year of multi-year commitments with any leftover funding. Currently, 
when funding requests for upfront payments and multi-year commitments 
must be prioritized, requests falling in a higher prioritization 
category will be fully funded before requests in the next lower 
prioritization category can be funded, provided that there are funds 
available and the internal cap has not been reached. For example, a 
three-year multi-year commitment request in a ``Priority 2'' tier may 
have all three years' services funded while a three-year multi-year 
commitment request in a ``Priority 6'' tier may not be funded at all, 
including the first year's service.
    55. The current prioritization process will inevitably result in 
some health care providers, likely those in the lower prioritization 
categories, losing all or a portion of their requested support when the 
requests must be prioritized while other health care providers receive 
commitments for the second and third years of multi-year commitments, 
even though they could request funding for these services in the next 
two funding years. To mitigate the adverse impact on those health care 
providers, the Commission proposes amending Sec.  54.621 of the 
Commission's rules to fund upfront payments and the first year of 
multi-year commitments for all priority tiers (provided funding is 
available), and then the second and third years of the multi-year 
commitments until the internal cap is reached. This way, it is more 
likely that all health care providers that requested upfront payments 
and multi-year commitments can at least have their current funding 
year's financial need satisfied. Applicants can still request the 
second and third year funding in the next funding year. The Commission 
seeks comment on the proposed change to Sec.  54.621 of the 
Commission's rules. Alternatively, should the internal cap apply only 
to self-construction, in order to reduce its impact on other forms of 
upfront payments, such as funding for equipment, and on multi-year 
commitments?
    56. The Commission also proposes allowing the underlying contracts 
associated with those multi-year requests that are not fully funded to 
be designated as ``evergreen,'' provided that the contracts satisfy the 
criteria set forth in Sec.  54.622(i)(3)(ii) of the Commission's rules. 
The evergreen designation will exempt applicants from having to 
complete the competitive bidding process for the contracts when 
subsequently filing requests for support pursuant to these contracts. 
As a result, applicants can request multi-year commitments pursuant to 
these contracts in the next funding year without going through the 
competitive bidding process. The Commission seeks comment on this 
proposal.
    57. The proposed method for prioritizing upfront payment and multi-
year commitment requests applies when both the total support available 
and the internal cap are exceeded. Should this method also apply when 
the total support available is exceeded but the internal cap is not 
exceeded? Currently, if the total demand exceeds the total support 
available but the demand for upfront payments and multi-year 
commitments is within the internal cap, all eligible requests (single-
year requests and upfront payment and multi-year commitment requests) 
submitted during the filing window will be prioritized according to the 
priority schedule defined in Sec.  54.621(b) of the Commission's rules. 
In such a case, no separate prioritization of the upfront payment and 
multi-year commitment requests will be conducted because the internal 
cap is not exceeded. If the proposed method should also apply when the 
total support available is exceeded but the internal cap is not 
exceeded, the Commission proposes funding all single-year requests, 
upfront payments, and the first-year of multi-year commitment requests 
in accordance with Sec.  54.621(b) of the Commission's rules before 
funding the second year and third year of multi-year commitment 
requests.
    58. The Commission acknowledges that some health care providers, 
especially those in the higher prioritization categories, may be 
inconvenienced under the proposed method because they would have to 
file applications in future funding years for services that otherwise 
would fall under the second and third year of a multi-year commitment. 
The Commission tentatively concludes that this inconvenience to those 
health care providers is outweighed by the benefit to health care 
providers who, without this rule change, could have funding requests 
for upfront costs and services in the first year of a multi-year 
commitment request denied or prorated. Do program participants agree 
with this tentative conclusion? Are there any additional disadvantages 
associated with this method? Are there any other approaches to better 
handle the prioritization reduction of upfront payments and multi-year 
commitments? Rather than making these changes, would it be better to 
simply eliminate the internal cap on upfront costs and multi-year 
commitments? The Commission also seeks comment on whether the current 
funding cap is sufficient to satisfy demand now and in the coming years 
for the RHC Program, including whether the current inflation adjustment 
mechanism accurately reflects changes in the cost to provide broadband 
and telecommunications services.
    59. Harmonizing Telecom Program Invoicing With HCP Program 
Invoicing. In the 2019 Promoting Telehealth Report and Order, the 
Commission established a number of improvements to the invoicing 
process for both the HCF Program and Telecom Program. Specifically, the 
Commission established a uniform invoice filing deadline for the RHC 
Program, beginning with funding year 2020, established a one-time 
invoice deadline extension allowing service providers and billed 
entities to request and automatically receive a single one-time 120-day 
extension of the invoice deadline, and strengthened the certifications 
under both the Telecom Program and HCF Program.
    60. The Commission proposes to fully harmonize the invoicing 
process between the Telecom Program and the HCF Program. Currently, 
there are separate invoicing processes for the two programs. Under the 
Commission's rules, Telecom Program participants ``must submit 
documentation to [USAC] confirming the service start date, the service 
end or disconnect date, or whether the service was never turned on.'' 
Health care providers send this

[[Page 14431]]

information to USAC via the FCC Form 467 (Connection Certification). 
After that, USAC generates a Health Care Provider Support Schedule 
(HSS), which the service provider uses to determine how much credit the 
applicant will receive for the services. When the HSS is generated, the 
service provider reviews the HSS for accuracy and applies the credit to 
the health care provider's account. Once the credit is applied to the 
health care provider's account, the service provider can file invoices 
through USAC's online filing system, My Portal. After an HSS is issued, 
it is the responsibility of the health care provider to submit a 
request for an FCC Form 467 revision if services are delayed or not 
turned on. Absent requests for an FCC Form 467 revision, the service 
provider may submit invoices for services for the exact amount listed 
on the HSS and USAC will continue to disburse funds according to the 
schedule.
    61. The Commission tentatively concludes that HSSs compromise the 
ability of USAC to administer the Telecom Program effectively and 
efficiently because once a service provider files an invoice and 
receives a disbursement, the FCC Form 467 can no longer be revised even 
when there is a change in service. Due to this limitation, if a service 
is later disconnected or was never actually installed, the service 
provider could still submit invoices for the service (but only for the 
amount established in the HSS) and receive disbursements from USAC. In 
My Portal, when a service provider submits an invoice, the amount 
requested for disbursement is pre-populated and must match the amount 
determined in the HSS even if the actual costs reflected in the bill 
are for less than the HSS amount. In recent years, the Enforcement 
Bureau discovered instances where invoices submitted under a valid HSS 
were inaccurate. Specifically, the invoices were for disconnected or 
uninstalled services, which resulted in funding disbursements to the 
service provider that exceeded the amount of Telecom Program support to 
which it was entitled.
    62. The HCF Program uses a simpler invoicing process. To invoice in 
the HCF Program, the participating service provider and the health care 
provider must submit an invoice for broadband service using FCC Form 
463 (Invoice and Request for Disbursement Form) to USAC after services 
are provided. Once a health care provider receives a bill from its 
service provider, it can create an invoice for the services received 
using the FCC Form 463. The health care provider must certify that the 
information in the form and attachments is accurate and that it or 
another eligible source has paid the 35 percent contribution. The 
health care provider then sends the FCC Form 463 to the service 
provider for approval through My Portal. The service provider reviews 
the FCC Form 463 and certifies its accuracy, and then submits the form 
to USAC. Once USAC receives the FCC Form 463, it processes the form 
and, if approved, funds are then distributed to the service provider. 
Thus, funding is only disbursed in the HCF Program when actual costs 
are reflected in an invoice from the service provider. The process of 
confirming costs with invoices reduces the possibility of over-
invoicing because funding is disbursed only when expenses are actually 
incurred, which differs from the Telecom Program where a service 
provider may receive funds when the service was never installed or was 
disconnected.
    63. To alleviate inefficiencies and to further protect against 
waste, fraud, and abuse in the RHC Program, the Commission proposes to 
revise the rules to eliminate the use of HSSs in the Telecom Program 
and align the Telecom Program's invoicing process with the HCF 
Program's invoicing rules. Specifically, the Commission proposes to 
have participants in both programs invoice USAC for services actually 
provided using the FCC Form 463 rather than use HSSs in the Telecom 
Program. The Commission tentatively concludes that eliminating the use 
of HSSs in the Telecom Program would increase the efficient and 
effective distribution of program funds because funds would be 
distributed according to actual costs rather than according to a 
predetermined schedule. The Commission seeks comment on this tentative 
conclusion. If the proposal to eliminate HSSs is adopted, the use of 
the FCC Form 467 would be unnecessary because health care providers 
would no longer need to file the form to receive HSSs. The Commission 
therefore proposes to eliminate the use of the FCC Form 467 and retire 
the form. The Commission tentatively concludes that removing the burden 
of reporting changes in service would better protect the Telecom 
Program from waste, fraud, and abuse because it would reduce the 
possibility that service providers could over invoice USAC for services 
not provided. The Commission seeks comment on these proposals and 
invite commenters to comment on whether there is an alternative method 
for revising the invoicing rules in the Telecom Program to protect 
against waste, fraud, and abuse.
    64. Application Processing, Funding Decisions, and Appeals of 
Decisions. The Commission seeks comment on any additional measures 
beyond those already taken by the Commission and USAC that could 
further enhance the efficiency of application processing and the speed 
in which funding commitment decisions are made. To ensure distribution 
of support in accordance with program rules and to make the application 
process as smooth as possible for health care providers, in the 
Promoting Telehealth Report and Order, the Commission directed USAC to 
develop procedures for application review and to develop outreach 
materials to help participants navigate program processes. 
Additionally, USAC recently began a multi-step overhaul of its 
application platform that should make the funding review process faster 
and more efficient. Analysis conducted by Commission staff indicates 
that USAC's processing for RHC Program applications has improved in 
recent funding years. The Commission seeks comment on what additional 
steps, if any, the Commission or USAC can take to further expedite 
application processing while still protecting the integrity of the 
Fund. Should the Commission consider requiring USAC to process 
applications and make funding commitment decisions within a specified 
period of time after the close of the filing window or after the 
requisite forms and responses to USAC information requests have been 
deemed received by USAC after initial cursory review? One stakeholder 
raised concerns that program rules are unclear regarding the 
eligibility of equipment, leading to inconsistent funding decisions. If 
this is the case, in what way are program rules unclear regarding the 
eligibility of equipment and how can they be made clearer? The 
Commission also seeks comment on whether there are changes that can be 
made to the existing appeals process for appeals with USAC and the 
Commission, including whether the Commission or USAC should be required 
to act on such appeals within a specified period of time.
    65. Finally, The Commission seeks comment on whether there are 
other reforms the Commission should consider to eliminate common errors 
with the application review and decision-making process. Stakeholders 
have previously expressed concern about administrative errors on the 
part of USAC that lead to lengthy delays. Do these types of errors 
remain a concern?

[[Page 14432]]

Are there steps the Commission can take to reduce the administrative 
costs and burdens on health care providers while maintaining the 
integrity of the Fund and protecting against waste, fraud, and abuse?
    66. Digital Equity and Inclusion. The Commission, as part of its 
continuing effort to advance digital equity for all, including people 
of color, persons with disabilities, persons who live in rural or 
Tribal areas, and others who are or have been historically underserved, 
marginalized, or adversely affected by persistent poverty or 
inequality, invites comment on any equity-related considerations and 
benefits (if any) that may be associated with the proposals and issues 
discussed herein. Specifically, the Commissions seek comment on how the 
proposals may promote or inhibit advances in diversity, equity, 
inclusion, and accessibility, as well the scope of the Commission's 
relevant legal authority.

III. Procedural Matters

A. Initial Paperwork Reduction Act Analysis

    67. This document contains proposed new or modified information 
collection requirements. The Commission, as part of its continuing 
effort to reduce paperwork burdens, invites the general public and the 
Office of Management and Budget (OMB) to comment on the information 
collection requirements contained in this document, as required by the 
Paperwork Reduction Act of 1995, Public Law 104-13. In addition, 
pursuant to the Small Business Paperwork Relief Act of 2002, Public Law 
107-198, see 44 U.S.C. 3506(c)(4), the Commission seeks specific 
comment on how to further reduce the information collection burden for 
small business concerns with fewer than 25 employees.

B. Initial Regulatory Flexibility Analysis

    68. The Regulatory Flexibility Act of 1980, as amended (RFA), 
requires that an agency prepare a regulatory flexibility analysis for 
notice-and-comment rulemaking proceedings, unless the agency certifies 
that ``the rule will not, if promulgated, have a significant economic 
impact on a substantial number of small entities'' by the policies and 
rules proposed in the FNPRM. Accordingly, the Commission has prepared 
an Initial Regulatory Flexibility Analysis (IRFA) concerning potential 
rule and policy changes contained in the FNPRM. Written public comments 
are requested on this IRFA. Comments must be identified as responses to 
the IRFA and must be filed by the deadlines for comments on the FNPRM. 
The Commission will send a copy of the FNPRM, including this IRFA, to 
the Chief Counsel for Advocacy of the Small Business Administration 
(SBA). In addition, the FNPRM and IRFA (or summaries thereof) will be 
published in the Federal Register.
    69. Need for, and Objective of, the Proposed Rules. Through the 
FNPRM, the Commission seeks to improve the Rural Health Care (RHC) 
Program's capacity to distribute telecommunications and broadband 
support to health care providers- especially small, rural healthcare 
providers (HCPs)--in the most equitable and efficient manner as 
possible. Over the years, telehealth has become an increasingly vital 
component of healthcare delivery to rural Americans. Rural healthcare 
facilities are typically limited by the equipment and supplies they 
have and the scope of services they can offer which ultimately can have 
an impact on the availability of high-quality health care. Therefore, 
the RHC Program plays a critical role in overcoming some of the 
obstacles healthcare providers face in healthcare delivery in rural 
communities. Considering the significance of RHC Program support, the 
Commission proposes and seeks comment on several measures to most 
effectively meet HCPs' needs while responsibly distributing the RHC 
Program's limited funds.
    70. In the FNPRM, the Commission seeks comment on several measures 
to improve the process of determining accurate and reasonable rates in 
the Telecom Program. Specifically, the Commission seeks comment on 
various data inputs related to rurality classifications for health care 
providers and categorization of eligible services to determine rates 
that reflect the cost of delivering service to health care providers. 
The Commission also seeks comment on how to improve the current rate 
determination mechanism to prevent some of the inconsistencies and 
anomalies in Rates Database. The Commission seeks additional comment on 
alternatives to the Rates Database, including a regression model.
    71. The Commission also proposes and seeks comment on a few 
procedural matters that would improve the overall effectiveness of the 
RHC Program. For example, the Commission seeks comment on reforming the 
RHC Program's internal funding cap. Specifically, the Commission 
proposes to amend the current rules so that the internal cap for 
upfront costs and multi-year commitments applies only if available 
funding for the entire program is exceeded. The Commission seeks 
comment on a two-tiered system that would prioritize first the funding 
of upfront costs and the first year of multi-year commitments and then 
the second and third year of multi-year commitments until the internal 
cap is reached.
    72. To alleviate inefficiencies and to further protect against 
waste, fraud, and abuse in the RHC Program, the Commission also 
proposes to revise the rules to eliminate the use of Health Care 
Provider Support Schedules (HSSs) in the Telecom Program and harmonize 
the Telecom Program's invoicing process with the HCF Program's 
invoicing rules.
    73. Legal Basis. The legal basis for the FNPRM is contained in 
sections 1 through 4(g)(D)(i)-(j), 201-205, 254, 303(r), and 403 of the 
Communications Act of 1934, as amended by the Telecommunications Act of 
1996, 47 U.S.C. 151 through 154(i), (j), 201 through 205, 254, 303(r), 
and 403.
    74. Description and Estimate of the Number of Small Entities to 
Which the Proposed Rules Will Apply. The RFA directs agencies to 
provide a description of and, where feasible, an estimate of the number 
of small entities that may be affected by the proposed rules, if 
adopted. The RFA generally defines the term ``small entity'' as having 
the same meaning as the terms ``small business,'' ``small 
organization,'' and ``small governmental jurisdiction.'' In addition, 
the term ``small business'' has the same meaning as the term ``small 
business concern'' under the Small Business Act. A ``small business 
concern'' is one that: (1) Is independently owned and operated; (2) is 
not dominant in its field of operation; and (3) satisfies any 
additional criteria established by the Small Business Administration 
(SBA).
    75. Small Businesses, Small Organizations, Small Governmental 
Jurisdictions. The Commission's actions, over time, may affect small 
entities that are not easily categorized at present. Therefore, at the 
outset, there are three broad groups of small entities that could be 
directly affected herein. First, while there are industry specific size 
standards for small businesses that are used in the regulatory 
flexibility analysis, according to data from the SBA's Office of 
Advocacy, in general a small business is an independent business having 
fewer than 500 employees. These types of small businesses represent 
99.9 percent of all businesses in the United States which translates to 
31.7 million businesses.
    76. Next, the type of small entity described as a ``small 
organization'' is generally ``any not-for-profit enterprise which is 
independently owned and operated and is not dominant in its

[[Page 14433]]

field.'' The Internal Revenue Service (IRS) uses a revenue benchmark of 
$50,000 or less to delineate its annual electronic filing requirements 
for small exempt organizations. Nationwide, for tax year 2018, there 
were approximately 571,709 small exempt organizations in the U.S. 
reporting revenues of $50,000 or less according to the registration and 
tax data for exempt organizations available from the IRS.
    77. Finally, the small entity described as a ``small governmental 
jurisdiction'' is defined generally as ``governments of cities, 
counties, towns, townships, villages, school districts, or special 
districts, with a population of less than fifty thousand.'' U.S. Census 
Bureau data from the 2017 Census of Governments indicates that there 
were 90,075 local governmental jurisdictions consisting of general 
purpose governments and special purpose governments in the United 
States. Of this number there were 39, 931 general purpose governments 
(county, municipal and town or township) with populations of less than 
50,000 and 12,040 special purpose governments (independent school 
districts) with populations of less than 50,000. Based on the 2017 U.S. 
Census Bureau data the Commission estimates that at least 48, 971 
entities fall in the category of ``small governmental jurisdictions.''
    78. Small entities potentially affected by the proposals herein 
include eligible rural non-profit and public health care providers and 
the eligible service providers offering them services, including 
telecommunications service providers, internet Service Providers 
(ISPs), and vendors of the services and equipment used for dedicated 
broadband networks.
    79. Healthcare Providers, Offices of Physicians (except Mental 
Health Specialists). This U.S. industry comprises establishments of 
health practitioners having the degree of M.D. (Doctor of Medicine) or 
D.O. (Doctor of Osteopathy) primarily engaged in the independent 
practice of general or specialized medicine (except psychiatry or 
psychoanalysis) or surgery. These practitioners operate private or 
group practices in their own offices (e.g., centers, clinics) or in the 
facilities of others, such as hospitals or HMO medical centers. The SBA 
has created a size standard for this industry, which is annual receipts 
of $12 million or less. According to 2012 U.S. Economic Census, 152,468 
firms operated throughout the entire year in this industry. Of that 
number, 147,718 had annual receipts of less than $10 million, while 
3,108 firms had annual receipts between $10 million and $24,999,999. 
Based on this data, the Commission concludes that a majority of firms 
operating in this industry are small under the applicable size 
standard.
    80. Offices of Dentists. This U.S. industry comprises 
establishments of health practitioners having the degree of D.M.D. 
(Doctor of Dental Medicine), D.D.S. (Doctor of Dental Surgery), or 
D.D.Sc. (Doctor of Dental Science) primarily engaged in the independent 
practice of general or specialized dentistry or dental surgery. These 
practitioners operate private or group practices in their own offices 
(e.g., centers, clinics) or in the facilities of others, such as 
hospitals or HMO medical centers. They can provide either comprehensive 
preventive, cosmetic, or emergency care, or specialize in a single 
field of dentistry. The SBA has established a size standard for that 
industry of annual receipts of $8 million or less. The 2012 U.S. 
Economic Census indicates that 115,268 firms operated in the dental 
industry throughout the entire year. Of that number 114,417 had annual 
receipts of less than $5 million, while 651 firms had annual receipts 
between $5 million and $9,999,999. Based on this data, the Commission 
concludes that a majority of business in the dental industry are small 
under the applicable standard.
    81. Offices of Chiropractors. This U.S. industry comprises 
establishments of health practitioners having the degree of D.C. 
(Doctor of Chiropractic) primarily engaged in the independent practice 
of chiropractic. These practitioners provide diagnostic and therapeutic 
treatment of neuromusculoskeletal and related disorders through the 
manipulation and adjustment of the spinal column and extremities, and 
operate private or group practices in their own offices (e.g., centers, 
clinics) or in the facilities of others, such as hospitals or HMO 
medical centers. The SBA has established a size standard for this 
industry, which is annual receipts of $8 million or less. The 2012 U.S. 
Economic Census statistics show that in 2012, 33,940 firms operated 
throughout the entire year. Of that number 33,910 operated with annual 
receipts of less than $5 million per year, while 26 firms had annual 
receipts between $5 million and $9,999,999. Based on this data, the 
Commission concludes that a majority of chiropractors are small.
    82. Offices of Optometrists. This U.S. industry comprises 
establishments of health practitioners having the degree of O.D. 
(Doctor of Optometry) primarily engaged in the independent practice of 
optometry. These practitioners examine, diagnose, treat, and manage 
diseases and disorders of the visual system, the eye and associated 
structures as well as diagnose related systemic conditions. Offices of 
optometrists prescribe and/or provide eyeglasses, contact lenses, low 
vision aids, and vision therapy. They operate private or group 
practices in their own offices (e.g., centers, clinics) or in the 
facilities of others, such as hospitals or HMO medical centers, and may 
also provide the same services as opticians, such as selling and 
fitting prescription eyeglasses and contact lenses. The SBA has 
established a size standard for businesses operating in this industry, 
which is annual receipts of $8 million or less. The 2012 Economic 
Census indicates that 18,050 firms operated the entire year. Of that 
number, 17,951 had annual receipts of less than $5 million, while 70 
firms had annual receipts between $5 million and $9,999,999. Based on 
this data, the Commission concludes that a majority of optometrists in 
this industry are small.
    83. Offices of Mental Health Practitioners (except Physicians). 
This U.S. industry comprises establishments of independent mental 
health practitioners (except physicians) primarily engaged in (1) the 
diagnosis and treatment of mental, emotional, and behavioral disorders 
and/or (2) the diagnosis and treatment of individual or group social 
dysfunction brought about by such causes as mental illness, alcohol and 
substance abuse, physical and emotional trauma, or stress. These 
practitioners operate private or group practices in their own offices 
(e.g., centers, clinics) or in the facilities of others, such as 
hospitals or HMO medical centers. The SBA has created a size standard 
for this industry, which is annual receipts of $8 million or less. The 
2012 U.S. Economic Census indicates that 16,058 firms operated 
throughout the entire year. Of that number, 15,894 firms received 
annual receipts of less than $5 million, while 111 firms had annual 
receipts between $5 million and $9,999,999. Based on this data, the 
Commission concludes that a majority of mental health practitioners who 
do not employ physicians are small.
    84. Offices of Physical, Occupational and Speech Therapists and 
Audiologists. This U.S. industry comprises establishments of 
independent health practitioners primarily engaged in one of the 
following: (1) Providing physical therapy services to patients who have 
impairments, functional limitations, disabilities, or changes in 
physical functions and health status resulting from injury, disease or 
other causes, or who require prevention, wellness or

[[Page 14434]]

fitness services; (2) planning and administering educational, 
recreational, and social activities designed to help patients or 
individuals with disabilities, regain physical or mental functioning or 
to adapt to their disabilities; and (3) diagnosing and treating speech, 
language, or hearing problems. These practitioners operate private or 
group practices in their own offices (e.g., centers, clinics) or in the 
facilities of others, such as hospitals or HMO medical centers. The SBA 
has established a size standard for this industry, which is annual 
receipts of $8 million or less. The 2012 U.S. Economic Census indicates 
that 20,567 firms in this industry operated throughout the entire year. 
Of this number, 20,047 had annual receipts of less than $5 million, 
while 270 firms had annual receipts between $5 million and $9,999,999. 
Based on this data, the Commission concludes that a majority of 
businesses in this industry are small.
    85. Offices of Podiatrists. This U.S. industry comprises 
establishments of health practitioners having the degree of D.P.M. 
(Doctor of Podiatric Medicine) primarily engaged in the independent 
practice of podiatry. These practitioners diagnose and treat diseases 
and deformities of the foot and operate private or group practices in 
their own offices (e.g., centers, clinics) or in the facilities of 
others, such as hospitals or HMO medical centers. The SBA has 
established a size standard for businesses in this industry, which is 
annual receipts of $8 million or less. The 2012 U.S. Economic Census 
indicates that 7,569 podiatry firms operated throughout the entire 
year. Of that number, 7,545 firms had annual receipts of less than $5 
million, while 22 firms had annual receipts between $5 million and 
$9,999,999. Based on this data, the Commission concludes that a 
majority of firms in this industry are small.
    86. Offices of All Other Miscellaneous Health Practitioners. This 
U.S. industry comprises establishments of independent health 
practitioners (except physicians; dentists; chiropractors; 
optometrists; mental health specialists; physical, occupational, and 
speech therapists; audiologists; and podiatrists). These practitioners 
operate private or group practices in their own offices (e.g., centers, 
clinics) or in the facilities of others, such as hospitals or HMO 
medical centers. The SBA has established a size standard for this 
industry, which is annual receipts of $8 million or less. The 2012 U.S. 
Economic Census indicates that 11,460 firms operated throughout the 
entire year. Of that number, 11,374 firms had annual receipts of less 
than $5 million, while 48 firms had annual receipts between $5 million 
and $9,999,999. Based on this data, the Commission concludes the 
majority of firms in this industry are small.
    87. Family Planning Centers. This U.S. industry comprises 
establishments with medical staff primarily engaged in providing a 
range of family planning services on an outpatient basis, such as 
contraceptive services, genetic and prenatal counseling, voluntary 
sterilization, and therapeutic and medically induced termination of 
pregnancy. The SBA has established a size standard for this industry, 
which is annual receipts of $12 million or less. The 2012 Economic 
Census indicates that 1,286 firms in this industry operated throughout 
the entire year. Of that number 1,237 had annual receipts of less than 
$10 million, while 36 firms had annual receipts between $10 million and 
$24,999,999. Based on this data, the Commission concludes that the 
majority of firms in this industry is small.
    88. Outpatient Mental Health and Substance Abuse Centers. This U.S. 
industry comprises establishments with medical staff primarily engaged 
in providing outpatient services related to the diagnosis and treatment 
of mental health disorders and alcohol and other substance abuse. These 
establishments generally treat patients who do not require inpatient 
treatment. They may provide a counseling staff and information 
regarding a wide range of mental health and substance abuse issues and/
or refer patients to more extensive treatment programs, if necessary. 
The SBA has established a size standard for this industry, which is 
$16.5 million or less in annual receipts. The 2012 U.S. Economic Census 
indicates that 4,446 firms operated throughout the entire year. Of that 
number, 4,069 had annual receipts of less than $10 million while 286 
firms had annual receipts between $10 million and $24,999,999. Based on 
this data, the Commission concludes that a majority of firms in this 
industry are small.
    89. HMO Medical Centers. This U.S. industry comprises 
establishments with physicians and other medical staff primarily 
engaged in providing a range of outpatient medical services to the 
health maintenance organization (HMO) subscribers with a focus 
generally on primary health care. These establishments are owned by the 
HMO. Included in this industry are HMO establishments that both provide 
health care services and underwrite health and medical insurance 
policies. The SBA has established a size standard for this industry, 
which is $35 million or less in annual receipts. The 2012 U.S. Economic 
Census indicates that 14 firms in this industry operated throughout the 
entire year. Of that number, 5 firms had annual receipts of less than 
$25 million, while 1 firm had annual receipts between $25 million and 
$99,999,999. Based on this data, the Commission concludes that 
approximately one-third of the firms in this industry are small.
    90. Freestanding Ambulatory Surgical and Emergency Centers. This 
U.S. industry comprises establishments with physicians and other 
medical staff primarily engaged in (1) providing surgical services 
(e.g., orthoscopic and cataract surgery) on an outpatient basis or (2) 
providing emergency care services (e.g., setting broken bones, treating 
lacerations, or tending to patients suffering injuries as a result of 
accidents, trauma, or medical conditions necessitating immediate 
medical care) on an outpatient basis. Outpatient surgical 
establishments have specialized facilities, such as operating and 
recovery rooms, and specialized equipment, such as anesthetic or X-ray 
equipment. The SBA has established a size standard for this industry, 
which is annual receipts of $16.5 million or less. The 2012 U.S. 
Economic Census indicates that 3,595 firms in this industry operated 
throughout the entire year. Of that number, 3,222 firms had annual 
receipts of less than $10 million, while 289 firms had annual receipts 
between $10 million and $24,999,999. Based on this data, the Commission 
concludes that a majority of firms in this industry are small.
    91. All Other Outpatient Care Centers. This U.S. industry comprises 
establishments with medical staff primarily engaged in providing 
general or specialized outpatient care (except family planning centers, 
outpatient mental health and substance abuse centers, HMO medical 
centers, kidney dialysis centers, and freestanding ambulatory surgical 
and emergency centers). Centers or clinics of health practitioners with 
different degrees from more than one industry practicing within the 
same establishment (i.e., Doctor of Medicine and Doctor of Dental 
Medicine) are included in this industry. The SBA has established a size 
standard for this industry, which is annual receipts of $22 million or 
less. The 2012 U.S. Economic Census indicates that 4,903 firms operated 
in this industry throughout the entire year. Of this number, 4,269 
firms had annual receipts of less than $10 million, while 389 firms had 
annual receipts between $10

[[Page 14435]]

million and $24,999,999. Based on this data, the Commission concludes 
that a majority of firms in this industry are small.
    92. Blood and Organ Banks. This U.S. industry comprises 
establishments primarily engaged in collecting, storing, and 
distributing blood and blood products and storing and distributing body 
organs. The SBA has established a size standard for this industry, 
which is annual receipts of $35 million or less. The 2012 U.S. Economic 
Census indicates that 314 firms operated in this industry throughout 
the entire year. Of that number, 235 operated with annual receipts of 
less than $25 million, while 41 firms had annual receipts between $25 
million and $49,999,999. Based on this data, the Commission concludes 
that approximately three-quarters of firms that operate in this 
industry are small.
    93. All Other Miscellaneous Ambulatory Health Care Services. This 
U.S. industry comprises establishments primarily engaged in providing 
ambulatory health care services (except offices of physicians, 
dentists, and other health practitioners; outpatient care centers; 
medical and diagnostic laboratories; home health care providers; 
ambulances; and blood and organ banks). The SBA has established a size 
standard for this industry, which is annual receipts of $16.5 million 
or less. The 2012 U.S. Economic Census indicates that 2,429 firms 
operated in this industry throughout the entire year. Of that number, 
2,318 had annual receipts of less than $10 million, while 56 firms had 
annual receipts between $10 million and $24,999,999. Based on this 
data, the Commission concludes that a majority of the firms in this 
industry is small.
    94. Medical Laboratories. This U.S. industry comprises 
establishments known as medical laboratories primarily engaged in 
providing analytic or diagnostic services, including body fluid 
analysis, generally to the medical profession or to the patient on 
referral from a health practitioner. The SBA has established a size 
standard for this industry, which is annual receipts of $35 million or 
less. The 2012 U.S. Economic Census indicates that 2,599 firms operated 
in this industry throughout the entire year. Of this number, 2,465 had 
annual receipts of less than $25 million, while 60 firms had annual 
receipts between $25 million and $49,999,999. Based on this data, the 
Commission concludes that a majority of firms that operate in this 
industry are small. Centers. This U.S. industry comprises 
establishments known as diagnostic imaging centers primarily engaged in 
producing images of the patient generally on referral from a health 
practitioner. The SBA has established size standard for this industry, 
which is annual receipts of $16.5 million or less. The 2012 U.S. 
Economic Census indicates that 4,209 firms operated in this industry 
throughout the entire year. Of that number, 3,876 firms had annual 
receipts of less than $10 million, while 228 firms had annual receipts 
between $10 million and $24,999,999. Based on this data, the Commission 
concludes that a majority of firms that operate in this industry are 
small.
    95. Home Health Care Services. This U.S. industry comprises 
establishments primarily engaged in providing skilled nursing services 
in the home, along with a range of the following: Personal care 
services; homemaker and companion services; physical therapy; medical 
social services; medications; medical equipment and supplies; 
counseling; 24-hour home care; occupation and vocational therapy; 
dietary and nutritional services; speech therapy; audiology; and high-
tech care, such as intravenous therapy. The SBA has established a size 
standard for this industry, which is annual receipts of $16.5 million 
or less. The 2012 U.S. Economic Census indicates that 17,770 firms 
operated in this industry throughout the entire year. Of that number, 
16,822 had annual receipts of less than $10 million, while 590 firms 
had annual receipts between $10 million and $24,999,999. Based on this 
data, the Commission concludes that a majority of firms that operate in 
this industry are small.
    96. Ambulance Services. This U.S. industry comprises establishments 
primarily engaged in providing transportation of patients by ground or 
air, along with medical care. These services are often provided during 
a medical emergency but are not restricted to emergencies. The vehicles 
are equipped with lifesaving equipment operated by medically trained 
personnel. The SBA has established a size standard for this industry, 
which is annual receipts of $16.5 million or less. The 2012 U.S. 
Economic Census indicates that 2,984 firms operated in this industry 
throughout the entire year. Of that number, 2,926 had annual receipts 
of less than $15 million, while 133 firms had annual receipts between 
$10 million and $24,999,999. Based on this data, the Commission 
concludes that a majority of firms in this industry is small.
    97. Kidney Dialysis Centers. This U.S. industry comprises 
establishments with medical staff primarily engaged in providing 
outpatient kidney or renal dialysis services. The SBA has established a 
size standard for this industry, which is annual receipts of $41.5 
million or less. The 2012 U.S. Economic Census indicates that 396 firms 
operated in this industry throughout the entire year. Of that number, 
379 had annual receipts of less than $25 million, while 7 firms had 
annual receipts between $25 million and $49,999,999. Based on this 
data, the Commission concludes that a majority of firms in this 
industry are small.
    98. General Medical and Surgical Hospitals. This U.S. industry 
comprises establishments known and licensed as general medical and 
surgical hospitals primarily engaged in providing diagnostic and 
medical treatment (both surgical and nonsurgical) to inpatients with 
any of a wide variety of medical conditions. These establishments 
maintain inpatient beds and provide patients with food services that 
meet their nutritional requirements. These hospitals have an organized 
staff of physicians and other medical staff to provide patient care 
services. These establishments usually provide other services, such as 
outpatient services, anatomical pathology services, diagnostic X-ray 
services, clinical laboratory services, operating room services for a 
variety of procedures, and pharmacy services. The SBA has established a 
size standard for this industry, which is annual receipts of $41.5 
million or less. The 2012 U.S. Economic Census indicates that 2,800 
firms operated in this industry throughout the entire year. Of that 
number, 877 has annual receipts of less than $25 million, while 400 
firms had annual receipts between $25 million and $49,999,999. Based on 
this data, the Commission concludes that approximately one-quarter of 
firms in this industry are small.
    99. Psychiatric and Substance Abuse Hospitals. This U.S. industry 
comprises establishments known and licensed as psychiatric and 
substance abuse hospitals primarily engaged in providing diagnostic, 
medical treatment, and monitoring services for inpatients who suffer 
from mental illness or substance abuse disorders. The treatment often 
requires an extended stay in the hospital. These establishments 
maintain inpatient beds and provide patients with food services that 
meet their nutritional requirements. They have an organized staff of 
physicians and other medical staff to provide patient care services. 
Psychiatric, psychological, and social work services are available at 
the facility. These hospitals usually provide

[[Page 14436]]

other services, such as outpatient services, clinical laboratory 
services, diagnostic X-ray services, and electroencephalograph 
services. The SBA has established a size standard for this industry, 
which is annual receipts of $41.5 million or less. The 2012 U.S. 
Economic Census indicates that 404 firms operated in this industry 
throughout the entire year. Of that number, 185 had annual receipts of 
less than $25 million, while 107 firms had annual receipts between $25 
million and $49,999,999. Based on this data, the Commission concludes 
that more than one-half of the firms in this industry are small.
    100. Specialty (Except Psychiatric and Substance Abuse) Hospitals. 
This U.S. industry consists of establishments known and licensed as 
specialty hospitals primarily engaged in providing diagnostic, and 
medical treatment to inpatients with a specific type of disease or 
medical condition (except psychiatric or substance abuse). Hospitals 
providing long-term care for the chronically ill and hospitals 
providing rehabilitation, restorative, and adjustive services to 
physically challenged or disabled people are included in this industry. 
These establishments maintain inpatient beds and provide patients with 
food services that meet their nutritional requirements. They have an 
organized staff of physicians and other medical staff to provide 
patient care services. These hospitals may provide other services, such 
as outpatient services, diagnostic X-ray services, clinical laboratory 
services, operating room services, physical therapy services, 
educational and vocational services, and psychological and social work 
services. The SBA has established a size standard for this industry, 
which is annual receipts of $41.5 million or less. The 2012 U.S. 
Economic Census indicates that 346 firms operated in this industry 
throughout the entire year. Of that number, 146 firms had annual 
receipts of less than $25 million, while 79 firms had annual receipts 
between $25 million and $49,999,999. Based on this data, the Commission 
concludes that more than one-half of the firms in this industry are 
small.
    101. Emergency and Other Relief Services. This industry comprises 
establishments primarily engaged in providing food, shelter, clothing, 
medical relief, resettlement, and counseling to victims of domestic or 
international disasters or conflicts (e.g., wars). The SBA has 
established a size standard for this industry which is annual receipts 
of $35 million or less. The 2012 U.S. Economic Census indicates that 
541 firms operated in this industry throughout the entire year. Of that 
number, 509 had annual receipts of less than $25 million, while 7 firms 
had annual receipts between $25 million and $49,999,999. Based on this 
data, the Commission concludes that a majority of firms in this 
industry are small.
    102. Providers of Telecommunications and Other Services, 
Telecommunications Service Providers. Incumbent Local Exchange Carriers 
(LECs). Neither the Commission nor the SBA has developed a small 
business size standard specifically for incumbent local exchange 
services. The closest applicable NAICS Code category is Wired 
Telecommunications Carriers. Under the applicable SBA size standard, 
such a business is small if it has 1,500 or fewer employees. U.S. 
Census Bureau data for 2012 indicate that 3,117 firms operated the 
entire year. Of this total, 3,083 operated with fewer than 1,000 
employees. Consequently, the Commission estimates that most providers 
of incumbent local exchange service are small businesses that may be 
affected by the Commission's actions. According to Commission data, one 
thousand three hundred and seven (1,307) Incumbent Local Exchange 
Carriers reported that they were incumbent local exchange service 
providers. Of this total, an estimated 1,006 have 1,500 or fewer 
employees. Thus, using the SBA's size standard the majority of 
incumbent LECs can be considered small entities.
    103. Interexchange Carriers (IXCs). Neither the Commission nor the 
SBA has developed a small business size standard specifically for 
Interexchange Carriers. The closest applicable NAICS Code category is 
Wired Telecommunications Carriers. The applicable size standard under 
SBA rules is that such a business is small if it has 1,500 or fewer 
employees. U.S. Census Bureau data for 2012 indicate that 3,117 firms 
operated for the entire year. Of that number, 3,083 operated with fewer 
than 1,000 employees. According to internally developed Commission 
data, 359 companies reported that their primary telecommunications 
service activity was the provision of interexchange services. Of this 
total, an estimated 317 have 1,500 or fewer employees. Consequently, 
the Commission estimates that the majority of interexchange service 
providers are small entities.
    104. Competitive Access Providers. Neither the Commission nor the 
SBA has developed a definition of small entities specifically 
applicable to competitive access services providers (CAPs). The closest 
applicable definition under the SBA rules is Wired Telecommunications 
Carriers and under the size standard, such a business is small if it 
has 1,500 or fewer employees. U.S. Census Bureau data for 2012 
indicates that 3,117 firms operated during that year. Of that number, 
3,083 operated with fewer than 1,000 employees. Consequently, the 
Commission estimates that most competitive access providers are small 
businesses that may be affected by these actions. According to 
Commission data the 2010 Trends in Telephone Report, 1,442 CAPs and 
competitive local exchange carriers (competitive LECs) reported that 
they were engaged in the provision of competitive local exchange 
services. Of these 1,442 CAPs and competitive LECs, an estimated 1,256 
have 1,500 or few employees and 186 have more than 1,500 employees. 
Consequently, the Commission estimates that most providers of 
competitive exchange services are small businesses.
    105. The small entities that may be affected by the reforms include 
eligible nonprofit and public health care providers and the eligible 
service providers offering them services, including telecommunications 
service providers, Internet Service Providers, and service providers of 
the services and equipment used for dedicated broadband networks.
    106. Vendors and Equipment Manufactures. Vendors of Infrastructure 
Development or ``Network Buildout.'' The Commission has not developed a 
small business size standard specifically directed toward manufacturers 
of network facilities. There are two applicable SBA categories in which 
manufacturers of network facilities could fall and each have different 
size standards under the SBA rules. The SBA categories are ``Radio and 
Television Broadcasting and Wireless Communications Equipment'' with a 
size standard of 1,250 employees or less and ``Other Communications 
Equipment Manufacturing'' with a size standard of 750 employees or 
less.'' U.S. Census Bureau data for 2012 shows that for Radio and 
Television Broadcasting and Wireless Communications Equipment firms 841 
establishments operated for the entire year. Of that number, 828 
establishments operated with fewer than 1,000 employees, and 7 
establishments operated with between 1,000 and 2,499 employees. For 
Other Communications Equipment Manufacturing, U.S. Census Bureau data 
for 2012, show that 383 establishments operated for the year. Of that 
number 379 operated with fewer than 500 employees and 4 had 500 to

[[Page 14437]]

999 employees. Based on this data, the Commission concludes that the 
majority of Vendors of Infrastructure Development or ``Network 
Buildout'' are small.
    107. Telephone Apparatus Manufacturing. This industry comprises 
establishments primarily engaged in manufacturing wire telephone and 
data communications equipment. These products may be stand-alone or 
board-level components of a larger system. Examples of products made by 
these establishments are central office switching equipment, cordless 
and wire telephones (except cellular), PBX equipment, telephone 
answering machines, LAN modems, multi-user modems, and other data 
communications equipment, such as bridges, routers, and gateways. The 
SBA has developed a small business size standard for Telephone 
Apparatus Manufacturing, which consists of all such companies having 
1,250 or fewer employees. U.S. Census Bureau data for 2012 show that 
there were 266 establishments that operated that year. Of this total, 
262 operated with fewer than 1,000 employees. Thus, under this size 
standard, the majority of firms in this industry can be considered 
small.
    108. Radio and Television Broadcasting and Wireless Communications 
Equipment Manufacturing. This industry comprises establishments 
primarily engaged in manufacturing radio and television broadcast and 
wireless communications equipment. Examples of products made by these 
establishments are: Transmitting and receiving antennas, cable 
television equipment, GPS equipment, pagers, cellular phones, mobile 
communications equipment, and radio and television studio and 
broadcasting equipment. The SBA has established a small business size 
standard for this industry of 1,250 or fewer employees. U.S. Census 
Bureau data for 2012 show that 841 establishments operated in this 
industry in that year. Of that number, 828 establishments operated with 
fewer than 1,000 employees, 7 establishments operated with between 
1,000 and 2,499 employees and 6 establishments operated with 2,500 or 
more employees. Based on this data, the Commission concludes that a 
majority of manufacturers in this industry are small.
    109. Other Communications Equipment Manufacturing. This industry 
comprises establishments primarily engaged in manufacturing 
communications equipment (except telephone apparatus, and radio and 
television broadcast, and wireless communications equipment). Examples 
of such manufacturing include fire detection and alarm systems 
manufacturing, Intercom systems and equipment manufacturing, and 
signals (e.g., highway, pedestrian, railway, traffic) manufacturing. 
The SBA has established a size standard for this industry as all such 
firms having 750 or fewer employees. U.S. Census Bureau data for 2012 
shows that 383 establishments operated in that year. Of that number, 
379 operated with fewer than 500 employees and 4 had 500 to 999 
employees. Based on this data, the Commission concludes that the 
majority of Other Communications Equipment Manufacturers are small.
    110. Steps Taken to Minimize the Significant Economic Impact of 
Small Entities and Significant Alternatives Considered. The RFA 
requires an agency to describe any significant, specifically small 
business, alternatives that it has considered in reaching its proposed 
approach, which may include the following four alternatives (among 
others): ``(1) the establishment of differing compliance or reporting 
requirements or timetables that take into account the resources 
available to small entities; (2) the clarification, consolidation, or 
simplification of compliance and reporting requirements under the rule 
for such small entities; (3) the use of performance rather than design 
standards; and (4) an exemption from coverage of the rule, or any part 
thereof, for such small entities.'' The Commission expects to consider 
all of these factors when it has received substantive comment from the 
public and potentially affected entities.
    111. Largely, the proposals in the FNPRM if adopted will have no 
impact on or will reduce the economic impact of current regulations on 
small entities. Certain proposals could have a positive economic impact 
on small entities. In the FNPRM, the Commission seeks comment on 
changes that would streamline and simplify the application process; 
maximize efficient and fair distribution of support; and increase 
support for small entities relative to their larger counterparts, 
thereby decreasing the net economic burden on small entities. In the 
instances in which a proposed change would increase the financial 
burden on small entities, the Commission has determined that the net 
financial and other benefits from such changes would outweigh the 
increased burdens on small entities.
    112. Determining Accurate Rates in the Telecom Program. To minimize 
potential rate variances and anomalies, the Commission seeks comment on 
how to determine accurate and reasonable urban and rural rates in the 
Telecom Program. The Commission specifically seeks input on how to 
define and evaluate rurality to determine what areas are comparable for 
purposes of determining rates. The Commission then seeks comment on 
what factors to consider when differentiating rural areas. The 
Commission seeks comment on approaches to analyzing existing data that 
would result in more accurate urban and rural rates such as 
establishing potential changes to the Telecom Program's categorization 
of service technologies that could further improve the accuracy of 
urban and rural rates in future funding years. The Commission also 
seeks comment on ways to improve and modify the current rate 
determination mechanism, the Rates Database, based on existing data. 
The Commission also seeks comment on an alternative model to the Rates 
Database.
    113. Harmonizing the Invoicing Process in the Telecom and HCF 
Program. Currently, there are separate invoicing processes for the two 
programs. To alleviate inefficiencies and to further protect against 
waste, fraud, and abuse in the RHC Program, the Commission proposes to 
revise the rules to eliminate the use of HSSs in the Telecom Program 
and align the Telecom Program's invoicing process with the HCF 
Program's invoicing rules, which are simpler than the Telecom Program's 
current invoicing rules. Specifically, the Commission proposes to have 
participants in both programs invoice for services actually provided 
using the FCC Form 463 rather than use HSSs in the Telecom Program.
    114. Reform of Program Funding Cap. The Commission proposes and 
seeks comment on reforming the RHC Program's funding cap. Specifically, 
the Commission proposes to amend the current rules so that the internal 
cap for upfront costs and multi-year commitments apply only if 
available funding for the entire program is exceeded. The Commission 
additionally seeks comment on a two-tiered system that would distribute 
funding first to upfront costs and the first year of multi-year 
commitments and then the second and third year of multi-year 
commitments until the internal cap is reached.
    115. Federal Rules That May Duplicate, Overlap, or Conflict With 
the Proposed Rules. None.
    116. Ex Parte Rules--Permit-But-Disclose. The proceeding the FNPRM 
is a part of shall be treated as a ``permit-but-disclose'' proceeding 
in accordance with the Commission's ex parte rules. Persons making ex 
parte presentations

[[Page 14438]]

must file a copy of any written presentation or a memorandum 
summarizing any oral presentation within two business days after the 
presentation (unless a different deadline applicable to the Sunshine 
period applies). Persons making oral ex parte presentations are 
reminded that memoranda summarizing the presentation must (1) list all 
persons attending or otherwise participating in the meeting at which 
the ex parte presentation was made, and (2) summarize all data 
presented and arguments made during the presentation. If the 
presentation consisted in whole or in part of the presentation of data 
or arguments already reflected in the presenter's written comments, 
memoranda or other filings in the proceeding, the presenter may provide 
citations to such data or arguments in his or her prior comments, 
memoranda, or other filings (specifying the relevant page and/or 
paragraph numbers where such data or arguments can be found) in lieu of 
summarizing them in the memorandum. Documents shown or given to 
Commission staff during ex parte meetings are deemed to be written ex 
parte presentations and must be filed consistent with Commission rule 
1.1206(b). In proceedings governed by Commission rule 1.49(f) or for 
which the Commission has made available a method of electronic filing, 
written ex parte presentations and memoranda summarizing oral ex parte 
presentations, and all attachments thereto, must be filed through the 
electronic comment filing system available for that proceeding, and 
must be filed in their native format (e.g., .doc, .xml, .ppt, 
searchable .pdf). Participants in this proceeding should familiarize 
themselves with the Commission's ex parte rules.
    117. Description of Projected Reporting, Recordkeeping, and Other 
Compliance Requirements for Small Entities. The reporting, 
recordkeeping, and other compliance requirements proposed in the FNPRM 
likely would positively and negatively financially impact both large 
and small entities, including healthcare providers and service 
providers, and any resulting financial burdens may disproportionately 
impact small entities given their typically more limited resources. In 
weighing the likely financial benefits and burdens of the proposed 
requirements, however, the Commission has determined that the proposed 
changes would result in more equitable, effective, efficient, clear, 
and predictable distribution of RHC support, far outweighing any 
resultant financial burdens on small entity participants.
    118. Application Documentation. The Commission seeks comment on 
proposed revisions to Telecom Program forms and corresponding USAC 
online portals to improve the quality and consistency of Telecom 
Program data. The Commission seeks comment on revisions to the FCC Form 
466 as well as any other RHC Program forms including HCF Program forms 
that might allow for the collection of more detailed service 
information to allow for more accurate comparisons of rates for similar 
services consistent with the revised rurality classifications and 
service categories proposed in the FNPRM. The Commission also seeks 
comment on whether there is certain information regarding the technical 
details or components of telecommunications services that rural health 
care providers cannot access or lack the technical expertise to report 
to USAC and should therefore be reported by service providers.
    119. Invoicing Requirements. To harmonize the Commission's rules 
under the Telecom and HCF Programs, and to ensure sufficient program 
oversight, efficiency, and certainty, the Commission proposes to 
harmonize the invoicing process between the Telecom Program and the HCF 
Program.
    120. Improving Data Collection. As the Commission seeks to better 
monitor RHC Program effectiveness, the Commission seeks general comment 
on the data collected for the Telecom Program.

IV. Ordering Clauses

    121. Accordingly, it is ordered that, pursuant to the authority 
contained in sections 1 through 4, 201-205, 254, 303(r), and 403 of the 
Communications Act of 1934, as amended by the Telecommunications Act of 
1996, 47 U.S.C. 151 through 154, 201 through 205, 254, 303(r), and 403, 
the Further Notice of Proposed Rulemaking is adopted.
    122. It is further ordered that, pursuant to applicable procedures 
set forth in Sec. Sec.  1.415 and 1.419 of the Commission's rules, 47 
CFR 1.415, 1.419, interested parties may file comments on the FNPRM on 
or before April 14, 2022, and reply comments on or before May 16, 2022.
    123. It is further ordered that the Commission's Consumer and 
Governmental Affairs Bureau, Reference Information Center, shall send a 
copy of the Further Notice of Proposed Rulemaking, including the 
Initial Regulatory Flexibility Analysis, to the Chief Counsel for 
Advocacy of the Small Business Administration.

List of Subjects in 47 CFR part 54

    Communications common carriers, Health facilities, Infants and 
children, internet, Telecommunications, Telephone.

Federal Communications Commission.
Katura Jackson,
Federal Register Liaison Officer.

Proposed Rules

    For the reasons discussed in the preamble, the Federal 
Communications Commission proposes to amend 47 CFR part 54 as follows:

PART 54--UNIVERSAL SERVICE

0
1. The authority citation for part 54 continues to read as follows:

    Authority: 47 U.S.C. 151, 154(i), 155, 201, 205, 214, 219, 220, 
229, 254, 303(r), 403, 1004, 1302, and 1601-1609 unless otherwise 
noted.

0
2. Amend Sec.  54.619 by revising paragraph (b) to read as follows:


Sec.  54.619  Cap.

* * * * *
    (b) Application of the internal cap on multi-year commitments and 
upfront payments in the Healthcare Connect Fund Program. The internal 
cap on multi-year commitments and upfront payments in the Healthcare 
Connect Fund Program applies only when the total demand during a filing 
window period exceeds the total remaining support available for the 
funding year. The total remaining support available for the funding 
year is based on the inflation-adjusted aggregate annual cap, the 
proportion of unused funding for use in the Rural Health Care Program 
determined in paragraph (a)(5) of this section, and the amount of 
funding allocated in one or more previous filing window periods, if 
any, of the funding year.
0
3. Amend Sec.  54.621 by adding paragraph (b)(3) to read as follows:


Sec.  54.621  Filing window for requests and prioritization of support.

* * * * *
    (b) * * *
    (3) Prioritization of upfront payment and multi-year commitment 
requests. When the internal cap on multi-year commitments and upfront 
payments applies pursuant to Sec.  54.619(b) and the demand for upfront 
payments and multi-year commitments during a filing window period 
exceeds the internal cap on multi-year commitments and upfront payments 
in the Healthcare Connect Fund Program, the Administrator shall

[[Page 14439]]

fund upfront payments and the first year of the multi-year commitments 
in all eligible requests in accordance with paragraph (b) of this 
section before funding the second year and the third year, if 
applicable, of the multi-year commitment requests in accordance with 
paragraph (b) of this section until the internal cap is reached or no 
available funds remaining. The Administrator shall also designate the 
underlying contracts associated with the multi-year commitment requests 
that are not fully funded as ``evergreen'' provided those contracts 
meet the requirements under Sec.  54.622(i)(3)(ii).
0
4. Amend Sec.  54.627 by revising paragraph (c) to read as follows:


Sec.  54.627  Invoicing process and certifications.

* * * * *
    (c) Certifications.
    (1) Before the Administrator may process and pay an invoice, both 
the health care provider and the service provider must make the 
following certifications.
    (i) The health care provider must certify that:
    (A) The service has been or is being provided to the health care 
provider;
    (B) The universal service credit will be applied to the 
telecommunications service billing account of the health care provider 
or the billed entity as directed by the health care provider;
    (C) It is authorized to submit this request on behalf of the health 
care provider;
    (D) It has examined the invoice and supporting documentation and 
that to the best of its knowledge, information and belief, all 
statements of fact contained in the invoice and supporting 
documentation are true;
    (E) It or the consortium it represents satisfies all of the 
requirements and will abide by all of the relevant requirements, 
including all applicable Commission rules, with respect to universal 
service benefits provided under 47 U.S.C. 254; and
    (F) It understands that any letter from the Administrator that 
erroneously states that funds will be made available for the benefit of 
the applicant may be subject to rescission.
    (ii) The service provider must certify that:
    (A) The information contained in the invoice is correct and the 
health care providers and the Billed Account Numbers have been credited 
with the amounts shown under ``Support Amount to be Paid by USAC;''
    (B) It has abided by all of the relevant requirements, including 
all applicable Commission rules;
    (C) It has received and reviewed the invoice form and accompanying 
documentation, and that the rates charged for the telecommunications 
services, to the best of its knowledge, information and belief, are 
accurate and comply with the Commission's rules;
    (D) It is authorized to submit the invoice;
    (E) The health care provider paid the appropriate urban rate for 
the telecommunications services;
    (F) The rural rate on the invoice does not exceed the appropriate 
rural rate determined by the Administrator;
    (G) It has charged the health care provider for only eligible 
services prior to submitting the invoice for payment and accompanying 
documentation;
    (H) It has not offered or provided a gift or any other thing of 
value to the applicant (or to the applicant's personnel, including its 
consultant) for which it will provide services; and
    (I) The consultants or third parties it has hired do not have an 
ownership interest, sales commission arrangement, or other financial 
stake in the service provider chosen to provide the requested services, 
and that they have otherwise complied with Rural Health Care Program 
rules, including the Commission's rules requiring fair and open 
competitive bidding.
    (J) As a condition of receiving support, it will provide to the 
health care providers, on a timely basis, all documents regarding 
supported equipment or services that are necessary for the health care 
provider to submit required forms or respond to Commission or 
Administrator inquiries.
* * * * *
[FR Doc. 2022-05191 Filed 3-14-22; 8:45 am]
BILLING CODE 6712-01-P


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