A. Eligible Services
4. Connections to Internet2 or National LambdaRail
provide support for such charges after the service provider demarcation point, consistent with the Commission’s current policy of not supporting internal connections for HCPs.347
129. In the E-rate program, fiber must be lit within the funding year for non-recurring charges to be eligible. We adopt this requirement in the Healthcare Connect Fund. HCPs, however, unlike schools, do not have a summer vacation period during which construction can take place without disrupting normal operations. Furthermore, in some rural areas, weather conditions can cause unavoidable delays in construction. Therefore, we will allow applicants to receive up to a one-year extension to light fiber if they provide documentation to USAC that construction was unavoidably delayed due to weather or other reasons.
130. Maintenance Costs. We also find that HCPs may receive support for maintenance costs associated with leases of dark or lit fiber.348 Only HCPs applying as consortia may receive support for upfront payments for maintenance costs, however, subject to the limitations in section V.D below.
131. Equipment. As we discuss below, we will provide support for equipment necessary to make a broadband service functional. Consistent with that standard, we find that HCPs may receive support for the modulating electronics and other equipment necessary to light dark fiber. If equipment is leased for a recurring monthly (or annual) fee, HCPs may receive support for those recurring costs. HCPs applying as consortia may also receive support for upfront payments associated with purchasing
equipment, subject to the limitations discussed below.349
132. Eligible Providers. The Commission has previously authorized schools and libraries to lease dark fiber, and authorizes schools and libraries to lease any fiber connectivity (not just dark fiber) from any entity, including state, municipal or regional research networks and utility companies.350
Consistent with our discussion in section V.E below, we will allow HCPs to lease fiber connectivity from any provider.351
Pilot Program.352 These research and education backbones link a number of institutions that house significant medical expertise, such as government research institutions and academic, public and private HCPs.353 Unlike commercial Internet backbone providers, non-profit research and education network providers such as Internet2 and NLR typically charge participating institutions an annual membership fee to connect and access other institutions on their networks.354 Participating institutions must separately obtain connectivity between their networks and the selected backbone network, and may choose to purchase additional connectivity services from the backbone network.355 The NPRM proposed to provide support for both the membership fees for participants to connect their networks to Internet2 and NLR, and to provide support for any recurring costs of obtainingbroadband services(including the actual
connections between HCP networks and Internet2 or NLR).356 The NPRMproposed to exclude other recurring costs related to NLR or Internet2 – for example, additional fees paid for subscriptions to videoconferencing services provided by Internet2.357
134. In the Pilot Program, the Commission waived competitive bidding and cost-effectiveness rules for applicants who wished to pre-select NLR or Internet2 as their backbone provider.358 The NPRM proposed to allow a participant to “pre-select” NLR or Internet2, or to seek competitive bids from NLR and Internet2 through the normal competitive bidding process.359
135. Discussion. As discussed above, “broadband services” in this context includes backbone services. We find that the membership fees charged by Internet2 and NLR are part of the cost of
obtaining access to the backbone services provided by these organizations, and thus are eligible for support as recurring costs for broadband services. We delegate authority to the Wireline Competition Bureau to designate as an eligible expense, upon request, membership fees for other non-profit research and education networks similar to Internet2 and NLR. We further find that broadband services required to connect toInternet2 or NLR should be eligible for support under the Healthcare Connect Fund, as well as any broadband services obtained directly fromInternet2 or NLR.360 Commenters generally support
352NPRM, 25 FCC Rcd at 9388, para. 40. SeeInternet2 Comments at 13 (describing Internet2); NLR Comments at 1-3 (describing NLR); Pilot Program Order on Reconsideration, 22 FCC Rcd at 2556-7, para. 5.
353Id.;see also Internet2 Comments at 13 (noting that research, education and health care organizations often focus on common issues with the aim of promoting the public good, and that non-profit research and education network backbones are specifically designed to provide optimal nationwide access to health care organizations, including Cancer Centers, Academic Medical Centers, Children’s Research Hospitals, and VA Medical Centers).
354Internet2 Comments at 13; NCTN Comments at 4.
355See, e.g., Internet2 Rural Health Care Pilot Program Network Usage Application, available at
http://www.internet2.edu/network/rhcpp/ (requiring Pilot participants to connect to Internet2 through a recognized
“Internet2 Network Connector”); see generally Internet2 web site at http://www.internet2.edu/network/fees.html (last visited Nov. 16, 2012) (describing various services that can be obtained through Internet2).
356NPRM, 25 FCC Rcd at 9388, para. 40 & n.80. The NPRM proposed to provide support for membership fees through the Health Infrastructure Program, and for broadband services through the Broadband Services Program.
Id.at 9388, para. 40.
357Id. at 9388, para. 40 n.80.
358Pilot Program Order on Reconsideration, 22 FCC Rcd at 2558, para. 8. The Commission also allowed applicants to request funding to connect their networks to the public Internet, but did not provide a competitive bidding exemption for such connections. Id. at 2555, para. 2 n.5.
359NPRM, 25 FCC Rcd at 9388-89, para. 41.
360For clarity, these services are eligible because they are “broadband” services, not because of any special preference for Internet2 or NLR. Broadband services required to connect to any other backbone provider, or obtained from any other backbone provider, are also eligible for support. We clarify that if a service is otherwise
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providing support for both membership fees and for the broadband services required to connect health care networks to Internet2 and NLR.361 In addition, some commenters believe that these networks may provide a level of service not available from commercial providers in certain situations.362
136. We conclude, however, that it is appropriate to require participants to seek competitive bids from NLR and Internet2, or any other research and education network, through our standard competitive bidding process.363 We recognize and anticipate that in some cases, Internet2 or NLR services may be the most cost-effective solution to meet a HCP’s needs. As noted by commenters, these networks can provide many benefits, and the most cost-effective solution for HCP needs may come from Internet2 or NLR.364 There may be instances, however, under which a more cost-effective solution is available from a commercial provider, or a non-profit provider other than Internet2 or NLR.365 Many (Continued from previous page)
ineligible (i.e., is not a broadband service), it is not rendered eligible simply because it is obtained from Internet2 or NLR. For example, the NPRM cited the example of videoconferencing services obtained from NLR because videoconferencing services, in general, are not eligible for support under the rural health care program, and will not be eligible under the Healthcare Connect Fund. NPRM, 25 FCC Rcd at 9388, para. 40 n.80; see infra section V.C.1 (ineligible services). We remind applicants and service providers that Commission requires recovery of funds erroneously disbursed for ineligible services. See 2007 Comprehensive Review Order, 22 FCC Rcd at 16386, para.
30.
361HHS Comments at 6-7; NCTN Comments at 4; NETC Comments at 3; PSPN Comments at 7; RNHN Comments at 9; WWHI Comments at 2; see also Internet2 Comments at 13; NLR Comments at 2.
362See, e.g., Internet2 Comments at 13 (stating that these advanced backbones are uniquely capable of reliably supporting demanding HD videoconferencing and large dataset transport by providing infrastructure with minimal or no packet loss and little or no congestion); PSPN Comments at 7 (stating that Internet2 provides a “highly reliable” alternative to commodity Internet, which has far more traffic and higher incidences of hacking into presumed secure files); RNHN comments at 9 (“While commercial backbones are sufficient for certain Internet uses, there has been a market failure when it comes to advanced broadband applications for medical applications.
Commercial networks are not optimized to support advanced broadband applications like telepresence and telemedicine. Moreover, commercial networks do not offer next-generation Internet technologies like IPv6 and IP multicast, which are critical to telepresence and telemedicine.”). We make no finding here as to whether the services offered by non-profit research and education backbone networks are better suited for health care purposes than those offered by commercial providers.
363See NPRM, 25 FCC Rcd at 9388-89, para. 41 (proposing that Health Infrastructure Program participants could either pre-select to connect with either Internet2 or NLR, or seek competitive bids from NLR and Internet2 through the normal competitive bidding process). The generally applicable competitive bidding exemption discussed below in section VI.B.6, however, would apply to any research and education network services. For example, HCPs who can connect to NLR or Internet2, or other research and education networks, through a government master services agreement that meets the requirements in section VI.B.6.b could take advantage of the competitive bidding exemption for such agreements.
364We note that in the rural health care support mechanism, price need not be the primary factor in determining what service is “most cost-effective;” rather, the most cost-effective solution is the method that “costs the least after consideration of the features, quality of transmission, reliability, and other factors that the HCP deems relevant to choosing a method of providing the required health care services.” 47 C.F.R. § 54.603(b)(4); see also 2003 Order and Further Notice, 18 FCC Rcd at 24575-76, para. 58 (affirming that HCPs should not be required to use the lowest-cost technology because factors other than cost, such as reliability and quality, may be relevant to fulfill their telemedical needs).
365Many Pilot projects have connected to Internet2. See Pilot Evaluation, 27 FCC Rcd at 9414, para. 46 and n.139;
USAC Nov. 16 Data Letter at 2 (although over 20 Pilot projects have Internet2 or LambdaRail connections, only six had requested funding commitments from USAC for such connections). Pilot projects that have received
commitments for Internet2 or NLR need not conduct competitive bidding to continue receiving disbursements based (continued…)
commenters opposed the Commission’s proposal to exempt National LambdaRail and Internet2 from competitive bidding, arguing, among other things, that such an exemption would be anti-competitive by disadvantaging other telecommunications providers.366 A competitive bidding requirement that applies equally to all participants will ensure that HCPs can consider possible options from all interested service providers. Because applicants must already engage in competitive bidding for all other services, we do not believe it would be overly burdensome to require applicants to also include Internet2 or NLR in their competitive bidding process. While we encourage all applicants to fully consider the benefits of
connecting to non-profit research and education networks such as Internet2 and NLR, we emphasize that it is not a requirement to connect to Internet2 or NLR.367