Sec.  54.609   Calculating support.

   (a) Except with regard to services provided under  Sec. 54.621 and subject to the
   limitations set forth in this subpart, the amount of universal service
   support for an eligible service provided to a public or non-profit rural
   health care provider shall be the difference, if any, between the urban rate
   and the rural rate charged for the service, as defined herein. In addition,
   all reasonable charges that are incurred by taking such services, such as
   state and federal taxes shall be eligible for universal service support.
   Charges for termination liability, penalty surcharges, and other charges not
   included in the cost of taking such service shall not be covered by the
   universal service support mechanisms. Rural health care providers may choose
   one of the following two support options.

   (1) Distance based support. The Administrator shall consider the base rates
   for telecommunications services in rural areas to be reasonably comparable
   to  the base rates charged for functionally similar telecommunications
   service in urban areas in that state, and, therefore, the Administrator
   shall  not  include  these  charges  in  calculating  the support. The
   Administrator shall include, in the support calculation, all other charges
   specified, and all actual distance-based charges as follows:

   (i) If the requested service distance is less than or equal to the SUD for
   the state, the distance-based charges for the rural health care provider are
   reasonably comparable to those in urban areas, so the health care provider
   will not receive distance-based support.

   (ii) If the requested service distance is greater than the SUD for the
   state, but less than the maximum allowable distance, the distance-based
   charge  actually  incurred  for that service can be no higher than the
   distance-based charges for a functionally similar service in any city in
   that state with a population of 50,000 or more over the SUD.

   (iii) “Distance-based charges” are charges based on a unit of distance, such
   as mileage-based charges.

   (iv)  Except  with  regard  to  services  provided  under   Sec. 54.621,  a
   telecommunications carrier that provides telecommunications service to a
   rural  health  care  provider participating in an eligible health care
   consortium, and the consortium must establish the actual distance-based
   charges   for  the  health  care  provider's  portion  of  the  shared
   telecommunications services.

   (2)  Base  rate  support. If a telecommunications carrier, health care
   provider, and/or consortium of health care providers reasonably determines
   that the base rates for telecommunications services in rural areas are not
   reasonably comparable to the base rates charged for functionally similar
   telecommunications   service   in  urban  areas  in  that  state,  the
   telecommunications carrier, health care provider, and/or consortium of
   health care providers may request that the Administrator perform a more
   comprehensive  support calculation. The requester shall provide to the
   Administrator the information to establish both the urban and rural rates
   consistent with  Sec. 54.605 and  Sec. 54.607, and submit to the Administrator with
   Form 466 all of the documentation necessary to substantiate the request.

   (3) Base rate support-consortium. Except with regard to services provided
   under  Sec. 54.621, a telecommunications carrier that provides telecommunications
   service to a rural health care provider participating in an eligible health
   care consortium, and the consortium must establish the applicable rural base
   rates for telecommunications service for the health care provider's portion
   of the shared telecommunications services, as well as the applicable urban
   base rates for the telecommunications service.

   (b) Absent documentation justifying the amount of universal service support
   requested for health care providers participating in a consortium, the
   Administrator shall not allow telecommunications carriers to offset, or
   receive  reimbursement  for, the amount eligible for universal service
   support.

   (c) The universal service support mechanisms shall provide support for
   intrastate telecommunications services, as set forth in  Sec. 54.101(a), provided
   to rural health care providers as well as interstate telecommunications
   services.

   (d)  Satellite  services.  (1) Rural public and non-profit health care
   providers  may receive support for rural satellite services, even when
   another functionally similar terrestrial-based service is available in that
   rural area. Discounts for satellite services shall be capped at the amount
   the rural health care provider would have received if they purchased a
   functionally similar terrestrial-based alternative.

   (2) Rural health care providers seeking discounts for satellite services
   shall provide to the Administrator with the Form 466 documentation of the
   urban and rural rates for the terrestrial-based alternatives.

   (3)  Where  a  rural  health  care  provider  seeks  a  more expensive
   satellite-based service when a less expensive terrestrial-based alternative
   is available, the rural health care provider shall be responsible for the
   additional cost.

   (e) Mobile rural health care providers —(1) Calculation of support. Mobile
   rural health care providers may receive discounts for satellite services
   calculated by comparing the rate for the satellite service to the rate for
   an urban wireline service with a similar bandwidth. Discounts for satellite
   services shall not be capped at an amount of a functionally similar wireline
   alternative. Where the mobile rural health care provider provides service in
   more than one state, the calculation shall be based on the urban areas in
   each state, proportional to the number of locations served in each state.

   (2) Documentation of support. (i) Mobile rural health care providers shall
   provide  to  the Administrator documentation of the price of bandwidth
   equivalent wireline services in the urban area in the state or states where
   the service is provided. Mobile rural health care providers shall provide to
   the Administrator the number of sites the mobile health care provider will
   serve during the funding year.

   (ii)  Where a mobile rural health care provider serves less than eight
   different  sites per year, the mobile rural health care provider shall
   provide  to  the Administrator documentation of the price of bandwidth
   equivalent  wireline  services.  In such case, the Administrator shall
   determine on a case-by-case basis whether the telecommunications service
   selected by the mobile rural health care provider is the most cost-effective
   option. Where a mobile rural health care provider seeks a more expensive
   satellite-based service when a less expensive wireline alternative is most
   cost-effective, the mobile rural health care provider shall be responsible
   for the additional cost.

   [ 68 FR 74502 , Dec. 24, 2003, as amended at  70 FR 6373 , Feb. 7, 2005]

   Effective Date Notes:   1. At  68 FR 74502 , Dec. 24, 2003, as corrected at  69 FR 3021 , Jan. 22, 2004,  Sec. 54.609 was revised, effective Jan. 23, 2004.
   Paragraph  (d)(2)  contains  information  collection and recordkeeping
   requirements and will not become effective until approval has been given by
   the Office of Management and Budget.

   2. At  70 FR 6373 , Feb. 7, 2005,  Sec. 54.609 was amended by adding paragraph (e).
   Paragraph (e) contains information collection and recordkeeping requirements
   and will not become effective until approval has been given by the Office of
   Management and Budget.