Pilot Program, an RFP that includes a build-out component need not be limitedto such costs (for example, some HCPs included in the RFP may not need any additional build-out to be served, but rather only need discounts on recurring services). We expect HCPs to select a proposal that includes carrier build-out costs only if that proposal is the most cost-effective option.426In addition, upfront charges for build-out are subject to the limitations in section V.D below.
157. Discussion. We will provide support for network equipment necessary to make a broadband service functional in conjunction with providing support for the broadband service.433 In addition, for consortium applicants, we will provide support for equipment necessary to manage, control, or maintain a broadband service or a dedicated health care broadband network.434 Equipment support is not available for networks that are not dedicated to health care. We conclude that providing support for such equipment is important to advancing our goals of increasing access to broadband for HCPs and fostering the development and maintenance of broadband health care networks, for three reasons.435
158. First, providing support for equipment will help HCPs to upgrade to higher bandwidth services. USAC states that Pilot Program funding for equipment allowed such HCPs to upgrade bandwidth without restrictions based on what their existing equipment would allow.436 We note that small rural hospitals and clinics often lack the IT expertise to know that they will need new equipment to use new or upgraded broadband connections, and finding funding to pay for the equipment can cause delays.437
159. Second, support for the equipment necessary to operate and manage dedicated broadband health care networks can facilitate efficient network design. USAC states that urban centers, where most specialists are located, are natural “hubs” for telemedicine networks, but the cost of equipment required to serve as a hub can be a barrier for these facilities to serve as hubs. In the Pilot Program, funding network equipment eliminated this barrier to entry.438 OHN explains that connecting to urban hubs can also
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approaches and also provide appropriate security”); WNYRAHEC PN Comments at 6 (recommending eligibility for network routers).
433Because support for equipment is contingent upon it being necessary for achieving broadband connectivity, we will only provide support for equipment if the associated broadband service is funded under the Healthcare Connect Fund. GCI argues that if the new program supports routers and other equipment, it should also support such equipment for services supported under the existing RHC program. GCI PN Comments at 6, 7. We expect to address potential reforms to the RHC Telecommunications Program at a future date. See infra section VIII.
434See 2007 Pilot Program Selection Order, 22 FCC Rcd at 20397-98, para. 74 (supporting “costs of constructing dedicated broadband networks that connect health care providers”).
435Certain equipment (e.g., a network router) is necessary to make a broadband service functional, regardless of whether the broadband service is being used for telemedicine or some other application unrelated to health care.
Providing support for such equipment is within the scope of our statutory directive to provide “access to advanced telecommunications and information services.” In contrast, while equipment such as telemedicine carts and telemedicine software may be necessary to engage in telemedicine, it is not necessary to making a broadband connection functional. See infra section V.C.1. The Commission previously has concluded that it lacked statutory authority to support telemedicine equipment. See 2003 Order and Further Notice,18 FCC Rcd at 24562, para. 30 and n.97 (responding to Washington Rural Health Association’s request that the Commission fund “services and equipment necessary for the provision of health care,” including “radiologic imaging equipment” and “video conferencing equipment”); see also Changes to the Board of Directors of the National Exchange Carrier
Association, Inc., Federal-State Joint Board on Universal Service, CC Docket No. 96-45 et al., Fifteenth Order on Reconsideration, 14 FCC Rcd 18756, 18781-82, paras. 39-40 (1999).
436USAC Observations Letter at 6-7.
437Pilot Evaluation 27 FCC Rcd at 9417-18, para. 50; OHN PN Comments at 9-10; UTN PN Comments at 4 (stating that leased services often have non-recurring costs for installation, including applicable network equipment).
438USAC Observations Letter at 5.
reduce the need for rural sites to manage firewalls at their locations, which allows the rural sites to reduce equipment costs while adhering to security industry best practices and standards.439
160. Finally, support for network equipment can also help HCPs ensure that their broadband connections maintain the necessary reliability and quality of service, which can be challenging even if the HCP has a service level agreement (SLA) with its telecommunications provider.440 Support for network equipment has enabled some Pilot projects to set up Network Operations Centers (NOCs) that can
manage service quality and security in a cost-effective manner for all of the HCPs on the network.441 The NOC can proactively monitor all circuits and contact both the service provider and HCP whenever the status of a link drops below the conditions specified in the SLA. This allows proactive monitoring to find and deal with adverse network conditions “in real time and before they have a chance to impact the delivery of patient care.”442 A HCP-operated NOC in some cases may be more cost-effective for larger networks (e.g., statewide, or even multi-state networks), particularly when the NOC may be monitoring and managing circuits from multiple vendors.443
161. We do not express a preference for single- or multi-vendor networks here, nor do we suggest that it is always more efficient for a dedicated health broadband network to have its own NOC.
For example, a network that chooses to obtain a single-vendor solution and obtain NOC service from that
439OHN PN Comments at 7 (explaining that rural sites do not have to manage firewalls if they utilize a dedicated connection to an urban hub and have all their public internet traffic managed by the hub location).
440An SLA is an agreement between a user and a service provider defining the nature of the service provided and establishing metrics for that service, trouble reporting procedures and penalties if the service provider fails to perform. See National Broadband Planat 353. As discussed in the Needs Assessment, HCPs need services that are reliable, especially in emergency situations, and must meet stringent privacy and security standards. See, e.g., OHN PN Comments at 9-10, 15 (“[i]n order for a site to rely on a network connection for real-time health care delivery, the HCP must be able to trust the connection will provide a quality level adequate to meet their needs whenever that need arises”) (emphasis in original); Needs Assessment (Appendix B) at para. 3, 21. SLAs, however, typically require the customer to register a complaint and have the vendor respond reactively, rather than having the service provider proactively monitor service levels. See OHN PN Comments at 15 (stating that most service providers do not have alarms or alerts set for metrics like jitter, latency, and packet loss (despite established SLAs), and issues related to these metrics are handled in a reactive manner by the vendor putting a probe in place when a complaint is registered). Furthermore, if multiple service providers are involved in providing a connection, identifying the service provider responsible for remedying a problem can take “an inordinate amount of time.” Id. This could pose a particular challenge for smaller rural HCPs, given their limited resources, lack of technical expertise, and limited broadband options.
441See, e.g.,IRHN PN Comments at 10 (explaining that the IRHN is managed and operated by a best-in-class NOC that can track each location because of the installation of IRHN-owned network terminal devices at each HCP location and optical switches in key network node locations).
442OHN PN Comments at 15; see also NETC PN Reply at 3 (one benefit of the NETC network is “the ability of the NOC to proactively respond and hold vendors accountable for meeting their service level obligations”).
443For example, NETC states that constructing fiber infrastructure was not feasible given the size and remoteness of its service area (New Hampshire, Vermont, and Maine), and it had to leverage existing carrier infrastructure from multiple service providers. Therefore, a significant part of NETC’s start-up costs reflected investment in equipment, including “large routers at the network core,” and this one-time investment was a critical part of the estimated $135 million in cost savings estimated for participating HCPs. NETC Reply at 2-5. Similarly, IRHN states that it could not have accomplished a cost-efficient network with a single RFP for all services. One vendor did submit such a response, which was more than ten times the amount of IRHN’s Pilot Program award. Instead, IRHN has utilized leased services (from for-profit and not-for profit service providers), wireless point-to-point, IRUs, owned
equipment, leased equipment, and owned last-mile fiber laterals (approximately 1600 miles of fiber-based services) to stitch together a network transparent to the hospital users. IRHN PN Comments at 9-10.
vendor may receive support for the NOC service as a broadband service, if that solution is the most cost- effective. Our actions today simply facilitate the ability of a consortium to operate its own NOC, if that is the most cost-effective option.
162. Eligible equipment costs include the following:
· Equipment that terminates a carrier’s or other provider’s transmission facility and any router/switch that is directly connected to either the facility or the terminating equipment.444 This includes equipment required to light dark fiber, or equipment necessary to connect dedicated health care broadband networks or individual HCPs to middle mile or backbone networks;445
· Computers, including servers, and related hardware (e.g., printers, scanners, laptops) that are used exclusively for network management;446
· Software used for network management, maintenance, or other network operations, and development of software that supports network management, maintenance, and other network operations;447
· Costs of engineering, furnishing (i.e., as delivered from the manufacturer), and installing network equipment;448and
· Equipment that is a necessary part of HCP-owned facilities.449
163. Support for network equipment is limited to equipment purchased or leased by an eligible HCP that is used for health care purposes.450We do not authorize support, for example, for network equipment utilized by telecommunications providers in the ordinary course of business to operate and manage networks they use to provide services to a broader class of enterprise customers, even if eligible HCPs are utilizing such services. Non-recurring costs for equipment purchases are subject to the limitations below on all upfront charges.