[Federal Register Volume 88, Number 56 (Thursday, March 23, 2023)]
[Proposed Rules]
[Pages 17495-17511]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-04990]


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FEDERAL COMMUNICATIONS COMMISSION

47 CFR Part 54

[WC Docket No. 17-310; FCC No. 23-6; FR ID 129966]


Promoting Telehealth in Rural America

AGENCY: Federal Communications Commission.

ACTION: Proposed rule.

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SUMMARY: In this document, the Federal Communications Commission 
(Commission) continues its efforts to improve the Rural Health Care 
(RHC) Program. The RHC Program seeks to support rural health care 
providers with the costs of broadband and other communications services 
for patients in rural areas that may have limited resources, fewer 
doctors, and higher rates than urban areas.

DATES: Comments are due on or before April 24, 2023, and reply comments 
are due on or before May 22, 2023. 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 contact listed as 
soon as possible.

ADDRESSES: Pursuant to Sec. Sec.  1.415 and 1.419 of the Commission's 
rules, 47 CFR 1.415, 1.419, interested parties may file comments and 
reply comments. 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, DA 20-304 (March 19, 
2020), https://www.fcc.gov/document/fcc-closes-headquarters-open-window-and-changes-hand-delivery-policy.
    People with Disabilities: To request materials in accessible 
formats for people with disabilities (Braille, large print, electronic 
files, audio format), send an email to [email protected] or call the 
Consumer & Governmental Affairs Bureau at (202) 418-0530 (voice), (202) 
418-0432 (TTY).

FOR FURTHER INFORMATION CONTACT: Bryan P. Boyle [email protected],

[[Page 17496]]

Wireline Competition Bureau, 202-418-7400 or TTY: 202-418-0484. 
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 [email protected] or call the Consumer and Governmental Affairs 
Bureau at (202) 418-0530.

SUPPLEMENTARY INFORMATION: This is a synopsis of the Commission's 
Promoting Telehealth in Rural America; Second Further Notice of 
Proposed Rulemaking (Second FNPRM) in WC Docket No. 17-310; FCC No. 23-
6, adopted January 26, 2023 and released January 27, 2023. The full 
text of this document is available for public inspection during regular 
business hours at Commission's headquarters 45 L Street NE, Washington, 
DC 20554 or at the following internet address: https://docs.fcc.gov/public/attachments/FCC-23-6A1.pdf. The Order on Reconsideration, Second 
Report and Order and Order (Orders) that was adopted concurrently with 
the Second Further Notice of Proposed Rulemaking is to be published 
elsewhere in the Federal Register.

Introduction

    The Second Further Notice of Proposed Rulemaking (Second FNPRM), 
continues the Commission's efforts to improve the Rural Health Care 
(RHC) Program. The RHC Program supports rural health care providers 
with the costs of broadband and other communications services so that 
they can serve patients in rural areas that may have limited resources, 
fewer doctors, and higher rates for broadband and communications 
services than urban areas. Telehealth and telemedicine services, which 
expanded considerably during the COVID-19 pandemic, have also become 
essential tools for the delivery of health care to millions of rural 
Americans. These services bridge the vast geographic distances that 
separate health care facilities, enabling patients to receive high-
quality medical care without sometimes lengthy or burdensome travel. 
The RHC Program promotes telehealth by providing financial support to 
eligible health care providers for broadband and telecommunications 
services.
    The Second FNPRM proposes revisions to the rate determination 
rules, seeks comment on to reinstating the cap on support for satellite 
services, proposes to make it easier for health care providers to 
receive RHC Program funding as soon as they become eligible, propose to 
align the deadline to request a Service Provider Identification Number 
(SPIN) change with the invoice filling deadline, and seeks comment on 
revisions to data collected in the Telecom Program.

Second Further Notice of Proposed Rulemaking

    The Second FNPRM proposes modifications to the three rural rate 
determination methods in the Telecom Program, including changes to the 
market-based approach of Methods 1 and 2 and new evidentiary 
requirements for justifying cost-based rates under Method 3. The 
Commission also proposes to simplify urban rate rules by eliminating 
the ``standard urban distance'' distinction and seeks specific comment 
on sources for urban rates as well as general comment on the urban rate 
rules. Next, the Commission seeks comment on reinstating the cap on 
support for satellite services that the Commission eliminated when it 
adopted the Rates Database and on amending Health Care Connect Fund 
(HCF) Program rules to make equipment supporting Telecom Program 
services eligible. In addition, to make it easier for health care 
providers to receive RHC Program funding as soon as they become 
eligible entities, the Commission proposes a conditional eligibility 
process to allow entities that will be eligible health care providers 
in the future to engage in competitive bidding and file Requests for 
Funding before they become eligible. The Commission also proposes to 
align the deadline to request a Service Provider Identification Number 
(SPIN) change with the invoice filing deadline and seek comment on a 
post-commitment process to amend evergreen contract dates. The 
Commission concludes by seeking comment on proposed revisions to FCC 
Form 466 intended to improve the quality of Telecom Program data.
    Rural Rates. In the Order on Reconsideration published elsewhere in 
the Federal Register, the Commission grants the petitions seeking 
reconsideration of the Telecom Program Rates Database and restore 
Methods 1, 2, and 3 for calculating rural rates in the Telecom Program 
effective for funding year 2024. Although the Commission believes 
restoring Methods 1, 2, and 3 is the best of the currently available 
options to ensure that healthcare providers have adequate, predictable 
support in the short term, the Commission also recognizes that 
improvements to these methods may be necessary for the long term given 
the issues that the Commission has previously cited with respect to 
these rate calculation methodologies. Therefore, in the following 
sections, the Commission proposes modifications to the three methods to 
improve the overall calculation of rural rates, make rate calculations 
simpler to administer, and reduce waste, fraud, and abuse in the 
Telecom Program for funding year 2024 and beyond. The Commission 
proposals are similar to the now-reinstated Methods 1 through 3 in that 
they contain multiple ways to calculate rural rates that are applied 
sequentially. While the Commission seeks comment specifically on the 
proposed modification to the methods, at the outset the Commission 
seeks comment generally on alternative rural rate calculation methods. 
In proposing alternative rate methodologies, commenters should be 
specific, point the Commission to available data sources to support any 
alternative methodology, and explain how any alternative methodology 
would be more advantageous in protecting the Fund against waste, fraud, 
and abuse.
    As an initial matter, the Commission addresses several matters 
applicable to rural rates regardless of the method used. For both 
market-based calculations and cost-based rates, the Commission proposes 
that the rural rate not exceed the monthly rate in the contract or 
other applicable agreement between the service provider and health care 
provider. This safeguard exists in the rules related to the Rates 
Database and ensures that rural rates will drop if market prices drop. 
The Commission seeks comment on this proposal. Are there situations in 
which it would be appropriate to base support on an amount higher than 
the monthly rate in the contract or other applicable agreement?
    Additionally, the Commission proposes that service providers with 
multi-year contracts, including evergreen contracts, continue to be 
required to justify rural rates only in the first year of the contract. 
Given that service providers would not be expected to submit additional 
bids within the duration of the multi-year contract, the Commission 
believes it would be reasonable to exempt such contracts from requiring 
additional rural rates justifications during the duration of the 
contract. The Commission seeks comment on this proposal. The Commission 
also seeks comment on whether a rural rate approval for a single year 
contract for the same health care provider for the same service should 
be effective for multiple funding years to reduce administrative 
burdens associated with filing rural rate justifications every year. If 
so, for how

[[Page 17497]]

many years should an approval be effective?
    The Commission seeks comment on whether the Commission should offer 
guidance on which point in the procurement and funding cycle service 
providers should determine rural rates. The Bureau previously advised 
that service providers should determine the rural rate before 
responding to a health care provider's request for bids. If the 
Commission offers further guidance, should it alter the guidance the 
Bureau previously offered? The Commission also seeks comment on whether 
additional clarification is needed regarding what constitutes 
``comparable rural areas'' for determining rural rates. Are health care 
providers and service providers currently able to determine what 
constitute a ``comparable rural area?'' If the Commission were to offer 
a clarification on what constitutes ``comparable rural areas,'' what 
should the clarification state?
    Market-Based Calculations. The rules that the Commission reinstate 
in the Order on Reconsideration published elsewhere in the Federal 
Register require health care and service providers to first calculate 
the rural rate by averaging rates offered by the service provider for 
an identical or similar service in the rural area in which the health 
care provider was located (Method 1), and in the event the service 
provider does not provide such a service, the average of rates offered 
by carriers other than the service provider (Method 2). The Commission 
now proposes alternative sequential methods for determining rural 
rates, which are called ``Method A'' and ``Method B'' for purposes of 
the Second FNPRM:
    Method A: The rural rate shall be the median of publicly available 
rates charged by other service providers for the same or similar 
services over the same distance in the rural area where the health care 
provider is located.
    Method B: If there are no publicly available rates charged by other 
service providers for the same or similar services (that is, rates that 
can be used under Method A), the rural rate shall be the median of the 
rates that the carrier actually charges to non-health care provider 
commercial customers for the same or similar services provided in the 
rural area where the health care provider is located.
    This proposal differs from Methods 1 and 2 in two primary respects. 
First, the new proposed calculations would be based on the median of 
inputs, rather than their average. Calculating rural rates using the 
median will mute the effect that a small number of abnormally high or 
low inputs would have on the calculated rural rate. The Commission 
seeks comment on the methodology. Would calculating rural rates using 
averages be preferable to using medians? If so, why? Are there other 
ways that the Commission should consider calculating rural rates?
    The second major way that the proposal varies from Methods 1 and 2 
is that the default calculation in the proposal is based on rates 
charged by other service providers, meaning that a service provider 
would only be able to use its own rates to calculate the rural rate if 
there are no applicable rates from other service providers. This change 
could improve program integrity and provide administrative benefits. As 
to program integrity, shifting the default rural rates calculation to 
rates from other service providers could ensure that rural rates in the 
Telecom Program better reflect market conditions. A service provider 
would not enjoy inflated rural rates simply because it charges inflated 
rates to customers outside of the Telecom Program. The Commission seeks 
stakeholder feedback on program integrity implications of the proposal 
to use rates charged by other service providers as the default for 
calculating rural rates. Are there any concerns with service providers 
using competitor's rates to determine rural rates instead of using 
their own rates? What are the benefits? Are there benefits to using the 
service provider's own rates as the default as Method 1 does?
    As to administration, the availability of rural rates on the Open 
Data platform on the Administrator's website could simplify the rates 
determination process if the Administrator were to build a tool that 
allows the filer of a Request for Funding to select the specific 
funding requests, i.e., prices from past request that would be used as 
inputs to Method A. The tool would then determine the rural rate under 
Method A on behalf of the health care provider before it certifies its 
Request for Funding. The automated process would not pre-determine 
which health care provider is in a similar rural area as the health 
care provider applicant. That would be left to the service provider to 
determine. During application review, the Administrator would verify 
that the sites from the inputs are in a similar rural area to the 
health care provider, just as it has done under the now reinstated 
Methods 1 and 2.
    The Commission seeks comment on developing an automated process to 
calculate rural rates, to the extent possible, by having USAC's website 
auto-generate the rural rate after the health care and/or service 
provider selects sites that are in the same rural area as the HCP. 
Would this help alleviate administrative burdens associated with 
calculating rural rates? Should filers be permitted to add rural rates 
outside of Open Data to be included in the calculation? Are there any 
circumstances in which a filer should be permitted to exclude a rate 
even if the rate is for the same or similar services over the same 
distance in the rural area where the health care provider is located? 
Are there any disadvantages to automating the rate calculation process 
in this way? Would a challenge process outside of the normal appeals 
process be necessary? If so, how should such a challenge process 
operate? Do commenters have any alternative methods of administering 
these proposed rate methodology changes that would increase efficiency 
and transparency? Commenters are encouraged to provide specific 
suggestions and feedback on how to best administer changes to the rates 
determination process.
    The Commission seeks comment on other iterations of the proposed 
Methods A and B. For instance, one alternative to the proposal would be 
to use the lower of the rural rates calculated under Methods A and B. 
This alternative would ensure that the Fund reaps the benefits of 
reductions in pricing from the service provider for the applicable 
funding request or in the overall market. The Commission seeks comment 
on the advantages and disadvantages of the approach.
    The Commission also seeks comment on the rates that should be used 
for Methods A and B under the proposal. For Method A, are there other 
sources of publicly available rate information to be considered, such 
as tariffed rates? Should Method A inputs be limited to data available 
in Open Data? Do commenters agree that the data available in Open Data 
would be sufficient for Program participants to determine a rural rate 
under Method A? If not, what additional information would be required 
in Open Data to make such a rate determination? For the proposed Method 
B, the Commission seeks comment on whether to include the median of all 
of the service provider's own rates for the same or similar services, 
including rates for USF-supported services, which are currently 
excluded from Method 1 calculations either in situations where there 
are no publicly available rates or tariffed rates outside of the 
service provider's own rates or in all situations. For Method B, should 
service providers use additional information available in their own 
records to make a more granular similarity determination?

[[Page 17498]]

    For both proposed Methods A and B, the Commission seeks comment on 
whether to include both healthcare provider and non-healthcare provider 
commercial customers in the rural area in which the healthcare provider 
is located to calculate the rural rate. Do commenters have any concerns 
with allowing service providers to rely on all of their own rates, 
including health care provider rates? How should Methods A and B 
account for the potential price variations caused by term and volume 
discounts? Do commenters have any concerns that the proposed Methods 
would not be suitable for health care providers in Alaska? Commenters 
are encouraged to be specific with their concerns.
    Cost-Based Rates. The Commission proposes that service providers 
continue to have the option to submit a cost-based rate if they cannot 
calculate a rural rate using Methods A or B. Under the rate 
determination rules the Commission reinstates, service providers may 
request approval of a cost-based rate under Method 3 from the 
Commission (for interstate services) or a state commission (for 
intrastate services) if there are no rates for the same or similar 
services in the rural area in which the health care provider is 
located, or the service provider reasonably determines that the 
calculated rural rate would not be compensatory. The Commission's rules 
require the service provider to submit a justification of its requested 
rural rate, including an itemization of the costs of providing the 
service requested by the eligible health care provider. To comply with 
the requirement, the request for approval of a cost-based rural rate 
requires service providers to include a cost study that demonstrates 
how the costs of providing services were allocated to RHC Program 
customers.
    In the Promoting Telehealth Report and Order (2019 R&O) (FCC 19-78 
rel. August 20, 2019 (84 FR 54952, October 11, 2019)), the Commission 
eliminated the cost-based method of determining rates and instead 
concluded that submitting a cost-based rate should serve only as a 
safety valve for service providers that have no other means of 
determining a rural rate. The Commission reasoned that implementation 
of the Rates Database made it unlikely that service providers would be 
unable to determine a rural rate with the data provided in the 
database. The Commission established a waiver process that allowed 
service providers to use a cost-based rate mechanism in ``extreme 
cases'' where the provider could show that the applicable rural rate 
from the Rates Database ``would result in objective, measurable 
economic injury.'' Now that the Rates Database has been eliminated and 
the previous rate determination rules have been reinstated, the 
Commission proposes to modify the cost-based rate-determination method 
to include specific evidentiary requirements to increase transparency 
in how service providers calculate cost-based rates when a rural rate 
cannot be calculated under Methods A or B or the carrier reasonably 
determines that the rural rate calculated under Methods A or B would 
not generate a reasonably compensatory rate.
    The Commission proposes a revised cost-based method that will 
require service providers seeking approval of a cost-based rate to 
satisfy the same evidentiary requirements that the Commission adopted 
as required for waiver of the Rates Database rules in the 2019 R&O. 
When service providers submit a cost-based rate, the Commission 
proposes to require service providers to include all financial data and 
other information to verify the service provider's assertions, 
including, at a minimum, the following information:
     Company-wide and rural health care service gross 
investment, accumulated depreciation, deferred state and Federal income 
taxes, and net investment; capital costs by category expressed as 
annual figures (e.g., depreciation expense, state and Federal income 
tax expense, return on net investment); operating expenses by category 
(e.g., maintenance expense, administrative and other overhead expenses, 
and tax expense other than income tax expense); the applicable state 
and Federal income tax rates; fixed charges (e.g., interest expense); 
and any income tax adjustments;
     An explanation and a set of detailed spreadsheets showing 
the direct assignment of costs to the rural health care service and how 
company-wide common costs are allocated among the company's services, 
including the rural health care service, and the result of these direct 
assignments and allocations as necessary to develop a rate for the 
rural health care service;
     The company-wide and rural health care service costs for 
the most recent calendar year for which full-time actual, historical 
cost data are available;
     Projections of the company-wide and rural health care 
service costs for the funding year in question and an explanation of 
these projections;
     Actual monthly demand data for the rural health care 
service for the most recent three calendar years (if applicable);
     Projections of the monthly demand for the rural health 
care service for the funding year in question, and the data and details 
on the methodology used to make that projection;
     The annual revenue requirement (capital costs and 
operating expenses expressed as an annual number plus a return on net 
investment) and the rate for the funded service (annual revenue 
requirement divided by annual demand divided by 12 equals the monthly 
rate for the service), assuming one rate element for the service, based 
on the projected rural health care service costs and demands;
     Audited financial statements and notes to the financial 
statements, if available, and otherwise unaudited financial statements 
for the most recent three fiscal years, specifically, the cash flow 
statement, income statement, and balance sheets. Such statements shall 
include information regarding costs and revenues associated with, or 
used as a starting point to develop, the rural health care service 
rate; and
     Density characteristics of the rural area or other 
relevant geographical areas including square miles, road miles, 
mountains, bodies of water, lack of roads, remoteness, challenges and 
costs associated with transporting fuel, satellite and backhaul 
availability, extreme weather conditions, challenging topography, short 
construction season, or any other characteristics that contribute to 
the high cost of servicing the health care providers.
    The Commission understands that stakeholders generally disfavored 
the evidentiary requirements for the cost-based waiver for determining 
rural rates because of the burdensome nature of the information 
requested, the possibility that the cost-based method would not provide 
sufficient support for those that could not calculate their rates using 
the Rates Database and the fact that these evidentiary requirements go 
far beyond the evidentiary requirements for Method 3. However, the 
Commission adopted the waiver process as a safety valve given how 
infrequently the cost-based method has been used in the Telecom 
Program's history and the small likelihood that providers could not 
determine the rural rate using the Rates Database. The Commission 
believes that such a comprehensive cost-based process would likely 
incentivize service providers to make every effort to justify their 
rates under Methods A or B, which would be much simpler for both the 
Administrator and service providers. Nonetheless, in addition to the 
proposal, the Commission seeks comment on alternative evidentiary 
requirements that can assist the Bureau

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and Administrator in evaluating cost-based rates in the event that 
service providers have no other way of determining rates. Do commenters 
have any recommendations that would increase transparency and 
efficiency in submitting and reviewing cost-based rates? How common 
would it be for service providers to have to use this cost-based rates 
process? Are there changes that the Commission can make to the proposed 
cost-based rates submission process that would mitigate administrative 
burdens on service providers without compromising Program integrity? 
How should service providers and the Bureau use the cost data to 
determine a cost-based rate to be charged to an individual customer? 
Should there be a deadline by which the Bureau must complete its cost-
based rate review and issue a rate determination? If so, how would such 
a deadline operate in the event that a service provider submitted 
incomplete or inaccurate information that required additional 
submissions to the Bureau? Would the use of cost studies to determine 
maximum rural rates decrease incentives for new infrastructure 
investment in hard to serve areas? Do commenters have any concerns that 
the proposed cost-based rate would not be suitable for health care 
providers in Alaska? Commenters are strongly encouraged to share 
specific recommendations.
    Urban Rates. The Commission next proposes to simplify and seek 
further comment on future urban rate determination rules for the 
Telecom Program. 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. The rules that the Commission 
restores on reconsideration elsewhere in the Federal Register state 
that urban rates ``shall be a rate no higher than the highest tariffed 
or publicly-available rate charged to a commercial customer for a 
functionally similar service in any city with a population of 50,000 or 
more in that state.'' Following the decision in the Order on 
Reconsideration published elsewhere in the Federal Register to 
eliminate the Rates Database and restore the previous rules for 
determining urban rates effective funding year 2024, the Commission 
proposes to simplify the urban rate rule by eliminating the ``standard 
urban distance'' distinction from it and now seek comment on whether 
any additional changes to those rules are warranted.
    Standard Urban Distance. The rules that the Commission reinstates 
published elsewhere in the Federal Register provide that, if the 
service is provided over a distance greater than the standard urban 
distance, which is the average of the longest diameters of all cities 
with a population of 50,000 or more within a state, the urban rate is 
the rate no higher than the highest tariffed or publicly-available rate 
provided over the standard urban distance. The 2019 R&O eliminated the 
standard urban distance distinction in adopting the Rates Database. The 
Commission proposes to eliminate this distinction between services 
provided over and within the standard urban distance and to base all 
urban rates calculations on rates provided in a city, rather than over 
the standard urban distance. The Commission expects that eliminating 
this distinction will simplify the process for determining an urban 
rate and will not adversely impact most health care providers because 
few Telecom Program participants calculate urban rates using the 
standard urban distance. The Commission seeks comment on the impact 
that this would have on urban rates and administrative burdens. Before 
the adoption of the Rates Database, how common was it to base urban 
rates calculations on services in a city (rather than services over the 
standard urban distance)? Would urban rates increase unduly if the 
Commission makes this change? The Commission seeks comment on whether 
to change the standard for ``urban'' from a city with a population of 
at least 50,000. Will changes to the standard for ``urban'' in 
conjunction with the elimination of the standard urban distance cause 
an increase in urban rates?
    Sources of Urban Rates. Under the pre-funding year 2020 urban rate 
rules that the Commission reinstates in the Order on Reconsideration 
published elsewhere in the Federal Register, documentation may be 
required to substantiate the applicable urban rate. The urban rate is 
determined by the health care provider, often with the assistance of a 
consultant or carrier, and reported on the FCC Form 466. To document 
the urban rate, health care providers may use ``tariff pages, 
contracts, a letter on company letterhead from the urban service 
provider, rate pricing information printed from the urban service 
provider's website or similar documentation showing how the urban rate 
was obtained.'' In the alternative, health care providers have 
historically utilized the urban rates listed on the Administrator's 
website for certain services in certain states. These urban rates are 
determined by reviewing tariff information on file with the Commission. 
One advantage of utilizing the urban rates posted to the 
Administrator's website is that health care providers did not need to 
provide additional documentation on their FCC Form 466. With the 
Commission's decision to eliminate the Rates Database, should the 
Administrator post urban rates as it did prior to the 2019 R&O or is 
the posting of urban rates of limited utility and unnecessary? Are 
there changes or updates the Administrator should make to the urban 
rates it posts on its website? While the Commission has made the 
decision to eliminate the Rates Database, the database contains urban 
rates that were collected as part of the database creation process. If 
the Administrator resumes posting urban rates, should the urban rates 
currently found in the Rates Database be included in the posted list, 
or have too many anomalies been identified that will preclude the use 
of those rates by participants in the Telecom Program?
    On a forward going basis, should there be any changes to the now-
reinstated urban rate rules? When exploring additional sources of urban 
rates, should the Commission allow health care providers to use the 
median of urban rates in the Rates Database as the urban rate? Parties 
lodging complaints about the use of the Rates Database to determine 
rural rates had relatively few complaints about its use to determine 
urban rates. Should the Commission require the Administrator to 
maintain a Rates Database for urban rates and require that urban rates 
be calculated utilizing the Rates Database? Alternatively, should a 
rate survey be used to determine current urban rates instead of relying 
on the Administrator to determine and post rates? If so, after the 
initial compilation of the survey, how often should it be updated? Are 
there any additional factors that the Commission should take into 
account for calculating urban rates in the Telecom Program?
    Threshold for ``Urban.'' The standard for ``urban'' of being 
``functionally similar service in any city with a population of 50,000 
or more in that state'' that the Commission reinstates published 
elsewhere in the Federal Register was originally adopted in 2003. 
Should the Commission maintain 50,000 as the population threshold for 
determining an urban area? Is there another population number that 
better captures the full spectrum of urban

[[Page 17500]]

areas or is there a value collected by a different agency that better 
captures the picture of an urban area?
    Network Function. The Commission seeks comment on two matters 
related to how networks function. First, the Commission seeks comment 
on reinstating the cap on support for satellite services that was in 
place before the adoption of the Rates Database. The Commission then 
seeks comment on the eligibility in the HCF Program of equipment that 
supports services funded in the Telecom Program.
    Satellite Services. The Commission seeks comment on reinstating the 
cap on support for satellite services in the Telecom Program at the 
amount of support the health care provider would have received for 
similar terrestrial-based services. When the Commission established the 
RHC Program, satellite service was the only available 
telecommunications service available in some rural areas. However, 
rural health care providers in those areas generally did not receive 
Telecom Program discounts because satellite service rates typically did 
not vary between urban and rural areas. In 2003, the Commission revised 
its rules to allow eligible rural health care providers to base Telecom 
Program support for satellite services on urban rates for functionally 
similar wireline services. However, because satellite services were 
often significantly more expensive than terrestrial-based services, in 
rural areas where a functionally similar terrestrial-based service was 
available the Commission capped support for satellite service at the 
amount that the health care provider would receive had it chosen the 
terrestrial-based service. If an eligible rural health care provider 
chose a satellite-based service that was more expensive than the 
available equivalent terrestrial-base service, the health care provider 
was responsible for the additional cost. In the 2019 R&O, the 
Commission eliminated the cap, effective for funding year 2020, 
explaining that the limitation on support for satellite services was no 
longer necessary because rural rates would be determined by the Rates 
Database and costs for satellite services were decreasing, while also 
acknowledging that eliminating the cap furthered technological 
neutrality and that improvements to competitive bidding rules would 
reduce the need for the cap.
    The Commission seeks comment on reinstating the cap on satellite 
services at the lower of the satellite service rate or the terrestrial 
service rate and allow rural health care providers to receive discounts 
for satellite service up to the amount providers would have received if 
they purchased functionally similar terrestrial-based alternatives, 
even where terrestrial-based services are available. It appears that 
the constraints on the price of satellite services that the Commission 
predicted when it eliminated the cap on satellite services did not come 
into fruition. Since the elimination of the cap and the waiver of the 
rates database, Telecom Program support for satellite services has 
increased significantly. The Commitments for Satellite Services dipped 
slightly in funding year 2020 but increased significantly after that. 
Funding Year Amounts: 2019--$28,726,457; 2020--$26,583,278; 2021--
$39,487,136; and 2022--$60,098,460.
    The steady growth in demand for satellite services may demonstrate 
the need to reinstitute the satellite funding cap. Without the 
constraints on support for satellite services imposed by the Rates 
Database, it appears that commitments for satellite services could 
increase to an unsustainable level. As an initial matter, the 
Commission seeks comment on the significance of the increase in 
commitments for satellite services. Does the increase reflect that the 
prices charged for satellite services in the Telecom Program increased 
after the cap was eliminated or are health care providers selecting 
satellite services because those services are now more competitive with 
terrestrial-based services? Are service providers less likely to bid on 
or upgrade networks for terrestrial services because the cap was 
lifted? Have rates for satellite services due to the availability of 
low Earth orbit (LEO) satellites dropped enough to make the cap no 
longer necessary? If that is the case, why did demand for satellite 
services increase so significantly in recent years? Are there other 
factors the Commission should consider in determining whether to retain 
the cap on support for satellite services? For example, is it 
appropriate to apply the cap in cases where satellite service provides 
redundancy in the absence of alternative terrestrial-based route 
diversity? Could reinstatement of the cap discourage investment in LEO 
satellites? What impact should the RHC Program's historical preference 
for technological neutrality and the fact that there previously was a 
cap on satellite services have on this determination? If the Commission 
reinstitutes the cap, are there other changes that should be made to 
it? Should the Commission not apply the cap to funding requests 
supported by satellite service contracts that were entered into before 
reinstatement of the cap? Do commenters in Alaska have any concerns 
with reinstating the cap, given the importance of satellite service in 
Alaska?
    HCF Program Eligible Equipment. The Commission also seeks comment 
on whether to amend HCF Program rules to make eligible network 
equipment necessary to make functional an eligible service supported 
under the Telecom Program. Current HCF Program rules restrict the 
eligibility of network equipment for individual applicants to equipment 
necessary to make functional an eligible service supported under the 
HCF Program. There is no analogous rule in the Telecom Program that 
provides support for network equipment. Should the Commission consider 
allowing HCF-eligible equipment to support both HCF and Telecom Program 
services? Would such a change improve the reliability of Telecom 
Program supported services? If the Commission were to make network 
equipment for Telecom Program supported services eligible, what would 
the financial impact be on the RHC Program? Would HCF Program funding 
for equipment supporting Telecom Program services reduce Telecom 
Program expenditures? Expanding the universe of supported equipment 
would make it more likely that the internal cap would be exceeded. 
Given the significantly higher discount rates already offered in the 
Telecom Program, would it be sensible to increase the likelihood of 
exceeding the internal cap to provide HCF Program funding to support 
networks that traditionally have been supported in the Telecom Program 
only? If the Commission implements the change, are there additional 
safeguards to consider?
    Conditional Approval of Eligibility for Future Eligible Health Care 
Providers. The Commission proposes to amend RHC Program rules for 
determining eligibility to allow entities that are not yet but will 
become eligible health care providers in the near future to begin 
receiving RHC Program funding shortly after they become eligible. Under 
the Bureau-level Hope Community Order (DA 16-855 rel. July 28, 2016), 
entities that are not yet eligible health care providers cannot receive 
an eligibility approval, which is a prerequisite to initiating 
competitive bidding and filing a Request for Funding, until they are 
eligible health care providers. As a result of the restriction, if a 
health care provider does not receive an eligibility approval in time 
to complete competitive bidding and file a Request for Funding by the 
close of the application filing window on April 1, the health care 
provider would have to

[[Page 17501]]

wait until a subsequent funding year to receive RHC Program funding, 
which could result in a delay of a full calendar year.
    In order to address the delay in funding, the Commission proposes 
to amend Sec. Sec.  54.601 and 54.622 of its rules to allow entities 
that will soon be eligible health care providers to request and receive 
a ``conditional approval of eligibility.'' Once the Administrator 
approves an applicant's conditional eligibility, the applicant could 
proceed to conduct competitive bidding and submit a Request for Funding 
during the application filing window. To ensure that no funding is 
disbursed for entities that are not yet eligible, the Administrator 
would not issue a funding decision for the funding request until the 
entity updates its eligibility request by providing documentation 
showing that it is an eligible health care provider and the 
Administrator issues a final eligibility approval. The conditional 
approval of eligibility process would use the same forms used to 
request eligibility approvals, which are the FCC Form 460 (Eligibility 
and Registration Form) in the HCF Program and the FCC Form 465 
(Description of Services Requested and Certification Form) in the 
Telecom Program.
    The Commission seeks comment on the potential impact of and 
mechanics of the proposed rule changes. How many entities would be 
impacted by the change? Are there any potential problems associated 
with the proposal or any potential negative impact on the overall RHC 
Program? Are any additional safeguards necessary beyond the restriction 
against the Administrator issuing funding commitments before an entity 
receives a final eligibility approval? Are there alternatives to the 
conditional eligibility proposal that would more effectively allow 
entities that are not yet eligible health care providers to receive RHC 
Program funding? Finally, are there any RHC Program rule changes beyond 
those that the Commission proposes that would be needed to implement 
the conditional eligibility proposal?
    Administrative Deadlines. The Commission addresses two matters 
involving RHC Program deadlines. The Commission proposes to push back 
the deadline for requesting Service Provider Identification Number 
(SPIN) changes to align with the invoice deadline. The Commission also 
seeks comment on whether a mechanism to allow post-commitment changes 
to evergreen contract dates is necessary.
    Service Provider Identification Number Change Deadlines. The 
Commission proposes to revise the current deadline for requesting 
Service Provider Identification Number (SPIN) changes from the service 
delivery deadline to the invoice filing deadline. A SPIN is a unique 
number that the Administrator assigns to an eligible service provider 
seeking to participate in the universal service support programs. An 
applicant under the HCF Program or Telecom Program may request either a 
``corrective SPIN change'' (in cases not involving a change to the 
service provider associated with the applicant's funding request 
number) or ``operational SPIN change'' (in cases involving a change to 
the service provider associated with the applicant's funding request 
number). The current filing deadline to submit a SPIN change request is 
no later than the service delivery deadline, which, with limited 
exceptions, is June 30 of the funding year for which program support is 
sought. The Commission established a SPIN change deadline aligned with 
the service delivery deadline to ensure consistency with the E-Rate 
Program and reduce the number of requests for extension of the invoice 
deadline.
    The Schools, Health and Libraries Broadband Coalition (SHLB) 
request that the Commission change the current deadline to make a 
corrective SPIN change from the service delivery deadline to the 
invoice filing deadline, which typically falls on October 28. SHLB 
maintains that the nature of corrective SPIN changes creates a 
``recurring hardship for applicants'' unable to meet the deadline 
which, in turn, results in deadline waiver requests filed with the 
Commission. According to SHLB, two commonly recurring situations 
support a change to the corrective SPIN change deadline: (1) mergers 
and acquisitions that can occur at any time during the funding year and 
(2) a service provider that assigns one of its multiple SPINs to a 
funding request without advising the healthcare provider as to the 
correct SPIN before invoicing begins, a situation that, in many 
instances, occurs after the service delivery deadline has passed. SHLB 
maintains that changing the deadline to request a corrective SPIN 
change to October 28 will provide the Administrator with sufficient 
time to process the change request without the need for applicants to 
request deadline waivers from the Commission.
    The Commission tentatively agrees with SHLB that the current 
deadline for requesting corrective SPIN changes imposes unnecessary 
burdens that a later-in-time deadline will largely eliminate. Delaying 
the deadline by 120 days (from June 30 to October 28 in most cases) 
would reduce the need for applicants to seek, and for the Commission to 
address, waivers of the current corrective SPIN change deadline that 
result from the types of situations described by SHLB, while still 
maintaining an administratively reasonable date by which such change 
requests must be made. Although SHLB focused its request on corrective 
SPIN changes only, the Commission concludes that it may be needlessly 
confusing to establish two different SPIN change request deadlines 
depending on whether the request is corrective or operational in 
nature. Accordingly, the Commission proposes to change the deadline for 
requesting both corrective and operational SPIN changes from the 
current service delivery deadline to the invoicing filing deadline. The 
Commission seeks comment on the proposal. Are there other benefits to 
the change? The Commission anticipates that one potentially undesirable 
consequence of the change is that it may cause Program participants to 
delay in filing SPIN change requests, which could result in Program 
participants missing the invoice deadline. If the SPIN change deadline 
is moved to the invoice deadline and the health care provider files a 
SPIN change request so close to the deadline that the Administrator 
cannot process the request before the invoice deadline, the health care 
provider will not be able to submit invoices. Does the flexibility this 
change would offer to health care providers justify the disadvantage to 
health care providers who are unable to invoice because they filed a 
SPIN change request too close to the deadline? Parties often indicate 
that alignment between RHC Program rules and E-Rate Program rules 
eliminates confusion. Would bringing these deadlines out of alignment 
create confusion? Are there other reasons not to adopt the same 
deadline for both corrective and operational SPIN changes?
    Evergreen Contract Date Changes. The Commission seeks comment on 
whether there should be a process for health care providers to change 
evergreen contract dates following a funding commitment. Evergreen 
contracts are multi-year agreements under which covered services are 
exempt from the competitive bidding requirements for the life of the 
contract. When the Administrator issues a funding commitment letter, it 
sets the period for an evergreen contract based on the estimated 
service start and end dates provided by the health care provider on the 
FCC Form 462. However, services sometimes start after the estimated

[[Page 17502]]

service start date, which means that the evergreen status of the 
contract expires before it would have if the evergreen designation 
period was based on the actual service start date. The Commission seeks 
comment on whether there should be a means for a healthcare provider to 
change evergreen contract dates. Is such an alternative necessary and, 
if so, how could it be accomplished? Would an alternative means require 
a change in the Commission's rules or could the current rules be 
interpreted to allow for evergreen contract date changes? What would be 
the impact of such a change on the duration of evergreen contracts? 
Would allowing program participants to change evergreen contract dates 
make it more difficult for the Administrator to process funding 
requests submitted pursuant to such contracts?
    FCC From 466. The Commission seeks comment on proposed revisions to 
the Funding Request and Certification Form (FCC Form 466), including 
service-specific details that could both improve the accuracy of 
similar service categorizations under the existing Method 1 and Method 
2, or the alternatives the Commission proposes in the Second FNPRM, and 
also result in more accurate cost-based rates. To ensure the reporting 
of accurate data, the Commission proposes to begin collecting the data 
from service providers because they are in the best position to furnish 
it.
    In the Promoting Telehealth in Rural America FNPRM (2022 FNPRM) 
(FCC 22-15 rel. February 22, 2022 (87 FR 14421, March 15, 2022)), the 
Commission sought general comment on both existing Telecom Program data 
collected through current program forms as well as potential changes to 
the categorization and details of Telecom Program services and data 
reported on the FCC Form 466. Certain data currently collected appears 
to be too vague and fails to capture details of the purchased services, 
resulting in significantly different monthly rates for services broadly 
categorized that report comparable bandwidths but likely vary 
significantly. The Commission requested feedback on updating the 
Telecom Program's categorization of services to more accurately reflect 
the functionality and cost of services purchased by incorporating data 
points such as details of service level agreements (SLAs). The 
Commission also sought comment on collecting data that would classify 
services based upon functionality, regardless of the commercial name 
used by the service provider to describe the service. The Commission 
then sought general comment on revisions to the FCC Form 466 and other 
Telecom Program forms and corresponding USAC online portals that would 
improve the accuracy of urban and rural rate determinations and ensure 
program integrity.
    Commenters agreed that collecting more detailed data would result 
in more accurate categorization of services purchased by health care 
providers and improve program transparency. Alaska Communications 
agreed that service categorizations should be more granular and 
explained that services broadly categorized as ``dedicated'' include a 
range of services and features, particularly security and reliability, 
that significantly impact rates. Alaska Communications also noted that 
the factors identified in the 2022 FNPRM ``can have a profound effect 
on the functionality of the service from the perspective of the end 
user.'' GCI suggested that the Commission could collect data on network 
type, prioritization, and term and volume discounts. GCI also argued 
that the Commission should collect data on services purchased rather 
than requiring healthcare providers to submit highly detailed forms 
when requesting service.
    The Commission proposes revisions to the FCC Form 466 to improve 
the quality, consistency, and level of detail of RHC Program data. 
Improved data will also increase the accuracy of rural rates calculated 
through the current three rate determination methods or through any 
rate determination process that is established in the future. Through 
continued review of data currently collected on the FCC Form 466, the 
Commission has identified five primary issues impacting the ability to 
calculate rates: (1) services reported by healthcare providers are not 
defined by a single factor such as technology or speed; (2) some 
reported rates are based on distance whereas others are not; (3) value-
added services beyond data transmission are not reported; (4) bundled 
prices offered by service providers make ``apples-to-apples'' rate 
comparisons difficult; and (5) the form does not measure the impact of 
SLAs on the rates offered.
    To address these issues and collect more detailed, accurate data, 
the Commission proposes to revise the FCC Form 466 to collect more 
granular information about the services purchased by health care 
providers. The Commission proposes to collect the following service 
details for each connection endpoint. The Commission seeks comment on 
collecting the data on the FCC Form 466 and welcome comments on 
additional or alternative service data that could improve the accuracy 
and fairness of Telecom Program rates. The Commission especially 
request recommendations for additional individual descriptors for the 
following items being considered:
    Contract Type. In many instances services reimbursed under the RHC 
Program are often part of a contract that bundles many services 
together. The Commission proposes adding a field that would indicate if 
the underlying contract includes a bundle and what services the bundle 
covers. Data collected would include the total number of end points 
serviced, an indicator of the geographic region of coverage, the 
contract's duration, discounts and service level agreements that apply 
to the contract, and the contract's total price including RHC supported 
services.
    Service Details--Connection Endpoint Information. There would be 
one entry for each endpoint.
    Location of Endpoint--Geographically identifiable latitude and 
longitude.
    Distance (If Applicable)--The distance would be in line miles from 
this endpoint to the far termination endpoint of the link or the 
central server node. This would be reported if the service provider 
uses it in the price calculation for this item. This field would be 
reported in line miles and not straight-line or ``crow fly'' miles.
    Connectivity--Point-to-Point, Point-to-Multipoint, Multipoint-to-
Multipoint
    Application--Voice, Data, or Both
    Service or Product--This is the service at the Endpoint. The user 
would select from the following options: Link (a point-to-point 
transmission), Device (at an endpoint for a link, such as a router or 
switch other network-supporting equipment), or Service (provided 
capabilities using the Links and Devices).
    Equipment Vendor/Model--If a device or other equipment is used to 
extend the eligible service to the endpoint, the user would list it 
here. All devices would be required to be listed.
    Technology--The user would report the technology at the endpoint 
selecting from items such as: DSL (Digital Subscriber Line), DOCSIS 
(Data Over Cable Service Interface Specifications), PON (Passive 
Optimal Network), GPON (Gigabit Passive Optical Network and its 
variants), and similar, as well as Other (Describe) and N/A.
    Bandwidth (Down/Up)--This would be expressed in Mbps.
    SLA Coverage--The user would select ``Yes'' or ``No'' to indicate 
if this endpoint is covered.
    Access Media--The user would describe the transmission media that 
is present at the termination of the

[[Page 17503]]

endpoint at each individual facility. This can often, but not always, 
be considered the last mile. The user would select from: copper, cable, 
microwave, fiber, high Earth orbit satellite, LEO satellite, power 
line, other, and N/A.
    Monthly Price--This field contains the monthly price in dollars and 
cents. This price would not include any uplift for SLA coverage, which 
will be collected elsewhere in the form. If the overall contract price 
is for a service such as MPLS, the price for each endpoint would be a 
pro-rated amount associated with each endpoint. Any service portion 
that cannot be associated with an endpoint, such as MPLS management, 
would be separately reported as an individual line item(s) in the 
``Additional Services and Differentiators'' section. MPLS and similar 
multi-point solutions would not be reported as a single item. These 
services would be pro-rated to individual endpoints.
    Additional Services and Differentiators--This question would only 
be used if the service cannot be described in the ``Service Details'' 
question.
    Service Name--This would be a free text descriptor for the 
provider's name of this item.
    Class--This would be a product, service, or differentiator not 
listed in the ``Service Details'' section because it is not associated 
with a single endpoint.
    Coverage Scope--This field would refer to the scope of the network 
and contract that this item covers.
    Period--This field would indicate the period length in months over 
which this item will occur. For example, if an ``Installation'' service 
is provided for the first year and one-half is part of the contract, 
``18'' months would be shown.
    SLA Coverage--The user would provide a ``Yes'' or ``No'' answer to 
indicate if this service/differentiator is covered under an SLA.
    Monthly Price--This would be expressed in dollars and cents. The 
provider would pro-rate the monthly average cost for each item if the 
overall contract price is a single number.
    The Commission also proposes to collect SLA details on the FCC Form 
466, which currently captures whether there is an SLA, but does not 
collect specific details about it. The specifics of an SLA appear to 
significantly impact telecommunications service rates and therefore are 
likely to be a key factor when determining whether services are 
similar. SLAs are typically sold at varying levels (sometimes with 
descriptors such as Gold, Silver, or Bronze) and include availability 
and reliability metrics, service maintenance and management, 
delineations of service provider and customer responsibilities, and 
penalties for non-performance. The Commission seeks comment on adding 
the following fields to the FCC Form 466 and also seek comment on any 
additional SLA data that could improve the accuracy and fairness of 
Telecom Program rural rates, with one line for each SLA coverage area 
or item:
    Target Measurement--The user would report the item or class of 
items to be measured such as Availability (Network Level Outage), 
Availability (Link or Endpoint Level Outage), Repair/Restore Times 
(MTTR--Mean Time To Repair), or On Site Spares (Response Time for 
Equipment Under Contract).
    SLA Level--High, Medium, or Low that may correspond to individual 
provider schemes, such as Bronze, Silver, Gold.
    Basic, Standard, Premium.
    As classified by any system the service provider may use.

What functions are covered?

    The user selects between Operations, Performance, Maintenance, 
Install, Administration, and Compliance.
    Period--The user would indicate the period length in months over 
which this item will occur. For example, if an ``Installation'' service 
is provided for 18 months, then ``18 months'' would be shown.
    Penalties For Non-Performance? (Yes/No)--The user would indicate 
whether there are specific monetary or other penalties for carrier non-
performance of specific SLA requirements written in the contract. The 
user would select from a drop-down menu. General statements of intent 
would not constitute a penalty.
    SLA Scope--The user would report the scope of the contract that 
this item covers. Examples of options filers would select from include: 
Performance (what is delivered), Operations (how it is managed), and 
Maintenance (how it is repaired).
    Description of Target SLA Measurement--An optional free text field 
the provider could use to enter further clarification for the specific 
SLA item.
    Price Uplift--The user would report the increase to the contract 
service price (usually represented as a percentage) that the SLA 
impacts. If it is not a separate line item in the contract, then the 
price would be estimated and/or pro-rated by the provider over the 
period and scope of SLA coverage.
    The Commission seeks comment on whether to apply the proposed 
revisions to FCC Form 466 to the HCF Funding Request Form (FCC Form 
462) for consistency. What are the benefits and/or drawbacks of 
revising FCC Form 462 to collect more granular service data?
    Service Provider Filing. The Commission proposes to require service 
providers to report the technical service details on the FCC Form 466. 
In the 2022 FNPRM, the Commission sought comment on whether service 
providers should report certain technical information about services 
purchased that rural health care providers either cannot access or lack 
the technical expertise to report. Commenters expressed concerns about 
increasing technical reporting burdens on healthcare providers. GCI 
argued that any new collection process should not burden rural health 
care providers, who are often ``not well positioned to supply technical 
and granular details about the services they need,'' and suggested 
collecting additional data through the FCC Form 466. Alaska 
Communications acknowledged that reporting technical service data would 
be complicated for health care providers. The Alaska Native Health 
Board (ANHB) and the Alaska Native Tribal Health Consortium (ANTHC) 
both supported increased data collection but cautioned against 
increasing reporting burdens on Tribal and other health care providers.
    The Commission agrees with commenters that proposed increases in 
the level of detailed technical data required on the FCC Form 466 would 
likely exceed the technical expertise of most health care providers. 
The service providers are in the best position to understand the 
difference between a commercial term and a functional capability as 
well as the difference between a capability and the underlying 
technology. The Commission therefore proposes that service providers 
input service information into the FCC Form 466. The Commission 
tentatively concludes that shifting the responsibility for providing 
technical details to the service provider would reduce burdens on 
healthcare providers and improve data quality and consistency. The 
Commission proposes that service providers provide the technical 
connection endpoint data as well as any other technical service data 
that is recommended by commenters and ultimately adopted by the 
Commission as part of the proceeding. Additionally, the Commission 
proposes that the service providers include the actual contract as an 
attachment to the FCC Form 466. This would be treated confidentially 
and would document the carrier's answers in an official company 
document. To ensure the accuracy of the information provided, the 
Commission

[[Page 17504]]

proposes that the service provider certify to the accuracy of service 
provider-supplied information. The Commission seeks comment on these 
proposals.
    The Commission also seeks comment on the logistics of service 
providers filling out portions of the FCC Form 466. The Commission 
proposes that the FCC Form 466 be transferred to the service provider 
after the health care provider completes the certifications on its 
portion of the FCC Form 466. The Commission seeks comment on how 
service providers completing part of the FCC Form 466 would impact 
program deadlines. Should the filing window close denote the health 
care provider's deadline for completing its portion of the FCC Form 
466? If so, how much time should service providers have to complete 
their portion of it? Finally, the Commission seeks comment on the 
extent to which there might be a miscommunication between health care 
and service providers about the requested services. In limited 
circumstances, service providers may be selected to provide RHC Program 
supported services without submitting a bid in response to an RFP. If 
there is no contract, how can the Commission ensure that health care 
providers and service providers agree as to the specific services that 
will be provided?
    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 Commission seeks 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.

Procedural Matters

    Paperwork Reduction Act. The 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 the 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.
    Ex Parte Rules--Permit-But-Disclose. The proceeding shall be 
treated as a ``permit-but-disclose'' proceeding in accordance with the 
Commission's ex parte rules. Persons making ex parte presentations 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 the Commission's rule Sec.  1.1206(b). In 
proceedings governed by the Commission's rule Sec.  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 the proceeding should familiarize 
themselves with the Commission's ex parte rules.

Initial Regulatory Flexibility Analysis

    As required by the Regulatory Flexibility Act of 1980, as amended 
(RFA), the Commission has prepared the Initial Regulatory Flexibility 
Analysis (IRFA) of the possible significant economic impact on a 
substantial number of small entities by the policies and rules proposed 
in the Second FNPRM. Written public comments are requested on the IRFA. 
Comments must be identified as responses to the IRFA and must be filed 
by the deadlines for comments. The Commission will send a copy of the 
Second FNPRM, including the IRFA, to the Chief Counsel for Advocacy of 
the Small Business Administration (SBA).

Need for, and Objectives of, the Proposed Rules

    Through the Second FNPRM, the Commission seeks to further improve 
the Rural Health Care (RHC) Program's capacity to distribute 
telecommunications and broadband support to health care providers--
especially small, rural healthcare providers (HCPs)--in the most 
equitable and efficient manner as possible. Over the years, telehealth 
has become an increasingly vital component of healthcare delivery to 
rural Americans. Rural healthcare facilities are typically limited by 
the equipment and supplies they have and the scope of services they can 
offer which ultimately can have an impact on the availability of high-
quality health care. Therefore, the RHC Program plays a critical role 
in overcoming some of the obstacles healthcare providers face in 
healthcare delivery in rural communities. Considering the significance 
of RHC Program support, the Commission proposes and seeks comment on 
several measures to most effectively meet HCPs' needs while responsibly 
distributing the RHC Program's limited funds.
    In the Second FNPRM, the Commission seeks comment on proposed 
revisions to rate determination rules, the cap on support for satellite 
services, and revisions to data collected in the Telecom Program. The 
Commission also proposes changes to allow health care providers to 
receive funding shortly after they become eligible, allow participants 
with multi-year and evergreen contracts to only justify rural rates in 
the first year of the contract, and proposes changes to administrative 
deadlines such as changes to amend program rules to align the deadline 
for filing a Service Provider Identification Number (SPIN) change with 
the invoice deadline.

Legal Basis

    The legal basis for the Second FNPRM is contained in sections 1 
through 4(g)(D)(i)-(j), 201-205, 254, 303I, 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.

[[Page 17505]]

Description of Projected Reporting, Recordkeeping, and Other Compliance 
Requirements for Small Entities

    The reporting, recordkeeping, and other compliance requirements 
proposed in the Second 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.

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).
    Small Businesses, Small Organizations, Small Governmental 
Jurisdictions. The Commission actions, over time, may affect small 
entities that are not easily categorized at present. The Commission 
therefore describes, at the outset, 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.
    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 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.
    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 we estimate that at least 48, 971 entities fall in 
the category of ``small governmental jurisdictions.''
    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.

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 the data, 
the Commission concludes that a majority of firms operating in this 
industry are small under the applicable size standard.
    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 the data, the Commission concludes that a 
majority of business in the dental industry are small under the 
applicable standard.
    Offices of Chiropractors. This U.S. industry comprises 
establishments of health practitioners having the degree of DC (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 the data, the 
Commission concludes that a majority of chiropractors are small.
    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

[[Page 17506]]

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 
the data, the Commission concludes that a majority of optometrists in 
this industry are small.
    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 the data, the 
Commission concludes that a majority of mental health practitioners who 
do not employ physicians are small.
    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 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 the data, the Commission concludes that a majority of 
businesses in this industry are small.
    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 the data, the Commission concludes that a majority of firms in this 
industry are small.
    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 
the data, the Commission concludes the majority of firms in this 
industry are small.
    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 the data, the Commission concludes that the 
majority of firms in this industry is small.
    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 
the data, the Commission concludes that a majority of firms in this 
industry are small.
    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

[[Page 17507]]

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 the data, the 
Commission concludes that approximately one-third of the firms in this 
industry are small.
    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 the data, the Commission 
concludes that a majority of firms in this industry are small.
    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 million and $24,999,999. Based on the data, 
the Commission concludes that a majority of firms in this industry are 
small.
    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 the data, the Commission concludes that approximately three-
quarters of firms that operate in this industry are small.
    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 the data, 
the Commission concludes that a majority of the firms in this industry 
is small.
    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 the data, the Commission 
concludes that a majority of firms that operate in this industry are 
small.
    Diagnostic Imaging 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 the data, the Commission 
concludes that a majority of firms that operate in this industry are 
small.
    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 the 
data, the Commission concludes that a majority of firms that operate in 
this industry are small.
    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 the data, the Commission 
concludes that a majority of firms in this industry is small.

[[Page 17508]]

    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 
assize 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 the data, 
the Commission concludes that a majority of firms in this industry are 
small.
    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 
the data, the Commission concludes that approximately one-quarter of 
firms in this industry are small.
    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 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 the data, 
the Commission concludes that more than one-half of the firms in this 
industry are small.
    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 the data, the Commission 
concludes that more than one-half of the firms in this industry are 
small.
    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 the 
data, the Commission concludes that a majority of firms in this 
industry are small.

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 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.
    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.
    Competitive Access Providers. Neither the Commission nor the SBA

[[Page 17509]]

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 the actions. According to Commission data the 2010 Trends 
in Telephone Report (rel. September 30, 2010), 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.
    Wireline Providers, Wireless Carriers and Service Providers, and 
internet Service Providers. 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.
    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 999 
employees. Based on the data, the Commission concludes that the 
majority of Vendors of Infrastructure Development or ``Network 
Buildout'' are small.
    Telephone Apparatus Manufacturing. This industry comprises 
establishments primarily engaged in manufacturing wire telephone and 
data communications equipment. These products may be stand-alone or 
board-level components of a larger system. Examples of products made by 
these establishments are central office switching equipment, cordless 
and wire telephones (except cellular), PBX equipment, telephone 
answering machines, LAN modems, multi-user modems, and other data 
communications equipment, such as bridges, routers, and gateways. The 
SBA has developed a small business size standard for Telephone 
Apparatus Manufacturing, which consists of all such companies having 
1,250 or fewer employees. U.S. Census Bureau data for 2012 show that 
there were 266 establishments that operated that year. Of this total, 
262 operated with fewer than 1,000 employees. Thus, under the size 
standard, the majority of firms in this industry can be considered 
small.
    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 the data, the Commission concludes that a 
majority of manufacturers in this industry are small.
    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 the data, the Commission concludes that the 
majority of Other Communications Equipment Manufacturers are small.

Steps Taken To Minimize the Significant Economic Impact on 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.'' We expect to consider all of these factors when we have 
received substantive comment from the public and potentially affected 
entities.
    Largely, the proposals in the Second FNPRM if adopted would have no 
impact on or would reduce the economic impact of current regulations on 
small entities. Certain proposals could have a positive economic impact 
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.
    Determining Accurate Rates in the Telecom Program. The Commission 
proposes modifications to the three rural rate determination methods in 
the Telecom Program, including changes to the market-based approach of 
Methods

[[Page 17510]]

1 and 2 and new evidentiary requirements for justifying cost-based 
rates under Method 3. The Commission also proposes that participants 
with multi-year contracts and evergreen contracts would only have to 
justify rural rates in the first year of the contract. The Commission 
also proposes to simplify the calculation of urban rate rules by 
eliminating the ``standard urban distance'' requirement and seek 
specific comment on sources of urban rates as well as general comment 
on the urban rate rules. The Commission proposes to keep the cap on 
support for satellite services reinstated and seek comment on potential 
changes to it. Lastly, the Commission seeks comment on proposed 
revisions to FCC Form 466 intended to improve the quality of Telecom 
Program data.
    Administrative Deadlines. The Commission also proposes to amend 
program rules align the deadline for filing a SPIN change with the 
invoice deadline. If implemented, the proposal would have a positive 
impact on small health care providers because it would reduce the need 
for them to seek waivers of the current SPIN change deadline. The 
Commission also seeks comment on whether a mechanism to allow post-
commitment changes to evergreen contract dates is necessary.
    Future Eligibility. The Commission also proposes a mechanism 
whereby entities that are not yet eligible health care providers can 
engage in competitive bidding and file requests for funding, which 
would allow them to receive RHC Program funding shortly after they 
become eligible. If implemented, the proposal would have a positive 
economic impact on small health care providers because it would allow 
them to receive RHC Program funding shortly after they become eligible.

Federal Rules That May Duplicate, Overlap, or Conflict With the 
Proposed Rules

    None.

Ordering Clauses

    Accordingly, it is ordered, pursuant to the authority contained in 
sections 1, 4(j), 214, 254, and 405 of the Communications Act of 1934, 
as amended, 47 U.S.C. 151, 154(j), 214, 254, and 405 and Sec. Sec.  
1.115 and 1.429 of the Commission's rules, 47 CFR 1.115, 1.429, that 
the Second FNPRM is adopted.
    It is further ordered that, pursuant to applicable procedures set 
forth in Sec. Sec.  1.415 and 1.419 of the Commission's rules, 47 CFR 
1.415, 1.419, interested parties may file comments on the Second FNPRM 
on or before April 24, 2023, and reply comments on or before May 22, 
2023.

List of Subjects in 47 CFR Part 54

    Communications common carriers, Health facilities, internet, 
Reporting and recordkeeping requirements, Telecommunications.

Federal Communications Commission.
Marlene Dortch,
Secretary.

Proposed Rules

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

PART 54--UNIVERSAL SERVICE

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

    Authority:  47 U.S.C. 151, 154(i), 155, 201, 205, 214, 219, 220, 
229, 254, 303(r), 403, 1004, 1302, 1601-1609, and 1752, unless 
otherwise noted.

0
2. Amend Sec.  54.601 by adding paragraph (c) to read as follows:


Sec.  54.601  Health care provider eligibility.

* * * * *
    (c) Conditional approval of eligibility. (1) An entity that is not 
a public or non-profit health care provider may request and receive a 
conditional approval of eligibility from the Administrator if the 
entity satisfies the following requirements:
    (i) The entity is or will be physically located in a rural area 
defined in Sec.  54.600(e) by an estimated eligibility date or, for the 
HCF Program only, is not located in a rural area but is or will be a 
member of a majority-rural Healthcare Connect Fund Program consortium 
that satisfies the eligible rural health care provider composition 
requirement set forth in Sec.  54.607(b) by the estimated eligibility 
date;
    (ii) The entity must provide documentation showing that it will 
qualify as a public or non-profit health care provider as defined in 
Sec.  54.600(b) by the estimated eligibility date; and
    (iii) The estimated eligibility date must be in the same funding 
year as or in the next funding year of the date that the entity 
requests the conditional approval of eligibility.
    (2) An entity that receives conditional approval of eligibility may 
conduct competitive bidding for the site. An entity engaging in 
competitive bidding with conditional approval of eligibility must 
provide a written notification to potential bidders that the entity's 
eligibility is conditional and specify the estimated eligibility date.
    (3) An entity that receives conditional approval of eligibility may 
file a request for funding for the site during an application filing 
window opened for a funding year that ends after the estimated 
eligibility date. The Administrator shall not issue any funding 
commitments to applicants that have received conditional approval of 
eligibility only. Funding commitments may be issued only after such 
applicants receive formal approval of eligibility as described in 
paragraph (c)(4) of this section.
    (4) An entity that receives conditional approval of eligibility is 
expected to notify the Administrator, along with supporting 
documentation for the eligibility, within 30 days of its actual 
eligibility date. The actual eligibility date is the date that the 
entity qualifies as a public or non-profit health care provider as 
defined in Sec.  54.600(b) and may be a different date from the 
estimated eligibility date. The Administrator shall formally approve 
the entity's eligibility if the entity meets the requirements for a 
public or non-profit health care provider defined in Sec.  54.600(b), 
provided that the entity still satisfies the requirement under 
paragraph (c)(1)(i) of this section. Upon the entity receiving a formal 
approval of eligibility, the Administrator may issue funding 
commitments covering a time period that starts no earlier than the 
entity's actual eligibility date and that is within the funding year 
for which support was requested.
0
3. Revise Sec.  54.604 to read as follows:


Sec.  54.604  Determining the urban rate.

    If a rural health care provider requests support for an eligible 
service to be funded from the Telecommunications Program the ``urban 
rate'' for that service shall be a rate no higher than the highest 
tariffed or publicly-available rate charged to a commercial customer 
for a functionally similar service in any city with a population of 
50,000 or more in that state, calculated as if it were provided between 
two points within the city.
0
4. Revise Sec.  54.605 to read as follows:


Sec.  54.605  Determining the rural rate.

    (a) The rural rate shall be used as described in this subpart to 
determine the credit or reimbursement due to a telecommunications 
carrier that provides eligible telecommunications services to eligible 
health care providers.
    (1) The rural rate shall be the median of publicly available rates 
charged by other service providers for the same or functionally similar 
services over the same distance in the rural area where

[[Page 17511]]

the health care provider is located (Method A).
    (2) If there are no publicly available rates charged by other 
service providers for the same or functionally similar services, the 
rural rate shall be the median of the rates that the carrier actually 
charges to non-health care provider commercial customers for the same 
or functionally similar services provided in the rural area where the 
health care provider is located (Method B).
    (3) If the telecommunications carrier serving the health care 
provider is not providing any identical or similar services in the 
rural area or it reasonably determines that the rural rate calculated 
under paragraph (a)(1) or (2) of this section would not generate a 
reasonably compensatory rate, then the carrier shall submit to a state 
commission, for intrastate rates, or the Commission, for interstate 
rates, a cost-based rate for the provision of the service.
    (i) The carrier must provide to the state commission, for 
intrastate rates, or the Commission, for interstate rates, a 
justification of the proposed rural rate, which must include all 
financial data and other information to verify the service provider's 
assertions, including at a minimum, the following information:
    (A) Company-wide and rural health care service gross investment, 
accumulated depreciation, deferred state and Federal income taxes, and 
net investment; capital costs by category expressed as annual figures 
(e.g., depreciation expense, state and Federal income tax expense, 
return on net investment); operating expenses by category (e.g., 
maintenance expense, administrative and other overhead expenses, and 
tax expense other than income tax expense); the applicable state and 
Federal income tax rates; fixed charges (e.g., interest expense); and 
any income tax adjustments;
    (B) An explanation and a set of detailed spreadsheets showing the 
direct assignment of costs to the rural health care service and how 
company-wide common costs are allocated among the company's services, 
including the rural health care service, and the result of these direct 
assignments and allocations as necessary to develop a rate for the 
rural health care service;
    (C) The company-wide and rural health care service costs for the 
most recent calendar year for which full-time actual, historical cost 
data are available;
    (D) Projections of the company-wide and rural health care service 
costs for the funding year in question and an explanation of those 
projections;
    (E) Actual monthly demand data for the rural health care service 
for the most recent three calendar years (if applicable);
    (F) Projections of the monthly demand for the rural health care 
service for the funding year in question, and the data and details on 
the methodology used to make those projections;
    (G) The annual revenue requirement (capital costs and operating 
expenses expressed as an annual number plus a return on net investment) 
and the rate for the funded service (annual revenue requirement divided 
by annual demand divided by twelve equals the monthly rate for the 
service), assuming one rate element for the service), based on the 
projected rural health care service costs and demands;
    (H) Audited financial statements and notes to the financial 
statements, if available, and otherwise unaudited financial statements 
for the most recent three fiscal years, specifically, the cash flow 
statement, income statement, and balance sheets. Such statements shall 
include information regarding costs and revenues associated with, or 
used as a starting point to develop, the rural health care service 
rate; and
    (I) Density characteristics of the rural area or other relevant 
geographical areas including square miles, road miles, mountains, 
bodies of water, lack of roads, remoteness, challenges and costs 
associated with transporting fuel, satellite and backhaul availability, 
extreme weather conditions, challenging topography, short construction 
season or any other characteristics that contribute to the high cost of 
servicing the health care providers.
    (ii) [Reserved]
    (4) The carrier must provide such information periodically 
thereafter as required by the state commission, for intrastate rates, 
or the Commission, for interstate rates. In doing so, the carrier must 
take into account anticipated and actual demand for telecommunications 
services by all customers who will use the facilities over which 
services are being provided to eligible health care providers.
    (b) The rural rate shall not exceed the monthly rate in the service 
agreement that the health care provider enters into with the service 
provider when requesting funding.
    (c) Service providers engaged in multi-year or evergreen contracts 
are required to justify the rural rate only in the first year of the 
contract.
0
5. Amend Sec.  54.622 by revising paragraph (e)(1)(i) to read as 
follows:


Sec.  54.622  Competitive bidding requirements and exemptions.

* * * * *
    (e) * * *
    (1) * * *
    (i) The entity seeking supported services is a public or nonprofit 
health care provider that falls within one of the categories set forth 
in the definition of health care provider listed in Sec.  54.600, or 
will be such a public or nonprofit health care provider before the end 
of the funding year for which the supported services are requested 
provided that the entity is requesting or has received a conditional 
approval of eligibility pursuant to Sec.  54.601(c);
* * * * *
0
6. Amend Sec.  54.625 by revising paragraph (c) to read as follows:


Sec.  54.625  Service Provider Identification Number (SPIN) changes.

* * * * *
    (c) Filing deadline. An applicant must file its request for a 
corrective or operational SPIN change with the Administrator no later 
than the invoice filing deadline as defined by Sec.  54.627.

[FR Doc. 2023-04990 Filed 3-22-23; 8:45 am]
BILLING CODE 6712-01-P