2. USAC, the Universal Service Fund (USF), and the FCC
The Universal Service Administrative Company (USAC)
administers the Universal Service Fund (USF) on behalf of
and under the auspices of the FCC
High Cost Low Income Rural Health Schools and
($4 billion) ($1.3 billion) Care Libraries
($400 million) ($2.25 billion)
www.usac.org/rhc 2
3. Rural Health Care Program
Telecom/
Healthcare Pilot Program
Internet
Connect Fund
Program
www.usac.org/rhc 3
4. The RHC Program
Telecommunications and Internet Program Basics
• For telecommunications services, RHC funds the
difference between the urban and rural rates
• For Internet access, RHC funds a straight 25% discount
off the rural rate
• There are approximately 4,700 health care providers
receiving support under the telecommunications and
internet access program
www.usac.org/rhc 4
5. The RHC Program
Pilot Program Basics
• Established by the FCC to help public and non-profit health
care providers deploy a state or regional dedicated broadband
health care network and, at the applicant’s discretion, to
connect that network to Internet2, National LambdaRail
(NLR), or the public Internet.
• Cost reimbursement program will support the connection of
non-profit health care providers nationwide to broadband
telehealth networks.
• There are 50 Pilot Projects with over 3,800 affiliated health
care providers.
www.usac.org/rhc 5
6. The RHC Program
Healthcare Connect Fund Basics
• Encourages growth or formation of statewide or regional
broadband health care networks
• Replaces current RHC Internet Access Program – RHC
Telecommunications Program remains in place
• Supports HCP-owned infrastructure, subject to certain
constraints
• Provides uniform 35 percent HCP contribution requirement
for all supported services and infrastructure
• Allows eligibility for individual HCPs and consortia
www.usac.org/rhc 6
7. Program Comparison
Telecom or Internet
Feature HCF Pilot Program
Access Programs
Discount on Urban-rural difference
65 percent 85 percent
telecom services or mileage based
Discount on 25 percent (not eligible
65 percent 85 percent
Internet services after 6/30/2014)
Administrative Eligible: Off-site data
offices, off-site Eligible centers; Not Eligible: Not eligible
data centers admin offices
Customized
Eligible Eligible Not eligible
networks
Equipment Eligible Eligible Not eligible
www.usac.org/rhc 7
9. Healthcare Connect Fund
Goals
1. Increase access to broadband for Health Care
Providers (HCPs), particularly those serving in
rural areas
2. Foster development and deployment of
broadband health care networks
3. Maximize cost-effectiveness of the program
www.usac.org/rhc 9
10. Healthcare Connect Fund
Highlights
• Encourages growth or formation of statewide or regional
broadband health care networks
• Replaces current RHC Internet Access Program – RHC
Telecommunications Program remains in place
• Supports HCP-owned infrastructure, subject to certain
constraints
• Provides uniform 35 percent HCP contribution requirement
for all supported services and infrastructure
• Allows eligibility for individual HCPs and consortia
www.usac.org/rhc 10
11. Healthcare Connect Fund
Consortium Approach
• HCF encourages HCPs to work together in consortia
to meet their broadband connectivity needs
• Consortia may receive upfront support for:
— Build-out costs and indefeasible rights of use (IRU)
— Equipment necessary for the formation of
networks
— Self-construction charges
www.usac.org/rhc 11
12. Healthcare Connect Fund
Consortium Eligibility
Both rural and non-rural HCPs are eligible to participate
• Non-rural HCPs may apply only as part of a consortia
that includes at least 50 percent rural HCPs
• Large hospitals (400 beds or more) are capped on
funding
– No more than $30,000 annually for recurring charges
– No more than $70,000 over five years for non-
recurring charges
www.usac.org/rhc 12
14. HCF Features
Administrative Efficiencies
• All services, equipment, and expenses related to
infrastructure and construction discounted 65 percent
• Simplified application process
• Eligibility determination separated from competitive
bidding process (FCC Form 460)
• Request for Services (FCC Form 461), Funding
Requests (FCC Form 462), and Requests for
Disbursements (FCC Form 463) simplified
www.usac.org/rhc 14
15. HCF Features
Greater Contract Options
Including:
• Multi-year contracts
• Pre-paid arrangements
• Use of existing Government Master Service
Agreements (MSAs)
www.usac.org/rhc 15
16. HCF Features
Custom Networks
• Last mile, middle mile, backbone services, and
leased equipment are eligible for support
• Customized network configurations are eligible
for support
www.usac.org/rhc 16
17. HCF Features
Build-out, Infrastructure, Administrative Offices
• Service provider build-out to the customer
demarcation point and the network equipment
necessary to make a broadband connection
functional are eligible for support
• Connections and network equipment associated
with off-site data centers and off-site
administrative offices are eligible for support
www.usac.org/rhc 17
18. HCF Features
Exemptions
The following are exempt from competitive bidding:
• HCPs requesting no more than $10,000 in annual
support
• HCPs purchasing services from an MSA awarded
through competitive bidding
• Previously endorsed “Evergreen” contracts
• Contracts bid under the E-rate program
www.usac.org/rhc 18
19. HCF Features
Eligible Services and Costs
• Public and private networks
• Last mile, middle mile, or backbone services
• Point-to-multipoint, IP-based, and cloud-based services
• Dark fiber, fiber maintenance costs, leases, and IRUs
• Build-out and up-front costs
• Equipment to make broadband service functional
• Internet2 and National Lambda Rail
www.usac.org/rhc 19
21. Fund Specifics
• Shares $400 million annual cap provided to the Rural
Health Care support mechanism
• $150 million annual cap on support for upfront
payments, multi-year commitments, and HCP self-
construction
• Non-recurring costs that exceed an average of $50,000
per HCP in a consortium must be prorated over a
minimum three-year period
• No more than $50 million allocated for Skilled Nursing
Facilities (SNF) Pilot Program
www.usac.org/rhc 21
22. Timeline
• Pilot Projects
– Funding available beginning July 1, 2013, for existing Pilot
projects
– Projects may obtain funding for HCP sites as they exhaust
Pilot funds
– May add new sites to existing Pilot networks
• New individual and consortium applicants
– Funding available beginning January 1, 2014
– Competitive bidding process may begin late summer 2013
www.usac.org/rhc 22
23. Skilled Nursing Facility Pilot
Program Details
• $50 million available over three years, beginning in
Funding Year
• Available only to SNFs that do not currently have
broadband services sufficient to support their
intended telehealth activities
www.usac.org/rhc 23
