§  54.609   Calculating support.

   (a) Except with regard to services provided under § 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 § 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 § 54.605 and § 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 § 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 § 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, § 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, § 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.