In the matter of: ) ) ADVISORY COMMITTEE ON ) TELECOMMUNICATIONS AND ) HEALTH CARE ) Volume: 1 Pages: 1 through 238 Place: Washington, D.C. Date: September 17, 1996 Before the FEDERAL COMMUNICATIONS COMMISSION Washington, D.C. 20554 In the matter of: ) ) ADVISORY COMMITTEE ON ) TELECOMMUNICATIONS AND ) HEALTH CARE ) Suite 856 FCC Building 2000 L Street, N.W. Washington, D.C. Tuesday, September 17, 1996 The parties met, pursuant to the notice, at 10:10 a.m. ATTENDEES: STAFF MEMBERS: GREG LAWLER, Chairman THAYER NELSON ELLIOT MAXWELL LYGEIA RICCIARDI MEMBERS: WILLIAM C. BAILEY, Southwest Bell Telephone JAMES E. BRICK, West Virginia University CANDY CASTLES, AT&T Wireless Services, Inc. JOHN CLARK, RONALD D. COLEMAN, Med-Tel International HELEN R. CONNORS, School of Nursing, University of Kansas Medical Center STEVE COTTON, University Health Science Center - HealthNet MARY JO DEERING, Department of Health and Human Services JUDY L. DEMERS, University of North Dakota School of Medicine MEMBERS: CHARLES DOUGHERTY, Creighton University JAMES H. DUKE, Herman Hospital WILLIAM L. ENGLAND, HCFA DIONNE GREEN, ROGER GUARD, University of Cincinnati Medical Center WILLIAM HAWKINS, Ethicon Endo-Surgery CHARLES F. HOLUM, Attorney, Doherty, Rumble & Butler GEORGE H. KAMP, American College of Radiology MICHAEL G. KIENZLE, University of Iowa College of Medicine JOAN KING, AARP JOSEPH C. KVEDAR, Partners HealthCare Systems, Inc. GREG LITCHFIELD, ART LIFSON, CIGNA TOM LORAN, MARY JO MACLAUGHLIN, Eastern Main Healthcare JIM MCCONNAUGHEY, MTIA DAVID METLZER, LOUISE NOVOTNY, Communications Workers of America ROBERT B. PILLAR, Public Utility Law Project of New York, Inc. DENA S. PUSKIN, Department of Health and Human Services GONZALO M. SANCHEZ, Sioux Valley Hospital JAY H. SANDERS, The Global Telemedicine Group AL SONNENSTRAHL, Consumer Action Network of Deaf and Hard of Hearing Americans THOMAS R. SPACEK, National Information Infrastructure Initiatives Belcore EUGENE V. SULLIVAN, University of Virginia ERIC G. TANGALOS, Mayo Clinic CYNTHIA TRUTANIC, Office of Tipper Gore REED TUCKSON, Charles Drew University of Medicine and Science ROBERT WATERS, Arent Fox and Center for Telemedicine LaW BILL WELCH, Nevada Rural Hospital Project BRIG. GENERAL ZAJTCHUK, U.S. Army Medical Research Development and Logistics Command, Department of Defense I N D E X VOIR WITNESSES: DIRECT CROSS REDIRECT RECROSS DIRE None. E X H I B I T S IDENTIFIED RECEIVED REJECTED None. Hearing Began: 10:10 a.m. Hearing Ended: 4:05 p.m. Recess Began: 12:20 p.m. Recess Ended: 1:17 p.m. P R O C E E D I N G S MR. LAWLER: First, I want to welcome everyone and thank people for their hard work. I am not going to single anybody out. There has been a lot of work that's gone on over the past, well, really since our last meeting. Normally more of it happens at the end than at the beginning, or at least the visible signs of it. So a lot people have been working very hard. I know some didn't get their, either due to the U.S. Mail in some cases, or errant faxes, some did not get the things that were sent out. If you don't have them, anyone that doesn't -- let me just run through these things. There is a -- Lygeia, would you just hold that up? There is a memo with findings and recommendations that was faxed out to people. If you don't have it we have got them here. There is one that does not have it. If you would just pass it around. And another. Let's just pass them around. MR. SANDERS: Did you say errant fax or a red box? (Laughter.) MR. LAWLER: There was also, and this was sent out by mail, I don't know, at the beginning, like Tuesday of last week, which is a compilation of all the subgroup reports. And, Judy, I know you did not get one. I don't know if you got one subsequently. MS. DEMERS: No, I got one. It came about three hours before I left. MR. LAWLER: They are coming around, a couple more. There is also -- where is Tom? There he is. There is also a redraft of the infrastructure subgroup report which I don't think anybody has. So why don't we pass that around. It's obviously going to be too long to read immediately, but it's some, not -- well, I will characterize it my way. Tom can disagree. They are not major changes, but they are minor changes after discussion, and it is now consistent with the recommendations, findings a recommendations we've sent out. MR. SPACEK: Please throw away the infrastructure report that's in the combined package. MR. LAWLER: Is the other one going around? It is. And if we don't have enough of those, which we may not, we will make more. MS. PUSKIN: Is it possible to get some kind of printed -- some of it's not very readable. MS. RICCIARDI: Yes. I want you to know we tried to do it from disks, but do to a series of computer errors, I made some fax copies. We can try that again. MS. PUSKIN: Well, does anyone have a clearer copy. MR. SPACEK: I have a clearer copy, if somebody -- it's back to back. MS. RICCIARDI: Okay. MR. LAWLER: We will make clean copies, and whenever they are ready they will be ready. All those are being reproduced. Hopefully, we will have them soon. When Lygeia returns there are a couple of things that are going to happen during the day. I guess the staff of the joint board is a round Elliot, and they are going to join is at some point for a discussion, a couple of events like that, but I will wait for Lygeia to get back because she knows who and when. What I thought we ought to try to do today is really going through the findings and recommendation attached to this document. My memo is a cover sheet to what's nine pages long. And called FCC Telecommunications Health Care Advisory Committee, Summary of Findings and Recommendations of Subgroup reports, and use this as an outline as we go through of where the difference subgroups arrived, what the actual findings and recommendations that we would be making are, and use that to provoke discussion, although before we get stared, Lygeia, if you could just run through or schedule for today, in terms of who is -- other than our discussion, who is coming and when. MS. RICCIARDI: Yes. For those of you who missed the Intel SAT presentation, which Cindy Trutanic arranged for us yesterday, David Meltzer will be returning at noon and again at four o'clock to talk to us formally or informally and bring us up to speed on a program that they are beginning. Also, later in the day we're going to have the opportunity to meet members of the state staff of the Joint Board. These are the people who staff the state commissioners who make up the Joint Board, and they will be in here about three o'clock, at which time we will give them an update of what we have been talking about, and just get to talk with them. MR. MAXWELL: Let me just piggyback onto that. They are a very important group because with respect to the Joint Board they will be advising the state commissioners who sit on that board as to the recommendations, and there are obviously a very strong connection between what you have all been doing and the work of the Joint Board. We plan to take the recommendations and to put them into the public record so there would be comment on it. But these are the folks who will be making a preliminary analysis of what other people say and what you say, and how it relates to the recommendations as to what will constitute universal service and what the particular provisions regard to telemedicine are. So I would encourage you to, if you have got concerns and ideas, to make them know to these folks. MR. LAWLER: Let me just describe before we get into the findings and recommendations what has gone on that I am aware of anyway. The subgroup reports came in, I forgot what the date was, but either right before or right after Labor Day. I think there was some interchange among the subgroup heads of those reports. There was a lot of discussion that went on. We tried to pull out from those the findings and recommendations like you see here. There were several long phone conversations between subgroup heads about where there were inconsistencies or things that needed to be meshed. And this document, I think, I hope reflects those discussions. It is for the most part consistent, although as Tom's report, subgroup report changes indicate, there are some changes, but it is mostly consistent with the different subgroup reports. So what I would suggest is we go through this, have a discussion, I'm sure, on some of these things will be some disagreement, and that's what we are here for, to have that discussion, and see if we can arrive at a consensus by the end of the day or maybe by 10:30, if we're, you know, all in agreement. So why don't we start at the beginning. The first finding is a general one. I actually have even seen a comment about this -- I forgot where I saw it -- about this should be a -- we could add to this the fact that it will help reduce cost, which I think is a good point, but hopefully this is not going to be one we're going to spend a lot of time on. Anybody have comments on the first finding there? MS. PUSKIN: I would be -- as much as I think it has a potential for reducing costs, I think that the jury is out on that. So I think one might want to talk about potentials as well as more than realities if one ever adds that comment to it. MR. LAWLER: I'm sorry. On cost? MS. PUSKIN: On cost. MR. LAWLER: Say potential on cost. MS. PUSKIN: Right. Because I think there is -- the history in the health care field of new technology as it's been -- MR. LAWLER: Always add costs. MS. PUSKIN: -- an add-on and not a substitute, and while there is this potential in some instances, certainly from the average, if we prove access from a system-wide point of view, we may in fact be adding costs that are well worth the investment, don't misunderstand me, from many peoples' perspectives, but I think we should not be glib about that. MR. LAWLER: The whole thing is couched in terms of potential. MS. PUSKIN: Right, right. MR. LAWLER: So obviously it's consistent. Anybody else? MR. SANDERS: Of course, they are between per patient cost and -- MS. PUSKIN: Right, exactly. MR. LAWLER: Right. MS. PUSKIN: Exactly. But since this is a terse finding, I mean one. MR. LAWLER: Finding number two here, they are not numbered, but the rural telemedicine one is just really what's underway out there shows that some of these things do work in terms of improving access. Any disagreement there? MR. GUARD: I would add consumer health and patient education information. MR. LAWLER: Consumer health? MR. GUARD: And patient education information. MR. LAWLER: Education information. No disagreement there. Any other? MR. SANDERS: There is another critical component of the education. One of the primary impacts is to provide a colleague to the primary care practitioner -- MR. LAWLER: Right. MR. SANDERS: -- out there and improving the educational level of the primary care practitioner. MR. LAWLER: How would you say that, Jay? Just that improving? -- MS. PUSKIN: Health professional education which can go in a number of way, both didactic and preceptorship-- MR. SANDERS: Right. MS. PUSKIN: -- things which we want to skirt that one a little carefully because some practitioners while it does do that, some of them would argue that they are also educating the urban practitioners at that rural practice. MR. SANDERS: I would be the first to say that. MS. PUSKIN: I know you would. That's why I said it. MR. LAWLER: Is everyone comfortable with education of health care professionals? The third finding is infrastructure and costs, both obstacles to successful rural telemedicine efforts. Okay, the first recommendation is the definition of rural -- Dena, I know you had, or I didn't hear it directly, but I overheard you saying there was something. MS. PUSKIN: I have no problem with deferring to our office. I have problems. My staff has been working with the staff of the FCC, and I know there is some discussions about using some of the Telco definitions. And we are having some problems with that. So I don't -- Elliot, you and I and Lygeia need to talk off-line about what this is. I just got this message cryptically from one of my staff who is working with the staff. And so we need to just explore what that is and make sure we have -- MR. LAWLER: Dena -- well, go ahead. But I think for these purposes, the advisory committee -- MS. PUSKIN: Right. MR. LAWLER: This is appropriate. MS. PUSKIN: This is fine. Right. MR. LAWLER: Okay. MS. PUSKIN: And the reality is, the off-line reality is what happens with FCC staff later. MR. LAWLER: Right. Could I actually -- Lygeia reminds we, we have a court reporter. So, unfortunately, we all need to identify ourselves before we speak just so the court reporter can get it. Dena, can I ask this? This is a very cryptic sentence and this is not a simple subject. It might be worth spending a minute describing what the approach is that the Office of Rural Health Policy believes is the right one. And then I think it's important that we have that in as -- you know. MS. PUSKIN: We have given a little bit of background material, but we certainly can write up even more if it's needed. MR. LAWLER: Yes. I think maybe if we -- I don't know what the right length is, but if we had a page describing succinctly precisely what it is, you know. MS. PUSKIN: Let me just say for the group, just to give -- we have struggled with this because we have had to implement programs where the ultimate person filling out whatever is being filled out is often a clerk. And you have to have definitions that are administratively reasonable for definitions. And really there are two questions here in defining rural: which areas should be designated rural, and among rural areas, because of the issues of comparability, and there are wide variations in population density size, you might want to distinguish among types of rural. And I think the most extreme is the frontier areas versus the townships of New England. Both are rural but they have very different characteristics and very different needs. So we, for the purpose of administering public programs, which we have to do all the time, we recommend that the in the first area that we designate non- metropolitan statistical areas as defined by OMB as the first cut on defining what is rural. Now, the problem is we have within those, and those are county-based definitions, so they are easy to implement. The problem is we have some very large counties in this country. Counties are not uniformly defined. So you have Pima County in Arizona, which is huge, or San Bernardino County which goes from the Pacific Coast to basically almost, almost the Pacific Coast to the border of Nevada. How do you define within that where you have, you know, large cities the rural area where there are more road runners than there are people? Well, we have developed something called a Goldsmith variation, which is basically after Hal Goldsmith, who is our demographer, and he basically has looked at that and come up with some definition for these very large counties to subdivide them in a way that is administratively simple, and we provide that based on census data. Then you have gotten now the metropolitan counties that are large, and you have gotten their rural areas out of them in an administratively simple way. Now you have got to distinguish among this great variety of rural areas. And we are recommending the use of Urban Influence Code, which have been developed by the Economic Research Service at the Department of Agriculture. There are lots of reasons why we think these are superior to anything else that's right out there, and also it's administratively simple. It's again based on counties. The data are easy to get at. You can put out a list and say here, you know, code yourself. And so we are looking for ways of defining -- of getting both as sensitive a measure of rural, because these are going to require some sensitivity for purposes of administration, as well as administratively simple. And so this is what we are recommending. We can write up a one pager on pros and cons. It is what we recommend for a whole host of reasons. MR. LAWLER: Jim, did you have any comment? MR. BRICK: Dena did send this information, and I sent it to you guys after we had sent this in, and I am sorry it didn't make its way into the report here, but she did send me that -- MR. BRICK: -- describing this. MS. PUSKIN: But it may be that I -- I sent you something really sort of designed as background for the committee. MR. BRICK: Right. MS. PUSKIN: And for staff. But maybe what they need is a little more lay type of write up. MR. LAWLER: Right. Right. MS. MACLAUGHLIN: Mary Jo MacLaughlin, Eastern Maine HealthCare I just wanted to reinforce the fact that we -- that Dena really put out a good explanation of rural at our first meeting, and we, who have very, very large counties in our state, were very pleased with that. And I think that if we just make sure that it gets into the recommendation to specifically talk about how we are going to break that out. That would be very helpful to states that reflect large counties. MR. LAWLER: anyone else? All right. UNIDENTIFIED SPEAKER: Greg, should we go ahead and change the wording to say that then we use that definition instead of follow the lead? MR. LAWLER: Yes. You're right. UNIDENTIFIED SPEAKER: I mean, just make it a recommendation. MR. LAWLER: Right. MORE. MAXWELL: And that there be some brief description of what that recommendation is. MR. LAWLER: Absolutely. Yes. MS. PUSKIN: Yes. MR. LAWLER: We need, as I think Dena used, a lay description of what it is, but enough so that someone reading it knows what it is, and if they need more detail precisely where to look. MS. PUSKIN: And if you want, we could actually list, you can list the counties that fall under each. It gets pretty complicated. MR. LAWLER: All the counties in the United States that qualify? MS. PUSKIN: Yes, but in fact what you end up doing in the end is -- administratively that's what you give a clerk, and you give a clerk with a -- UNIDENTIFIED SPEAKER: We can just attach that as part of a record -- MR. LAWLER: Sure. UNIDENTIFIED SPEAKER: -- for this, so that if there is any question, it will be in the record. But for the purposes of the committee it can just be the recommendation is that the Goldsmith variation as played by Van Gould -- MS. PUSKIN: And the Urban Influence Code. UNIDENTIFIED SPEAKER: You can tell that Elliot and I have been working together. It's now an attachment rather than a footnote. MR. LAWLER: Okay. The next recommendation, and this is really a series of them. Why don't I do this, Tom, if you are willing, this is from your paper, do you just want to go through and give us a brief description sort of bullet by bullet. MR. SPACEK: Sure. MR. LAWLER: And how you arrived there, and start the discussion that way. MR. SPACEK: Okay. For the minimal package basically the approach that was taken that was sort of joint between two of the subcommittees was actually -- we actually ended up defining a marketbasket of services, and we did that not by an approach that you will in the further recommendation about what to do in the future, which is actually to take a survey, but using members here as a proxy for that survey. So in the report, and I think this is probably pretty much the same in both the old one and the revised one, there are seven different telemedicine items listed that seem to me to be the most important items that you needed to do. And so given that marketbasket, what we then attempted to do is say what is the band width that would be needed to accomplish that at reasonable speeds. And there are footnotes in the report where how long x-rays would take and how long other things would take. And what we had come up with is that 384 kilobits per second was sufficient to do these kinds of things, but that's clearly open for discussion. And I guess in addition to that we had some footnotes that if, for example, someone had a higher speed line, or even 384, depending on what you were doing, you could use those same lines for other things. For example you could use a T-1 or a quarter T-1, which is 384, for your telephone service. So, okay, somehow it would have to distinguish that if you use something for things that are not covered by the act, that they should not be given discounted rates. In any case, 384 is what we had come up with, although I know there are some people in the room here who would prefer T-1, and we can have that discussion and you buys can decide, okay. Secondly, there was internet access, including electronic mail, information access, cooperative applications and so forth. We didn't cover the pricing of that in this recommendation cause pricing is really a separable issue and comes up later. And I think when you see the pricing differential recommendations later, I am not aware of any urban area in the U.S. at the moment where you can't get flat rate internet access via a local call. That could change over time, of course, but at the moment that will get covered later. But internet access as a service is also in the recommendation. And on that same issue, internet access could also be done using your T-1 or 384 line also. In fact, some of the larger areas -- well, people who want to use more, do more video or imaging on the internet might chose that as a preference, and that would be another valid use of that line that would be covered. That's actually about it on this particular recommendation. The -- there is two things that, in sort of working on this and thinking about this over the weekend, there is actually two things that should change compared to what is written here, and I think it doesn't change the proposal. But basically in this particular recommendation it says what the 384 is used for. It should not say that. Rather, we should have a footnote and have the marketbasket listed, you know, that we have in the report, because, you know, these are the things. And then another item is that something that we say at the bottom of the fourth bullet is that although we have this marketbasket there is no intent that your use of telemedicine would be limited to that marketbasket. In other words, you are getting this telecommunication services at a discount rate. Any telecommunication application is okay to use. Okay? So that sentence should probably get moved up to this recommendation. So basically we are saying there is a marketbasket which has these seven or eight things in it. You are not limited to that 384 kilobits, internet access. That's the minimal package to meet the marketbasket in the recommendation. MR. LAWLER: Tom, also, why don't we get to all of these bullets at once, and then I will ask Jim and Eric, who also participated in various parts of this if they have comments. But the emergency services, you have a recommendation. What else? Home health care. MR. SPACEK: Yes. Why don't we just cover those now. MR. SPACEK: Okay. MR. LAWLER: And have a full discussion on this. MR. SPACEK: Okay. On emergency services, and especially for mobile units like helicopters and ambulances and so forth, the recommendation here is to have a minimum of 9.6 kilobit data transmission to enable reports to emergency departments, urban trauma centers and so forth on vital signs and things of that sort. Relatively low speed. Cost-wise, it probably, you know, urban and rural, probably not much difference in that except when we get later into infrastructure development there probably will be a difference in getting the infrastructure further out into the rural areas to do that. This is the -- this is what's recommended in the minimal package. And as you will see when we get to advanced services later, we are recommending that in these biennial reviews of what the minimum package is over time as you move advanced services and you consider that the Joint Board and the FCC consider many additional types of services as costs get reduced and infrastructure gets built and so forth, such as you can potentially video or, you know, imaging and video from ambulances and helicopters. Okay, so the recommendation though here is 9.6 for mostly vital sign information, available to any rural area that requests it. Yes? MR. SANDERS: Just one thing, Tom. In this bullet, just from a semantics standpoint, the first sentence says, "Based upon experience," et cetera, et cetera, "80 percent of the casualties are occurring in rural areas. To reduce this imbalance," well, we're not reducing the imbalance in terms of the casualties. MR. SPACEK: Casualties, yes. MR. SANDERS: Really what we are reducing is we need a sentence in between there which, and this is the data, that there is a four to one greater morbidity and mortality to rural casualties in Texas. This was a study done by the University of Texas about six years ago. MR. SPACEK: Could you mail or provide the details on that? MR. DUKE: Hey, Tom, it's also in other places too. I mean, the same -- the disparity and distance from where it is in the country -- I am Duke. But they -- it's the far out, that's why -- the travel faster, and they are harder to find, and when we find them, you still got that period between the time they find them and the time they get them back where you can do something effective, and that's where I'll be -- and time goes get to be important, you know, when that -- you know, when you are watching that blood run out on the highway, it does -- time becomes imperative. MR. MAXWELL: Is the four to one, or approximately that, pretty consistent? MR. DUKE: Those are just number of guesses. Those studies have been done all over everywhere, and it's kind of following a gillion different states. I just happen to be in Texas. But the first one ever done was in California, and then just different people looked at the same thing, and it's just kind of a principle. I wouldn't live by that exact ratio, but you may die by it. MR. LAWLER: Jay is correct on the grammar though. He is also right about the merits, but there does need to be a different -- MS. PUSKIN: In order to improve this something about -- that's what you're looking at, right? MR. LAWLER: Right. MR. DUKE: That's the whole point. If you can get, if you can get someone out there -- if you have some person or responder out there who is communicating with a knowledgeable person at a center. MS. PUSKIN: That's right. MR. DUKE: You've therefore extended the physician care to the same, which beats the thunder out of variously trained, wonderful, but variously trained first respondent. MR. LAWLER: Right. MS. PUSKIN: Now, let me just say that w have done a study in North Carolina which supports this, a very detailed study in looking at the problems of rural emergency rooms as well. And what you are trying to do is beef up the emergency response system both at the first responder level and the emergency room. MR. DUKE: I couldn't agree more. MS. PUSKIN: And I want to talk a little later about why there is some inadequacies here in some -- MR. DUKE: You are absolutely correct. MS. PUSKIN: But, in fact, we have problems in both, of which this technology can be a major difference. MR. LAWLER: Just anybody who can get us references to the studies or the studies themselves it will help, again, you know, bolster the report in terms of this is something that the -- MR. DUKE: You want a bunch of references? MR. LAWLER: -- yes, the Joint Board and the FCC can actually look at and say, you know, there is data here, we're not making this up. I'm going to first go here. MR. KIENZLE: Mike Kienzle. You know, the magnitude of the rural/urban disconnect, I think, is the basis for the emergency medical services statewide kinds of things that are happening in many states. I mean, the fact that there is a rural/urban discordance has given rise to the kinds of state-generated legislatively mandated emergency medical services acts, and those are in place in many, many states. So I think that's been recognized for some time. MS. PUSKIN: Unfortunately, that -- it's nothing compared to what was in place in the seventies in the Emergency Act. We have real problems and holes. MR. SULLIVAN: Eugene Sullivan with a question. Does 9.6 then meet the needs of the emergency services? I wonder if we are setting our target maybe a little bit too low there. Obviously, the ER is going to want a lot more information, and we can't give them everything, we may not be able to give them everything, but I think we need to look higher than 9.6, and maybe your studies show that. MS. PUSKIN: Right. Well, that's what I was getting at. It's one thing to talk about 9.6 for the first responder at the scene, and the other issue is what do you need at the emergency room once you get someone there or once they are there in terms of relationship to follow up with in fact a tertiary center in terms of follow-up care and what you need. And I'm not sure about the 9.6 for the first responder, but I can tell you on the emergency room level or the rural emergency access community hospitals which people are talking about, which is a whole different model that we're talking about here, I am not -- I am convinced 9.6 won't work, and I certainly am very skeptical about 384. MR. LAWLER: We have another comment here, Tom. MS. CONNORS: Helen Connors. I would just say that since I am hearing people say that there are studies that have been done out there, that we change that first part of that sentence instead of saying, "Based upon experiences in Houston," because it sounds like it's too local, and it sounds like there is other broader studies done. MR. DUKE: That it goes down to local. MR. LAWLER: Tom, did you have a -- yeah, I agree with that comment. You are absolutely right. We should get the other studies references, and it should be broader than Houston. MR. SPACEK: Yes, and on your comment, there are two separable issues. The 9.6.6 is the -- you know, the first arrivals and so forth. And once you are in the emergency, you know, in an emergency area, clinic or something of that sort, then the telemedicine services available would fall under the other items, which would be the 384. MS. PUSKIN: And I think we need to talk about that separately. MR. SULLIVAN: But I think Dena and I said the same thing. Does the first responder need more than 9.6? MR. SPACEK: Oh. she didn't -- MR. SULLIVAN: And I think if there hasn't been a study done, maybe a study needs to be done cause 9.6 would probably give them about the same capabilities as they have now, which is the voice saying blood pressure, et cetera. Why not look to more tools to aid them out in the field? Pick a number, 14.4, 28.8, something up there that maybe they can take a picture and send a high quality image even though it takes a little bit of time? MR. SANDERS: But Picasso does that now. MR. SULLIVAN: Right. At what speeds? MR. SANDERS: I don't know. And the question I was going to ask is what modality are we talking about? Are we talking about cellular capability? MS. PUSKIN: We are talking about that. MR. SANDERS: Now, I know there will be a quarter of the T-1 within the next 12 months on cellular, but it doesn't exist now. What can we get from cellular? That's what we're talking about. MS. PUSKIN: But 20., we can get now, and that does give you a lot more capability. I mean, I would agree, I mean, I didn't want -- since this is -- the area, first responder, is not my specialty area, and I think we do have someone here who it is. I think we should really defer. But I would say base on our experience with our outreach grants, which we have funded some of them, we go to a higher band with those. We use 28.8 modem capabilities and that's questionable too. MR. DUKE: Duke again. I can 'tell you about the cellular. We had a lot of tough experience with that. We tried it, we tried compression. Now understand, I don't understand what I'm saying. If you talk about 9.6, you can tell me anything and I'd believe you, you know. (Laughter.) But I am talking about trying to make it work out in the field, and we used -- we tried cellular transmission by using phone lines, and somebody from Oklahoma had a technique or some technology to compress it, and they were using it, selling it to new stations to show people tornadoes. Well, the hooker is if you go -- if you have a new authority, particularly tension pneumothorax, and for you that don't know what that is, you've got too much air pressure in one lung, you've blowing along and you've got more pressure in there than you've got blood coming back to the heart, you're going to die if somebody doesn't fix that. And it doesn't work. If you move and you go from one cell to the next, and it goes dead, and you can't find it again, you know, or it -- also, it's too slow. It doesn't give you -- you either get a slide show, you know, or you're so far behind the guy is already dead anyway. It's interesting you said you would do a study on this thing about whether -- what impact it has. The only study that I can tell you, and I don't how else you would get it, but Dr. General Zajtchuk, who is a member of this task force, told me not long ago that out of the 8,000 odd autopsies done, complete autopsies done among the Vietnamese men in the Vietnam War, 80 some odd of those men died of tension pneumothorathine because they had -- MR. SANDERS: Head and thorax, the closed head wound and closed chest wounds are the one major casualties. MR. DUKE: So that is one of them. MS. PUSKIN: So what would be needed? I mean, it's just that -- what would be needed? MR. DUKE: Don't ask me the number, but ideally we perfected the -- I say "perfected," I haven't done anything. We have worked with people that are a lot smarter than I am, and they got this little bitty cameras, you know, and doing this stuff trying to transmit this stuff back if you can get some band width to do it on. You know, I don't know how many bits, bytes or anything else it takes to do that. You know, but if you can see it -- I mean, I can tell a paramedic out there better put a chest tube in, put it down one rib place lower, and so forth. MR. LAWLER: Jay. MR. SANDERS: Well, I feel somewhat credible in discussing this. I helped start an EMS system in Dade County, Florida. The reality is that in the example that you give, tension pneumothorax, the real need is for the EMS personnel to be able to, you know, identify tension pneumothorax, and that's listening to the lungs and feeling -- MR. DUKE: Well, they do this all the time, and I defy you -- I mean, I know what the books say, and I know what everybody teaches, but in the emergency room you can listen to one of those buggers and he will have plenty good breath sound, and be all dead as a hammer. MR. SANDERS: I know, so what then is -- MR. DUKE: You can tell by the way -- it's the look you can get on their face and the way they are breathing, and also if they start getting a lot of subcutaneous emphysema and they're not breathing right, that sort of thing. You can pick them up. And the thing, you know, that we teach them now, you know, to stick needles in there. This last year I had three people come in dead with needles in place because the needles stop up. MR. SANDERS: I actually think, and it's probably for another time, if you actually look at the trauma cases that you are dealing with, it's not going to be the picture that is going to give you the information. It's going to be the training of the EMS personnel and their audio capability and their hand capability that is critical. But with that said, my feeling is we ought to provide as much band width as possible to EMS in rural areas. By the way, the sentence that I would stick between the first and the present second sentence in that second bullet would be, "However, the trauma expertise that exists," I would say, "There is a great disparity between the trauma expertise in rural areas versus urban areas," something to that effect. Then I would say "to reduce that imbalance." MR. MAXWELL: Just a question. There is a difference between getting as much band width as you are able to get and going back to at least the injunction from the law, which is to say establish a kind of comparability, listings that are essential. And so I have no expertise in this, but to the extent that we are talking about it, we're talking about this is to what is deemed essential in urban areas, not sort of what we are capable of getting. So with respect to whatever recommendation the committee makes, it should be thinking about what is available in urban areas as a basis for determining what's essential for health care, and therefore the services need to be available at comparable rates. MR. KIENZLE: Mike Kienzle. I think the committee has to be a little bit careful about defining applications and band width that might be in some circumstances essential. I mean, from the perspective of someone who is very familiar with the problems of rural hospitals, who are often somewhat vulnerable to vendors of certain types of hardware and software, that there is a problem in holding out in a public forum a certain application that may be helpful, but it may not be helpful. But one thing is certainly true, it is expensive. And so I would just hope that we can be reasonable about what we're defining as being essential, and try to recommend those things that are clearly been shown to be helpful and valid. MR. LAWLER: Cindy, did you have a comment? MS. TRUTANIC: I'll wait. MR. LAWLER: Okay. Eric, hold up. Tom, why don't we finish running through this set of bullets, and then we will have this entire discussion, and Eric and Jim, if you have comments we will -- when Tom is Done. MR. SPACEK: Okay. The next item is a recommendation with respect to nursing homes that several people thought was very important that not-for-profit nursing homes be considered to be covered by the act. It turns out that, in reading Section 254(c)(1), where it defines -- I'm sorry, I have the wrong page. But anyway -- let me find the right -- MR. LAWLER: Here you go, Tom. MR. SPACEK: I have it. Okay, it's 5(b), as health care provider, it defines health care provider in 5(b). And no matter how you try to stretch your imagination you can't -- I mean, it's hard to say that nursing homes are covered there, okay. So they are not. I mean, we were hoping that there would be some category that say, ah, it falls under that. So what the recommendation basically is, is that the FCC consider either a mending the act or new legislation or something, however one would change something, to get nursing homes included. That's that recommendation. The next one has to do with this marketbasket of essential services, and that is, even though this group sort of as a proxy came up with the seven items that make up the marketbasket, in addition to the fact that you can do anything else within -- within the telecommunication service that is discounted as long as it is telemedicine, that that should be reviewed every two years, cause applications change. They may have greater requirements, or in some case, less requirements if there is better technologies and compression techniques or something of that sort. But in any case, it should be reviewed with a group that has the characteristics of this group, in the sense people who do rural telemedicine, people who know telecommunications, and other health care -- government, health care providers and so forth. And the idea is to continue, you know, equalizing telemedicine services in rural and underserved urban areas. And we also recommend, based on some of the members of the committee,that the revised marketbasket perhaps come up with taking a survey of sort of well served areas. Okay, I guess that's really it. The last sentence there, you know, I already suggested moving that up to the band width recommendation. So that's the marketbasket approach, and this method also -- this is put here also, this review, so that we really review the applications and what you need to do in telemedicine; that the idea is not to review band width. Once you review that and decide what is essential, and if the -- you know, the bar moves up for what is essential over time and what is affordable over time, that you -- then you figure out what that is, and then translate that somehow into telecommunications and with requirements. So we are just recommending a similar approach in the future that was used by this committee except for the serving. Okay, there is a lot said here about home health care, and how to expanding and becoming more and more important and why it's becoming more important. It's covered in the next recommendation. And the idea here is that we are recommending that services for home health care be identified and potentially be included in the first biennial review, and we look at that to see the status of technology at the time, the costs and so forth, to see whether not-for-profit home health care providers would be included in the next round of marketbasket. MR. LAWLER: I just wanted Jim Brick and Eric Tangalos, they -- sort of a joint effort in this one. MR. BRICK: I guess the only comments I have about this is I am concerned, as Dena is, about the 384. The folks that responded to me in my group in the multiple surveys that we did, I don't think that there was a single person that said that -- that used a number that was as low as 384 for the service in the rural hospitals. I think that the practice around the country that is going on as people moving when it's available and when they can afford it, and those are two important issues to the higher band width services in those small rural hospitals, and I am very concerned that we will set a standard here that will become not a minimum, but a maximum, and that because of that, if folks have the money, and they have the wherewithal and they have the need, that they are willing to make the investment in a higher band with service, that they are going to have difficulty obtaining services. That's my major concern about this. The issue about the other end of the spectrum, about the emergency services and the ambulances and with the first responders, I don't think we have enough information to -- we have even less information on that end of the spectrum, about what is needed and what's necessary and what people are using across the country. But I think on that end we also need to set a standard and we need to -- and then in the biennial reviews that this can be evaluated, not just leave it open-ended. And from what I am hearing from Jay and from other people that have some familiarity with what's the capabilities at that end of the band width, I'm not even sure that 9.6 is enough to do anything other than tell the doctor in the emergency room what the patient's blood pressure and pulse and that kind of thing is. And that's not, I don't think, what they are talking about. I think they are looking to have a little more information than that. How much is necessary, I'm not sure. That's an end of the spectrum where we haven't done very much work. But if we're going to -- if we want that end of the spectrum to expand, I think we should give them enough band width to be able to use it for something, and get something out of it. And maybe we can learn something that in these biennial reviews can be used to change standards. MR. LAWLER: All right. Eric. MR. TANGALOS: I think the chair struggled with two issues that needed to be resolved here, nd it was interesting to see everybody lock on 9.6. But that's one of the issues. We need a discussion of 384. The question is, is that a minimum, is that a maximum, where do you want to go with those things. And that relates to the other issue here, which is the marketbasket. And Chuck Dougherty in our group, I mean, in our report, eloquently described the difficulties in a marketbasket, and that's again what we have already started to discuss; that as you define elements, you are putting things in and leaving things out, and the closer you define what those services are, the less likely you are to allow other services later on to be in there, and the more you are really defining the max rather than the minimum. And so I think that a discussion -- we need guidance and direction as to, one, what the minimums are going to be; and then how closely or clearly do you define a marketbasket. How much do you want to say this is what's in that versus saying these are the services that we think, you know, are kind of out there that that help gauge what the proposes are? So that's the two issues that have to be resolved before we go forward. MR. LAWLER: Let me just add, and this keeps hitting me, and if people think this is irrelevant, so be it. But, and it really appears later on, actually it's the next section, the backbone infrastructure. I think it's important to keep in mind exactly what we're talking about here. We are talking about two things that the law says will happen. The first is that you get a comparable rate to an urban area. So, you know, a hospital in West Virginia, you set up a telemedicine network, I don't know what the urban rate will be in West Virginia, but whatever it is in that state you get the comparable urban rate. But we are also talking about something more than that, which is sort of what I call the build out of the rural infrastructure. It also means that if that infrastructure is not there in the parts of West Virginia that your telemedicine network is covering, whatever the term in the act is, the eligible telecommunications carrier, whoever is either going to volunteer or be drafted to build that infrastructure, they are going to have to build it to whatever we -- whatever the Joint Board and the FCC decide is the -- you know, the minimum that they are going to have to build it to. So it's not only an issue of, well, are we going to give them a cheaper rate, it is you've got to go build the infrastructure. And I just think it's important to keep that in mind when we're talking about all this, because, you know, somebody is going to go spend a lot of money doing this, and the Universal Service Fund is going to put out a lot of money to support it. And obviously, you know, if you go -- I don't know what the most sophisticated thing you could build in the world is, but if you say ever rural area has got to have it because we might want to use telemedicine, we would quickly run out of money. So we need to keep that in mind. Tom, did you have a -- and I will be right over here. MR. SPACEK: Yes, I have two comments. One, Eric, with respect to the marketbasket, I think that's -- you know, it's an excellent point. You don't want to try to define what's in it and say you can only do those things. And I don't think that's what was done this year, nor are we recommending in two years. I think what we are doing is saying defining a marketbasket as a guide, and that's how it was used. In other words, these are the things that people are claiming are the most important things that need to get done, essential things. And then as a guide use that to determine, or to estimate what some band width requirement would be, because that's the thing you are getting the discounted service for. You have to specify what the service is that is going to be cheap, okay. And then specify that you cannot -- that that marketbasket was just a guide, and any valid telecommunications application can be used on that service, okay. And that's a little different approach, and I think that makes it a fairly amount more flexible. Just one comment on your -- MR. LAWLER: Sure. MR. SPACEK: In building out the infrastructure, that's sort of, you know, technically -- you know, it is costly and all that stuff. But in some sense it's a little bit less of an issue than the 384 is or the 9.6 is in the sense that this is the -- the 384 and 9.6 is what you get to use at your site. The infrastructure development most likely will have facilities -- you know, when people are burying cables and all this stuff, it's much less expensive to put in more than you need, okay. And that typically is done and all that. MR. LAWLER: I agree with that. MR. SPACEK: So that would be less of a problem. MR. LAWLER: Yes, I agree with that completely. Let's go over here. Judy? MS. DEMERS: I am Judy DeMers from the University of North Dakota, and I served on the infrastructure subcommittee and I was the one hold out who opposed the recommendation of 384 and supported the T-1 as the minimum. And I did want to comment on that in terms of, first of all, I am not infrastructure expert, but for that reason I developed a group of about 12 to 15 people that I talked to consistently as this information came across, and to a person, they feel that the T-1 is the minimum that we need to use for a number of reasons. First, if you look at what's available in urban areas, the infrastructure committee report says very clearly that T-3 is available in most of those areas, and yet we are wiling to say for rural areas we will go with a quarter T or a 12 volt difference. I guess I don't think that's particularly appropriate. Second, if you're going to build a system, you don't underbuild a system, you overbuild a system to begin with because the technology is going to catch up very rapidly. Thirdly, you can't buy 384 in my state. So we can provide subsidizes rates for 384, but the fact is if a rural hospital is going to use that system they are going to have to go out and buy T-1 and pay full rates for three-quarters of that T-1. Folks, that doesn't make sense. I think that's extremely discouraging, if not prohibited, to many rural hospitals that we are trying to reach. I also called my U.S. senator. I have been working with his staff as well as we have received these reports. And they talked to the VA for me. And the chief information officer at the VA, Dr. Robert Collander, said that the VA Hospital also selected T-1 as their minimum for all of their hospitals basically because of significant clinical implications; the ability to split, the ability to use four quarter T-1s for different purposes and different kinds of transmissions. For that reason I think that, even though I have great respect for what my subcommittee has done, I am still in disagreement with the 384 and would urge us to consider the T-1 as the minimum. MS. MACLAUGHLIN: Mary Jo MacLaughlin. One comment about the home health care bullet that's been inserted. As a matter of fact, I spoke with Jim Brick several weeks ago about including the point about home health care. It talks about during the first biennial review to consider home health care for possible inclusion in the minimum package. I wonder if this is a wise thing to do, to wait two years to address this issue. Because as we know, more and more people are being forced to go home earlier or stay home longer. And therefore if we can't even address this issue for two years, I am afraid that the marketplace is going to push people into the homes, and even to a greater extent than they are now, and those folks attending to them won't have the opportunity to have some of the advance technology that even EMS has, or some of the small rural providers. MR. LAWLER: If I, and this is really just a comment on what the law says. If you read the seven categories of people who are eligible under the law, I don't know how you get home health care in there, but somebody smarter than I, cleverer than I may be able to figure out a way. So I think the only other recommendation we could make would be that the Joint Board and the FCC ought to consider recommending a change in the law. If we are going to do that, I think we ought to have some evidence to suggest that there is a -- here is the reason you ought to do it, and, you know, we may have that. I have not seen it. We may have that. And, frankly, I wouldn't suspect that this is going to be changed immediately no matter what we suggest. So, you know, I think we ought to think carefully about, you know, do we have the evidence at any point in time to suggest this, and have it taken seriously. I think at least we ought to pay the attention due it to see whether or not this might not be a recommendation made to them, to include home health care, because to exclude them, I believe you are leaving out a huge chunk of the world population, and will cause greater expense because that rural population will then have to seek services at the hospital. MR. LAWLER: Right. Chuck? MR. HOLUM: Yes, I have a question related to that and also to the nursing home question. Is there talk already of some kind of a fix bill for the Telecom Act. I mean, is there going to be some legislation? MR. LAWLER: How long did this one take, Elliot? Twenty years. So. MR. HOLUM: But that doesn't mean you wait two years to start the process. If you start now, it will take four years or 20 years. MR. LAWLER: Right. MR. HOLUM: And maybe you want to start putting these ideas into the report. MR. LAWLER: Sure. MR. HOLUM: The nursing home language is similar and troubles me just because the more I learn about these different reasons the more I am troubled by saying nursing home because that probably includes things and excludes a lot of other long-term care facilities. And I would recommend saying, for instance, nursing homes and other long-care facilities in rural and underserved areas so that you don't exclude some whole category of facilities. MR. LAWLER: Just while those words are on the table, anybody have any objection to that, other long-term care facilities? Cindy? MS. TRUTANIC: Cindy Trutanic. First, I would just like to express my gratitude as a member of the infrastructure subcommittee for Tom and Sid Hussain who really put in a lot of work trying to really pull together a lot of various and different thoughts from subcommittee members, and I think they did a very good job. The marketbasket of services language has been a difficult one for us to manage because while I think the services is important to identify services that are used to serve as an illustration for the types of -- the kinds of band width that we are recommending, it is a slipper slope because they you, as Eric said, you get stuck in an application-centered approach which is limiting and may not keep up with the technology. One of the things I think that we can do, which is it's mentioned as a guide indirectly in our infrastructure report but not in the list of recommendations, and I think if we just specifically state that this is by no means an inclusive list, but a guide for the infrastructure recommendations that we have made. The one thing I disagree with, though, is that to compare the applications -- to use the service applications in an urban context to compare them to service applications in the rural context to achieve some sort of parity, I'm not sure that's the way to go because the applications in an urban community may be very different than the health applications required in a rural community. And the Act really talks about the parity of the rates and of the skeletal structure or the potential to get the infrastructure there. And I think you get into trouble trying to compare urban and rural services, you know, service by service. I don't know if anybody has any other thoughts about that, but it seems to me kind of difficult. MR. LAWLER: Jim? MR. BRICK: I just wanted to make one more comment about the home health care issue. I had a lot of conversations with Mary Jo back and forth about that during the last month, and she is very eloquent in her -- in her pleading for us to do something about that. And I think there is an issue there that maybe we could say is more strongly in here. I'm not sure how to say it, a recommendation, that this needs to be looked at and it needs to be looked at soon if it can't be covered under the bill. And the reason why it is is because there are other people believe that this is a valid thing. The industry is interested in this. At my place we have had several folks come in there looking for people to partner with as a way to use telemedicine, to be able to deliver home health care. I know that -- I think that Hewlett Packard has a project with the Mayo Clinic, and also the folks at Duke looking at that specific issue. And, you know, I think this is an area that is going to expand, and I think if we can put -- make some more stronger language in here that we recommend that this be pursued, maybe it can't be done under the provisions of the law now, but I think that is an area that is going to expand, and that we should go on record as saying that we are aware of that, and that we think it should be pursued. MR. TUCKSON: There is a related point on all of these that I don't want to introduce a third issue in terms of the diad that we are dealing with. Maybe we can come back to it. But what we have is we continue to talk about underserved as well. There is this language in both the second and third bullet that talk about underserved communities being distinct from rural, and being distinct from purely urban environment. So there is a whole another set of issues. And what we haven't done in the record as I read it is to describe what that means, what is an innercity or urban underserved area and the special challenges therein both for nursing homes and home health care, as well as the marketbasket issues. And this is probably a little different discussion than the one we have been having on these two points, and so I just urge us to put a footnote to that and come back -- MR. LAWLER: Okay. MR. TUCKSON: -- to what does that mean. MR. LAWLER: Sure. MR. MCCONNAUGHEY: Jim McConnaughey, MTIA. A couple of points on the third bulleted paragraph. Maybe I have been inside the Beltway too long, but I think we may want to clarify the language, the third sentence talking about the objective of equalizing telemedicine services. I think the act points more towards similar services on a reasonably comparable basis. It's a bit of a nitpick, but it's -- we may want to show that this group is in sync with the act, not blazing a different trail. The second point is I would share the concerns that a number of folks have said about this marketbasket process. As an economist, sort of my instant knee-jerk reaction is how about if a rural health care provider needs a service, they get it, and then they get a discount in the sense of the reasonable comparability with the urban provision of it. That could be fraught with difficulties too. I mean, in terms of the size of the fund, well, and just trying to keep track of that sort of thing would be a nightmare as well. But it seems to me there should be sort of a cost benefit type of look at this sort of thing; that it is probably the right way to go though. There are some concerns but perhaps it should be mention in the report that we realize that a marketbasket is not a panacea that, I guess guide was the word that was used along the way here, I think that would serve us well. On the subject of the biennial review, I was just curious about why two years was chosen, and why -- not why, but what group would be constituted to do this sort of thing, and would it be under the auspices of the Joint Board which would, I guess, have to be reconvened, or would it be under the umbrella of the FCC? MR. LAWLER: Well, I think I -- I don't know where two years came from, but I suspect it was, you know, carefully considered. One or three, how about two. MR. MCCONNAUGHEY; I don't have a glib answer. MR. LAWLER: But I do think -- I mean, there was in fact a recommendation, I think, Tom, it was in yours, that the advisory committee continue. Actually, I will take responsibility for suggesting that that might look somewhat self-serving to say that we ought to continue our existence, you know, forever so we can provide you advice. (Laughter.) MR. TANGALOS: We did not have the hubris to do that. (Laughter.) MR. LAWLER: And the thought was, you know, it didn't have to be this group, but there ought to be a group out there of, you know, representing similar interests with similar expertise that was available to say, yeah, we have moved, you know, the technology has moved, the rural medicine has moved, something has moved, you know, so you ought to look at it this way as opposed to that way. And my recollection is, Elliot, and you correct me, I think that, you know, this would ultimately be something that the FCC would continue. The Joint Board is got at some fairly quick point. So I think, you know, it would be up to the FCC in the future to update any of this that needed updating, and I think a lot of it probably would. MR. MAXWELL: Elliot Maxwell. I expect that also the Joint Board would make a recommendation about how this should be reviewed in the future as well. MR. LAWLER: Right. Let me start here and then we will go. MS. DEERING: I want to get back to the marketbasket question as well. And without trying to come to closure on exactly what we put in, I think it's clear that everyone agrees that it will be illustrative. We had also talked earlier on that as a matter of process it was at least the effort to address what constituted this marketbasket that would then indicate what types of services that were needed. I wonder if we couldn't get around some of our difficulty by putting the marketbasket in a preamble or an introductory, moving it up front with the clear statement that it is illustrative. After all, the state/federal board will not know exactly what it is we are talking about, and I think that it might be helpful and important for them to see the array of specific functions that can be carried by these services to illustrate the importance of it, and that gets around the issue of recommending a specific marketbasket. MR. LAWLER: Just so I understand what you are saying, you are suggesting that wherever, earlier on than this there actually be a description of the different services that would be available under whatever the -- MS. DEERING: What is it that it does. MR. LAWLER: Right. MS. DEERING: Who does what with it. MR. TANGALOS: Having looked at Chuck's comments again, it doesn't get into what the pieces are, but it's a very nice discussion that he carried out earlier on, on that concept, and you might want to use some of the language that we've got. MR. MAXWELL: Just a comment. I think that one of the interesting things about any advisory committee like this and the people who are getting the advice is that sometimes you get so far down into what you are doing that you forget the audience knows far, far, far, and I can -- dot, dot, dot, less than you do, and will have less ability to understand why you came to that conclusion. So I think any comments about the process, sort of what you were assuming and what the process was for getting to this conclusion will be helpful so that when they have to make a decision about, you know, do I have to say this or that, you've taken them through it in a way that they can say, oh, I'm comfortable with the notion that they have looked at it, they have looked at the act, they have seen what the charge is, they have made a right decision, and I can do that. And so I think those are good suggestions to improve sort of the understanding that your readers will have. And we can work on that as we short of reach consensus about the recommendations, about how to present it in a way that makes it accessible to the audience. MR. SULLIVAN: Gene Sullivan. For Greg and Elliot both if I may, I think -- I applaud the idea of an extension or a continuation or a reforming of the advisory board. There is a lot of issues that we're not going to finalize today. Just as a quick example, Jim and I, Dr. Brick and I were talking about the act and who is considered a health care provider, and who is then afforded this act's protection, if you will. What if a not-for-profit hospital has a nursing home affiliated with it that's also not for profit, does that nursing home gather the same benefits as the hospital? And then what about the not-for-profit nursing home that's across the street that's not affiliated? And then we go into the home health care. So that could be a whole session or two for a group like this -- MR. LAWLER: Right. MR. SULLIVAN: -- to further discuss. MR. LAWLER: I agree with that completely, and I think the fact that there is a list in here and it is a limited list, this is going to be -- some are going to get an advantage out of it. But frankly I don't know what we do about it other than say you ought to look at, you know, changing it for these other things because -- MR. SULLIVAN: But we may need to do that because of the -- again, the market forces, if you will, from those that aren't benefiting starting to ask for changes to the Telecom Act, and it's not going to take 20 years this time to make some of those changes. MR. LAWLER: Right. There is a recommendation later on, I forget precisely where it is, about, and we talked about this in the last meeting, that, you know, this is not available to physicians in their offices in rural areas, whatever percent people said, health care delivery in individual offices. So if it's not there, you know, people are not going to get it. And my recollection is we recommended that that is something that the FCC should look at to change, but it does open -- you know, it becomes very complicated. You have a, you know, successful practice in a rural area. They are making plenty of money. Do they need a subsidy? So they -- but I agree with you, that just shows the need for continuing review of this. Let me go over to this side. MR. ENGLAND: Bill England. I just want to make sort of a technical comment first on the 9.6. As an engineer, my guess is that that the band width for -- we're talking wireless on that issue -- is pretty well defined. I mean, the Motorola engineers that are designing transceivers, the cell phone people, have already defined the band width. My guess is it's substantially, it's a round 28 probably. So if we go out with anything less than what's currently standardly available, it would be just wasting the rest of the band width. So I am not sure what that is, but my guess is it's more than 9.6, and I don't think we should pick something less than what's out there. Secondly, on the home health issue, This is to be a subsidy to nonprofit providers. And for the same reason that Medicare has a problem dealing with home care, not that it's not needed, and all our demonstrations show that it is wonderful, but as soon as we make the service available it can easily get out of control. And we are now talking about not 8,000 hospitals and maybe a limited number of nursing home that can well be defined. But as soon as we talk home health we have got every potential rural home in the country possibly involved. And I think if we -- if we put that in here, we are loading this potential subsidy with something that could just completely drag the whole thing under, and I would be a little scared about putting that out there. Now, if it's not needed, I just don't think this is the way to address that. They have already got 288 available just by virtue of the phone lines in the house, and I think that for now is quite adequate. MR. LAWLER: Dena. MS. PUSKIN: Well, I would sort of like to respond on a number of levels here. It's Dena Puskin. First of all, very quickly in response to the home health, the real issue we have out there in getting services to the home for a lot of different things, and I would argue this is also true to private doctor's office, is dial up access to the internet. For many of the things we need to do, we need local dial up access to the internet. And we can do an awful lot with that kind of capability into the home. And I point to what's going on in Hayes, Kansas, and a number of examples where we already have demonstrations at home health. If we get the first part of this defined as to what is a reasonable universal service in rural areas period in terms of the kind of band width, I think we go a long way to addressing it, and then raise the question as home health as something that needs to be very carefully looked at over the coming year with a specific time frame on it. I think we get around, because Bill has raised a lot of very good points, but other points have been raised. This is a growing area of immense importance in the health care system, and especially in rural areas. But that would be my recommendation, which is, again, to make sure that we get the equivalent of local dial up access for all rural people, and I think we go a long way to solve it. The other issue that I have is, and it goes back to this definition of nursing homes, and who should be a provider here. The law is very vague. As I said in my testimony, I don't know what a community mental health center is. There is no definition of that that we use any longer in the federal government. A community health center with a small "c", small "h," small "c" again, is that one that gets federal money? What do we mean? We need a recommendation or we need to begin to deal with defining who are the providers, even as specified in the current statute. And I think we need clarification, and I think the FCC ought to go for it because no matter what decision you make you're going to get some congressman mad as hell at you if you don't get clarification, and this is a very important issue. We could make recommendations here. This group has -- I mean, I can talk to you about FQHEs. I can tell you who I would include. But I am not sure that makes sense politically. I think you need to get clarification from Congress as part of a dialogue, and I think that should be part of a recommendation that I don't see anywhere here, and I was hoping that I would see it. MR. LAWLER: But, Dena, do you agree that that list of seven does not include home health care no matter how you read it. MS. PUSKIN: I agree -- MR. LAWLER: And it doesn't include nursing homes. MS. PUSKIN: And I agree, and I think we need to have -- there are two issues here. What it doesn't include that we need to have it include, and I think nursing homes, we have had now a number of grantees in which the ability of this technology to improve the care of patients in nursing homes and long-term care centers is enormous. I don't necessarily think, you know, I am not going to argue what band width you need, I don't -- it's not the same as you need in a rural hospital. Let me leave it at that and we can discuss that a little later. But we have experience with it, and it is enormous, and the law is remiss in not including it, okay. So I think we have what's not in there, and then what is in there not being well defined and very problematic. And I think we need, and I think those are two issues here. In terms of underserved which was raise earlier, which indeed the statute addresses, I think the question is what do we mean by underserved. Do we mean underserved in terms of the telecommunications infrastructure, or in terms of the providers in the community, because there is a difference? I can have an area that is underserved, I don't have primary care docs out there, I don't have psychiatry, but in fact they may have an infrastructure out there that's pretty decent. I think that it is very important that we define that and deal with that very carefully. I think the staff is dealing with underserved in terms of actually the infrastructure and not in terms of the providers, but I think that's what the intent is. MR. LAWLER: Right. MR. KIENZLE: I'm Mike Kienzle. Would some of the problem -- would some of the problem that's been expressed of what is intended to be a floor becomes a ceiling, would it be actually improved by inserting the words "or higher" after each of the band width specifications to explicitly indicate that that's -- that there is a range above that that's also at least potentially eligible for subsidy. MR. LAWLER: And this, I guess, is how the reader reads it, but my own opinion is anytime you put a number in there, then that's the number even if you put a bunch of, you know, words around it, that becomes the floor and the ceiling. Others may differ. MR. SPACEK: In this discussion, when we get back to it of 384(d)(1), you may very well want to consider that because you really have to specify something that some service that you get the discount for, and you've got to -- it has to be essential, so, you know, you can't make it too high, but you need it because you can't just say "and higher" because that's anything that's available for discount. And I think that that, you know, the guidance that -- my understanding of the guidance that's needed is what is available for discount. And it gets reviewed, you know, over time. MR. WATERS: This is Bob Waters, The Center for Telemedicine Law. I do think on the issue of whether, you know, nursing homes or home health agencies are covered, Jim raised a pretty legitimate point, which is that even under the existing definition it may be possible for those entities if they are owned by a covered institution to also get coverage, particularly in those components where I think we could easily see applications like a nursing home. I think we need to make a recommendation that that be addressed so that there is sort of a level playing field out there because that can cause, I think, some real distortions in some areas. To that end, I think it would be helpful in terms of the way we present this to sort of group together those areas where we believe there ought to be an expansion statutorily of the covered services, whether it's nursing home, home health, or underserved urban areas, but just organizationally I think that would make the report a little clearer to folks because we have sort of skipped around a little bit on that. But I think our intent is to have certain categories of things that ought to be added, and then other categories where we are making recommendations within the statute. MR. LAWLER: Right . Let me just, and I think there is going to be -- you know, assuming that the subsidies, if I can call them that, are significant to people, who gets covered I think is an issue that is going to be incredibly important as we go forward. Frankly, I don't know how to address it. I mean, does a rural hospital that -- pardon my phrase, but owns the doctors, you know, they have an HMO or whatever, but the doctors also have independent offices, you know, they are paid a salary for a not-for-profit that clearly qualified, do they get the advantage of this? You know, probably. You know, the competing doctor across the street who, you know, for whatever reason is on his own practices at the hospital but on his own, does he get it? No. But other than describing that and saying this is something that you've got to look at on an ongoing basis, and that's the easy example, there are probably of them that are more complicated, I, frankly, don't know how we address it other than to say this is something you've got to look at it. MR. SPACEK: Later, again the organization of this is -- you know, this may not be the best, but we are getting into a lot of issues that also will come up later because there is the resell recommendation later which touches on this issue; at least gives guidance. You know, it won't resolve all the individual situations one can come up with, but it least it will give the FCC and the Joint Board guidance as to the intent. MR. LAWLER: Right. Cindy? MS. TRUTANIC: Just one last comment on the health care issue. Cindy Trutanic. I do think that there is a growing trend towards taking care of elderly, chronically ill and home bound mentally ill individuals in their home. And I think that we just need to recognize for the record that there are other ways of providing home health care services that are less costly than, you know, laying new fiber out to every home in the country, and that the second generation of cable modems that are being explored may be an inexpensive way of doing it, and there are other pass-throughs into homes. So I think by not acknowledging that this may not be a great tax on the subsidy fund, you know, the Universal Fund, that we have to just acknowledge that there are other ways to skin this cat, and that it may be worth pursuing in the future. MR. LAWLER: Let me try -- let me find the one on physicians. Actually, it's not on physicians. It's on health care professionals, which is on page 6, and maybe there is a way to try to deal with all of these in one recommendation, which I may fail in this attempt, but let me try. This is a general statement. It says, you know, most people get their health care in an individual's office in a rural area. You know, they are wonderful people. To the extent that the patients don't have access to this telemedicine through them, you know, it does not benefit the patient. And then the last sentence is, you know, what our suggestion is or our recommendation, which is that the FCC look at this. Let me just try to throw out as a -- you know, as a possibility to this. We have got what I will call a competitive equality issue, which is, you know, is this fair and whether it's the nursing homes example or the physician example, you know, across the street from each other. One gets availability of it, one doesn't. We have got nursing homes. We have got home health care. Is it worth putting all of those in one and making a -- Dena, actually this corresponds with the point that you made, and really making a suggestion that who is eligible for this is something that needs to be addressed, and can't be addressed simply by -- my own belief is it can't be addressed simply by the FCC. As wonderful as you are and as clever and as much as you can interpret regulations, Elliot, I'm not sure you can make this one work, to address these issues. And that way we get the opportunity to say, you know, you have got to look at this. Obviously, you go forward with what you've got, but you've got to look at this. You have got a competitive issue. You've got an access issue. You've got all these things covered. And try to cover them all in the -- you know, in one sort of category, and, you know, tell the Congress this is -- we want this to work, it's a good thing, but you've got to pay careful attention to who gets it and who doesn't, and then they will shoot us for dropping this, you know, for raising this issue with them. MR. SPACEK: I think that was the same thing that I kind of thought I heard over there, the recommendation, which is really a matter of, you know, how the report is organized. I mean, in making our decisions today about which category or what we want to make things is to look at in two years, or to change it, for example, to say we recommend that this, you know, be looked at for potential change, that's just -- I think we can take those one by one. But when you organize the report, you probably want to put all things of that ilk, you know, together in one spot in the report, and all others in -- I think that's what you are recommending. MS. PUSKIN: But I think there are some things that they have to address now or very soon. You need guidance now as to -- on some things. MR. LAWLER: but, Dena, that's what we need to try to figure out right now though. Some of these things I am suggesting that you can't deal with them; that Congress has got to deal with them if they are going to deal with them at all. MS. PUSKIN: But Congress needs to know that they need to deal with some of them now. MR. LAWLER: Fine, and we -- yes, and we can say that as clearly as we can write it down. MS. PUSKIN: Right. And some things may require some study, and I think you need to distinguish between those very clearly. I mean, the ambiguity in some of the current designations I know cause Elliot's staff calls me and we have been working on it, and there are no easy answers for them. MR. LAWLER: But that's not -- well, this is the question. I don't believe that's in the category of something that Congress has to address. You can take whatever it is, a community health center which does not refer to anything in another statute, and the Joint Board and the FCC can interpret that, you know, to include some things and not include some things. If we have an opinion, we can recommend it. I'm not sure we do. MS. PUSKIN: Right. Well, I do. (Laugher.) MR. LAWLER: Jay? MR. SANDERS: I think, in listening to all the comments, that we have three issues that really can come to closure on right now. MR. LAWLER: Right. MR. SANDERS: Number one, I would just echo the comments that Bob made and that you made, and that is that we have got to at the very least identify critical constituencies within the bill, within the law that have really been excluded that we consider to be very, very critical, and we have named them. And I think at the very least we have got to state that we recognize the fact that this is an inadequacy as we see it at the present time with the present legislation. Number two, one of the things I think that we are all having angst with is reviewing this in many respects as the last meeting. And one reality or one recommendation we need to really very strongly underline is that this is a dynamic living process, and there has got to be this review. Whether it's a year or biennial or every three years, it's got to be reviewed. And whether it's this body and these individuals or whatever other mechanism, it's got to a dynamic, living re-review process. And I think, third, I have heard a lot of comments about the issue of 384 versus T-1, but I really haven't heard a lot about -- I haven't heard a lot of people standing up and saying, well, it's got to be a quarter of T- 1. So I would like to recommend that we take the minority view and that we recommended full T-1 access. MR. LAWLER: Can I -- I want to try to close one issue at a time here. MR. SPACEK: Do you want to close one in order, and I think that was the first one? MR. LAWLER: Do we have agreement on the recommendation for the three groups, nursing homes, home health care, health care professionals, that that's something that we recommend that Congress has to look at? Do we also have agreement that the competitive issue is something that we have to look at covering not-for- profits the way health care is changing. When you say "not- for-profit," there are a lot of -- I don't know what the right word is, people earning a profit under not-for-profits who are competing with people who are for profit, that that's something that needs to be looked at, and we can't address with the language that is here? Is there any disagreement with that? Done. Now, for the noncontroversial part of it. 384 versus T-1, let's continue the discussed because I think there is a little more? Bill? MR. ENGLAND: In terms -- Bill England. In terms of the law, I thought the standard was going to be urban areas, and I guess I am wondering do we have to define it, but simply to say that the subsidy makes available at a reasonable cost similar to the urban area, however you want to define it. So if you want a T-1, it's what a T-1 would cost in an urban site, not at your rural site. And you can -- or T-3 would also get a subsidy. We don't have to specify a specific band width for the subsidy. MR. LAWLER: Well, let me again, again, not to rely entirely on the word of the act, but what it literally says is a telecommunications carrier provide whatever is necessary for the provision of health care services for people, for an institution which is providing service to people who reside in a rural area. So it doesn't say you get whatever you get in an urban area. It says whatever is necessary for health care in the rural area. And I think that's why everyone is saying, okay, you know, what the hell does that mean. MR. TANGALOS: Bill, part of the issue on the low side was that Mayo has hooked up with providers that were at 12, and that's a disaster to try to communicate at that level. And so we don't want to it below a certain minimum because you can't -- you can't work with it. So we were looking at it not from the high side. Indeed, if somebody wants to provide -- if somebody wants to buy T-1 at the urban rate, that's what they are going to do, but we know that with each increment you are paying more and more. And we heard from plenty of rural providers that with each jump it's going to cost us more, and there are only a certain amount of dollars that we're going to allocate to this anyway. So there is a lot of reasons on the low side and on the high side why we compromise to 384. MR. SPACEK: Yes, this is not the 384/T-1 issue, but it's the issue of saying another reason, I think, why we have to specify, in addition to like what Greg said, is that Section 102 of the act also requires the eligible telecommunications provider to give you whatever service is recommended in the minimum basket. So, you know, if somebody in some island somewhere wants, you know, off the coast in a rural area wants some, you know, an OC-12, and we don't specify that T-1 is it for now, you know, they get it, and that would be sort of an unrealistic thing to do. MR. KAMP: George Kamp, College of Radiology. Related to this discussion, I also am surprised that it hasn't been mentioned the changes in data compression technology. In my own practice, we work with everything from the 112. I absolutely agree with you, Eric, it's awkward, it's difficult. We work all the way up to T-1 lines. But data compression technology is changing so rapidly with the wave length compression of up to 30 to one, I think, now has FDA approval. But this emphasizes the point Jay makes. This is a rapidly moving target, and whatever we say has got to be looked at again and soon. MR. SPACEK: Do you want to try to reach closure on T-1 versus 384, whatever represses you would like picked? MR. MCCONNAUGHEY: Not to beat a dead horse here, but given the statement he just made about how dynamic the industry is, could there be two or three years and then perhaps, or a petition from interested group? I mean, if there is some incredible breakthrough maybe two years isn't soon enough to reconvene the group and do a new batch of surveys. MR. LAWLER: Well, I mean, the easy part of this, and I -- you know, I think two years was the number and they picked it, and it wasn't immediate and it wasn't too far away, I mean, we could certainly recommend, for example, without, you know, saying you have to keep us around forever, that this being an ongoing -- this being an ongoing process of consultation, whatever the right words are, advice from, you know, people with the same expertise as the people in this room. I don't have any problem with that at all. And, you know, when there is a -- it doesn't have to, you know, we don't even have to recommend that they, you know, who they are or when they meet. But if there is, you know, a breakthrough or for some reason the experience says get together and tell the FCC they ought to change something, they don't have to wait, you know, for two years. They could do it in two weeks. MR. SPACEK: Yes, you may want to say that there should be a formal review at least every two years, and by petition or by some organization or whatever in the interim that, you know, could be called for another review based on a breakthrough or whatever else. MR. LAWLER: I guess I'm -- it just seems to me we have got to look at this in terms of what we think is realistic in terms of cost. You know, I happen to believe, and Tom and I have had this conversation, that we ought to recommend T-1. People are using it, it's out there. But I also think that -- I don't know whether people remembered this, at one point, I think it was in your last paper, Tom, there was a distinction between the different providers. Rural hospitals were going to get 384, and I forget what others were going to get, something less than that, which I don't -- you know, just in terms of the law I am not sure it works. And then distinguishing between the seven categories of providers, you know, we will have everybody gone made within a short period of time. But I do think we have got to look at what the, you know, there is a cost to this. And even though, yes, people overbuild -- you know, you put home health care in, and you say -- we say T-1, and anybody who want home health care, you know, you put in T-1 to every home in a rural area where someone is getting home health care. I mean, I have no idea what that number is, but I suspect that we can't afford it. So I do think there has got to be some context. Jay, you are shaking your head in disagreement over there. MR. SANDERS: Yes, because I think one of the things that we, and I have fallen into this trap many times, I get so hooked into the idea of health care as the use of the telecommunication infrastructure that I forget about the fact that the telecommunication infrastructure you put in, once it's in place can be used for all sorts of things. MR. LAWLER: Right. MR. SANDERS: So when we talk about cost, what happens when we get interactive entertainment and shopping and banking and commerce coming into the home on that same telecommunication infrastructure. Our costing for that is going to be a lot less. MR. LAWLER: Well, Jay, I agree with that completely, but I don't -- you know, we can call Time Warner or somebody else and ask them, I don't think they are putting that in rural Colorado right away. MR. SANDERS: No, they are even having trouble in Orlando, Florida. MR. LAWLER: Right. So I do -- to the extent that we put in, you have an instant mechanism and an immediate mechanism in place to say that you get this, you know, eventually it's going to get there cause it's going to get everywhere, but I do think we're saying do it here sooner, and, you know, there is a cost to that. MS. DEMERS: Judy DeMers from the University of North Dakota. I just want to remind us all that we also in this report endorse the sharing concept between public schools and libraries and health care facilities. And I guess in my state, and I would guess in many more states, you know, that's what is going to happen. We are going to see that joint kind of approach. And that's why I think the T-1 is minimal at this point in time when you talk about the ability to split and use and who has priority and all the other kinds of issues that you are going to see out there. I can't imagine that the school system and the public library and the hospital are not going to work together because this is something they all -- MR. LAWLER: Right. MS. DEMERS: -- very badly need. MR. LAWLER: Let me, in the interest of trying to split this baby, and, Tom, listen to this, what would people feel about recommending T-1 with the condition that it is found to be affordable under the Universal Service Fund? MR. SPACEK: I would go for it. If I were going to put it, I would just go for T-1 or 384, and not say that because part of the determination of the size of the Universal Service Fund in some sense will be what we recommend. MR. LAWLER: Okay. MR. SPACEK: So, you know, I would go for, you know -- UNIDENTIFIED SPEAKER: Do it or not do it. MR. SPACEK: Yes, go for one or the other. The only caveat I would have is if you were going to say T-1, or that you would say something about that the intent of that is for telemedicine services, and if you are lumping your voice and other things onto that, that, you know, the discount is appropriately allocated. MR. LAWLER: Jim? MR. BRICK: May I am misunderstanding, but is what we are saying here is up to T-1 or are we saying that's all the subsidy is for is for T-1? MR. LAWLER: Well, that was a question I raised, which Tom said he's not enthusiastic about, which he says prick a number, T-1. If you want T-1, you get a subsidy for the urban rate for T-1, and you get it built to your facility. MR. BRICK: But I think that's -- correct me if I'm wrong, Tom, that's not quite what I heard. I heard him say that we need to pick a number, okay, but I didn't hear him say that it wasn't okay to say up to a level, because it may be that's all you're requiring. MR. SPACEK: Up to T-1, up to 1.54 or whatever. MR. BRICK: I misunderstood. I'm sorry. MR. SPACEK: I don't know if I said it, but that's what the intent was. MR. MAXWELL: Let me see if I am understanding that and maybe make one clarification. It seems to me that for the purposes of what the advisory committee is saying, you've already dealt with the question of sort of who gets it, and what anomalies there exist in the act, or what ambiguities exist in the act, or what things you think you should not -- you restrict it the way it is in the act, and the second is what services are included to this group. And it is, it is for the purposes of this subsidy a ceiling that you can get up to -- MR. BRICK: Okay. MR. MAXWELL: -- this data rate for -- at a subsidized rate. That subsidy being the comparable rates with urban areas. That provides the flexibility to the taker of the service as to what they were asking. It doesn't necessarily mean that the fund is going to be required to provide this to every potential user, and the shift is to put the burden onto the user to determine what they believe is necessary, and the group has said that up to this data rate is necessary for health care and people will use it for those purposes. MS. PUSKIN: Can I -- MR. LAWLER: Wait a minute. Stop there. Did I hear you say the fund doesn't necessarily -- MR. MAXWELL: Well, I mean, in thinking about what the size of the potential subsidy is one could sort of say let's imagine having a T-1 facility to every rural health care provider as defined in the act. MR. LAWLER: Right. MR. MAXWELL: That's not necessarily what would happen. MR. LAWLER: Right. MR. MAXWELL: What was being described here is that the user would say this is what I would need to provide heath care, but the service provider would provide that facility, and we're then talking about the delta between -- MR. LAWLER: Right. MR. MAXWELL: -- the urban rate and the rate that's charged, and going further to something we will discuss a little bit more, the infrastructure that we are required to provide if it were not always available. MR. LAWLER: But the maximum exposure to the fund -- MR. MAXWELL: The maximum exposure would be defined as -- MR. LAWLER: -- is everyone of those seven categories would be able to say we want T-1, and here is where our network is, and we want the urban rate, and build us the infrastructure. MR. MAXWELL: And would have to pay the comparable rate for that service -- MR. LAWLER: Right. MR. MAXWELL: -- to the provider. MR. SANDERS: With that clarification, I don't see how we could -- we wouldn't go up to T-1. MR. HOLUM: I think the provider is still going to have to -- this is Chuck Holum. The provider is still going to have to demonstrate or show that they need the full T-1 as opposed to a quarter T-1. A full T-1 is going to cost more maybe. MR. LAWLER: They don't. They have to -- they have to say we want T-1, and they would be silly to, you know, they are not getting it free. They have to pay for it. All they get is the differential between the urban and the rural. MR. HOLUM: But if they don't need the whole -- MR. LAWLER: They would be silly to buy it. MR. HOLUM: They would be silly to pay the whole thing. I think there is a natural check on how much demand they are going put on -- MS. MACLAUGHLIN: Mary Jo MacLaughlin. I would have to say that that's absolutely true. From the point of view of rural health care, we are going to have to outlay money in order to have T-1, and therefore it's not like it's a free ride. We are still going to have to contribute, and therefore the market will control itself because if I can't afford even what an urban hospital pays for T-1, I am going to get along with 384, and therefore it's going to control itself, and therefore why wouldn't we say up to T-1, and let the hospitals and health care providers control what they can afford and what's necessary in their practice. MS. DEMERS: Judy DeMers. My argument has always been for up to T-1. When we started talking about this, we were talking about hospitals, rural clinics and others. And I have very strong feelings that hospitals ought to be able to have the T-1 line, the rural hospitals. I didn't have as strong a feeling about others because I think that there is a really varying kind of need out there. And so I think if we talk to subsidies up to T-1, and we don't put too many strangle holds, i.e., federal regulations on those hospitals for having to document the fact that they want to use T-1, then we are really right in the ballpark. MR. LAWLER: Keep moving down the line. MR. KAMP: George Kamp. I like that also for two reasons. One, it deals with my earlier point about changing technology and the interaction of the band width requirements and the data compression. And, two, the tremendous differences that I see in my own practice of the needs of the outlying facilities. We have got one outlying hospital who has a small bed capacity, and at the intersection of two very busy interstates, and their needs are very different than the more isolated community on the through roads. So I would be supportive of that also. MR. LAWLER: Cindy? MS. TRUTANIC: Cindy, just for the record, there exists an anomaly today in that networks that require maybe only a half T or a quarter T are being forced, because of a lack of a band width on demand system, to pay for a full T-1 capacity, which is what's killing them. You know, they can cost out their equipment over time, but the line access charges and the fact that they have to pay for more capacity than they are actually capable of having is a real problem. So whatever we do in that regard we have to be careful that that doesn't continue. MR. SPACEK: On that issue, I mean, one thing you can do, and a rural hospital is likely to have some number of telephone lines too. You can lump those telephone lines onto the T-1, reducing the cost of the other telephone lines. So you can handle that to some degree. With respect to, you know, T-1 versus 384, I mean, in some sense it's just -- I think, you know, I don't know whether -- you know, there are kind of arguments on both sides. It doesn't make much difference, you know, I don't care. I mean, I care in the sense that I want to get the right, you want to get the right stuff out there, we want to make the right recommendations. You know, it's really a matter of where our subcommittee came out with an exception that up to 384 was probably okay to meet these applications, and there is a lot of other people in other groups who think up to T-1 is necessary to meet those obligations. So, you know, it's really just a matter of, you know, are there more of one than the other, which is the right thing to do. We can argue it forever. MR. LAWLER: Let's keep going here for a minute. I have a feeling we are getting somewhere. MR. MCCONNAUGHEY: Jim McConnaughey, MTIA. It seems to me if we package all of these together, we might have a solution. You cap it out at T-1, which is Elliot's point. Then you mention in the report 384 seems to be the minimum level for adequate performance for telemedicine. I think it's mentioned in a footnote here someplace it will be a self-policing process. I mean, people are with budget constraints. They are not just going to go crazy in terms of how much band width they get. And it would have to be necessary for medical purposes pursuant to the act. I think the puzzle pieces, thanks to everybody around the table, are on the table. It's a matter of putting them together. MR. LAWLER: Right. Mary Jo. MS. MACLAUGHLIN: I am glad you spoke before me because it actually clarifies something that I wanted to say And my concern is about the remarks that have been made that it is the provider who is going to have to request this. Well, how is the provider going to know what they need? And certainly if we think to the thrust of the consumer movement overall, we have an obligation to help them understand what capacity will do what. And I am wondering, without throwing this in too much in advance, I don't know what function the clearinghouse was supposed to play or what function our report was supposed to play in helping identify specifically what capacity did what so that people have some guidelines. That gets me onto the other point that I am even more concerned about and yet nobody else seems to be, which is normally in this day and age people would hate like heck to ever specify very precisely exactly what technology and lock it in. We have made that comment numerous times, and therefore we are going to allude to the need for review. All I am wondering is whether we can accomplish the goal that we seem to be moving toward on a consensus basis by modulating the language somewhat that -- and perhaps we can't -- that specifies what we are trying to accomplish, and then saying that currently that capacity is illustrated between the band widths of 384 and T-1. In other words, I am just saying as a matter of avoiding unintended consequences I would be -- do we need any concerns about being so precise about the technology now? And is there anyway we can accomplish that without boxing ourselves in? MR. LAWLER: Well, isn't the -- and correct me, people if you hear different, but I think what everyone is saying that whatever number we pick we are saying it is up to the provider to make the choice. MS. MACLAUGHLIN: And they have to know how to make that choice. MR. LAWLER: Well, but that's for a different moment here. They do have to know how to make that choice, but we are saying under the act you get a subsidy, you get the discounted urban rate anything from nothing up to T-1 or 384, wherever it comes out, and you make the choice. You may not want to pay for it. You know, whatever technology you are going to in your wisdom or ignorance pick and pay for, and the service that goes with it, that's your choice. MR. SPACEK: Yes. And by the way, I don't think we do actually want to say T-1, even if you pick that. We want to say 1.5 megabits or equivalent, because we want to be technology independent. MR. LAWLER: Let's keep going here. MS. CONNORS: And I think the provider knowing what they want to do with it can give what band width they need. MS. PUSKIN: I just -- with studying that sort of floor that was suggested at 384, I have a problem with that because then you are going to have to say it's appropriate for what kinds of application, and there really is a great difference clinically in peoples' views about what 384 is adequate for versus what you need T-1 for in terms of the time it takes to transmit an image, whether store and forward is a capable application. And I would simply like to leave it at up to T-1 and not get the floor in there because, in fact, I think that it would lead people to say, well, what is one good for and what isn't it good for. And I believe that gets us into the specificity we don't want to be in. So I would say if you just say "up to," you in a sense let the market determine a lot of things. MS. KING: I just want to follow up on a comment that was in my earlier, which there should be really some sort of clearinghouse for information because however you are going to deliver up to 1.5 megahertz, it would be based on engineering studies. It might be done in a variety of ways, given, you know, your particular locality. And I don't know if the FCC is going to be doing this, to offer clearinghouse information to a particular rural site or some government agency, but it seems as though by pooling or aggregating demand in a particular area, then you can interact better with the telecommunications provider on how to engineer this particular service at the most cost- effective rate. And the other issue, of course, is what kind of cost studies are going to be done to determine the difference between a rural and urban rate. That will depend on what the Universal Fund will be, and that's another piece of the pie. But I would think that up to T-1 would be appropriate or 1.5 megahertz. MR. BAILEY: I just have a clarifying point I want to ask, and we have been talking about T-1 versus 384. Are we talking dedicated or are we taking switch? I assume we're talking dedicated because switch could be a real big problem. MS. KING: You mean it's a lot more expensive. MR. BAILEY: Yes. Well, it just doesn't exists everywhere, so it would be very expensive to make it exist everywhere. MR. SPACEK: We should probably put the term "dedicated" in there? MR. BAILEY: I think so, dictated, or point to point, or some phase like that. MR. SPACEK: Yes. MR. LAWLER: Cindy? MS. TRUTANIC: One thing that Mary Jo alluded to that wasn't responded to, and it's something that came up in our infrastructure discussions, about training the consumer or helping the consumer determine what technology is out there so that they could make their networks more efficient rather than less efficient in the future. And whether that comes under our discussion of peripheral or on-premises equipment, we never really resolved it, to my understanding. But I think it's an issue that's going to -- that the FCC should address because if you don't support that training or on-site training or network training, what you are doing is encouraging inefficiencies for people who don't understand the communications component of their network. MR. LAWLER: Mike. MR. KIENZLE: The one other, the one other perhaps unintended impact of defining a floor is that it would also discourage research and development in areas in which lower band width applications are being developed. And I don't think we would want to do that. I think we would want to, with new compression technologies and other things, kind of encourage some of the lower band widths to be explored further in the future. MR. SPACEK: And you also want to make sure that somebody who doesn't need that band width, or can't afford it, you know, below the floor can get something and can get it at a discount if they are eligible. MR. SULLIVAN: Did something just get slipped in here? James Sullivan. We just mentioned dedicated service and point to point? I think we need to really, really address that because if you're doing a point to point, you're going to have multiple connections at one hospital to multiple sites. You are going to be paying multiple charges. We need to look to the providers of the telephone service to give us switch service, as they do in urban areas. MR. LAWLER: Bill, do you want to elaborate on the distinction? MR. BAILEY: Well, we have been talking about transmission at different speeds, and most of what we have been talking about can be carried over copper cables up to T-1, typically can be carried over copper cables. However, if you are talking about switching something other than a voice grade line, that requires a different switch than what you typically have in a network for voice communications. Those exist. I will give you an example in Missouri. We have two. We have on in St. Louis and one in Kansas City. So if I want to provide a switch to digital service at three or four RT-1, it has to go all the way back to St. Louis or to Kansas City in order to do that. Now, in order to -- in order to dictate that you're going to provide switch connectivity at those speeds, you're talking about a huge investment in order to make that possible. MR. SULLIVAN: If you don't do that, I think you're going to defeat the purpose of telemedicine, and I think I had an agreement with Dr. Sanders there that point to point is just -- it's hard, it's expensive. What do you do for multi-cast or educational purposes if you want to broadcast three or four or five different rural health practitioners at a particular session? You are really encumbering the system when you -- you are making it easier for the phone companies, for the providers, but you are not helping the cause of telemedicine by saying that. MS. DEMERS; I thought that we dealt with this switching issue in the infrastructure report, but I think that's the other issue that we need to address. I will give you one example. St. Alexus Hospital in Bismarck has, it's a city -- we will call it a city, that's what we call it, 50 to 60 thousand people. They serve by telemedicine nine rural communities. They have to have nine separate T-1 lines and pay for them because the phone company will not switch. MR. LAWLER: Right. MS. DEMERS: And I think that that's another issue that we just have to address if we are going to make this work for our mid-size city providers and for our rural communities. MR. LAWLER: Can I, at the risk of saying that we are arriving at a consensus, is do I hear a T-1 consensus building out there? MS. PUSKIN: Do you want a show of hands? MR. LAWLER: I don't if we -- MR. BAILEY: Let me say this, if you are saying T- 1 switch, then I think I have a problem with that. If you are saying T-1 dedicated, then that probably is reasonable from my standpoint. But T-1 switch, you're talking about a huge increase in the cost of this, and I agree with you that there are circumstances where it would be fine, but the fact of the matter is if you're going to have T-1 every point on that network has to be connected to a T-1 switch someplace. Now, if you have got four locations in Bismarck, and you don't have a T-1 switch, I don't know what the nearest city is that has a T-1 switch, but then everyone of those are going to have to be truncated to that nearest city in order to switch them. That's a whole lot more expensive than putting in dedicated connections between those locations in that city. MR. LAWLER: Bill, do you have the same problem with 384 switch? MR. BAILEY: Sure. MS. DEMERS: Can I ask what's the -- what's the difference though? MR. BAILEY: Let me explain. MS. DEMERS: I mean, can't you pick and choose which is the most reasonable, whether, you know, it is a switch or a dedicated for a particular situation? And that's an honest question. I don't know. MR. BAILEY: I mean, I guess there are -- I think if you can split a standard out there, then you are saying that's what we want. And all I am saying is, for example, if I have -- if I have, and I will use some areas I'm familiar with, but if I have three -- I have a couple hospitals in Columbia, Missouri, which is in the center of the state. It happens not to be our territory, but I will just use it as an example. And they want to be connected with T-1 connections. Then there would be direct connections to each of those hospitals. But if they wanted switch connectivity, each of those hospitals would have to be connected back to St. Louis, or in that case, Kansas City, all the way with T-1, because there is no switch available in Columbia that could perform that. So the cost of making that switch in that circumstance may be a whole lot more than the cost of making dedicated facilities in that circumstance. MR. LAWLER: But isn't that really the issue? And I don't know whether this is possible, but is that something that can be worked out between the -- the person who pays for it is going to be of significance to both sides. But isn't that something, I mean, to use your example, if Columbia has four sites that it wants to go to, and what they want is the cheaper rate, the rate as if it were a switched rate, but other than that they probably don't care whether it's dedicated or switched at that point in time. They may a year later when they have 10 more sites they want to add on. MR. BAILEY: Well, the problem is that we are making things the same price in rural areas as metro areas. MR. LAWLER: Right. MR. BAILEY: Right? And, I mean, if I make things the same price, there is no incentive for anybody in Columbia to choose dedicated when that's certainly for the entire country it's a whole lot cheaper to provide -- connect those locations in Columbia on a dedicated basis than to haul everything 200 miles back to the nearest city. MR. LAWLER: Well, unless they are indifferent. I mean, if they have a network that they've created, and they say we want, you know, our center location is Columbia and we have five sites wherever they are around there that we want to communicate with T-1. MR. BAILEY: Well, let me clarify something because I may be -- there may be a -- we have a telemedicine trial which is being operated in Missouri. It's in central Missouri. Columbia is in fact one of the main locations on that, and they are connected to another hospital in northeast Missouri, and then there are, I think, 13 rural health care facilities are connected to those two. They, in essence, have their own switch. Any point can look to the other, okay. But that's different than having them have the ability to call anyone else in the world. MR. LAWLER: Right. MR. BAILEY: Okay, using 384 or T-1, and that's what I was talking about with switch. You can set up a circumstance where you have the ability within a small network to make connections on a time-sensitive basis. But going anywhere is a problem. MR. SULLIVAN: But why not? Let's go back to the doctor's example there. General Zajtchuk, tension pneumothorax scrape. We have got a patient down at UVA that we need to consult with Dr. Zajtchuk. Why shouldn't I be able to use my telemedicine system to connect to Dr. Zajtchuk at Walter Reed Army Medical Center? Why should I be limited to limited to my own network or my own world? Dr. Tangalos gives a great lecture at the May Clinic. Why shouldn't I be able to dial into the Mayo Clinic, pay his fees for his CME class, and have my physicians attend his class? What you are doing is you're setting up little fiefdoms that are never going to talk to each other by doing a dedicated network. That's fine for one hospital and the five outlying clinics, but this hospital is not the center of the universe. There is expertise all around this table and all around the country that I want to connect with. MR. LAWLER: Mary Jo. MS. MACLAUGHLIN: It seems to me that that's something that have got to earlier reminding ourselves that we are not dealing with health care in a vacuum either. And I am wondering whether this concern can be addressed under other provisions of the law, because clearly the intentions of the law will be served by making the backbone, making the overall infrastructure as fully switched as possible. Is there any way that we can play -- that would fit in? I'm not -- not now, but talking about the goals and the act and what the act overall is trying to accomplish, clearly also support this goal of a fully switched network. MR. LAWLER: Jay, did you have a comment? MR. SANDERS: Yes. I agree with everything that's been said and I think once again it's a problem that we have as to what the first step is and what the real goal is. There is absolutely no question that the real goal is the switching capability, and the real empowerment of the telecommunications, particularly to health care provider and the patient, is being able to "pick up their telemedicine system" and access anybody any place in the world. That is what our goal is. That is the seamless net work. MR. LAWLER: Right. MR. SANDERS: What we were forced to do in the State of Georgia in developing our seamless telemedicine system is to have multiple point to point T-1 connectivity, but it's switching within that network so that any site can go to any other site, but that's just within that network we developed. I think that has to be, and that is what most of our starting points are. And I think, once again, we have to say that our intent is to have seamless infrastructure and the switching capability, but it's got to be within the economic realities of what exists as to what that rural hospital can afford. If you're telling me that it's going to cost, you know, three times the amount with a switching network as opposed to a point to point network, and that cost is going to be the responsibility of the rural network or the rural hospital to pay for, I mean, we can't do it. MR. LAWLER: But, Jay, isn't that the -- and I suspect this is Bill's worry, the urban rates, comparable urban rate in that situation is switched, which means you're going to get where the switches are already there ,and I assume the fear is that's what you're going to get in terms of what the subsidy is. MR. BAILEY: Well, we have -- we have a service which is switched T-1, and I mean, if you compare that to the number of services that are dedicated, we probably have less than probably a tenth of a percent. I mean, very few people are using switched T-1 these days because there is no one to switch to. MR. SANDERS: But I think as you find more and more people doing it. MR. BAILEY: I don't disagree with you, but I guess what I -- I guess what I would recommend is that this is something that in two years or four years, however often we are going to relook at this thing, that that be one things considered. But initially let's talk about dedicated because I think the example you gave, you can have a network that in essence does its own switching so they don't have to have dedicated connections between each point in the network, and it's also possible to go outside of that network if need be to get to other locations. You don't have to have ever point on that network have switch capability to go anywhere else, because I think more often than not, at least the way I -- what we have talked about here, most of those points are going to be talking to one another. There may be occasion for them to go outside. But do you fund everyone of them so they can go outside? MR. SANDERS: Well, on your point-to-point service are you offering that dedicated service to pay on a usage basis? MR. BAILEY: No. MR. SANDERS: Okay. Then you get them again. You're paying 24 hours a day, seven days a week for a dedicated point-to-point service, and that's not what we need. That's not what we want. We want to be able to contact the clinic in Danville, Virginia, for 30 minutes on Wednesday afternoon, and not have to pay for the other -- MR. BAILEY: Well, my switch service is you pay for a dedicated facility, and then you pay usage on top of that. MR. SANDERS: But it's still much less than your dedicated point-to-point service. MR. BAILEY: No, it's not. It may be if you have a network, you may have some savings, but the connection itself is not less. MR. LAWLER: Let me go to Eric here. We have to obviously keep discussing this for a moment. MR. TANGALOS: I would like nothing better than dial up service from around the country and around the world. I mean, if we want to talk about how to get a competitive world of health care going, that's how to do it. But in my wildest stretch I cannot believe that there would be enough money in the Universal Service Fund to essentially rebuild our telecommunications infrastructure. And I honestly think that that's what you are asking for. That in the next two years if there were enough people that came forward and said we want switched services, and that's what is specified in the law, there ain't enough money in that Universal Service Fund no matter how you cut it to rebuild the system in that period of time. MR. SANDERS: You're going to have point-to-point services for your hospital and the five clinics. Then the schools are going to have it for -- point-to-point services from the schools to the K through 12 to maybe a magnet school in one location. You are going to have so many overlaying point-to-point lines that you might as well build phone closets the size of this room to handle all the individual switching between points. It may be expensive, but if we don't at least articulate it I think we are going to be stuck with what the providers are going to give us. MR. LAWLER: Let's keep going here for a minute. Do you have a comment? MR. KVEDAR: Yes. Joe Kvedar from the Mass. General in Boston. Just to bring this back to the reality of the comparison with the urban marketplace, which is something that I have a little bit of experience with, in the merger between the Mass. General and the Bringham and the formation of Partners Healthcare we have laid our own infrastructure because we can't get the kind of switching that we need. We put in our own switches. So I think the urban community, at least in eastern, northeastern United States, doesn't have the kind of capability that we are talking about. And just to underscore Eric's comments, that really does require a complete overhaul of the telecom infrastructure. I don't think that's the purpose of this group to recommend that on this legislation. MR. LAWLER: Tom. MR. SPACEK: I agree with those points too. What we are hearing from a lot of folks, and especially when we're talking about education in health care and so forth coming together, and the ability to communicate with all other systems and applications throughout the country and perhaps throughout the world, this is the Clinton-Gore and Commissioners Council on Competitiveness and CSPP's vision of a national information infrastructure. You have got to take steps along the way to get there. I want that vision. In fact, my job is to try to make that vision happen worldwide when I'm not doing this stuff. (Laugher.) UNIDENTIFIED SPEAKER: It used to be his job. MR. SPACEK: And we are a long ways off. We have got to take steps in the right direction. The direction here, if you had this sort of T-1 mesh that we have been talking about that's not switched, I mean, it's only available in a tenth of the country or something, or at least a tenth of that region, you know. So making it available in the other nine-tenths, it's not even available in cities in a lot of cases, apparently. But, you know, you can mix things. You can have that available with T-1s, and then in addition a lot of the other communications we're also recommending, it was a reason for it, access to the internet, and it might be on your T-1 line too, or to the hospital and then from there it can go out to the rest of the internet. You can do many other things that way. Now, you are not going to do things at high speeds right away and so forth. But some of your communications and educational and transfer of data files and stuff can be handled in that way. It's not as good as the NII Is going to be some day. MR. SULLIVAN: You can't do that if it's a dedicated point to point. You cannot access the internet under a dedicated point to point. MR. SPACEK: Yes, you can. Yes, you can. Yes, you can. MR. LAWLER: Can I suggest this? We have -- unless someone jumps up and down and screams, we have reached a consensus, I hope, that T-1 is what we are talking about. We need to continue this discussing about dedicated or switched when we return from lunch. Lygeia, we have someone you are going to introduce from Intel SAT was here, who is available if people want. MS. RICCIARDI: Yes. David Meltzer is in the back there. Do you want to stand for a second, David? David held a meeting for our group yesterday in Intel SAT, which only a couple of us were able to attend, so he has offered to come back today and tell us about a pilot program that Intel SAT is organizing in order to increase demand for telemedicine and teleducation services. David, if you want to take just a couple of minutes to give a really broad overview of what you are doing, then people can talk to you on an informal basis during lunch, and then you will be available, as I understand it, later in the day when our meeting breaks up at about four as well. MR. LAWLER: Okay. This is, however, our lunch, so -- MR. MELTZER: I'll keep it brief. MR. LAWLER: -- why don't we return at 1:00 to -- I'm sorry, go ahead. MR. MELTZER: Can I just also assume that the conversation that I also need us to have about what needs are underserved in an urban environment, that that also is on the agenda when we come back from lunch? MR. LAWLER: Yes, we did not -- the only things that are off is what we -- no one puts up too much and screams about. David, come on over here and sit here, and we will be back to switch versus dedicated at one o'clock, so eat hearty. Elliot, where can one eat here other than -- MR. MAXWELL: There is a passable place right down on the first floor. MS. RICCIARDI: They provided your coffee and Danish and stuff. MR. MAXWELL: Or you can make your own judgments, and there are about like 4,000 places within two block around ranging from the well-known brand names to a whole see of take-outs. There are many choices. MR. MELTZER: Okay. Well, thank you for the opportunity. I will keep it very brief. As you may have heard, Intel SAT, in conjunction with a number of other public and private sector organizations, is helping put together what we view as a two-step process to promoting the establishment of a global network on distance education. Briefly, distance education we take to mean telemedicine, vocational training, K through 12, university. And essentially the two steps are: Step number one is what is being called a global summit on distance education, which will be held here in Washington October 23rd and 24th. We have enjoyed a wonderful response both from organizations that would like to sponsor such as AT&T SkyNet, Hughes Communications, COMSAT World Systems, as well as advisory committees. We have the University of Virginia, Texas Tech Health Medical Center, and a number of other universities already on advisory committee. Essentially the purpose of the summit is to try to get people under one roof, not just the U.S. but the international government, private sector, as well as consumers of this education, all under one roof. We are aware that there is a great need and a great amount of interest in distance education worldwide, but unfortunately there isn't a whole lot of coordination. So we are offering our facility basically as a roof for people to get together. We have a number of excellent speakers. The second part of the two-step process that we are particular excited about is what we are calling a pilot program for the Americans where Intel SAT as committed to provide satellite capacity at no charge for a one year period of time starting some time in 1997 for distance education network. That will focus solely on the Americas initially. We hope to have other communications providers, services, goods make similar donations in kind for a one year period of time, and we hope at the end of the year we will at least have demonstrated what works and what doesn't work on a regional basis. And then the hope is we can expand it to an international basis and make it viable. We don't expect that Intel SAT nor the other contributors would be able to provide the capacity or goods or other telecommunication services for free for an endless period of time, but the idea is let's make our mistakes on a relatively small scale. We look forward to the involvement of the U.S. sector, both telemedicine education and vocational. But I am here with a number of materials. If anyone would like to talk to me during the lunch break, I will be right in the back, and I welcome anyone's attendance as well as participation. Thank you. (Applause.) (Whereupon, at 12:20 p.m., the meeting was recessed, to reconvene at 1:00 p.m., this same day, Thursday, September 17, 1996.) // // // // // // // // // // // // // // // // // // // A F T E R N O O N S E S S I O N (1:17 p.m.) MR. LAWLER: If we're missing anyone who cares deeply about this issue. If I can just restate where I think we are. We have reached a consensus that the up to T-1 is something we ought to recommend and we are discussing the issue of dedicated versus switched, and we have had a couple comments from this side of the room saying, well, I guess agreeing with Bill that switch is not available even in metropolitan areas, and we have some disagreement that dedicated is satisfactory. So let's see if we can proceed from there and try to reach some kind of recommendation on this, and then we've got more to go here. Dena? MS. PUSKIN: It seems to me that what we are hearing is that it's not out there and it would be extraordinarily costly to envision being put in place in the next year or two. But on the other hand, we have a problem of a system in which we build a series of stovepipes and how do we move from a stovepipe basically system of dedicated networks to moving to what ultimately we would like to see, which is a national information infrastructure with switch system. So I really think we need a recommendation here, or at least a statement that talks about the fact that we are -- our ultimate goal is to move from essentially where we are now to that system, and that part and parcel in planning and moving out there we need to create a transition or the ability to transition, and figure out how to transition, and that part of the issue in planing, because you have a lot of sort of generic recommendations there in building that infrastructure or backbone, is planning the transition for how we move essentially from a stovepipe systems, which inevitably will be built right now, to that information infrastructure, and that essentially the recommendation be put forth within two years on that. And I know Tom and I have discussed this. MR. SPACEK: Yes, we had talked about this, and actually we're, you know, this sort of recommendation is further along that we haven't got to yet. And there is a, you know, particular places where we talk about alternative infrastructure technologies where it's sort of very appropriate, in fact, to make, you know, statements of that sort, and to recommend transitioning from the initial capabilities and the stovepipe-like stuff to a national information infrastructure capability which may or may not include switch T-1. I mean, it's possible it will be a routed network, you know, using IP services. Who knows where that will evolve to that will provide the same functionality. That's like undecided yet on, you know, what technologies will win out. But there are appropriate places to talk about that transition and to say that it should be addressed. MR. LAWLER: Mary Jo. MS. MACLAUGHLIN: Well, again, to go back to what I stated earlier, which has been picked up on, is there any way that this general statement can be framed in such a way as to urge schools and libraries and medical facilities to look at this jointly so that they perhaps can collectively identify ways to facilitate this building a little bit faster? MR. LAWLER: I mean, I think the answer to that is absolutely yes, but I'm still not sure that's going to get us over the hurtle that we've got immediately. MR. TANGALOS: Actually, I would like to come back to that because Dena has brought it up, Mary Jo has brought it up. It's been brought up a couple of times. The Texas law, which is precursor to the Telecom Bill has within it a reporting outreach requirement for the industry to display that these services are there. And Steve Cotton has given me plenty of information with model language, but we've got to get over this hurtle before we can get to this. MR. LAWLER: Right. MR. MCCONNAUGHEY; Jim McConnaughey, MTIA. I think maybe part of the transition, I don't know, it's coming from a wild-eyed economist, I guess. MR. LAWLER: That's an oxymoron. (Laughter.) MR. MCCONNAUGHEY: I was afraid you were going to say redundant. (Laughter.) Perhaps dedicated seems to be the way to go, at least in terms of affordability at this point in time. Would it be possible to come up with a scheme where you take the delta, the amount that's gotten from the fund and apply that or give the user the option to apply that to a switched T-1? I mean, it would be a sweetener of some sort that might make the switch T-1 more affordable, and perhaps be a way to word that capability into the area. It's just a thought. I mean, that wouldn't be a total solution but it might be part of the puzzle. MR. BAILEY: One point I think -- my concern was that you would by setting a standard cause people to take the most costly mechanism to solve a problem, and there may be circumstances, depending upon where you are and what the circumstances are, where the switch would be the cheapest way to do something in one circumstance. In another circumstance it may be more expensive, and I don't know how to do that. But I think what you are saying is if you have the technology there to provide services to -- the types of services, greater service that health care providers want, then we ought to be trying to at the same time incent people to get those services in the most cost-effective manner. I don't know how you do that, but I recognize that there are circumstances where dedicated would be the most cost effective way to do it, a dedicated mini-network let's say that may have the ability to go outside of that network if need be. Or it may be cheaper in some circumstances to just offer primary rate interface, ISDN, between several locations. A lot of that has to do with where -- how the net work currently exists and so forth, and I don't know how -- I'm not sure how you do that. MS. DEERING: I just have a quick question. From the point of view say individual rural hospitals that -- or some other entity out there that might be faced with creating multiple stovepipes, can you give us any indication of at what point it becomes from that institution's point of view more effective to straight to a switch from the beginning? I mean, is there a three-year scenario if they can anticipate them doing X, Y and Z, then they may as well do it now? Is there anything like that? MR. BAILEY: Well, unfortunately, you know, you can look at the way that my company, for example, prices its services today, and there probably is a tradeoff point. The problem you have got is there are a number of companies that may price their services somewhat differently, and as you introduce competition it's going -- right now I don't charge a different rate between rural and metropolitan areas. It doesn't matter where you are. It is a mileage sensitive rate, but at least it doesn't matter. I think what may happen though is as you get competition in the metropolitan areas you will see rates come down in the metropolitan areas, and they won't come down in rural areas. So you will create a difference that is hard -- you know, it's hard to predict today what the tradeoffs will be given the changes that are happening in the network. MR. MAXWELL: You know, part of the -- if one wanted to try to go up to 100,000 feet on this, you would say one of the goals that the Congress is suggesting is to ensure the availability of these services in rural areas, and in the most cost-effective way possible. And so that says something about technological neutrality. It says something about the introduction of competition. And to the extent possible, it says what should be coming out of your recommendation, how do I get these things out there and how do I get them out there in a way that's going to be reasonable for the health care providers, and how am I going to get them out there in a way that's reasonable for the health care providers in as quick and as efficient way as is possible across the society. So some of -- one of the questions that I think takes off from both your question and your earlier comment is how are we going to help people know what services are available? How are we going to help them know what will be cost effective for them? How are we going to make sure that there is the -- that the learnings that each one of you bring to this are more widely available than in your own houses? We have got to figure out something, and we can talk more about that later, but that in the end is going to be a very important part of this. MR. LAWLER: Jay? Sorry, Bill. MR. BAILEY: I just want to interject, I just thought of this. Several people asked me what does it cost, and I can't give you a number. But there was a -- about two years ago there was a proposal by, I think it was then called the REA, or maybe it changed right in there, I'm not sure, to dictate, and I think that was basic rate ISDN throughout, and there was such a huge cry from the industry and all of the states who regulated the industry that it was such a huge cost associated with that. MR. HOLUM: It was a totally bizarre way of getting a result. MR. BAILEY: Yes, that I think it collapsed under its own weight. And that was for, I think, if I remember correctly, that was for basic rate ISDN, not primary rate ISDN, which is probably what we are talking about here. MR. LAWLER: Jay? MR. SANDERS: Based on the number of comments about the need for, and I think probably everybody would raise their hand in the affirmative for some type of educational resource that would exist for the providers. I would just like to make an offer, and hopefully it's an appropriate one, the American Telemedicine Association can function as one of those educational resources. We have task forces dealing with the clinical, the technological, the infrastructure, a specific task for on rural telemedicine, and the constituency of those task forces are made up in most respect similar to the comprehensive constituency that's here. So that as sort of an ongoing resource, I would like to volunteer that the ATA provide some of that educational input. MR. LAWLER: Sure. Can I try, again just to see if we can move along here, see if we can get agreement. And I will start very grand, which is, is there general agreement that the technology is not there at the current time so that anybody who says, you know, I would like switch T-1 should not be able to on demand get it? Any disagreement with that? If there is any disagreement, they are disagreeing silently. MR. MAXWELL: What you may want to -- I think what people have said and where there is more maybe agreement about, which is a kind of precursor statement, is that in the best of all possible worlds people would like to avoid stand-alone systems or non-connected systems, and they would prefer to be able to have switches which would enable them to request band width on demand, to switch in each and every -- MS. PUSKIN: Have the capabilities. I think we have to put in -- MR. MAXWELL: So maybe we can start with where people would like to be. MR. LAWLER: Right. MR. MAXWELL: And then to go to -- MR. LAWLER: Well, let me try, and we will get there, but let me try another one because I do think this is relevant to what the law says. It says you get those or you get the comparable rates, you get the build out for things which are necessary for health care services in that state. And, you know, maybe Boston is not the center of the universe, but if it isn't available in Boston, and I heard someone else say it's not available in Manhattan. I don't know what the most sophisticated technological city in the country is. But if it's not available in those places at this point, it's hard to imagine that it's necessary for the provision of health care services in the state. Is there any -- is there any disagreement with that? Are we talking bets on whose got the best technology? (Laughter.) Because if there is agreement on those two things, I think then we are where Elliot just suggested we are, which is, you know, it is whatever the proper words are, it is the goal, it is desirable and someday we ought to get there, but in the context of what we have today, you know, it's not an issue at least for the next, whatever is next, before our next review, which is somewhere between tomorrow and two years from now. MR. WATERS: And Greg, I think if we can also make sure that that is put on the review list for two years. MR. LAWLER: Sure. Yes. Is there any disagreement with that? MR. SANDERS: Could we also put on the list HCFA reimbursement? (Laughter.) MR. SANDERS: I couldn't resist. MR. LAWLER: Jay, I've been timing you to see how long it took for that to come up. (Laughter.) MR. LAWLER: You did quite well. MR. SULLIVAN: Not a disagreement, but then along the same lines, Bill and I spent the lunch hour discussing switch and dedicated. If we could jump back then to the service for the emergency services people that we talked about. MR. LAWLER: Yes MR. SULLIVAN: Are we talking about what's in place today, or are we talking about that there should be universal service at 9.6 or whatever for an ambulance anywhere? MR. LAWLER: The latter. MR. SULLIVAN: The latter. Then Bill probably has a little problem with that. MR. BAILEY: I don't work for a cellular company. (Laughter.) MR. LAWLER: Well, there may be a problem but it's not mine. (Laughter.) MR. SPACEK: I assume part of the problem with that -- I don't work for a cellular company either or a wire-link company, but they own us today. (Laughter.) But, I mean, part of the problem, we will get to it later in this meeting, is that the infrastructure is not out there, and you may need additional cell sites that cost money. But part of what the infrastructure recommendations will be is to build those sell sites that cost money and reimburse those providers, and we will ge there. MR. SULLIVAN: Then the same thing applies to the switch services. They are not there now, but put the switch services in, and we will reimburse the providers. MR. LAWLER: There are a lots of things that aren't there now that we could recommend that we are not recommending. The question, I think, here is what is necessary for health care services in that state. What we have before us is a recommendation that, you know, you need T-1, you need something on emergency services which is what we need to talk about next. But I think we have a consensus that switch T-1 is not something you need today for health care services in the state. UNIDENTIFIED SPEAKER FROM AUDIENCE: Which point would you connect to? Just about say three hospitals, but also from one of those to the necessary -- MR. LAWLER: You are going to have to speak louder. UNIDENTIFIED SPEAKER FROM AUDIENCE: Yes, I think that's clearly something that's happening within cities -- MR. LAWLER: Can we go back? I think the last bullet left in this series of bullets is the emergency services and any other issues that -- yes. MR. PILLAR: I think the -- MR. LAWLER: You have to, for the court reporter you have got to identify yourself. MR. PILLAR: Bob Pillar from the Public Utility - - This is kind of transition comment. Are we being consistent in terms of the 9.6 on the emergency services, and I think you want to make a distinction here and say that while the 9.6 service may not actively being utilized in the cities, that there is a comparable system of access of the ambulance team to being able to get to the expert services, and this then would become kind of the equivalence. So I think there is a distinction between saying that this is something that's comparable to these even though it's not the exact technically same service then we would have to get to switch T-1. MR. LAWLER: Right. On the emergency services do we want to recommend something other than 9.6? And what is it? MR. BRICK: This is Jim Brick. Bill made a point about what is there, you know, which I think was -- you know, kind of like what's there and, you know, why should we change that? Isn't that right, what you said? MR. ENGLAND: I just think you buy -- the band width is already out there. I don't know how Motorola designs their communicators, but my guess is it's greater than 9.6. So I mean, you don't want to specify something less than the equipment currently out there. And I don't know what it is. But I suspect it's more. MS. PUSKIN: Is the standard moving to 28.8? Why don't we ask people who know. MR. SPACEK: Well, is there anyone in the room how knows whether -- if the cellular site is out there, you know, can it handle 28.8 in all cases? MR. LORAN: Tom Loran, Highpoint Rural Health. The answer is we're talking apples and oranges. The cellular sites are analogue in reality, and the analogue runs at 25 kilohertz per channel, but it's all designed for voice. So there is recall not an equivalent. They are developing standards, and there are about three standards that are on the table right now. They really don't know which way they are going to go. So, you know, you have got GSM, CD, PD, things like that. But those are all up in the standard, and that's just a complete wide open area. There is no standard. They are not going to -- there are cell sites being put up for experimental reasons to use a whole variety of different technologies, and they don't interrupt. So that's an issue. So it's a wide open field. MR. MAXWELL: Maybe I can make a comment. Just as the notion of doing T-1 equivalence as opposed to saying T-1 lines or some such, it may be worth doing something off-line before these are finalized, to take a look at what is available in the urban areas, because urban areas do use radio. It's not only cellular -- I mean, it's not only digital. People do use analogue circuits. We are looking at really daily rates as much as anything else, and it's not a question, again, of what technology we use, but looking for some kind of equivalent, whether it's the moral equivalent or some other equivalent for this. You know, we can talk about it. But why don't we do some work off-line and not have this ceiling piece be driven by sort of our own ignorance and look toward what's available, and come back to the group. But I think it may well differ from the 9.6, but we can figure that out. MR. SPACEK: And in some cases it will be using cellular with modems, and that's okay. And that's sort of at the moment has a max of 28.8, but you don't really get that either. You only get about, you know, 20 or so. So why don't we do this off-line, and what the number will be probably is somewhere between 9.6 and 20, or whatever, at least for the initial kind of what's there And, yes, there are different technologies, but there is nothing we can do about it. I mean, we can't just say that, ah, the world has a lot of technology, so we don't want to say anything. We have to give a little bit of guidance as to a minimal capability, you know, recognizing that it's going to change. MR. LAWLER: Agreement on that? All right, are there any other issues within this overall heading that we need to talk about now? MR. TUCKSON: Well, I have been raising this issue about getting clear about -- this is Reed Tuckson. This issue about the underserved communities. And I think what I need is a little guidance from what our assumptions are about the relative difference in infrastructure availability between urban, rural and then underserved. And the point made earlier, which is an important one, that underserved can be viewed from the context of underserved from a health care delivery perspective, and clearly that is real. The work that we are doing in South Central Los Angeles with public housing developments, and those communities surrounding that suggests to us that those communities are also underserved infrastructure-wise; that, you know, the public housing developments don't have cable. They don't have any wiring. And that's not just only for public housing, but for innercity challenged environments. So I just think if that be the case, and if my assumption is correct that if we are going to meet the demands of the act, which is fair and equitable for all Americans, then I think we are going to need to make special recommendations for underserved communities that permit them to have access just as anyone else. And the way we are doing it now is sort of we throw it into various sentences, at the beginning of sentences, and then there is no recommendation that goes with it so it's really just kind of inadequately dealt with. But let me stop and listen to how others view it. I am just a little concerned. MR. LAWLER: Cindy? MS. TRUTANIC: Actually, I think it's a point was mentioned for -- can everybody hear me? Especially for underserved populations in urban communities. You can actually identify the point at which they are coming into the health care market either improves or worsens the onset of whatever disease it is that they have, because it is a fact that children in urban areas do not see a physician early enough in the progression of a disease, and that oftentimes by the time the disease has progressed fairly far the cost of treating them is much greater in the urban communities. So in that respect I think Mr. Drew is -- I have thought what he ways. There are also communities like home-bound mentally ill, home-bound chronically ill individuals and whatever, which is where the home care issues, I think come into play. MR. TUCKSON: This is Reed Tuckson again. Let me just extend that because what we are -- we are seeing is big difficulty when we try to establish telemedicine capacities in underserved housing developments and other such communities. There is no infrastructure with which to link in. So that if you really try to do all the things that make sense for our rural conversation, you know, if you realize that folks don't get access to ophthalmologists and we want to then provide teleophthalmological services, there is no infrastructure that allows you to be able to do that, and so you are basically back -- you might as well be in rural America even though you are sitting in the middle of urban America. And so it's both, it's those issues, and then it's the sense of how do we then extent all the technology i. MS. PUSKIN: Can I raise a question in terms of parallels though? In terms of the infrastructure you would not necessarily need any different infrastructure. I mean, if we say up to T-1, Reed? MR. TUCKSON: Yes. MS. PUSKIN: That wouldn't be any different in the innercity. We are saying that we need to subsidize in communities that are underserved up to certain standards. MR. TUCKSON: Oh, no, wonderful point. I am not suggesting anything different. My only concern is that it's just not -- if you read the report from the point of view of an innercity community, it's as if they don't exist except they get sort of thrown out there every once -- you kind of dangle it, and then you take it away MR. LAWLER: Just let me, and I'm looking back through this to make sure I don't miss it, and I may still have missed it. In terms of the subsidy that's available, the law only talks about rural areas. I mean, I don't think it could be any clearer. It says, you know, serves persons who reside in rural areas in that state at a rate. So I don't think that there is any contemplation in the law, and we can recommend what we want to recommend, but we have to recommend that it be changed in order for the Joint Board or the FCC to include something more than rural areas. MR. SANDERS: And, one, I think, in reading the law you are absolutely correct. But once again I think it needs to fit into the basket of critical constituencies that we need to at the very least recommend to Congress be readdressed in the same way that we are talking about the nonprofit primary care provider, the way we're talking about the nursing home, the way we are talking about home health care, that we need to recognize that you don't define underserved by geographic isolation; that underserved are underserved by whatever definition you choose to define underserved, not by -- it's geographic as well as socio- economic isolated, and that's really what we are dealing with. MR. LAWLER: I don't have any disagreement with that. I guess I am trying to look for a hook here. I mean, there is more general language in the universal service part of the law. It just doesn't go to the rural subsidy. And I know far less about this than, Elliot. I won't put you on the hook, but you may have a better perspective on this, you know, and these are -- the Joint Board, in recommending definition of service is supported by universal service are essential to education, public health or public safety. I mean, clearly that is a hook big enough for something, but I am just not sure where it gets you from here because there is then no specific provisions that says you get X, or, you know, you get -- MR. MAXWELL: Let me make a suggestion. I think that from the beginning we have talked about some parallels between rural areas and underserved areas in urban areas. This advisory committee, because of its emphasis on health care in general, can clearly, I think, make the point that you are making, which is either way you cut it, whether it's the telecommunications infrastructure or the health care infrastructure, either way there are underserved areas that are not rural, and that -- MR. LAWLER: Right. MR. MAXWELL: -- the Joint Board needs to pay attention to this in its overall concern and in its overall implementation of the health care provisions, both 254 and advance services, to think about this in ways that serve the broadest view of the congressional intent, which was to ensure that health care goes -- general level of health care be raised. And I think that would be perfectly appropriate for the committee to do because of its own expertise. MR. LAWLER: Right. Jay, this may be a nit in the sense that it's, you know, disagreeing with you for no good reason, but the -- I mean, it seems to me that this is in a different category than the -- you know, the health care professionals and the nursing homes and the home health care because those, you know, you've got a list of people that are in rural areas, it's targeted at something. It's just a question of whether they are eligible or not. Here, we are talking about something that, you know, is sort of mentioned in the act but there is no real mechanism to get there, and we are trying to say, you know, you have got to come back and look at this in a different way. Just don't throw, you know, underserved urban areas into the rural structure cause, you know, it may not be relevant. I mean, the subsidy, to some extent, is the same as in an urban area while you're giving subsidy to people in an urban area, you now. So I guess while agreeing with you I think it ought to be just a little bit different. Cindy? MS. TRUTANIC: Just to elaborate, I think maybe -- what about the provisions for schools and libraries because it is a fact that many of these underserved people could be serviced if it's housed in a school nurse's office or whatever. I mean, there are health care services that can be provided in moving trucks in the neighborhood. It's not necessarily -- it doesn't mean that the infrastructure has to go to each individual home. You really want to go where you can get the most people taken care of the most efficiently. MR. MAXWELL: And that's why I think that a group that has been looking at health care, again, primarily in the context of these rural requirements -- MS. TRUTANIC: Right. MR. MAXWELL: -- can clearly make the statements about health care in underserved areas. It's not necessarily restricted. MS. TRUTANIC: Okay. Yes. MR. LAWLER: I do -- Elliot, you may kill me for this, but there is a provision in here which at least I had not paid attention to before which says, "In addition to the services included in the definition of universal service, the Commission may designate additional services for such support for schools, libraries and health care provider." So the way that reads you can pretty much do whatever you wanted. So we will just say this is your problem. (Laughter.) MS. PUSKIN: Can I just raise a question because it seems to me we have a section in this report on global international that really doesn't deal with the subsidy. I mean, there is a sort of inconsistency in our position here, and I hate to point that out right now. But we have a section here in the report on global competitiveness and issues relating to that, which would argue that since this, and I agree, I know I sit here with one hand representing rural, but I do representing the Joint Working Group on Telemedicine that deals with both urban and rural, and I feel very strongly that the points being make about urban innercities, underserved in terms -- need to have some emphasis in this report. And that if we are going to give emphasis to global competitiveness, we ought to give at least a couple of pages to the underservice, and I think that we ought to perhaps think about that, and urge someone doing that. MR. LAWLER: I don't hear any disagreement. Why don't we work together to try to come up with something that says we ought to, you know, this needs to be addressed, and we will tell the FCC and the Congress, you know, we tell you you've got to do it. You better do it. (Laughter.) MS. DEMERS: I just have one concern, and that is that we appear to be looking as access to telemedicine as a standard of health care, and I don't think that's necessarily true. I think you need to look at how health care is accessed in urban areas, and whether that's the best method for doing it. I think health -- I think telemedicine is a God send potentially to rural communities because of the distance factor. I think there is also a lot of problems with it. You lose a lot of personal contact, a number of other things. And so I don't think it's the end all in health care delivery, but it's an answer to a particular problem caused by distance, and I'm not sure I see that in some of the urban underserved areas. I am wondering if there might be better ways to increase the access than telemedicine, and it's just a thought. I have worked with both urban underserved and I have lived in the rural area now for the last 20 years or so. MR. LAWLER: Bill? MR. ENGLAND: Bill England. I want to go back to something Mary Jo mentioned awhile ago about including schools and libraries and hospitals all together. And I am wondering, and I don't know whether the FCC is just going to have to deal with this or whether this committee should, we're talking about the subsidy from the effect of how much the hospital -- tex receiver is going to pay. From Telco's perspective, if I am not in the community and the hospital says I want a T-1 line, and my lines out in that area are absolutely stressed to the max and there is no way I can make T-1 available without going out to the poles and putting another line in. So I do that, and then next year a school comes and says, well, now, we have read this and we would like a T-1 line, or two of them, and you keep tacking on. And whether we could ask for some sort of coordination in the community, that the hospital talk to the other entities so you all will come in at the same time. That may make a bid difference in terms of what the Telco is going to put in. Are they going to put in a fiber if there is enough demand they sense they are going to have to meet out there? They may want to lay a fiber line out there if there is not one there. And then the next question is how much is -- if they decide we would like to lay a fiber line to get that T- 1 out there, even though that gives us far more than we need, is the subsidy going to pay for laying that line, or how -- what is the equivalent? I mean, that is their cost to make that available. So is that how much they are going to subsidize for that capital expenditure or what? MR. LAWLER: If I can suggest to your second point, we're going to get there, I think. Let's wait till we get there. On the first one, I think there is -- MS. DEERING: And it's actually an editorial suggestion again, and that seems to me, getting back to the underserved issue, that there are -- and under the overlooked, other constituencies, and that perhaps it would be quite appropriate to have an introductory section our understanding of what the intent of the law was. And based on our understanding of the intent of the law, there is this, that and the other that was not appropriately addressed, and that that is a way of educating them saying we heard you, we heard what we thought you wanted to do, and just for your information this is why we are raising these issues. And perhaps that would be a more persuasive way of bundling an awful lot of this stuff. MR. LAWLER: Sure. MR. TUCKSON: And finally, just to point out, which is a good one. I don't think anyone would suggest that this is the end all and be all of the solution to those problems, but they are certainly important interventions. The use of teleradiology in these environments is very cost effective. We are finding very efficient use of teleophthalmology, and a bunch of other things. So I think we don't want to oversell it, and I think you are absolutely right. And what I particularly appreciate about your point is when it comes back to the notion again that I heard here in the sense that we don't want to put underserved innercity environments in the same paragraph as the rural because they are different issues, and they are different sets of challenges, and maybe some of the, even the infrastructure issue as much as the application issues are going to be different, and I think they need to be dealt with differently. But I think your moderating point is a good one. MR. LAWLER: We have -- Bill? MR. BAILEY: Just a comment on your idea. I'm not sure I know what the right answer is. I do know that over the last couple of years in Missouri we did establish a number of community advisory boards around the state to try to do just what you suggested, and we may have done it right but it was a failure. I suspect that to the extent there is some for of subsidy for health care, there is some form of subsidy for education, libraries and so forth, the providers will go out there, recognize where they can get subsidies, and try to bring those things together because they can reduce their costs in doing that. I think the problem might take care of itself. MR. LAWLER: Right. We do -- I mean, I think there -- everybody has said from day number one we want to try to make the different -- the libraries or the schools, the health care providers, everybody work together. I think that is a focus of the Joint Board and the FCC because it's money, and there is a limit to the Universe Service Fund. We ought to mention it, but I also think it is something that's going to be -- you know, we can tell them, but they already know. Can we move -- Chuck. MR. HOLUM: One point just on that idea. Again, you're talking about consolidating the demand in an area to benefit the telecommunication companies who have to go out and build the facilities to serve them. I want to emphasize that there is also a great benefit to consolidating demand from the user side. MR. LAWLER: Sure. MR. HOLUM: Which is the comparability standards. MR. LAWLER: Right. MR. HOLUM: If you can consolidate the libraries and the hospitals and clinics and all these people into one user, it's going to look more like a large industrial customer and get a lower rate. MR. LAWLER: Right. MR HOLUM: And we want to encourage that, and I think we ought to say something about that in our report. UNIDENTIFIED SPEAKER: A real quick question. On page 2, you have internet access, number one. Does that imply internet access up to T-1 rate or whatever this percent is? MR. LAWLER: No. Did we lost Tom for a minute? I think the answer is that is a no, that it says internet access, not at T-1. MR. TANGALOS: When the work group chairs got together, it was access. We stopped there. MR. LAWLER: Right. MR. TANGALOS: We did not want to specify rates. MR. MAXWELL: What is the T-1 rate? In other words, between hospital and hospital, they have the T-1 rate? MR. LAWLER: Whatever the network is, yes. I mean, it may be between a hospital and five different clinics or whatever the -- however it's configured. UNIDENTIFIED SPEAKER: How much would be it to connect that network to an internet service provider? MR. LAWLER: It's not only -- UNIDENTIFIED SPEAKER: Why don't you just put them in there and then ask for 1.5408 if there is no difference? MR. LAWLER: Yes. MR. PILLAR: What driveS it is generally demand and how much -- how many lines may be going into that cost and whether or not they are graphic intensive, and our system and the large system even for existing school systems and hospitals, those will be connected into -- rather than T-1. So you may have to be creating a limited to each rather than something desirable here. It's an normal aggregation issue as to how you do the example here once you are on a network. MR. LAWLER: Right. Let's move on here, if we can, to the next recommendation, which is on page 3, which is backbone infrastructure development, and there are three bullets here. Should we do these separately or together? Well, let's do them separately. The second one, I think, is just what we have all said all along, that everybody ought to -- Tom, do you want to handle the first bullet there? MR. SPACEK: Sure. The idea here is that universal service -- we talked about two uses of the universal service. One we have talked about today, but we will talk about later as far as a recommendation, and that is the -- you know, difference in urban and rural rate for services and that comes later, but we also know what the implications of that are. This goes to -- another use of the universal service lines and that's to get the backbone infrastructure out there. Okay, it doesn't help too much to say, hey, I can get it cheap on line if I can't -- you know, if there is no telecommunication infrastructure anywhere near where you are, you know, anywhere near your rural community to be able to get it. So how do you get that infrastructure out there? And what the recommendation here is, is that -- and it's not just getting it out there. It's upgrading it in some cases. In some case it's there, but it's analogue and it would have to be upgraded to digital, okay. So it covers both build and upgrade. And the idea here is that the eligible telecommunications provider, per Section 102 of the act, gets to use the Universal Service Fund to build out or upgrade the infrastructure to reach the rural communities so you can offer these other services. Otherwise, you just can't offer them. And that's what the first recommendation is. There are several safeguards with respect to that though. One safeguard -- well, first of all, there isn't necessarily one eligible telecommunications provider. Section 102 says the FCC will look at the people who apply, and they appoint more than one, so there might be two or three in competitive situations. I find that in most cases probably highly unlikely, but, you know, there will be out in a lot of rural areas. You will see several provider vying for the business. But, in any case, if there are more than one, they will -- you know, they will be competitive with each other. In some case you may not get a telecom provider or other provider to come out there, or apply to the FCC to become eligible. In that case, Section 102 says the FCC will appoint somebody to be eligible. I would imagine in the selection criteria the FCC uses if people apply to be eligible would probably look at the existing infrastructure these folks have, so you have the last necessity to add more costs and develop more infrastructure. That's just my guess of what the FCC would do. So anyway, this gets at building the backbone. This is the infrastructure, not to get to your site. This is just the basic telecommunications infrastructure to get somewhere close to your site. And secondly, there were concerns that the telecommunications provider would look for profitable purposes other than education, telemedicine and those kinds of things. In other words, the sold it to rural businesses. And so I am getting into the third one anyway because it's really tied in. MR. LAWLER: Go ahead. MR. SPACEK: The third bullet basically says to the extent that that's the case, that the same infrastructure that was subsidized via the first bullet gains for-profit money from businesses and so forth, that the FCC would come up with a mechanism that would use those profits to reimburse to whatever degree possible the subsidy that was given in the first place. Now, a caution is -- that sounds like a wonderful idea. The caution is there is probably not a whole lot of big business opportunities out in rural areas. But to the degree that there, and maybe in some cases there will be, any such profits would be used to reimburse this funding that would come out of number one. MR. LAWLER: Tom, I just didn't, and I really didn't even pay attention to this till now. The way this is worded, it's just a wording thing. Put in place a mechanism to recover some of the cost to partially repay, you know, that's sort of viewed aside what it is. Don't we want to say to the extent that there is a profit made, you ought to get the profit back to replay the fund? Eric? MR. TANGALOS: Part of this, and we have struggled with this. This is another area that the work group chairs discussed at some length. An example would be there are two rural telcos. One has spent time and money over the last five years upgrading the system, and when the request comes into to provide telemedicine services at a given band width, they are able to do that at a modest increase in cost. The telco across the state line or cost accounting border hasn't done a darn thing, and indeed now it sees the Universal Fund as an opportunity to tap into a resource that it didn't have before. So it convinced a rural health care provider that they need telemedicine service. So they make the request of telemedicine to be there, and this telco that hasn't done anything to upgrade its equipment or over five years now reaches into the Universal Fund to do that. A year or two down the line they may have a competitive advantage over the telco that has done its job over time. And what equities can we put into place that will assure that any profits that are accrued go back to the Universal Fund. This was the best way we tried to do that, but it doesn't get to all the nuances. And if I as a health care person can come up with this way to gain the system, I am sure that there are telcos out there that will be able to do the same. MR. SPACEK: Eric, I think there are lots of scenarios we could come up with about, you know, these are the bad guys and these are the good guys and stuff. And we probably can't handle them all. This was the best approach we had to try to handle that. But, secondly, with respect to your scenario, I think there is an additional way in the sense that the FCC is going to -- is going to appoint, based on application, an application to them, who the eligible provider is. And my guess is that if both of these companies came along and the FCC saw one had build outs in most areas and the other had a very sparse infrastructure, they probably would not choose the one that has the sparse infrastructure to be eligible. So I think that's a second -- another safeguard. MR. LAWLER: But, Tom, back to the point I raised. The point you are trying to make here is if we give you $100 to build out the infrastructure, 50 of it you use for telemedicine, libraries, schools, and you make 50 bucks, you ought to pay that 50 bucks back to us because we gave you the money to build the infrastructure. Once you have repaid the fund you can do whatever you want, but you ought to replay the fund. Is that an accurate description? MR. BAILEY: I don't recall where, but it's someplace you suggest how you're going to actually refund, and as I recall it's a credit for the difference between the rural and the urban rate. MR. SPACEK: That's an issue on the service itself, not the backbone. That comes up later. MR. BAILEY: Okay. So you are saying you're going to get subsidy for the service, and also subsidy for the backbone? MR. SPACEK: Yes. That's right. MR. BAILEY: There is another important issue here. If over the long term there is a hope that there will be competitors in the rural areas, and that that will improve the infrastructure available, unless there is some mechanism for recovery of sorts, you would have a situation where the person designated as an eligible provider and subsided for infrastructure development would essentially have a plan without any capital investment. And it's tough to imagine that someone is going to come in and compete with someone who has no capital costs, and you may -- if something like this isn't done, you have a situation where the long term might be defeated, and the best term and the long term might be defeated. MR. TANGALOS: And have we spelled this out enough, that's what you are saying. MR. SPACEK: I think, I think what he is saying is that the words "some" and stuff shouldn't be there, but rather, it should be -- MR. LAWLER: I don't even care whether we describe the mechanism, but if we -- MR. SPACEK: No, we can't describe the mechanism. MR. LAWLER: -- get money from it, replay it. MR. SPACEK: Yes, if it's used for other profitable services. MR. LAWLER: Yes, absolutely. MR. SPACEK: Yes. Fair enough. MR. LAWLER: Jay? MR. SANDERS: Let me approach that question in a different way, Tom. Let's assume -- well, let's start without the new telco act, without this committee. I am a rural community and I go to you and I say, look, I want T-1 connectivity into my community. And you look at you situation and say, well, look, I'm going to have to build out to it to give that to you. You have figured out the cost of building it out. Is your monthly rate to me using that T-1 connectivity include a depreciation cost on the build out? MR. SPACEK: Well, historically I'm sure that varies from place to place, and sometimes it does. The idea here, of course, would be that the state commissioner or whoever is determining rates urban versus rural does not double charge the customer. I mean, you're right, that could happen. But we are sort of assuming here that they are smart enough to realize that we paid for something and we're not going to recover that -- we are not going to let the company recover that money twice. MR. SANDERS: Yes. Well, the flip side, my suggestion was going to be that rather than get into this complication of paying back, that in fact the cost to me as the community end user would be less because the Universal Fund has paid you to put in that connectivity into my community, that my monthly rate for that T-1 use should be less. MR. LAWLER: Jay, you are building in a -- that means where someone uses the fund to get infrastructure built. MR. SANDERS: So it's the flip side. MR. LAWLER: Yes, you are just -- you get different levels of subsidy for different rural areas for no reason other than where the money came from. MR. SANDERS: Okay. MR. SPACEK: Yes. MR. SANDERS: That's why I'm in medicine. (Laughter.) MR. PILLAR: I think I have some doubts about how this can be set up. I take it that in the optimum scenario, the marketplace would take care of this and service would be provided, but we're talking about a situation where a company's own business plan says we're not going to build it. On the other hand, generally speaking that business plan did not anticipate from the get-go that there is going to be no other customer that' using these capabilities. And if the company is a telecommunications company of any size, we're talking about five forms and sub- five forms and the like. So we are talking about adding capability at the switch and various points along the way, and probably the installation of fiber or other plant in the ground. So, I think the first thing is that the Commission shouldn't be saying, or shouldn't be forbidden from this fund that, gee, if you build it, we'll pay 100 percent of it and then reimburse you as you in fact get customers. What would be reasonable, I think, in the competitive marketplace is that you decide at that point, you project the business case on the competitive customers, and that that should be the risk of whoever the provider is. Now, you want some sort of true-up mechanism to deal with the projections later on. You might need to do this, that as it's build out they may be adding customers, and the subsidy may in fact have been too large. The notion that this will come out of profits, I think, is wrong. I think the notion is that a certain amount of it the company should be at risk for from its competitive customers having added the capabilities, because once you have this capability not only will, you know, to some extent you will have your rural customers come in, but to some extent some of the plans will be closer to urban areas and will be used for multiple services. So I think that the construct perhaps that we have here, while it's not conceptually wrong, it's a little too simplistic. MR. LAWLER: You're suggesting we pay for the increment above what they would be doing on their own? MR. PILLAR: Yes, and I think it's not out of profits per se. MR. LAWLER: Yes, I agree with that. MR. PILLAR: It's talking about sharing risk in the marketplace versus sharing that is and continues to be subsidized. MR. SPACEK: Well, I disagree with you in the following sense. One, with respect to overall objectives, the idea here is, at least for health care and for other things, but it's to get that infrastructure out there as quickly as we can so that something happens, okay. And we need to incent that to happen, otherwise it's just not going to happen. Okay. And the idea also then is not just to build the infrastructure and wait for companies to come, this is in response to customer demand in the sense that the act, Section 102 of the act requires that if a telemedicine health care provider requests the service in this minimal package that we just talked about this morning, that the eligible telecom provided has to provide it. Okay, so that s that starts the build out of the infrastructure. Okay, now, that build-out may be based on a very, very small number of customers. And if you are talking about putting the risk then on the provider, you're talking about a huge risk over a huge -- you know, many, many years unless this rural population just happens to -- you know, to grow. MR. PILLAR: But what if these areas needs it just the way you've described it now. MR. SPACEK: It could vary. And coming from profits, I think, is the economically efficient way to do it. We have an economist there. I am not one, but I have loads of them who worked for me, and I learned a little bit from them. You know, I think if you look at economic efficiency and measures, I think you will come out that taking it from profits is really the most economic, efficient way to do it. MR. PILLAR: But you wasn't want to build beyond what is economically necessary to that -- MR. SPACEK: Right. MR. PILLAR: I guess the logical approach is that you don't have to pay for 100 percent up front in order to do that. MR. SPACEK: I think you need to pay for 100 percent to get something close enough to fulfill the telemedicine person's request. And there is nobody else out there doing it, and then you want to make the guy -- if indeed it's close to an urban area or whatever, and the person can make profits, other profits from that same equipment, then the third bullet says you pay it back. Okay, I think you are putting a tremendous -- doing it the other way, I think it's putting just a tremendous risk on providers and may very well cause providers not to apply to be eligible telecom providers, and I think we want to encourage providers to apply. MR. LAWLER: She had her hand up there for a long time. Did you have your hand up? Do you have a comment? MS. KING: We had commented on that through E- mail. Our idea was, and this goes back to the Universal Service Fund, the universal -- of the other committee, which is to the Joint Board, which is going to set a rate in order to determine subsidy. You base the rate on the costs of providing that service in a forward looking cost rather than historical cost. And then that subsidy is offered to different providers. The one who has already got there is going to make a lot more profit than the one who is building it from scratch. So if you take it from profits, you've got a problem there. I mean -- am I clear? MR. SPACEK: No, I'm missing the point. MS. KING: Okay, you want to set a price for doing this, and you want to find a cost for building the infrastructure, and it's got to be based on engineering and lease cost studies. MR. SPACEK: Yes, but there are two different issues. One is getting the infrastructure built and the cost of that. And then there is a separable cost of getting from whatever this infrastructure point is -- MS. KING: Right. MR. SPACEK: -- to the site, and so those are sort of separable issues, separate facilities, separate trenches in the ground or satellite, whatever, you know. MS KING: But it's real. MR. SPACEK: Yes. MS. KING: I mean, you've got to figure out what you're going to subsidize. It can't be an inflated thing. MR. SPACEK: Right. MS. KING: It has to be based on engineering studies and a real cost. MR. SPACEK: Right. MS. KING: So that could be offered to anybody who is willing to provide the service. MR. SPACEK: Yes. I mean, the idea is too is people don't just build stuff willy-nilly. I mean, they have to apply to the FCC for this money, and I am sure the FCC will require them to show some plan that this is for the purpose of meeting the request of this particular rural area, that I'm not overbuilding and so forth. MS. KING: If the subsidy is available for any provider to bid on, then you have a competitive equity there. MR. LAWLER: Well, the subsidy can be. I mean, it depends on what it shows. You can have more than one telecommunications carrier in the area. MR. SPACEK: But that's where Section 102 sort of gets at. MR. LAWLER: Right. MR. SPACEK: And hopefully there will be multiple ones, but there may not. In some cases they will and then it will be more competitive, and others, there may not be. MR. LAWLER: Bill, and then Dena. MR. ENGLAND: If I could just offer as an example, Medicare tried this with hospitals a number of years ago and obviously it didn't work very well. If you offer essentially, you know, if you build it, we'll pay for it, at least as far as our share goes. And if you use it to serve Blue Cross, then we are going to have cost reports and we will figure out how much of it went for who. It's just a hopeless morass, and eventually we went to prospective payment as a way to try to solve it. And even that has a -- and I just worry slightly if the FCC is going to have to come up with something of the equivalent of a cost report to try to sort out what is going on out there. MR. LAWLER: The prospective billing thing is not an option for it. MR. ENGLAND: Well, I know. MR. LAWLER: You're really talking about whether you make them do this cost reporting at the front end or at the back end, and whose money it is. MR. SPACEK: And some level of reporting needs to be done, and to some degree it may not be a morass, at least beyond the morass they are going to get themselves in anyway. (Laughter.) Because they are going to have to at least make sure that the lines that go to providers are eligible providers. They need a list of those. Any service that goes to anybody else but those people are for-profit providers by definition. So, you know, it's there. Whether that hard to do or not, I don't know. They have to do it for case number one, and the other is only A minus B. So it's not like it would be a morass to do it. MR. LAWLER: If there is money involved, I am sure it will be a morass. (Laughter.) MR. LAWLER: Dena. MS. PUSKIN: If I understand what you are saying, you are saying that if you provide the services to anyone else but a nonprofit provider, therefore that counts as profits. MR. SPACEK: Your profits from that. MS. PUSKIN: But it would be profits from that. What happens, and this is a technical question to anyone who runs a rural telephone cooperative, they don't -- the may not make profits per se. I mean, it's -- how do we handle places that supposedly don't make profits? They have different lines of business but they presumably don't have bottom line profits? MR. SPACEK: If there are such, I am not aware of such places. But if there are such, my guess is, is that they would not repay. They would have an advantage, but it's not clear whether the FCC would approve -- you know, if the FCC approved them as the eligible provider, they would know this up front. MR. LAWLER: Right. MS. PUSKIN: I just want to point out to you that you will be building out maybe differentially, and there are a lot of rural telephone cooperatives out there. I don't know what their pricing structure is, but they are cooperatives by nature and I believe they are nonprofit in nature, and therefore they operate differently. MR. LAWLER: Yes. MR. TANGALOS: The committee needs to be very aware also that I think the infrastructure subgroup spent the most time with this, but we all made the decision that the monies would not go to the physician, the medical service side of things ;that indeed the FCC, with regards to the infrastructure and with regards to the service rate differentials, would pay the telecommunications provider directly. You have to accept that in both instances because that was something we came to a couple weeks ago. And indeed up until a couple of weeks ago we weren't certain whether or not we would give the money to the medical side to say now you pay the differential cost. No, we chose not to do that. We would leave all the responsibility between the FCC and telecom. MR. LAWLER: Are there any other comments on that before we -- MS. DEMERS: I just wanted to comment that the question is a valid question. For instance, in my state AT&T just sold off everyone of its rural exchanges to the Association of Telephone Coops, everyone of them. And so you are -- MR. LAWLER: U.S. West? MS. DEMERS: U.S. West -- no, no -- okay, U.S. West. It was U.S. West. I'm sorry. But the deal was approved by the legislature in '95, and it was sealed this summer. So I think we need to look at how those for-profits are reported in terms of this recommendation. MR. LAWLER: Are they not for profit, the coops? MS DEMERS: They are not for profit. They are a different tax status, which is causing us a lot of grief on how to support local school districts that had been collecting property tax. MR. LAWLER: Right. MS. DEMERS: Et cetera. So I do think it's a real issue. MR. LAWLER: Right. MR. SPACEK: I agree it's a real issue, but I think it's covered in the sense that if the FCC chooses that cooperative to be an eligible provider -- MS. DEMERS: It's the only game. MR. SPACEK: Okay, it's the only game in town, and let's say they approve it. I think they can assign somebody else. They are allowed to do that too. But if they don't and they choose that game, than that cooperative would be given under this revision money to build the infrastructure to meet the demands that are asked by telemedicine providers. And if they are indeed not for profit, they wouldn't have profits, so they wouldn't replay. MS. PUSKIN: No, they wouldn't replay but they can have for-profits that -- see, the issue is really how you implement this. This is all we are talking about. I can do that and I can then sell to a for-profit, and essentially make "profits." Presumably I will plow it back into more services, but it won't be paying back the Universal Fund. You need to recognize that the way they are going to operate is that you're not going to get any revenues back even though they may in fact have for-profit providers as other lines of business. MR. LAWLER: Can we agree on the concept here, which is, to the extent you make profits from the infrastructure service that you have been subsidized to build, however that is described, and we are not going to become the IRS of the FCC here, but that is something that should be repaid to the fund. And leave that to someone else to figure out how we're going to deal with coops and do they make a profit from this or this and all the rest of it, which -- MS. PUSKIN: I think they always do it. I think it's just a recognition. I think that we understand that we have different models out there. MR. LAWLER: Any other comments on this section so we can just -- I am going to point out it's 2:20, we are on page 3. We have 9 pages. MR. PILLAR: If I can point out on this point that even on this limited point, I have problems when we're talking about profit because to the extent that you are using 10 percent, let's say, just for capacity, or your private customer, you should be at risk to 10 percent of that cost, whether or not you make a profit from that other 10 percent. You are going to extend this service in the competitive marketplace where others may be joining private markets. It shouldn't depend on whether you can make a profit. As a matter of fact, in this case the more profit you may be able to distort the marketplace and manipulate it. So I think -- while I think the concept is that if you are selling to others, you have got to pay back in some broad sense, I agree with that. But when you say just out of profits, I think you are starting to have some marketplace distortion. MR. LAWLER: I guess I -- I mean, we can go on for a long time on this. If I really thought there was going to be a rush to the FCC or to the state commissions to say, "I want to build to these rural areas where there is no business," I think this might be a more serious worry. But I just -- Elliot, unless you tell me otherwise, I think the anticipation is we will be lucky if there are people saying, "I want to go do business in these places." MR. MAXWELL: I think they -- I think this can be worded in a way that (a) doesn't get this group trying to make cost allocation decisions about the investment, and looks to the principal. But if there is money drawn for infrastructure development, and if it's used for providing services to other than the party that made the request that led to the infrastructure development, there should be a way of recapturing money for the fund, and that principal is recognized, then the Joint Boar can make recommendations about how it can be done in the most economically efficient way. MR. SPACEK: I guess I'm not but the point is regardless of whether the Joint Board, the Joint Board can do whatever it wants regardless of our recommendations. I am just saying what I think is the most appropriate economical recommendation for, you know, for us to make. If the Joint Board doesn't like that, they can -- MR. LAWLER: Do whatever they want to. MR. SPACEK: -- do whatever they want. MR. KIENZLE: A lot of these plans using the term profit, both for-profits and not-for-profits have revenue, and that's -- if you just use the word "revenue" instead of "profit," it gets at the kind of -- you know, the kind of problem that we are having. It's revenue but it's derived from the business. It may or may not be profit. MR. SPACEK: If it's profit for the carrier, that's what we are talking about. We're talking about profit for the carrier, not just revenue. MR. KIENZLE: Well, it may not be a profitable venture, but there still may be revenue coming in that could be recovered. MR. SPACEK: Yes, but if they are losing money, if it's not profitable and they are losing money on it, I don't think that's an appropriate place to pick up something from. MR. MCCONNAUGHEY: This plan has short-term appeal in the sense that it would serve the needs immediately, or for a very short term for a particular area. Long term, I would be very concerned about the prospects for competition. This is greatly distorting the signals that would be necessary to bring in competitors. If somebody has their infrastructure given to them for free, I mean, that's got to be a huge incumbent advantage further down the road that just wouldn't bring in the competition that everybody, I think, agrees to would be the way to go in the long run, to the extent you can do it wherever, rural areas included. I would be very concerned this would stifle. MR. LAWLER: Well, I am missing a loop here. Nobody is talking about doing it for free. The whole point here is that if you earn a dollar beyond the health care and the library and school, we want a portion of that dollar above your cost to come back to the fund. MR. MCCONNAUGHEY: But that takes time. I mean, if you give somebody a large amount of money. MR. LAWLER: That's what the law says that's how they are going to -- I mean, I'm not sure we can change that. MR. SPACEK: Yes, we can not do this, but the problem is my guess is you are going to delay infrastructure development for years, and get -- and not -- you know, you can want all the T-1s that you want, but nobody can get them to you. MR. MCCONNAUGHEY: It has short-term appeal to it, but perhaps something like competitive bidding might solve the same thing. MR. SPACEK: See, in the longer term, though, hopefully -- you know, hopefully the thing will get paid back. MR. LAWLER: But there is competitive bidding. The whole point -- the way the law works, the hope is that 30 people line up and say, "I want to build the infrastructure for this rural area." That would be terrific. It's just nobody thinks it's going to happen. Nobody want to serve it. Otherwise it wouldn't be here, we wouldn't have a provision. They would just say, you know, everybody go to town. THE HOLUM: The whole notion of the Universal Service Fund is because this is a real problem. MR. LAWLER: Right. MR. HOLUM: Because nobody is doing this on their own. MR. MCCONNAUGHEY: No, I agree. Once you prime the pump it's a good idea. I would just be concerned that you wouldn't get other people continually in there. MR. BAILEY: If you don't have T-1 available today, it's not very profitable. Why don't we just say that it's the intent that companies not use this subsidy to subsidize entrance into the non-health care and other fields, and that the Joint Board will have some mechanism to put -- MR. SPACEK: You can do that for the service itself, but for the backbone you really can't. MR. LAWLER: You want it to -- MR. SPACEK: I mean, I think it would be great if you find some for-profit companies out there so you could repay this back. That would be better. MR. LAWLER: I think we are talking about utility accounting and how the hell you recover the money, not anything of any significance here. But one more. MR. ENGLAND: To the extent you are nonprofit and you sell services to businesses, for-profit business, the revenue that you are getting from them, unless you are subsidizing them, it better be including depreciation of the equipment. And to the extent that you are charging a fee that would allow you to recover depreciation, that ought to be going into this Universal Service Fund, whether you are a nonprofit or not. Otherwise, if you charge a market rate, you are getting money that ought to get plowed back in. I think revenue is what you want to look at, not -- I mean, I don't see how you can look at anything else but revenue. MR. SANDERS: I never thought I would be in agreement with you. (Laughter.) MR. LAWLER: Well, today is a milestone for someone. Can I suggest this? Can we move along? I really do think what we are talking about is how utilities are regulated in this country, you know, across the board. I didn't like in law school, and I still don't, if there is -- MR. SPACEK: The point is here let's -- the mechanism is going to be up to the FCC or the Joint Board to figure out what the right -- you know, the details of that. MR. LAWLER: And we have a concept which is you want to pay back something that we are not going to describe in any detail. (Laughter.) MR. LAWLER: All right, with that can we move along to recommendation of the next one, advanced services on the bottom of page 3, top of page 4. Tom. MR. SPACEK: Advanced services, the idea with advanced services is if they don't get subsidized, they do maybe over time as, you know, something gets cheaper, and in the review of the minimal package something gets advanced today is not considered advanced in the future. Okay, but for today the advanced services are not subsidized, but the FCC is supposed to come up with some competitively neutral rules that hopefully would say if somebody is going to put advanced services out there in these rural areas, that at least they would do it in some fair way. That will be a challenge for the FCC to figure out what those rules are. We do define what some of these advanced services are. For example, it's like the same stuff in the marketbasket, but with no delays. You know, so you are talking about real high band widths, for example, or in the emergency case situation it's talking about, you know, real time video from the helicopter and so forth. So those are the kinds of things that require a lot more that don't get subsidized. And I guess that all we are recommending here, I mean, our guess is that nobody -- I mean, even with competitively neutral rules early on, nobody is going to be rushing to put these, you know, real high services out there. If they do, fine. But the idea is that to recommend that in these biennial or one year or three year reviews, whatever they may be, that these what are advanced services today get very carefully looked at with respect to new technologies that are coming along, or reduced cost of exiting technology and so forth, so that, you know, we don't -- we do get -- so that an increasing set of capabilities out there over time. That's what the -- MR. LAWLER: Let's hold on the second one. Is there any comments, discussion, disagreements, agreement? MS. CONNORS: I just have a question. Is there any reason why we view this physician consultation and physician/patient interaction? I would bet a lot of those consultations would be other health providers to physicians. MR. SPACEK: It probably should say, "For example" here. I mean, we tried to give an example of what would be more capable than what we're saying before, and I don't think we need to list the whole marketbasket again. But you are right, the way it's worded it sounds like it's a couple specific things, and those would be just be examples. MR. LAWLER: Did you, I'm sure, was your comment that this ought not be physician to physician, it ought to be health care professional to health care profession? MS. CONNORS; Health care professional, or just for health care professional connotation. MR. LAWLER: Tom missed your point. MR. SPACEK: I missed your point. MS. CONNORS: Yes. Well, putting it in as examples may be all right, but I would bet like in a lot of rural areas it's not going to be physician to physical. It would be the other health care providers too. MR. LAWLER: Yes. We ought to do both things actually, yes. Any others? Somebody else had their hand up. I'm not encouraging it but -- (Laughter.) MR. BRICK: Just a fast one. Down here with the number, the 1.544, maybe it ought to say service indications beyond. MR. LAWLER: It should, it should. And then down below there is another grammatical fix MR. SPACEK: It definitely has to say "beyond." We just didn't predict the outcome. (Laughter.) MR. BRICK: That's right. I understand it. MR. LAWLER: Anything else there? Okay, Tom, the next bullet. MR. SPACEK: Okay, the next bullet was here because we were asked to address this issue of state networks and how they relate to all this. And there is lots of them but we took, you know, two that may be extremes, at least, from an economic perspective on how they are handled. And just -- and we just gave them as examples actually. I mean, North Carolina has a statewide network that's, you know, a very high capacity and it could certainly lead to advanced services more quickly than a state that didn't have such. Okay, Iowa did the same sort of thing. The concern here, and the recommendation is that the providers of the -- let's see, of this guidance with competitively mutual rule for advanced services should be aimed and encouraging competition from private sector firms. And in order not to discourage competition the competitively mutual rule should ensure that government subsidized networks are not used to provide commercial services in competition with the private sector. So the whole idea there is that if you want another company to come in and you have -- you know, if you try to -- for advanced service and you try to spur on competition, and you have a government subsidized network, nobody else is -- you know, you can use that. But if you are competing with the private sector using that, nobody else is going to come in to try to to price a service that's going to be underpriced by the government. So the footnote to building these things, it's just competitively mutual rules is all it's saying should be aware of this situation, and try to do it competitive, as I assume that the word "competitive mutual rule" is supposed to be. MR. WATERS: I have got a question. I'm Bob Waters. I have got a question on that point, because at least from the provider's side it would seem to me that their interest, and I think one of the goals of this is to get, you know, health care providers access to the communication system as inexpensively as they can provide access in those rural areas. And it seems like we are getting involved in another issue here, which is concern about whether the states have erected their own structure and what, you know, how that might impact in terms of telephone companies' competitiveness in those areas. I don't know that we need to address this point. I'm not sure how it relates to the mission of this group. Maybe somebody can explain that to me, in terms of what -- I am just saying like the Iowa example where they build out a system. MR. SPACEK: Okay, the idea here was to say, it was, you know, specific questions that was asked of the infrastructure committee to say how do state networks like this relate to the provision of telemedicine, does it help or hurt or whatever. So that's sort of the segu‚ into why it's being addressed. The idea is that there is no -- there is no intent of this statement to say what the state's rights are or what the state's rights are not to build their own infrastructure with whatever money they want. The only intent here is to say that in the advanced services section of this, which we were also asked to comment on in the report, to talk about the competitively neutral rules that the FCC is supposed to provide for telecom carriers. MR. WATERS: But it's almost like the discussion we just had. We are looking for ways to reduce the costs associated with subsidizing private health care institutions to get access to rural areas. We had a long discussion about we ought to recover some of the costs associated with private businesses that might build on that network. In a situation where a state had developed its own structure, and I think most of the states that have are not allowing private access for some of the same reasons, but that's a local battle that's being fought. But let's say they would decide, hey, we have built this out and we made it available to educational institutions and health care institutions, and we also want to reduce the costs associated with those health care and educational institutions accessing the network, so we want to make the same facility available to the private sector. Why do we want to get into that? It's almost flipping around in a different direction than what we just talked about. I just think that's an issue for -- MR. SPACEK: I don't feel it's slipping around. It isn't inconsistent because in one case we're coming back. This is just recommending to the FCC that when they establish competitively neutral rules they be careful, and the be careful is that you want competitively mutual rules that will allow competitors to compete and encourage that as opposed to the potential, and with us recommending that they look at this, but the potential for coming up with rules that would actually discourage competition. MR. LAWLER: Tom, at the risk of causing more discussion here, but the last sentence really says more than that. It says, "The FCC in its competitively neutral rules should ensure that government subsidized networks are not used by commercial service." It's saying don't do this. MR. WATERS: Right. MR. SPACEK: Okay. MR. LAWLER: And I guess I'm -- in fact, I would have to go back and look at what the law said. I'm not sure why we are telling them as a health care telemedicine group, why we are telling them what they should do with respect to advanced state funded, state-owned advanced telecommunication networks. I mean, if we are restating competition is good, which as I recall is in the act in several places, that's fine. But this is saying more than that. It's saying, you know, don't let the states do it. MR. TANGALOS: The great State of Iowa would like to respond. (Laughter.) MR. LAWLER: Sorry. MR. KIENZLE: Well, again, it's one of these deals where you can't have it both ways. In 1987, the State of Iowa could offer an RFP process a statewide fiber optic network that they could not get using our tried and true and, you know, competitive mechanisms. So it went ahead and built it, and then went on to define what is in the state's best interest from an access standpoint. And so this language would, I think, ask to have it both ways. Okay, you get it built the best way you can but then at the same time don't use it for things that the state finds in its best interest. MR. SPACEK: But there certainly were mechanisms like in North Carolina where they found a cooperative arrangement to be able to create a state infrastructure. MR. KIENZLE: Well, in actual fact in Iowa, when I set up the site, I used the Iowa communications network, and I ran circuits from the private sector. So it is in fact a private and public venture in the sense that in order for me to do something in Iowa City that shows up in Peasaguah, Iowa, requires an accommodation of the Iowa telecommunications network and tail circuits I ran from both sides from U.S. West or whoever happened to be the provider. MR. MAXWELL: One of the questions under that circumstance if GM came to you or to the Iowa network manager and said, "I want to have a statewide network to link my plants and say my dealerships," is the state network able to offer that? MR. KIENZLE: Not currently. MR. WATERS: Yes. Currently, and Mike would know it too, but currently the State of Iowa only permits access to certain types of providers, which actually very much mimics this. It's educational institutions, the community colleges and health care institutions. What I don't know is -- and so right now it's not available, but I don't know that at the federal level we want to constrain what states can do in that regard. It might be that at some point in the future Iowa would decide it would want to open that up, and it's a battle they will have to have with their own phone companies, and maybe they will sell off the network to the private phone companies. I mean, there is a lot of things that could happen out there. But I just don't see that if our -- it just seemed to me that this was a non sequitur to everything else we were doing. MR. LAWLER: Maybe this resolves it, maybe this is a different point, but the last sentence really says something more than you should have a competitive network. It says, government, you may not compete with the private sector. And if Iowa says we've got excess capacity, the only thing we can do with it is open it up to General Motors, that's competition. It's not -- you know, you can't compete. It is saying, you know, somebody says this is what it costs, this is -- you know, we will even build in a profit for the State of Iowa, that's competition. This is saying you can't do it even if it is competition. MR. SPACEK: But that's competition with the private sector. MR. LAWLER: Yes. MR. SPACEK: Using a subsidized network, which means you can charge lower than the -- MR. LAWLER: But that's an entirely different -- MR. SPACEK: We don't need to give competitive, we don't need to give competitively neutral guidelines to the FCC. So we don't need this point. However, I think, you know, personal opinion is that we should give them rules, you know, some guidance with respect to -- MR. LAWLER: I don't have any problem, for example, saying that there ought to be some competitively neutral. I think this says more than competitively neutral. I think it says you can't compete. MR. WATERS: Yes. In fact, it's interesting -- I could easily see what's going on in this area will actually, it's not inconceivable that the private sector could be more competitive for some of the communities in providing the services. It may actually force the ICN to drop its rates. MR. KIENZLE: The ICN does not stymied development of fiber optic networks in the State of Iowa. In fact, a lot of the competition in around areas of the state, more along the whole communities and final mile kinds of things that the ICN doesn't have rates. MR. SPACEK: I think there is enough in the media that maybe we should drop this point. One of the longer run issues with respect to this is when you look at it in the large as opposed to, you know, in the small of this particular state network or local government's network or something of that sort, you discourage the development of a national information infrastructure in the sense that you get, you have firm -- private sector firms that will not go to a particular rural community or other community to compete because they know there is a network out there that was subsidized with government funds and undercut their price. Now, in the small, it's a great idea. If I was a local school district and I had excess capacity, I would want to sell it to the drugstore or anybody else to make up my, you know, pay for maintenance fees and stuff like that. So now you have every community or whatever becoming a telephone company, and I don't think that whole idea is good for the country, and you stifle the overall development of an NII, which this morning is what we all wanted to create in the sense of being able to have telemedicine go to anybody in the country or use their applications and so forth. So this sort of stifles that. MR. LAWLER: But, Tom, I think there is probably a word that we could come up with to solve all these concerns. I mean, take Iowa, nobody wanted to build it. They built it. They then have a need. They have got excess capacity, they have a need. They didn't build it with the intention of undercutting somebody else. They built it because nobody else would do it. And now to say to them you can't compete, meaning that you can't even play in the game, that's not fair either. They put money into it. You know, the network is there. You tell them they have to sell it. MR. KIENZLE: We looked at the issue of selling it just because it is -- continues to be a contentious issue. MR. LAWLER: Right. MR. KIENZLE: What we found was we couldn't -- we couldn't because it is an ad hoc mixture of federal, state, all kinds of people have right of way, they have money in it, so we decided to continue as we are, and kind of go with the flow. But you have to go back to first principles as to why we did it. MR. LAWLER: I mean, for example, if the -- my only objection to this is the last sentence. The rest of the bullet and competitive neutral rules, all the rest of it is we want competition, we want, you know, a fair fight. But I don't think the last sentence does that. Bill? MR. BAILEY: I don't know what you do with the existing circumstances, and the circumstance that I am familiar with in Springfield, Missouri, the city owned a utility company that provides electric throughout the city, owned its own fiber network, and it put it in before control mechanism, and it is now reselling that in competition with telecommunication providers in that area. The bottom line is we may not install more fiber in Springfield because we can't compete with them. So in the long run, they are going to damage the availability of the competitors in their area by doing what they are doing. And I think the -- from my standpoint, either it's a public good or it's not a public good. And going forward you shouldn't be stimulating public networks in the future. Now, that doesn't say what you do with existing ones. I don't know. But if you decide that competition is the way to go, then you shouldn't have future public networks being created. Maybe it doesn't belong here but. MR. KIENZLE: Well, again, there is a lack -- one of the issues is resale, you know, and we are really not talking about resale in the state of Iowa. It's really used for education and other public issues, and the actual number of purchasers is relatively small. MS. DEMERS: I just want to comment as a state legislator. Most states are hurting for money. There is a lot of movement of federal programs on the state levels, and I can guarantee you no state is going to get into the venture of investing millions of dollars unless that's the only way that it can be done, or it can be done significantly cheaper without subsidies. I mean, we're not going to invest millions of dollars in order to beat out competitive private company. That just doesn't make one bit of sense. So I object to the last sentence because the only way states will get into it is basically if in fact they can do it cheaper without subsidies. MR. SPACEK: I -- yes, any private -- I would say anybody, state government, the for-profit company, anybody who wants to build a private network because their economic study or whatever says that it's cheaper to do that, more power to them. Let them do it, okay. The point is that if they do it, and they use public funds to build that network, then you don't let that network compete for services to businesses and so forth. That's the bottom line. MS. DEMERS: Why not? MR. SPACEK: Because -- MS. DEMERS: The private companies are going to use public funds. MR. SPACEK: No, using -- MS. DEMERS: They get a level playing field. MS. PUSKIN: This is all subsidized. MR. WATERS: If the private companies can get public funds, why can't the public companies get private funds? MR. BAILEY: What public funds -- MR. WATERS: I am kidding. (Simultaneous conversation.) MR. WATERS: Believe me, this isn't public funds they are getting. It's monies from private companies. MR. SPACEK: Well -- MR. LAWLER: All money starts in the same place. MR. BAILEY: It's a tax any way you look at it. MR. SPACEK: Yes, but the idea of this universal service business is not because there is a bunch of telcos out there who are trying to make a whole bunch of profit and they said, "Let's have universal service and let's got the rural areas," okay? So, you know, don't confuse the proffered opportunities here. MR. LAWLER: But, Tom, the other point is -- MR. SANDERS: Back in Texas they have done exactly that. In fact, the telcos were the ones who lobbied for a senate bill, I think it's 2124 that assesses them $150 million a year for the next 10 years, and they were the biggest lobbying group to get that bill passed because they recognize that once that infrastructure was laid, that over the years the amount of hits on their system by users would be more than enough to pay them back for those infrastructure costs. They went through that rationale, and they came up with a business plan that in fact it would be good for them to tax. MR. LAWLER: Let me just trying to -- Tom, you react to this. Does this bullet do any good from your perspective without that last sentence? MR. SPACEK: Yeah, it's certainly not strong, but the next to the last sentence certainly says you should come up with things to encourage competition. MR. LAWLER: Which everyone agrees with. MR. SPACEK: And if the FCC -- MR. LAWLER: I think we are on agreement on that. MR. SPACEK: If the FCC agrees with the last bullet, they will insert that themselves in their own recommendation without us telling them. And I believe that the FCC and many U.S. government agencies actually do agree with the last bullet. MR. LAWLER: Can we agree to drop the last sentence? MR. SPACEK: Sure. MR. LAWLER: Done. Next bullet or next -- this is alternative infrastructure? MR. SPACEK: Yes. The whole idea of the next bullet is that we won't be technologically specific, number one, but your recommendation says however it best gets done is the way it gets done regardless of technology. But even more than that, that the chances of us getting heterogeneous technologies out -- I'm sorry -- homogeneous technologies out here in the U.S. is really slim, that all over the place we will all get ATM, or we will all have ISDN or something like that. It just never going to happen. Maybe a lot of some of those things. So since that's the case, we want to make sure that the FCC establishes policies that at least encourages interconnection standards for interoperability among networks with heterogeneous technologies. There is no laws right now or things that actually encourage that, so we are just encouraging the Joint Board and the FCC to do that. The next two sentences give some potential guidance of what might do that well. Okay, the internet protocol, I am not calling it the internet because it may be the internet and it may be the way it evolves a little differently from the way it is today or so forth. But the internet protocol is a strong standard for such -- a strong candidate for such a standard because of the fact it's just about the only standard out there in use that allows heterogeneous networks to talk to each other. That's the whole idea of it. Okay, so we are giving guidance to the FCC to say, hey, we think you should push that or encourage that. And similarly, using that standard over various technologies like ATM, or any other technologies, over-frame relay, over whatever else is also a way that allows differing technologies to be built, and we are not pushing one or the other, whatever people think should get built, and using IPO allows those technologies to also work together. So that's the bottom line of the recommendation. The missing link here is I think we should add what we were talking about earlier, about we should address the issue here -- it seems like this is the most appropriate place -- of the transition from, you know, the existing technologies into a future interoperable technologies, and shooting towards a national information infrastructure that meets the goals where, you know, all these telemedicine and education applications can all kind of work together over the same network, and meet some of the goals we were discussing this morning. End of bullet. MR. LAWLER: Any discussion, disagreement, agreements? No hands. Bravo. Oh. MR. MAXWELL: Just I'm sure this is something that you meant to do. MR. SPACEK: We're supposed to give you guidance. MR. MAXWELL: Right, right. (Laughter.) MR. MAXWELL: Just inadvertently, it's cellular and other wireless technologies, I would assume you mean because it could be PCS, it could be other -- MR. SPACEK: Yes. Yes. And other wireless technologies. MR. MAXWELL: And technically ask people to kind of keep in their minds that this question of interoperability may be another things we talk about in terms of clearinghouse or ways or vehicles for doing this because there may be things that the committee wants to talk about. MR. LAWLER: The next bullet, well, it speaks for itself. Find a partnership if you can find one. (Laughter.) UNIDENTIFIED SPEAKER: What did you do with the next one? MR. LAWLER: We're done. All right, I don't remember whether this next one here was yours or Tom's. MR. SPACEK: Some combination. MR. TANGALOS: It's a combination. MR. LAWLER: Well, whoever wants to speak. MR. SPACEK: Let Eric. MR. TANGALOS: Well, you can read the bullet. We stopped short of making a recommendation with regards to too strict standards because we heard from both sides that the issue that too strict standards was going to stifle development of new technologies and the development of the protocols, et cetera. And so we were torn between saying these are the minimis that we have to operate on versus these are where we want you to go, and then no one is going to develop proprietary stuff that takes us any further. And so it's kind of a weak recommendation with regards to architecture. But the struggle that we had was indeed we couldn't make up our mind hearing from both sides of the issue whether proprietary systems should be allowed to go on their own, which in some peoples' mind would accelerate the development of programs and systems, versus setting standards that would at least let everybody have interoperability but might take you to a low common denominator, and that's the essence of - - I think that's the essence of this particular bullet. MR. LAWLER: Eric, and this is not disagreement with it, can we make this more -- is there anything we can say which makes this more in the form of a recommendation to the FCC that they should -- MR. TANGALOS: Well, one piece that came out in our discussion and it's not in here, was that perhaps the FCC would like to serve as the foundation for standards discussion, much like the American College of Radiology has done for only -- only Diacum has been able, only radiology has been able to carry on a high level discussion that's gotten both provider community and the supplier involved in this. All the other medical applications, 25 of them, just don't have the size, the numbers to do that. If you wanted to make a recommendation, it might be along those lines, that the FCC would take -- UNIDENTIFIED SPEAKER: When you say 25 other applications, you're talking about -- MR. TANGALOS: Twenty-five other specialties. We are not talking about anything that would -- well maybe we are talking about things that -- UNIDENTIFIED SPEAKER: I believe we are if we are talking about this if it includes not all medical applications, but it include veterinary medicine -- so it goes beyond it. That's a recent development and something that may not be widely known. But in addition to that problem, Diacum would be moved as an ANCI standard for application of the standards. It's expanded out much beyond radiology. MS. PUSKIN: I have an objection to that being placed in the FCC. I think that -- I think there is a real need for standard development, and it goes multi levels. We are talking about this because we are talking about producing a report to Congress in which we have to write about standard development. And I think the issue is that obviously we need to create a forum that may help promote better communication between the specialty societies and the manufacturers. But I think there may be better venues for that, and I think -- MR. LAWLER: Well, Dena, without treading on the perilous territory of which government agency does what -- MS. PUSKIN: I think that's a -- that's why I was going to suggest that -- MR. LAWLER: We can certainly suggest that the FCC ought to play a role along with other appropriate government agencies, but make sure that it gets done is the bottom line. MS. PUSKIN: I think defining the need and suggesting that it need to get done as opposed to suggesting at this point in time the venue, because there will be a report -- MR. LAWLER: Well, we should certainly suggest to the FCC, the body that we are reporting to, that they ought to participate in seeing that this happens, whether they are a lead agency or whatever role they play, not our job. But we are reporting to them, we are giving them guidance. They do have a role in this. MS. PUSKIN: Oh, absolutely. MR. LAWLER: Whatever it is, go see that it gets done. We don't really care who takes the lead. Is that a fair characterization? MS. PUSKIN: I think that's fair. UNIDENTIFIED SPEAKER: As long as it gets done. MR. LAWLER: Well, so is every other part of this. MS. PUSKIN: Yes, right. UNIDENTIFIED SPEAKER: To a certain extent, I think it's being done under the auspices of ANCI. MR. LAWLER: If it's being then, then the FCC will have succeeded marvelously riding the coat tails of success. But in the event that it's not, let us urge all deliberate speed. All right, the next one is a finding really, and I forget again whether this was Tom or Eric's. MR. TANGALOS: This is the follow up of that particular part, that indeed, you know, when we look at the act it doesn't really get into some of these particular issues with regards to what we have to have in terms of equipment. But when we do look at equipment, it's going to cost -- equipment costs are going to be the same whether you're in the city or in a rural area, and so we didn't think it was a particularly big issue, this part of it. MR. LAWLER: Right. But there is the suggestion here which, you know, we are perfectly capable of making, I guess, but it seems of a different sort. That what we are suggesting here is that maybe there ought to be a mechanism for a subsidy for equipment. Is that wrong? MS. PUSKIN: There is a lot of subsidy out there already under different auspices for equipment. I am not sure that you want to really get into that. MR. TANGALOS: I don't think we have really said that. MS. PUSKIN: I mean, there is a whole lot of subsidy out there one way or another for equipment. And it actually turns out that the equipment, if you look at the systems, it's not the major barrier to implementing these systems. It's been the ongoing operational costs that's been the major issue. MR. LAWLER: Well, if it isn't, I'm lost as to what we are saying if we're not saying that. MR. TANGALOS: Well, we can rewrite this, I guess. It's, again, a finding rather than a recommendation. MR. LAWLER: Right. MR. TANGALOS: So we are not in big trouble. I think the simplest thing to say is that equipment costs haven't been the barrier, aren't the barrier, and that indeed subsidy probably is not appropriate. MR. LAWLER: Okay, I got it. MR. TANGALOS: There is no difference between the cost in the urban or rural. MR. LAWLER: Right. Just the truck to get it there. All right, financial incentives. And, Tom, I think this is back to you. MR. SPACEK: Okay. Yes, actually the first one Eric covered this morning in one of your comments actually. But what the idea here is that in the difference between the urban and rural rates, which is what we are recommending, and actually I think what the act calls for, that the health care provider who is asking for the T-1 line or whatever else they would be billed under this scenario at a lower rate. Okay, they would be billed the discounted rate. And then the sum of all those discounts, you know, the difference would be given by the FCC to the telecom provider to make up the difference, okay. There were just two alternatives we looked at. There was that alternative and the other alternative was every time a health care provider used the service that the Universal Service Fund and the FCC would provide, you know, keep providing money every month or whatever to the provider for the use of that service. And we after talking about it for awhile, we decided that both of these were just about equivalent, and the latter was much more costly and harder to maintain, and therefore would add to cost. The reason they are equivalent is because the telecom provider is not deciding what to do here at all. It's totally market demand. The only things that are getting subsidized are the services as requested by the health care provider. So the demand is identical. It's just a matter of how do you give the subsidy out. MR. LAWLER: First, any -- we have talked about this already, but is there any other further comment on it, just how it works mechanically? MR. SPACEK: Okay, the next -- oh, the next bullet actually -- well, you can read it. MR. LAWLER: It says be fair. MR. SPACEK: It doesn't need a lot of explanation in that area. MR. LAWLER: Any comment on the second bullet? The third one. MR. SPACEK: You can just read the third one too. MR. LAWLER: Chuck? MR. HOLUM: I had some concern as the lack of detail in how the comparable rate is calculated. It sounds like a good ground for fights. MR. LAWLER: We wouldn't want to miss one. MR. SPACEK: In a recommendation later we are going to say that the FCC do some studies to figure that out. We don't give them the details of how to do it. But, you know, I mean, in the sense they have to -- they have to figure that out. I don't know what to tell them. I mean, you know, we do have a foot note in here saying that we recognize that, you know, things vary from, you know, from state to state today, and prices are different and all that stuff. But you know, at the end we just sort of recommend that they do some studies to figure that out. MR. LAWLER: But Chuck's point is correct. MR. SPACEK: Excuse me? MR. LAWLER: We don't say here is how you should do this. MR. SPACEK: Right. MR. LAWLER: Or we don't get into it. MR. SPACEK: Right. MR. LAWLER: And, frankly, I'm not -- I mean, there are 20 hard parts of this but what's the comparable urban rate, you know. MR. SPACEK: Yes. MR. LAWLER: We are wonderful and smart but I don't know how we figure that out, and I know the Joint Board people and others are looking at it, and I guess our decision was we didn't have any particular expertise in that area and didn't get into it. You're right, it's a ground for disagreement. MR. LORAN: I just have one quick point here or area of concern. Now, are we talking about the total cost of -- let's say T-1 if that's what we decided to do -- are we talking about the total costs or are we talking about the costs per mile? Because I mean, that was brought up, and that's a major area for us, you know, like the T-1s would go hundreds of miles. MR. SPACEK: It's whatever -- it's whatever states through their Public Utility Commission with guidance from the FCC in the future or whatever would need to charge as the normal service cost, service price for that service in the rural area versus what, you know, somebody figures out that this cost in some urban area; whether it needs to be in the same state or the closest urban area, whatever. MR. LAWLER: I think the law says -- MR. SPACEK: So, you know, if it's mileage dependent or not, whatever, that's just base don what tariffs are and how they want to do the study. MR. LAWLER: But I think, Tom, and tell me if this is a restatement of your question, I am out in -- you pick the rural area, wherever your clinics are. MR. LORAN: Colorado. MR. LAWLER: Colorado. And I have a distance sensitive T-1 rate that is, you know, $3,000 a month or whatever it is, and in Denver it's, I don't know, $1,000 a month. MR. LORAN: Or approximately 396. MR. LAWLER: Approximately 396, and I guess this is -- I have the same question. The discounted rate that they are getting is the $396. They are getting the Denver rate. MR. LORAN: I crunched all kinds of statistics. My cost per mile is substantially less in the rural area than in the urban area. However, if I look at what the cost of connecting that urban clinic is, it's 10 times as expensive because my distance is well over 10 times the distance. So this is a very major point to me, whether I'm going to be paying $396 a month or am I going to be paying $3100 a month. MR. SPACEK: The intent is to pay the -- the intent is to pay what they pay in an urban area. MS. PUSKIN: So do you want distance-sensitive rates? Is that what you want? MR. SPACEK: No, I don't think we -- I don't think we can specify whether rates are distance-sensitive or not distance-sensitive because I don't think we should be specifying tariff structures or anything. MR. LAWLER: Okay, but you are saying something. By definition, the urban rate implies, if nothing else, that you are not going 1,000 miles or 500 miles. MR. SPACEK: Right. MR. HOLUM: The whole point of this, it seems to me, is to make up for the distance. MR. LAWLER: Right. MR. HOLUM: Therefore, how can you have a distance-sensitive rate? MR. LAWLER: But I think Tom is saying we don't want to say that but in fact we are accomplishing the same thing. MR. SPACEK: Yes. MR. BAILEY: But it can be very complicated because you may have an urban area. MR. LAWLER: That's right. MR. BAILEY: I mean, an urban area may be 50 - 60 miles across. That's longer than some other -- so, I mean, what is an urban rate? I don't know. MR. LAWLER: Right. MR. BAILEY: But I think that's obvious is that, to the extent competition creates price differentials between urban and rural that don't exist today, that needs to be addressed. I suspect that the FCC, in what you recommend on page 7 here, has to define what is an urban rate. MR. LAWLER: Right. MR. BAILEY: And I don't know. I don't think that it's an easy answer. I don't think you can say that you're going to force everybody to do distance-sensitive rates because face it, there is a cost relationship between distance and cost. MR. LAWLER: Cindy? MS. TRUTANIC: The thing that is killing some of these rural networks -- can you hear me? MR. LAWLER: Yes. MS. TRUTANIC: Is the distance-sensitive rates. You know, a lot of Dena's projects in eastern Montana and Oregon and some of these other projects, they tell us that what's killing them is not the cost of the equipment. It is a combination of the distance that they have to travel and the rates they have to pay for the distance, in addition to having to pay for capacity that they are not even getting, like having to pay for a full T capacity when they are getting a quarter T. And I guess the intent was that part of the subsidy from the Universal Service Fund would help remove that issue, which is the primary issue for real rural telemedicine networks. MR. LAWLER: I mean, just for -- let's go back to Colorado. I don't know how many urban areas there are in Colorado, but there is at least one, and say there are a couple and say the methodology is, you know, you take an average. I don't know how it will be done. But say you take the three or four urban areas in Colorado, figure out what the T-1 rate is. Some of them may be 60 miles across. You may have a rate for them. But you come up with what that number is, and whatever it is is whatever the rural people get. MR. SPACEK: Right. And in the rural area if the state PUC or whatever decides that the normal rural rate for businesses -- nothing to do with this thing, you know, with health care -- is distance-sensitive, and would charge so much, that would just mean that differential is a lot bigger. MR. LAWLER: Right. MR. SPACEK: More money comes out of the Universal Service Fund. The intent is to overcome this -- MR. LAWLER: But I think the answer to your question is, whatever words we use, you get the urban rate in the fact that it is not traveling a great distance, no matter how many miles your network is traveling. Chuck? MR. HOLUM: I know we don't want to get into cost calculations, and precise applications of how you do this. On the other hand, we are supposed to be giving the Joint Board some guidance on how this is supposed to work. If you don't give them some guidance on this, who is? MS. TRUTANIC: Can I just say that -- MR. LAWLER: But let me just -- Chuck, what you are saying here, this is a question. Are you saying here that what we need to do is be more specific about the general approach in calculating what the comparable rate is? MR. HOLUM: I think we should say as much as we can without coming up with a formula. MR. LAWLER: Right. MR. HOLUM: I think we should say, for instance, that rates should not be mileage-sensitive. MS. TRUTANIC: That's what I was about to say. MR. LAWLER: Mileage-sensitive. MR. HOLUM: Distance-sensitive. MR. SPACEK: I don't think we can say that. I mean, we are telling state PUCs what they can do and can't do and all that. But you come out -- the way it's worded, or the intent, maybe the wording isn't clear, and that could be clear. The bottom line comes out to be the same. The bottom line is -- MR. SANDERS: We're just making a recommendation, Tom? MR. SPACEK: Excuse me? MR. SANDERS: We're just making a recommendation. They can choose to take the recommendation or not. MR. SPACEK: Okay, I -- MR. SANDERS: But I think we need to determine as a group whether or not we feel that's the strong message to provide, and I think it is, and I think there are people here who have worked in the rural areas think it's the most critical message to provide because these rural hospitals, are not going to use telemedicine if their rate is going to be distance-sensitive. MR. SPACEK: But we're -- I think Greg mentioned this before, I think we have covered that, and you're going to get the urban rate in this situation. MR. SANDERS: But we just want to make sure that they understand that. MR. LAWLER: Let's be clear about what the urban rate is -- MR. SPACEK: Right, we don't know. MR. LAWLER: -- I think is what people are saying. MR. SPACEK: Yes. Right. MS. PUSKIN: Maybe we are saying the urban rate should be distance-sensitive. I mean, the key is if you say you are going to get the urban rate, and it is reflective of a distance, it doesn't -- what everyone is saying is it doesn't do you any good. So you have got to be clear enough to say what it is that's going to do some good. And if you feel it is clear enough, but everyone else around the table doesn't see that, maybe you can help us to see why you think it's clear enough here, because I too am very confused. If the problem -- as Cindy made it very clear, there are two problems that you hear most often. You have got to buy more capacity than you need, and you have got to pay at rates that are sensitive to distance. Those are the two problems you hear. Now, we are dealing with the second problem here, and you feel it's taken care of here. But I don't think we know how it's taken care of. MR. SPACEK: Okay, this is sort of getting into if I was the FCC, what I might do mechanism as opposed to -- I might, you know, if I am trying to figure out what an urban rate is, and let's say the urban rate is distance-sensitive, and I look at the average T-1 line in the urban rate -- in the urban area is six miles long -- I'm just making all these numbers up -- then that -- you know, the typical person then in the urban area pays a six mile distance- sensitive tariff, and that's the rate that you pay. Then that's what you pay in the rural area. I mean, if I were the FCC, that's what I would do. MR. LAWLER: But that's why Tom is saying, you know, we don't want to say distance-sensitive rates because they may be distance-sensitive in, you know, your base. MR. SPACEK: But there may be more clarity needed to make it read so it will be interpreted as the way I just said it. MS. PUSKIN: Yes. MR. SPACEK: And obviously it's not worded that way because several people have -- you know, bring that up. MR. LAWLER: Yes? MR. PILLAR: Bob Pillar. I think you may want to say that you want it no higher than the highest health care comparable urban rate that applies to the state. And the reason for that is that under the construct, for example, that was just set up, you can have a distance-sensitive rate in an urban area that in fact might be a dozen miles, that will be higher than what you would pay with a 200 mile distance, and you don't want that to happen. And to complicate this further, that within urban areas, certainly in my state, New York, that depending upon how your T-1 service is configured, you will have different mileage rates. So to put it another way, you are able to get, if you have a closed network with several T-1 lines, and you were able to get a silent ring, you will pay buck less for most of your T-1 lines that if it was purely a single line back to a base without that silent ring. So there are all sorts of mileage sensitivity. We get into a morass at this level if we want to try to give any specific instructions to the FCC. MR. LAWLER: Right. MR. PILLAR: So I think that the point people want clarified that in the rural areas that certainly nobody would pay more under any construct that they might set up than the most expensive line that is comparable in an urban area. MR. SPACEK: That's almost giving too much guidance too because they may want to use some average as opposed to the most expensive. MR. LAWLER: In fact, the law contemplates an average. MR. PILLAR: -- that it can't go beyond that because I agree with you that this is yet another reason, your objection, as to why we tried to make this point and still remain pretty vague. MR. LAWLER: I mean, the law says similar services in urban areas in that state. There is no reason for us to suggest something that differs from that. I guess I am still -- Chuck, you are still not satisfied? Are you more satisfied with Tom's explanation when there is a -- MR. HOLUM: Could we say something like users shall not be penalized for the distance of their connection. MS. TRUTANIC: Why don't we just state in the sense that these are some of the pitfalls that rural networks are -- or some of the problems that they are facing with the rate structure, the current rate structure, and hopefully whatever new rate structure the Joint Board comes up with will address those. MR. LAWLER: Is there anything other than distance-sensitive that is the problem here? Because it's easy to say the rate shall be distance-sensitive only if they are distance-sensitive in the urban area, and then you get the urban area sensitivity only. MR. SPACEK: But that's implied though. MR. LAWLER: It may be implied, but I think people are looking for more comforts. MR. BAILEY: Well, I'm not sure about everybody but in our circumstance you apply so much per mile. So that if it's -- while a distance-sensitive rate in an urban area might be 10 or 12 miles, it's not that much. But if you are going out 60 or 70 miles, it's more expensive. MS. TRUTANIC: Why not state the problem and then say let's avoid it in our new rate structure, however they choose to avoid it. MR. LAWLER: Right. MR BAILEY: Well, I have an objection to the use of the word "rate structure," because I don't think we want to tell them how they have to charge for rates. They just want to know what type of subsidy you are trying to get. MR. LAWLER: Right. I mean, I agree we have a definitional problem here, but I am not sure there is any disagreement in terms of what we are trying to say. MS. PUSKIN: What's being said is that whatever subsidy is put in place, it should obviate the problems introduced by distance. MR. BAILEY: Well, no. MS. PUSKIN: Is that what you are saying? MR. BAILEY: No, let me clarify that. It should obviate the differences between rural and urban applications created by distance. MS. PUSKIN: Okay, that's fine. MS. TRUTANIC: Ditto. MR. BAILEY: Because you may still have distance- sensitive rates in an urban area. MR. LAWLER: Right. MR. BAILEY: As somebody suggested awhile ago, you can come up with the average rate in the area and then nobody in the state pays more than that, and that may be a solution. MS. PUSKIN: There is another problem which Bill has pointed out just now, and that is, I remember when I first reviewed this legislation, and correct me, but doesn't the legislation say between urban and rural within a state? Because the problem -- MR. LAWLER: It's a single state, yes. MS. PUSKIN: -- comes down to, and I don't know how to deal with it. This is maybe one of those things we put as another issue. But the across state problem, how it might -- where your nearest urban area is actually across the state line. It's not within the same state, and your networks for health care do not follow geopolitical boundaries. And as a result -- MR. LAWLER: But they do, and somebody correct me if this is wrong, and I do not know why they did it this way, but most of the state regulatory structures do follow the state boundaries. MS. PUSKIN: Right. MR. LAWLER: And I suspect that was the motivation in saying, yeah, we have got independent -- MR. BAILEY: There are some exceptions to that. MS. PUSKIN: But then -- MR. BAILEY: But generally speaking. MR. LAWLER: Right. MS. PUSKIN: But then that becomes an issue if you are trying to basically create what is going to be your nearest urban area or your urban area for comparability when it -- you know, what are you going to be looking at. MR. BAILEY: I don't know how you solve that problem because the nearest area of comparability might be a different state, different company, different, you know. How do they -- MS. PUSKIN: I just raise it. We can move on because you are way behind schedule, but I think it's an issue that might require some further discussion. MR. LAWLER: If I can take one second, we have a couple of the staff, state staff people for the Joint Board here, and they may be contacting individual people here. We did have a brief discussion at lunch about where they are and what their needs are, and I think the expressed a desire to talk to some people individually, especially those engaged in telemedicine around the country. So I might introduce them just so they are here and you can see them. I don't know if it's worth our doing around the room and introducing ourselves or what, and I will probably mispronounce your names so forgive me. But John Clark is here. Deb, is it Creetie, and I don't have your name? MS. GREEN: Dionne Green. MR. LAWLER: Dionne. MR. MAXWELL: And John is -- John works for the FCC, and is working with the state board members, and Deb and Dionne are working with the state staff and are the liaison with health care, and are sort of, I think, probably intensely interested in the last part of the discussion because this is a real tough issue that they are facing. MR. LAWLER: Deb, you are from Pennsylvania; is that right? MS. CREETIE: Yes, I am. It was really good that we walked in on this portion of the discussion because we have been talking about it. I just want to emphasize, to the extent that you want to make a recommendation or weigh in on these issues, it might be helpful. And you are right, the geographic boundary issue, we have been grappling with this problem as well as the other. Thanks. MR. LAWLER: Thank you. MS. CREETIE: Thanks for having us. MR. MAXWELL: Let me say we did something that maybe was -- I maybe did something that was out of line, Greg didn't, and that is, I -- MR. LAWLER: Thank you, Elliot. MR. MAXWELL: I volunteered that my experience and Lygeia's experience with the group here has been that you have been extraordinarily responsive to questions that we have had and to what we are trying to do, and offered to the state folks the opportunity to, if there were questions that they have or things where they would like some feedback from practitioners and experts in the area, that you might all be willing to respond, whether we do it electronically or telephonically. And so I went out on your behalf and said that you would be wiling to give your advice to these folks as they struggle with it. And if I was wrong, you should tell me later and not embarrass me now. But if I am not wrong, then I expect that we will continue a dialogue over the next couple of months as they try to form recommendations for the state staffs and the federal commissioners about what to do about these things. And I have found it real helpful, and I am sure they will as well. Hearing no objection. MR. BRICK: I just want to -- MR. LAWLER: Jim. MR. BRICK: -- say that's fine as long as they don't send us any attachments. (Laughter.) MR. MAXWELL: Having received one voice mail from you about meetings, I would also caution them about scheduling meetings. MR. LAWLER: Bill. MR. ENGLAND: I hope this -- maybe this is a red herring, but if there is more than one urban area in a state, this sort of subsidy could result in two rural areas that are 400 miles apart paying $400 a month, and if two major medical centers in those two urban areas want to call each other, and the urban rate is rate-sensitive, they might spend 2,000. And I don't know if there is any intent to -- MR. LAWLER: Well, I think, again, at the risk of reading the law, I think what they -- (Laughter.) MR. LAWLER: It says reasonable comparable to rate charts for similar services in urban areas in that state. And, you know, that to me means some sort of averaging kind of thing. MR. ENGLAND: No, my point is if two hospitals in the urban area wants to talk to each other, it may because they are widely separated, although they are both urban, they would not be eligible for the subsidy. MR. LAWLER: Right. MR. ENGLAND: So they might be spending a large amount and couldn't get subsidized. MR. HOLUM: Unless they are serving rural -- MR. ENGLAND: Unless they are serving rural people. MS. PUSKIN: Or undeserved, maybe, depending what happens. MR. LAWLER: But you're right. MR. HOLUM: All they need to do is get one little rural network in there. MR. LAWLER: Or a rural clinic. Tell them you want T-1 and off you go. Do we have any suggested wisdom on this? MR. SPACEK: I would just like -- the think the words that you would obviate this distance thing and then give an example is probably the best way to do it without getting into recommending rate structures. You recommend what you are trying to accomplish. MS. PUSKIN: Your objectives. MR. LAWLER: Chuck, can I volunteer you and Tom and Dena to try to come up with some language on this in short order? That if anyone else is desperate to participate, they are welcome, but smaller is better. MR. MAXWELL: There is one -- there is one interesting kind of the way this had been dealt with, distance has been dealt with in a related area. When the issue came up about comparability of new providers and competitors came in to compete with the incumbent providers and enhance services, and basic services, there was a notion that you would establish essentially a boundary, and say within a certain mileage bank, you took the same rate as the incumbent, and so you didn't have to locate right next to the incumbent central office, or it was sort of an averaging effect. One of the ways of dealing with this is to say that there is a certain distance band around services that would be assumed to be the rate for urban and rural providers equally so that you have an averaging effect, and you do it in a similar way, and just assume away the mileage problem. So there are things I think one can do to obviate that. MS. PUSKIN: Is it possible to give some examples of that? Would that make some sense? MR. SPACEK: I don't know. I think there are some examples we can give but the issue that you just brought up, I mean it seems like the FCC is sort of, you know, on top of what these different mechanisms are, and, you know, we want them to do it in a fair way. You know, we can come up with 50 different ways of doing it. MS. TRUTANIC: Well, all we have to do is take the difference between in one network, in one rural state, the difference in cost between an urban connection, considered urban connection in the state and then the difference between a center presence out to a community center, you know, 100 miles away. And it will be as much as a thousand or -- MR. LAWLER: But as I hear the real concern here it is that we be clear in a way that this is not clear that if the rate is distance-sensitive within the urban area, that's fine, but it is limited to the urban area, and it is not distance sensitive in the rural area. MR. SPACEK: Well, yes and no. You are right in the sense that the most the health care provider would pay would be whatever this distance-sensitive rate is in this urban area. The rate in the rural area might be distance- sensitive. MR. LAWLER: You are absolutely right. MR. SPACEK: But these guys don't pay it. MR. LAWLER: Right. Everybody else will pay that rural distance-sensitive rate. MR. SPACEK: They will pay the difference, and then the Universal Service Fund makes up the difference. MR. LAWLER: Right. Right. But I don't think there is any disagreement -- you know, we haven't gotten the words to say it yet, but I don't hear any disagreement on the principle we're trying to -- MR. LORAN: I'm sorry. A 15-second clarification. Let's say, for example, and these are pretty close real numbers, that it costs about 28 cents a mile to hook up an urban hospital to my central office, but let's say it costs about 26 cents, which is less, to hook up my -- 26 cents per mile to hook up a rural hospital. Are you saying that there would be a subsidy of two cents difference between them, or are we looking at the total? MR. LAWLER: You're -- well, I'm not quite sure about your -- MR. HOLUM: You're saying that if the urban hospitals are 10 miles apart, it costs $2.80? MR. LORAN: Yes. MR. HOLUM: That the connection to the rural hospital should be $2.80? MR. LORAN: And the only reason I am raising this issue, because I've crunched these numbers many, many times, and it's actually cheaper per mile -- MR. LAWLER: We got that. MR. LORAN: Just wanted to -- MR. LAWLER: Where are we here? I guess the next is the -- we've finished all three bullets. MR. SPACEK: We are on the finding. This is something that's probably goes very early in the report with the rest of the findings. Everything is not particularly in order here. It's just one of the areas that was asked to be addressed. MR. LAWLER: It's actually quite significant, but it is -- MR. SPACEK: Yeah. MR. LAWLER: -- not a recommendation. It's only, you know, this is what's going to happen. Top of page 6, I actually think we have covered the for-profit health care providers, so we are on to resell where we have a recommendation and two findings. Tom, you want to -- MR. SPACEK: Okay, yeah. It turns out that the way the for-profit one above, which is basically some -- would require new legislation or changes of some legislation. It's a real important issue. MR. LAWLER: But, Tom, as far as I'm concerned, we have done that one. MR. SPACEK: Yeah. No, I'm not covering that one. MR. LAWLER: All right. Sorry. MR. SPACEK: I am just referring back to that because the way -- the way for-profit people would be handled would be by some new legislation or by some change. MR. LAWLER: Okay. MR. SPACEK: Change in current legislation. Okay? Not by having eligible providers resell to ineligible ones, okay. So we are not saying we want to subvert the law. We are saying there is an issue. That's what the top of the page says. Somehow we want to get that issue addressed, and it's not covered by the bill. Okay, and then the resell recommendation basically, I mean, is just saying that, you know, you don't subvert the law and have eligibles resell to non-eligibles. That's it, and then there is two findings after that that are related. It just gets into -- okay, it's just two findings that lead up to the recommendation actually. MR. LAWLER: They are sort of -- it's not Tom's fault, it's my fault that we did this. They show up in the wrong place. MR. SPACEK: Yes, they should be before it instead of after it, but, you know, in general, that's the idea. These are some of the background information that leads to it. MR. MCCONNAUGHEY: Jim McConnaughey of MTIA. Would this rule out consortia? I'm more familiar with the education side where it's pretty common where elementary schools and universities and the government might all get together and realize economies by being on the same shared network. MR. LAWLER: I think the intention is clearly not, on the health care side it's actually in the seven providers consortia are specifically provided for. They are included. So you certainly could do that. And on the education and library side, I mean, I suppose we could say that that's clearly not retail, but I think that's probably clear. MR. BAILEY: It would rule out, wouldn't it, though, a for-profit institution being a member of a consortia? MR. HOLUM: Unless you could allocate the process. You could charge the not-for-profit based on this kind of rates but not give the for-profits the benefit. MR. LAWLER: I think, though, Chuck, that the act, or the law actually says the opposite. I think you get your subsidize -- you will get your infrastructure, you get your subsidy, it says you can't resell it. It doesn't say, you know, if you resell it, you have to give up part of your, if I remember correctly. MR. WATERS: This is Bob Waters. I just have a question in terms of how this might work. I am thinking in the case of let's say a rural hospital where you would have a private radiologist who would contract with the hospital to provide the services. Does that mean that private radiologists can't use the hospital telemedicine equipment, or discounted equipment? MR. LAWLER: You have raised a very good point that we have not addressed. MR. WATERS: And, see, I think in some respect diving in -- I mean, I appreciate the fact in terms of resell into, you know, GM who wants to -- or locate their credit card company or something like that out in the rural area, that's different from even trying to parse out the health care part of the equation. MR. HOLUM: Who is charging for the use of the network? MR. WATERS: What? MR. HOLUM: Is the hospital charging for the use of the network? MR. WATERS: Well, the radiologist is going to submit -- I mean, in some cases our pathologist might be reimbursing under a certain code. MR. HOLUM: But not for use of the network. The radiologist is going to charge for the radiologist service, and the hospital is going to charge for the --- MR. LAWLER: Generally, that's right. MR. WATERS: Well, I don't think that distinction is -- I think the key one is sort of defining here, you know, what is an extension of the hospital service, the presence at the hospital, because in many hospitals, I mean, the radiologist is really part of tex hospital, but it's a private physician who is contracted to provide the service to the hospital. He may work three or four different hospitals. MR. LAWLER: But why isn't that a distinction? I mean, I go to have a MRI or whatever I have done. It is the hospital's equipment. I get charged by the hospital. I also get a bill from the radiologist, which is whatever they are, under contract to the hospital. For some reason there is, you know, a telemedicine application, they are billed by the hospital, which is a not-for-profit subsidized hospital. Why isn't that a distinction between the two? MR. WATERS: Well, I think this is where it gets difficult. Then you get back into drawing in other types of health care services that are within, you know, say owned by the hospital. The hospital owns a home health service, you know. I think there is --- MR. LAWLER: But isn't that the issue that we raised earlier, that there are competitive implications from this that -- MR. WATERS: Right. MR. LAWLER: -- perhaps haven't been sufficiently considered, but we can't go back and monkey with that without simply -- MR. WATERS: And my view would be we would bring up, okay, the private side sector up to the level of what might be admittable under the current statute, rather than anyway drawing down the public side to the other end. I mean, it may be that the language of the statute would permit, you know, some other applications by the not for profit hospitals, and I think we want to permit that. I don't think we want to draw the -- MR. LAWLER: I agree with that, and I think this ought to be couched in terms of these are additional providers that you will look at, including, and you ought to look at the fact that they are -- you know, you may be creating competitive disadvantages by not allowing certain health care providers in who are doing exactly the same things, not suggesting that hospitals, you know, not cover. MR. SANDERS: I think that is very different than the non-health care end of it. MR. LAWLER: Right. MR. WATERS: Right. MR. SANDERS: But is a very important question because the majority of rural hospitals are going to be contracting telemedicine with for-profit providers at distance sites. MR. HOLUM: Sure. MR. SANDERS: And by definition you are increasing the marketplace for that for-profit radiologist as an example using a subsidized network. MR. HOLUM: But the radiologist does not make any money off the -- MR. SANDERS: Sure, he is. Sure. Oh, of course he is. MR. LAWLER: He's not charging, but for that network he would have less business. MR. SANDERS: Exactly right. MR. LAWLER: But in a way that's -- at the same time that's exactly what we want to have. That's what this is all about. If we can't do that, they can't do anything. MR. HOLUM: We don't want anybody to have service. MR. LAWLER: We want telemedicine but no services. MR. SANDERS: And, of course, the only reason they do teleradiology is that's the only thing HCFA reimburses for. MR. PILLAR: Bob Pillar. I want to get back to the thought here too because I have seen a number of these consortia starting to develop, and sometimes they are groups of not-for-profit care providers. And you have a situation where the relationship between the umbrella groups and the telecommunication provider is one or more had contract, and then they, in essence, pay a contribution to their members. This seems to me to be at least on the border of resale from one to another. And I think we will contemplate that that's not a violation here, but I think that it may require in the last paragraph some reworking of the sentence. This probably is a kind of form of resale allowable providers. MR. SPACEK: What sentence are you referring to? MR. LAWLER: This is the third sentence of the second finding under resale, is that right? "In addition"? MR. PILLAR: Yes. Where it says there is no need to resell eligible health care providers since they are all eligible. MR. LAWLER: Yes. MR. PILLAR: In fact, it's the umbrella group that will have the sale in a matter of speaking in the internal accounting among the members it will be a resale or reimbursement from the umbrella group. MR. SPACEK: I think the intent is the way it's stated in the sense that, you know, only eligible providers, according to the law, and we are recommending above maybe we want to change the law, have access to the reduced fee -- to the subsidy. Yeah, there are complications that I don't think we can solve other than letting the FCC know that there are complications in sorting and stuff like that with strange arrangements. MR. PILLAR; I would suggest that this isn't permissible. I mean, the alternative that each of the members of the consortia would have to be subfield by the provider, and then they are clearly qualified, and you don't have a resale. And I think to make people jump through that hoop -- MR. LAWLER: You lost me at least. Could you give us a brief description of your example again? MR. PILLAR: Yes. You have a trade association of health care -- not-for-profit health care providers located in several locations. They decide to buy an ATM switch and to interconnect them on the wall, and they do this with facilities through a telecommunications provider like one of the R-BOCs. The R-BOC would typically set this up and build a consortium with the umbrella trade association, who would then in turn allocate among the five members in this example. The alternative is, I guess, that you could ask the R-BOC to build each of the five, and then they quality, but that would be a -- MR. SPACEK: But they are all not for profits. MR. PILLAR: Yes. MR. SPACEK: Yes, that's a nonissue. We are not saying how it's billed. MR. PILLAR: Yes, but otherwise you have -- the way this is worded it would appear that because of this billing that there is a resale because you have the trade association, in essence, sending out a bill for so much. MR. SPACEK: But the resale is only -- okay, it's only -- it's prohibited from eligibles to noneligibles. That's the only prohibition. Ignore findings or information that leads to it in the recommendation, it doesn't say -- it just says that an eligible provider is prohibited from selling to an ineligible. MR. MAXWELL: You're talking past one another because you are -- you are talking, I think, past one another because of the way the sentence in written. I think you are agreeing with each other about the facts of it. MR. SPACEK: Okay. MR. MAXWELL: And I think we can fix that because yours is more an explanatory sentence, and you are reading it as an injunctive sentence, which we can fix this. MR. LAWLER: All I can say is you have left me in the dust. MR. SPACEK: That's all right. Me, too. MR. LAWLER: Let's work on fixing this sentence if we don't have a disagreement. MR. WATERS: In terms of my original point, I mean the two findings, I have no problem with the way they are worded. I think that's fine. I think that's consistent with the statute. But it's under the, you know, the one sentence right at the beginning that may unwittingly constrain applications that I think the act was intended to cover. I think the act intended that the radiologist be able to utilize the hospital facilities to provide telemedicine. MR. LAWLER: I haven't heard any disagreement with that. But, frankly, the sentence only restates what the act says. I don't know how we can be -- especially when the word "subversively" is in there. It's not only contrary to the act, but it's contrary to the national security. (Laughter.) MR. WATERS: Well, not the word "subversion," but I think it implicitly goes a little bit further. MR. SPACEK: It does just state what the act says. MR. MCCONNAUGHEY; Just to follow up the line of discussion here. Could there be a possibility there would be volume discounts involved? If you had this umbrella trade group that Bob mentioned, by the statement in here you would say, well, you don't want to permit them to get together. Would it be possible that there would be volume discounts that would exceed the Universal Service discount arrangement for which they would want to get together? MR. SPACEK: I don't know if I can answer that, but I suppose there could be where somebody had, you know, a good enough deal to negotiate with somebody their rates even cheaper than the discount rate. Well, go for it, you know. MR. LAWLER: But if that's the case, none of -- I mean, they are outside of this structure and they can do whatever they want or whatever the regulatory system allows them. MR. MCCONNAUGHEY: And we're saying aggregate demand, I guess we said that earlier, Coalition, buying thins like that wouldn't be discouraged. MR. LAWLER: Absolutely not. No, I would be, frankly, surprised -- MR. SPACEK: You just wouldn't get a double discount or something. You can't make profits out of your discounts. MR. LAWLER: Bill? MR. ENGLAND: We have some problems with some of the demos we're running, and we are a little worried that some of them may run afoul of this. In particular, the one we are about to start in Medicare, we explicitly are assuming that the hospitals are going to subsidize the physicians, and we talked about the fact that the hospitals may begin to get their services, their communication services less expensively. We are probably underpaying physicians with the idea that the hospitals will provide the facilities and use of the lines to the doctors, who will then bill Medicare for services, and we are not paying them quite as much as they probably would need to get from us to really deliver this if they were having to go in and buy the services at cost because we assume under our demo we are giving grants and the FCC is subsidizing the hospitals, so we want to pass that along to the doctors. MR. LAWLER: I think the only way to look at this without driving ourselves insane is pretend that we don't care what Medicare does. I mean, that this is -- you know, we are not subsidy on top of subsidy. MS. PUSKIN: Can we try some other statute? MR. ENGLAND: We have to waive STARK, for example. MR. LAWLER: All we care about, all we should care about in that situation is not the fact that it's Medicare or anything else. All we care about is if there is a -- let's assume the hospital goes and applies and says, you know, we got a network and we want to do this, and we qualify. We're not for profit, we're doing this, and we're serving people in rural area. The fact that they have, and I don't know what relationship these doctors have. They have a teleradiology network. Assuming that your worry is not a correct one, we don't care how they get reimbursed or whether you give them five cents on the dollar or $1.20 on the dollar. MR. ENGLAND: But you care if the doctors in the hospitals have a financial relationship that doctors are paying the hospital for use of their facility, for example. That's one of the things that we also going to encourage them to do. MR. LAWLER: I am not an expert on hospital/doctor relationship, but I think that happens all the time anyway outside of Medicare. MR. ENGLAND: But the rate that the hospital charges the doctor reflects, for example, the subsidy that the hospital is getting. MR. SPACEK: And my guess is nobody at the FCC or nobody else would -- MS. PUSKIN: Okay. Well, let's talk about something else. Let me just talk about the other demo problem. There is another problem. Our demos, and we talk about tying legislation in other kinds of for-profit providers. But our demos include, and we are going to have under Kasenbaum's bill actually an expansion of it, and my job is to try to harmonize federal policy guys. That's part of what I am here for. We are going to have under Kasenbaum's bill, which I think is going to pass, I think, I think, I think, we are going to have consortium that are going to be authorized, and we already fund them, that include essentially hospitals, physicians, social service agencies, not schools but other groups that it felt will be a part of the consortium that will take advantage of this infrastructure. And they may be not for profit, but they are not necessarily listed under your schools. How does that count? MR. LAWLER: I hate to say it -- MS. PUSKIN: Is that resale? MR. LAWLER: -- it doesn't count. You don't get it. I mean, if you literally have a consortia that includes people who are not eligible, you're not eligible. MS. PUSKIN: But I think that raises a question about trying to build essentially multi-use systems that are viable out there. Subsidies, which is what Mary Jo is getting at and others here, when you have one piece of federal legislation trying to encourage the essentially sharing of resources, and sharing of the infrastructure. And you have another piece saying but in fact you're prohibited from sharing it, or at least sharing the subsidy under the resale provision. MR. LAWLER: Well, but it isn't -- I mean, if you have education, library and health care providers, you are fine. But if it's outside that -- I mean, that's what the law says. MS. PUSKIN: I know, but just as we have said suggesting there may be some inadequacies in the law in terms of harmonizing public policy, I would argue that there are social service agencies and others as you're trying to provide these services, that you might want to argue need to be looked at in terms of harmonizing federal policy. MR. LAWLER: I got you. MR. WATERS: My one last comment on it and I will try to be quiet about it. But if the purpose of this section is simply to restate the statute and nothing more, then I would recommend we delete it, because it doesn't add anything to the statute. It doesn't attempt to interpret the statue. There is no need to be included in there as part of our advice. MR. SPACEK: Well, what was asked by the FCC was, was the question, try to interpret what that -- what it means, okay, and it wasn't necessarily totally clear. And the combination of the two findings and the statement is what was -- you know, our interpretation of what that meant. And so, you know, the whole idea is -- I mean, you are going to get leakage no matter what. And you are not going to come up with laws that prevent some leakage. You know, there was an issue several years ago about, you know, about the higher education community when internet became commercial still doing E-mail on the experiment backbone with the new federal. Well, heck, you know, sure. If they were just doing E-mail to somebody that wasn't really a research project, that shouldn't be on that backbone. I mean, that's a little leakage that you don't worry about, you know. It's just the basic principle that you don't want to subvert the law, and that you don't want to have eligible people, you know, intentionally reselling stuff to ineligible ones. MR. WATERS: And I think the primary leakage that you're talking about is dealt with in terms of the findings, which is going to clearly take care of private/commercial/non-health care applications to try to parse out in the not-for-profit side in terms of who goes into those eligible institutions all of the different applications that might involve private/for-profit individuals is a very sticky question that would take us many more hours of a day to really come to a good recommendation. MR. LAWLER: I'm missing something here. There is something that I am just not clicking on. I mean, the reason that this is in here and where it is is because, you know, we said, look, and this is the original motivation for it, we think physicians, you ought to look seriously at bringing physicians into this thing because so much health care is delivered in physician's offices, and, you know, it isn't only physicians. There is more than that. We've got nursing homes. We have got home health care, all of which are legitimate, but then it was -- but let's do this right up front, address it, address the whole thing. Don't find some way to say, okay, we are going to come up with a mechanism where a not-for-profit can resell, and, you know, it's in the law already. Yes, it is restated in one sentence, but it's restated in the proper place. You know, you could argue we devoted too much space to it. MR. SPACEK: And the top piece of it goes together with the bottom piece. MR. LAWLER: Right. MR. SPACEK: So there is one story. You know, the piece on the top of the page. MR. LAWLER: Right. MS. TRUTANIC: Are we going to talk about the international telemedicine? MR. LAWLER: Yes, let's move on. We have one last recommendation here, which I think we have already covered, which we are going to -- this is just the urban/rural, it's just recommending a study that we are going to try to provide a little more. Chuck, I see has been busily scribbling, so maybe we have got some additional words. The international, yes, I don't see Rick here. I don't know whether he left or not. So why don't we just get into it. I mean, the easiest way to do this is just to reach, especially in the findings, there are one, two, three, four findings that I think have been from the subgroup. Hopefully, they are without a great deal of controversy, but people should read them and speak if they have -- Cindy? MS. TRUTANIC: I just wanted to say that I think that the last recommendation in terms of the coordination among the agencies and the private sector groups that are doing international telemedicine is really needed. And whether or not it's housed at the FCC or housed at some other agency, right now there is just a lot of potential for replication of infrastructure and human resources in the international market, and there are a lot of activities that are going on internationally, some of which you may or may not be aware of, but I think this is an important recommendation. MR. LAWLER: Right. MS. PUSKIN: Can I make a comment on that, because I agree, I think it's very important. And the Joint Working Group on Telemedicine, which covers a lot of issues, the actual issue of international applications and the role of the federal government in working with the private sector is only an agenda for the working plan starting January. And I don't know whether that would be a vehicle for at least beginning this activity, but it has all the representation of federal agencies, and has the capability of pulling together that. So I don't know if that would be a mechanism, but I think it might be a start. MS. TRUTANIC: Can I just follow up? I just think that that's probably, whatever mechanism is started, I think that should include private sector representatives, whether it's the communication companies or representatives, or universities or medical facilities, because uniformly in every meeting that I go to that has something to do with international telemedicine, and it's like who is in charge, what's going on, and there may be 10 projects to St. Petersburg, Russia, that no one knows about. MS. PUSKIN: Right. And I think one way to do that is spin off a subgroup which has essentially a joint partnership with it. But it is a mechanism for doing it in which you have essentially an administrative mechanism that already has a core to it. MR. LAWLER: Right. MR. SANDERS: Just a point of information. I have just been asked by Donna Shalala's office to be the U.S. representative for B-7 nations to help us, so they are now in the planning stage of what U.S. participation will be in the international telemedicine initiatives. So obviously there are a bunch of joint -- MS. PUSKIN: Well, maybe that's the first step is to figure out -- MR. MAXWELL: It seems to me we can at least recognize what in fact is going on in this area here rather than not saying what's going on, and pointing at least some place to begin. MR. BAILEY: I have a clarifying question for myself anyway. With regard to the recommendation, we are not recommending that whatever funds, whatever come from the Joint Board, whatever happens here happens, but it's not part of the funding mechanism of the Joint Board? MR. LAWLER: No. Unless you would like to. MR. BAILEY: No. UNIDENTIFIED SPEAKER: Just a brief comment related to maybe this issue and the infrastructure issue. In addition to the debate on international telemedicine is an ongoing on, and it's obviously telemedicine is a public safety application, but people here, especially the emergency medical services, they are going to have a little smaller application or something of the service funds. MR. LAWLER: Do we have anymore comments on the international side of this? Terrific. Here is what I would like to suggest. We're done. Oh, sorry, Eric, we're not done. MR. TANGALOS: Oh, no, we're not. Remember we talked about this morning about clearinghouse stuff. MR. LAWLER: Yes, we did. MR. TANGALOS: And we talked about -- MR. LAWLER: Sorry, I -- MR. TANGALOS: -- a House bill, 2128 from Texas, the model legislation there. MR. LAWLER: Right. MR. TANGALOS: It came up a couple times. Let me just give this to you. This is what the telecom providers are required by law to do because the Texas bill specifies far more things for them to do. That indeed they have to advertise to the health care providers in the state that these are services that individuals can petition for right now. MR. LAWLER: Right. MR. TANGALOS: And so the suggestion from Steve Cotton and from around this table is should we make a recommendation even though it was not in the federal law -- MR. LAWLER: Right. MR. TANGALOS: -- that indeed somebody be required to say that these services are available, and to help people find those services and get to those services. And you will see from the attachments that are included that indeed Bell South has a full brochure that they have produced as to what services are available, how to get these services. Here we are to help get those services, et cetera. So I am fulfilling my obligation to Steve. MR. LAWLER: Any discussion, disagreement, agreement? Jay? MR. SANDERS: This is hopefully a philosophical note. I have a feeling that 20 years from now we are going to look back at what we did here in these three sessions and our report as ending up being the first step of a process that didn't simply address deficiencies that presently exist in rural communities, but in fact will have totally changed what we identify as a rural community. I really think this is going to end up being the urbanization in the good sense of the rural community. I mean, there is going to be a regrowth of rural community populations, and economics. MR. LAWLER: Somebody -- Mary Jo, did you have your hand up? MS. MACLAUGHLIN: No. I was just going to say that I think it's very important, coming from a rural state where people do not have the time to talk to each other or get to meetings to find out what's going on, I think it's of the utmost importance that we provide a clearinghouse for information for people to know what's available so they can take advantage of it. MR. LAWLER: Any disagreement with having a recommendation on a clearinghouse? No. I would be before -- if we go on long enough, there won't be anybody left so they won't get a chance to raise it. Are there things that are not in here that people think should be addressed? Have we failed to address something? No. Why don't I suggest this, what we will try to do in very short order, meaning in the next couple of days, is take this nine pages and redraft it to reflect what we did today. We will get that around to people, I guess, by fax is probably the most efficient way. And then if anyone has comments on that, brief comments on that, you know, we will work from there, but hopefully we will hit the mark and there will not be any. The hope is, and, Elliot, you correct me, or Lygeia, if this is not accurate, that the Joint Board staff and the Joint Board itself is very anxious for our input because they have a time table that they have to meet. So we want to move as quickly as we can. In terms of -- we may find a legal unofficial way for them to have available to them the comments or the recommendations that we make, but we also need to have a formal, I believe we need to have a formal report that has more than just findings and recommendations, and as soon as we get -- we finish with putting the findings and recommendations together, we will try to take the subgroup reports and, you know, the greater length and explanation is there and try to combine that in some organized fashion to reflect the background for the findings and recommendations. And, frankly, I don't know how long that will take. Hopefully, not too long. But until we get started, it's hard to tell. MS. PUSKIN: In that light, if we have comments on the subgroup reports, I assume that we should send them to the subgroup chairs with copies to Lygeia and to Elliot? MR. LAWLER: I think that's -- yes. MS. PUSKIN: Because there are some comments I think that we might have. MR. LAWLER: Absolutely. MS. PUSKIN: Depending on the redrafting of Tom's section, in particular. MR. LAWLER: Sure. MR. SPACEK: Yes, there were obviously some inaccuracies that we were able to point out and something I can fix up. MR. LAWLER: Right. And obviously they need to be changed to reflect, you know, the things that we talked about changing to day. MR. TANGALOS: and again, in the subgroup reports there are area that conflict with one another. MR. LAWLER: Right. MR. TANGALOS: Not that it's particularly bad, but our final recommendation should be a synthesis of those things, and of mutual agreement, but MTIA really pointed out to me that there were things of conflict. I'm not sure that they just shouldn't stay. MR. LAWLER: Right. MR. SPACEK: But that's actually an issue though in the following sense. I realize that, you know, the report of -- you know, the architecture committee had a lot of inputs from a lot of people, and they are all attached in the report, and there is a lot of good work, and therefore since there is a lot of different input they conflict. The only problem that I would be concerned about, unless it can be covered somehow in a cover to the report or the introduction or something, is that once this whole report becomes public, and you have these attachments which are part of the record, then people, you know, can quote from the report, and you have these conflicting things, no, I like that one. You know, the U.S. Advisory Committee on such and such said, and that will be my only concern. MR. LAWLER: Tom, shouldn't it be that -- first, we're going to have findings and recommendations, and the report itself ought to support those. I mean, we shouldn't be having findings and recommendations and then giving 15 on the other hands in the body of the report. We ought to, you know, use the examples that we have and the work that's been done to support that. That doesn't mean, however, and I am just thinking of the work that Steve Cotton did, for example, which is a survey, there is no reason that that, I don't know whether, whatever it is, an appendix, an attachment or something. You know, he did a lot of work. He got a lot of opinions. They are good opinions. They don't reflect where we came out after a lot of discussion and decision-making, but it is valuable information for people. It is not the report. It is just, you know, an appendix or. MR. SPACEK: Yes. If it's positioned appropriately land says it's a survey that was taken and used as input by the committee, yes. If it says all that, that will be fine. MS. RICCIARDI: Exactly. There is a lot of information that we shouldn't lose. MR. LAWLER: That's right. MR. MAXWELL: In that sense, those things will not be in the findings of the advisory committee -- MR. LAWLER: That's right. MR. MAXWELL: -- on the recommendations. They will be input to that, and what is officially the work will be in some way a kind of preamble to this, the findings and the recommendation, and the rest is, as they say, commentary. MR. LAWLER: Right. MR. LAWLER: Any closing? Those who are still left are anxious to go. Again, thank everyone very much. We are not done, but we're close to done. People have worked hard and I hope we are making a contribution. I think we are. MR. MAXWELL: It ain't over yet . MR. LAWLER: Right. MR. MAXWELL: We do appreciate enormously what's gone on so far. There will be more questions,m ore interaction, and so appropriate closing way of doing this when we get this all together. MR. LAWLER: Any other comments? If not, we're adjourned. (Applause.) (Whereupon, at 4:05 p.m., the advisory committee meeting was concluded.) // // // // // // // // // // // // // // // // // // // // REPORTER'S CERTIFICATE FCC DOCKET NO.: N/A CASE TITLE: ADVISORY COMMITTEE HEARING DATE: September 17, 1996 LOCATION: Washington, D.C. I hereby certify that the proceedings and evidence are contained fully and accurately on the tapes and notes reported by me at the hearing in the above case before the Federal Communications Commission. Date: _09/17/96_ _____________________________ Official Reporter Heritage Reporting Corporation 1220 "L" Street, N.W. Washington, D.C. 20005 Bonnie J. Niemann TRANSCRIBER'S CERTIFICATE I hereby certify that the proceedings and evidence were fully and accurately transcribed from the tapes and notes provided by the above named reporter in the above case before the Federal Communications Commission. Date: _09/25/96_ ______________________________ Official Transcriber Heritage Reporting Corporation Joyce Boe PROOFREADER'S CERTIFICATE I hereby certify that the transcript of the proceedings and evidence in the above referenced case that was held before the Federal Communications Commission was proofread on the date specified below. Date: _09/25/96_ ______________________________ Official Proofreader Heritage Reporting Corporation James E. Maxfield