Cuts threaten subsidies for rural health broadband

More and more, rural hospitals and clinics rely on high-speed internet access to bridge the urban-rural gap and provide their patients with services that are often found only in much larger cities. But a federal program to help subsidize the cost of broadband for rural health care facilities has hit its funding cap, which may jeopardize the push to connect more rural health facilities. 

OCHIN operates a consortia of rural safety net clinics and hospitals, drawing down federal broadband subsidies through the Federal Communications Commission’s Rural Health Program. The program was created in 1997 and helps rural facilities pay for high-speed connectivity. Administered by the Universal Service Administrative Company, the program provides 65 percent funding for broadband costs, up to an annual cap of $400 million.

Spending over the first 12 years never reached that amount combined. But the cap did not grow with inflation, and the growing importance of connectivity has greatly increased demand. As a result, requests for subsidies hit the cap for the first time in fiscal year 2016. That prompted the administrator to reduce subsidies in fiscal year 2017 by 15 percent for individual participants and by 25 percent for consortia members. The American Hospital Association has urged the FCC to increase funding to fully meet demands. The FCC has proposed increasing the cap to account for inflation over the 20 years of the program. That would bring the cap to about $571 million, enough to cover all of the $521 million in subsidy requests received in fiscal 2017. But the FCC has not finalized that change and so the subsidies are still being cut.