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.

Proposed Rules Federal Register

14421 

Vol. 87, No. 50 

Tuesday, March 15, 2022 

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. 

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: 

• Electronic Filers: Comments may be 

filed electronically using the internet by 

accessing the ECFS: https://

www.fcc.gov/ecfs/. 

• Paper Filers: Parties who choose to 

file by paper must file an original and 

one copy of each filing. 

• 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. 

• 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. 

• U.S. Postal Service first-class, 

Express, and Priority mail must be 

addressed to 45 L Street NE, 

Washington, DC 20554. 

• 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/fcccloses-headquarters-open-window-andchanges-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 fcc504@fcc.gov 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 

Bryan.Boyle@fcc.gov. 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 

fcc504@fcc.gov 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 


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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 


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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 tractbased 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 


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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 Alaskaspecific 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 


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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 multiprotocol 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), pointto-multipoint (1:N), and multipoint-tomultipoint (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 


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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, §§ 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-toadminister 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 


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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-bystate 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 ERate 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 


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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 ERate 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 


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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 § 54.619(a) of the 

Commission’s rules and the proportion 

of unused funding determined for use in 

the RHC Program pursuant to 

§ 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 


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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 secondyear 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 multiyear 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 threeyear 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 

§ 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 § 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 § 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 multiyear 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 § 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 multiyear commitment requests in 

accordance with § 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 multiyear 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 


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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 overinvoicing 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? 


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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-andcomment 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 highquality 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 multiyear 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 multiyear 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 


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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 


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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 


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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 


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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 


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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 boardlevel 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 multiyear 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-ButDisclose. The proceeding the FNPRM is 

a part of shall be treated as a ‘‘permitbut-disclose’’ proceeding in accordance 

with the Commission’s ex parte rules. 

Persons making ex parte presentations 


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14438 Federal Register / Vol. 87, No. 50 / Tuesday, March 15, 2022 / Proposed Rules 

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 §§ 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 

■ 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. 

■ 2. Amend § 54.619 by revising 

paragraph (b) to read as follows: 

§ 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. 

■ 3. Amend § 54.621 by adding 

paragraph (b)(3) to read as follows: 

§ 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 § 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 


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Federal Register / Vol. 87, No. 50 / Tuesday, March 15, 2022 / Proposed Rules 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 § 54.622(i)(3)(ii). 

■ 4. Amend § 54.627 by revising 

paragraph (c) to read as follows: 

§ 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 


khammond on DSKJM1Z7X2PROD with PROPOSALS