Alaska Communications Statement on the Federal Communications Commission’s Rural Health Care Order
August 21 2019 - 4:05PM
Business Wire
Background: The Federal Communications Commission (FCC) issued
an Order on Aug. 20 that takes steps toward fixing unworkable rules
promoting telehealth in rural America by adopting new Rural Health
Care Program rules intended to clarify the process for the
distribution of limited program funds.
Leonard Steinberg, Senior Vice President, Legal, Regulatory and
Government Affairs at Alaska Communications (NASDAQ: ALSK)
commented that:
“Technology and telemedicine have assumed an
increasingly important role in health care delivery, particularly
in rural and remote areas of Alaska and the country. Broadband
plays a critical role in the delivery of telemedicine, giving
patients in rural areas high-quality health care services. We thank
the Commission for recognizing that its Rural Health Care program
rules have been problematic, and taking steps to adopt new rules
that are intended to clarify the program’s funding. In particular,
we appreciate that the Commission understood that Alaska is unique
and created sub-tiers within the program that improve the
likelihood that the benefits of this program will reach some of
America’s most remote locations. We also commend the Commission for
providing greater clarity regarding the transition for multi-year
contracts. We thank the Alaska Delegation for its continued support
of the Rural Health Care program and the significant impact it has
on the health and wellbeing of rural Alaskans.”
The Order addresses many topics as they relate to the program. A
significant item is the calculation of urban and rural rates,
summarized below:
Pursuant to the applicable federal statute,
the Rural Health Care Program funds, amongst other things, the
difference between the rural rate and the urban rate for
functionally similar services used by health care providers. Under
the new FCC rules, the FCC will fund no more than the difference
between the median urban rate in a state and the median rural rate
for the geographic tier in question in that state. The Universal
Service Administration Company (USAC) has been directed to
establish the urban rate for each state based on the median of all
of the urban rate data it reviews across all urban areas of the
state. USAC also has been directed to collect all publicly
available rural rates for functionally similar services grouped by
the geographic areas prescribed by the FCC (geographic “tiers” will
be classified as extremely rural, rural or less rural) within each
state, and determine the median rural rate for that group of rates.
The FCC agreed to create a fourth tier in Alaska due to significant
differences between extremely rural on-road and extremely rural
off-road areas.
The new rules eliminate cost-based showings
and put USAC in the position of developing a cap (the median) for
rural rates in each tier. USAC has two years to work out its
process for developing the medians in all 50 states and has hired a
consultant to advise them on updating their electronic data
systems. The new rate rules will take effect July 1, 2021. The FCC
says the new rules will remove uncertainty and reduce delay in
getting paid. The practical effect is to authorize a cap (median
rate) for rural areas that may make it difficult to serve locations
with costs in excess of the median. We will not be able to assess
the financial impact on Alaska Communications until USAC completes
its analysis.
About Alaska Communications
Alaska Communications (NASDAQ: ALSK) is the leading provider of
advanced broadband and managed IT services for businesses and
consumers in Alaska. The company operates a highly reliable,
advanced statewide data network with the latest technology and the
most diverse undersea fiber optic system connecting Alaska to the
contiguous U.S. For more information, visit
www.alaskacommunications.com or www.alsk.com.
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Media Contact Heather Cavanaugh, 907-564-7722 Director,
External Affairs and Corporate Communications
Investor Contact Tiffany Smith, 907-564-7556 Manager,
Board and Investor Relations investors@acsalaska.com
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