STATEMENT OF
COMMISSIONER MICHAEL O’RIELLY
Re: Promoting Telehealth in Rural America, WC Docket No. 17-310.
I welcome this proceeding to update the Rural Health Care program.  I have seen firsthand the 
role that the program can play in promoting the health and safety of Americans in some of the most 
remote parts of the country.  One of my first trips as a new Commissioner was to Alaska, a telemedicine 
pioneer and hot spot by necessity.  As I traveled to isolated villages accessible only by air, I saw health 
aides use what I’ve called “technology triage” to assess patients and forward relevant health information 
to larger facilities in regional cities and Anchorage.  Through this connectivity, many patients can be 
montiored and treated remotely.  At other times, the information is used to determine whether a patient 
needs to be air lifted for treatment as far away as Seattle, which can come at great cost and health risk to 
the patient.  This is how I envisioned the program working, but it was powerful to experience it in person 
and I wish more of our good staff could have the same opportunity.  For this reason, I remain cautious 
when suggestions are made to take funding from a portion of the U.S. that is unlike any other in our 
Union.   
While that experience helped illustrate the benefits of the program, I have also had a chance to 
witness its shortcomings.  For years, regulators and recipients complained that the program was 
underutilized, meaning it didn’t spend every last dollar allowed under a set budget cap.  Therefore, a prior 
Commission expanded the program to include broadband and marketed the heck out of it.  Pushing 
dollars out the door quickly took precedence over cost-effectiveness and, not surprisingly, spending 
increased rapidly.  To be sure, most of this funding has been used for the intended purposes – to provide 
discounted connectity to rural health care providers, improving access for more consumers.  However, in 
some cases, it has been used to buy more capacity than what’s actually needed, overbuild other rural 
providers, and connect sites that were not originally intended to be part of the program.  
I implored the last Chairman to put a plan in place to address the spending increases, but my 
requests were ignored.  Now, demand exceeds the cap and we are left playing catch up.  However, that 
cannot be an excuse to spend more and reform later. 
Fortunately, the Notice seeks comment on ways to root out inefficiencies and target support 
where it is needed most.  Indeed, I am pleased to see cost-saving ideas from other programs included in 
this Notice.  In particular, the item seeks comment on excluding certain expenses outright, examining 
whether services are “used and useful,” and capping or limiting support that exceeds a specified threshold 
or reasonable comparability benchmark – issues I’ve spent a great deal of time on in the high-cost 
program.  In fact, I think we are getting real close to announcing new limitations on the extraneous uses 
of ratepayer funding by rate-of-return providers.  The item also seeks comment on prioritizing certain 
areas, including based on economic need, which sounds a lot like the means-testing concept that 
Commissioner Clyburn and I have urged the Commission to at least seek comment on in the high-cost 
program.     
At the same time, the Notice does ask about increasing the spending cap above the current $400 
million.  I have several concerns with such an approach.  As a threshold matter, it is my hope that 
improving program efficiency and targeting of the funds will obviate or at least decrease the need for 
more of it.  
In addition, there seems to be an underlying assumption by some that the budget should be set 
based soley on health care demand.  That’s simply not the right approach.  We are not a health care 
agency and we really aren’t even part of that realm.  What we do through the Rural Health Care program 
can help provide savings on the health care side, but we do not have insight into that nor do we recoup 
any of the savings to help offet our costs.  Our job, according to the statute, is to provide a discount to 
help make already available service more afforable.  Funding new networks that potentially overlap and 
undermine existing infrastructure is expensive and can be wasteful.  
We have to keep in mind that the federal universal service program is already authorized to spend 
approximately $11 billion per year.  And, there is no shortage of requests for additional funding as 
recipients from each of the four programs have requested even more.  Instead of looking holistically and 
finding the necessary offsets, the Commission has tended to increase funding at the expense of 
consumers.  
It is time for the Commission to decide how much we reasonably and justifiably should take from 
ratepayers then set an overall budget for USF and individual program budgets accordingly.  Just recently, 
some suggested that a separate Commission action was akin to a tax on consumers, but this actually is 
one, if not officially labeled as such.  Hard working Americans and businesses are charged extra fees on 
their phone bills in order to fund these programs.  There must be a limit on how much we are willing to 
take from them – no matter how meritorious the spending could be.  So, let me be clear:  I will be 
extremely reluctant to increase the budget of the Rural Health Care program in any final item without 
corresponding spending reductions elsewhere.  
I thank the Chairman and staff for working with me to include additional questions on the impact 
of funding increases on consumers.  I am also pleased that the Order makes clear that any price reductions 
undertaken by service providers to help address the current shortfall will be completely voluntary.  I vote 
to approve.