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The FCC and the Success of the Rural Healthcare Pilot Program

How Successful Has it Been?


Broadband is often an equalizer when it comes to the disparity between rural and urban healthcare delivery. The FCC recently reaffirmed its commitment to rural healthcare and telemedicine as it released a comprehensive report on the use of broadband and rural healthcare. However, the federal agency has supported the deployment of broadband to support rural healthcare providers for several years.

Significant broadband initiatives announced by the FCC:

FCC Passes Net Neutrality Regulations

FCC Advisory Group Makes Key Broadband Recommendations

FCC Delivers National Broadband Plan: All Eyes on Congress: What Provisions Will Congress Act on?

In September 2006 the FCC established the Rural Healthcare Pilot Program to provide funding to support state or regional broadband networks designed to bring the benefits of innovative telehealth and telemedicine services to areas of the country where the need for those benefits is most acute. Participants are eligible to receive up to 85 percent of the costs associated with the following:

  • Construction of state or regional broadband health care networks and the advanced telecommunications and information services provided over those networks;
  • Connecting to Internet2 or National LambdaRail, which are both dedicated nationwide backbone networks; and
  • connecting to the public Internet.

Additionally, the program allowed participants to use funding to purchase items that are not eligible for support under the Telecommunications or Internet Access Programs, such as equipment (e.g. servers, routers, firewalls, switches, and other devices or equipment necessary for the broadband connection), or to upgrade their existing equipment and increase bandwidth. The FCC awarded a total of $417 million in funds for the Pilot projects, spread over a three-year period.

Although enacted well before the publication of the National Broadband Plan, the Rural Healthcare Pilot Program provided critical funding to rural healthcare providers in the years leading up to the enactment of the broadband initiatives recommended in the National Broadband Plan.

Not All Broadband is Created Equal; Different Broadband Technologies

At the end of 2012, there were 50 active projects covering 38 states. Many of the active projects are state-wide or regional provider networks, ranging in size from 4 to 477 HCPs. As of the end of 2012, USAC had committed $364.4 million in funds to approximately 3,822 individual HCP sites. The Pilot projects are in different stages of implementation of their networks, with some nearing the end of their Pilot Program funding. In an Order released on July 9, 2012, the Commission extended the Pilot Program funding on a temporary basis for individual Pilot Project HCP sites that will exhaust Pilot funding before the end of the funding year (before June 30, 2013), in order to preserve the status quo while the Commission completes this proceeding.

The importance of broadband for rural healthcare has been established in both government and independent research reports. A research report published by UnitedHealth Group stated that telemedicine would significantly close the gap between healthcare received in rural areas versus care received in urban areas. The report made several recommendations:

  • Increase telemedicine adoption by expanding broadband connectivity
  • Create incentives for physicians to incorporate telemedicine into their practices
  • Reduce regulatory barriers to the adoption of telemedicine
  • Align reimbursement structures across various payers

The report also revealed that Medicare covers a broader range of telehealth services than many private payers do. However, private payers reimburse for telehealth services no matter where patients live, while Medicare covers some telemedicine services only in rural shortage areas.

Gigabit Squared Offers $200 Million for High Speed Broadband Application Development

The National Broadband Plan sums up the inefficiencies and problems facing the healthcare industry: "Rising costs would be less concerning if there were results. But Americans are not healthy. Sixty-one percent of American adults are overweight or obese, which often leads to medical complications. Chronic conditions, which already account for 75%3 of the nation’s health care costs, are increasing across all ages. The nation has 670,000 new cases of congestive heart failure every year, many of them fatal. Too often the care itself causes harm. One and a half million Americans are injured every year because of prescription drug errors, while a person dies every six minutes from an infection developed after arriving at a hospital.

Broadband Facilitates Rural Healthcare Delivery: Telemedicine is Critically Important for Rural Areas

The future of telemedicine will benefit both the medical community, patients, and broadband providers. With the burgeoning demand for consumer applications on mobile devices, many applications will continue to be available for patients to take control of their own health. Devices to measure blood pressure, control diabetes, and transmit diagnostic information to physicians and other healthcare providers are available now. The demands these applications will place on broadband networks are large - creating a brand new market for bandwidth and high speed networks.

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