Rural healthcare facilities struggle paying Internet bills as FCC rate review holds up subsidies

YKHC consists of a regional hospital in Bethel. Photo Courtesy of YKHC.
YKHC consists of a regional hospital in Bethel. Photo Courtesy of YKHC.

A program that provides millions of dollars in federal subsidies to help pay rural Alaska healthcare facilities’ high internet bills has been on hold for nearly a year. Internet service providers have not been getting paid what they expected as the Federal Communications Commission conducts a rate review. The result for one facility, the Cordova Medical Center, was a shutoff notice due to an unpaid internet bill of nearly $1 million.

Alaska Journal of Commerce reporter Naomi Klouda has been reporting on the delays with the FCC’s Rural Health Care program. She spoke with Alaska Public Media’s Lori Townsend and says the rate review came after the $400 million dollars for rural health care programs across the country ran out.

Listen now

KLOUDA: That’s what held up the payment, but it also triggered a rate review because the FCC realized they wanted to understand the rates. How do you justify these costs? What are you charging?

TOWNSEND: Naomi, give us a little perspective on this. A million-dollar internet bill… What’s the range of what these hospitals are paying for service?

KLOUDA: Well, for example, the Cordova Community Medical Center, because of the fees not getting paid by the FCC, Alaska Communication Services was really having revenue problems. One of the issues was in December, ACS laid off 30 workers, which was a fifth of its workforce. So they sent the letter to the Cordova hospital and said, “Hey, somebody’s gotta start paying these fees.” And it cost roughly $1 million — not quite that, it was 800-some thousand dollars. Now each month is an $80,000 bill at the Cordova Medical Center in order to pay for their telemedicine, just that portion. Of that, because of the way that they wanted to make it fair for rural and urban medical facilities to not be paying these outrageous sums, they are subsidized by the FCC. So Cordova’s portion was $1,060 per month, which is pretty reasonable. So you’ve got about $12,000 to 13,000 per year for that clinic to pay. Now the FCC portion of that was whatever was left over, $78,000 per month — that times 12. So that’s how it ended up being almost a million dollars. Imagine a facility that’s much larger and serving more people like the Yukon-Kuskokwim Health Corporation. They would be many, many times that amount.

TOWNSEND: Let’s talk about what’s at risk here. Rural healthcare providers need reliable high-speed internet. They’re doing telemedicine. How much is that a part of rural health medicine now?

KLOUDA: It’s a huge part, and it really does save lives. We’ve heard lots of stories like, we’re talking about Fort Yukon or Brevik or places outside Kotzebue, those cluster villages, the 56 villages outside of Bethel. We’re talking down King Salmon. So, there’s something like 300,000 people, which is almost half of our Alaska population, that benefits from some form of telemedicine.

TOWNSEND: Naomi, you reported some movement on this issue recently. What’s going on? What’s the current situation?

KLOUDA: So, back to when there was the $400 million allotment, this pot of money, that wasn’t enough to stretch across the nation — this was the amount of money that was alloted when the program was created in 1996. Now $400 million is like a joke when it comes to all 50 states sharing that. So, they appealed to the FCC and said, “Hey. This needs to be raised somehow.” And Chairman Pai listened; he’s the head of the FCC. He decided, just last week, to go ahead and propose $571 million which would be the amount if $400 million had kept up with inflation during those 20 years. That would be the exact amount it would be today. So that’s under discussion right now. They’ll be voting on it.

TOWNSEND: And in the meantime, they have said that the bills will be paid. Is that correct?

KLOUDA: Yes. At that point, the FCC spoeksman explained to me just this week that it would be 100% of whatever those invoices are. So going back to ACS, and it’s 70-some thousand dollars per month invoice to the Cordova hospital; that would be repaid to ACS 100%.

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Lori Townsend is the News Director for the Alaska Public Radio Network. She got her start in broadcasting at the age of 11 as the park announcer of the fast pitch baseball games in Deer Park, Wisconsin. She has worked in print and broadcast journalism for more than 24 years. She was the co-founder and former Editor of Northern Aspects, a magazine featuring northern Wisconsin writers and artists. She worked for 7 years at tribal station WOJB on the Lac Courte Oreilles Ojibway Reservation in Wisconsin, first as an on-air programmer and special projects producer and eventually News Director. In 1997 she co-hosted a continuing Saturday afternoon public affairs talk program on station KSTP in St. Paul, Minnesota. Radio brought her to Alaska where she worked as a broadcast trainer for Native fellowship students at Koahnic Broadcasting. Following her work there, she helped co-found the non-profit broadcast company Native Voice Communications. NVC created the award-winning Independent Native News as well as producing many other documentaries and productions. Townsend was NVC’s technical trainer and assistant producer of INN. Through her freelance work, she has produced news and feature stories nationally and internationally for Independent Native News, National Native News, NPR , Pacifica, Monitor Radio, Radio Netherlands and AIROS. Her print work and interviews have been published in News from Indian Country, Yakama Nation Review and other publications. Ms. Townsend has also worked as a broadcast trainer for the Native American Journalist’s Association and with NPR’s Doug Mitchell and as a freelance editor. Townsend is the recipient of numerous awards for her work from the Alaska Press Club, the Native American Journalists Association and a gold and a silver reel award from the National Federation of Community Broadcasters. Townsend was the recipient of a Fellowship at the Metcalf Institute for Marine and Environmental Reporting in Rhode Island as well as a fellowship at the Knight Digital Media Center in Berkeley. She is an avid reader, a rabid gardener and counts water skiing, training horses, diving and a welding certification among her past and current interests. ltownsend (at) alaskapublic (dot) org  |  907.550.8452 | About Lori