The FCC Wants to Rewrite How 14,000 Rural Clinics Get Their Broadband Subsidy. Comments Close September 30 — and the Funding Cap Is Not on the Table.

There is a federal subsidy program that pays a large share of the broadband bill for nearly 14,000 rural health care providers — the critical access hospitals, community health centers, rural clinics, and behavioral health facilities whose telehealth programs live or die on connectivity they could not otherwise afford. It moved $523 million in 2025. Its FY2026 cap is $744.2 million.

Most of the people who depend on it have never read a filing in its docket.

On August 31, 2026, the Federal Communications Commission published in the Federal Register its Third Further Notice of Proposed Rulemaking in Promoting Telehealth in Rural America — WC Docket No. 17-310, adopted August 6, 2026 as FCC 26-54. It proposes the most consequential set of changes to the Rural Health Care Program in years.

Comments are due September 30, 2026. Reply comments are due October 30, 2026.

If your organization draws RHC support, or advises anyone who does, that is a four-week window on rules that will determine what you can buy, how fast you find out whether you are funded, and how much documentation your carrier has to produce to justify your rate.

How the program is built, and why that matters

The RHC Program has two halves that work on entirely different logic, and almost every problem the FNPRM addresses lives in one of them.

The Telecommunications Program (1997) subsidizes the difference between what a rural provider pays and what a comparable urban provider in the same state pays for a similar service. It is a gap-filler. It requires the Commission to determine two numbers — a rural rate and an urban rate — and pay the spread.

The Healthcare Connect Fund (2012) does something far simpler: a flat 65 percent discount on eligible advanced telecommunications and information services. No rate comparison, no spread calculation. HCF accounted for 56.8 percent of funding commitments in FY2024 — it is now the larger half.

The reason this matters is that the FNPRM's hardest problems are all Telecom Program problems, and the Telecom Program is the shrinking half.

The rural rate problem

Determining a rural rate is supposed to work through three sequential methods. In practice, the sequence has collapsed onto the last resort.

Method 3 — building the rate from a carrier's own cost study — has expanded dramatically, particularly in Alaska, where the geography makes comparable-service benchmarking nearly meaningless. Cost studies are expensive, slow, and enormously documentation-heavy. They are also difficult for the Commission to verify.

The FCC previously tried to solve this with a Rates Database, a centralized reference set of rural and urban rates. It was eliminated in 2023 after significant anomalies surfaced in the data. The Commission has been improvising through waivers ever since — which is itself one of the criticisms of this proceeding: a set of temporary waivers has hardened into de facto permanent policy, and the FNPRM in part proposes to ratify it.

What the FNPRM actually proposes

Redefining "similar services." Today the comparison uses a plus-or-minus 30 percent speed threshold to decide whether two services are similar enough to benchmark against each other. The Commission asks directly: "should we consider another approach to defining similar services?" It also floats adjusting comparison rates for bandwidth differences and expanding geographic comparability beyond state boundaries — a change that would materially move rates in states with no dense urban market to benchmark against.

Replacing cost studies with three alternatives. Instead of a full study, a carrier could justify a rate using:

1. Wholesale rates it charges other carriers,
2. Previously approved rates for similar services in comparable areas, or
3. Rate projections extrapolated from existing approved rates.

Each of these trades verification depth for administrative speed.

An eligible services list. The FNPRM proposes publishing "a list of all supported services eligible for Telecommunications Program and Healthcare Connect Fund Program support," modeled on the E-Rate program, with the Wireline Competition Bureau publishing it at least 60 days before each funding year opens.

This is the quietly transformative proposal. Right now, eligibility is determined case by case, which means applicants routinely commit to contracts before knowing whether the service qualifies. A published list, 60 days ahead, converts a guessing game into a procurement input.

Application processing deadlines. The Commission seeks comment on adopting E-Rate-style performance targets — E-Rate works to a September 1 deadline for issuing funding commitments or denials on "workable" applications. RHC has no equivalent. Health systems currently sign multi-year connectivity contracts without knowing when, or whether, the commitment letter arrives.

Primary versus secondary backup services. The FNPRM proposes distinguishing between them — relevant to any facility funding redundant circuits for uptime.

Two administrative eliminations. Evergreen contract pre-approval requirements would go away, as would the Healthcare Connect Fund's annual reporting requirement.

The criticism worth taking seriously

Independent observers have flagged several concerns, and grantees should weigh them before filing:

• Waivers becoming permanent. Codifying stopgap measures adopted under time pressure is not the same as designing a rule.
• Retreat from technology neutrality. Some proposals risk favoring particular network architectures over others.
• Concentrated influence. Alaska's largest provider, GCI, is by far the heaviest user of Method 3 cost-based rates and has been the most active shaper of the record. A proceeding whose reforms are calibrated to one carrier's circumstances in one state will not necessarily fit a clinic in rural Mississippi.
• The cap is absent. The FNPRM's stated rationale is to "better administer limited funding given increased program participation and service costs" — and then never asks whether the limit itself is right. The FY2026 cap of $744.2 million is an inflation-adjusted derivative of the $571 million figure the Commission set back in funding year 2017. Participation has grown. Bandwidth requirements have grown far faster. The proceeding addresses the queue, not the pool.
• Losing the HCF annual report. Eliminating it reduces burden. It also removes one of the few structured public datasets on how the larger half of the program is actually performing.

What rural providers should do in the next four weeks

File something, even if it is short. The RHC docket is dominated by carriers and consultants. The FCC repeatedly says it is trying to reduce burden on participants — but participants rarely file, so the record describing that burden gets written by the entities that bill them. A two-page comment from a critical access hospital describing exactly how long it waited for a funding commitment, and what that delay cost, is disproportionately valuable evidence. Comments go to WC Docket No. 17-310 by September 30, 2026.

Answer the eligible services list question specifically. If you have ever bought a service and later discovered it was ineligible, that is the concrete anecdote the Commission needs. Say what the service was, when you learned, and what it cost you. And weigh in on the 60-day lead time — for organizations with long procurement cycles or board approval requirements, 60 days may be too thin.

Push hard on processing deadlines. This is the single highest-leverage proposal for provider organizations, and it costs the Fund nothing. E-Rate has a date certain; RHC does not. Tell the Commission what your contract cycle looks like and what date you would need a commitment by in order to plan.

Say something about the annual report before it disappears. If HCF's annual reporting produced data your organization or your state relies on, that is worth two sentences on the record. Burden reduction that eliminates the only visibility into a $400-million-a-year program deserves at least a comment.

Do not restructure procurement yet. These are proposals. Comments close September 30, replies October 30, and an order will follow at the Commission's pace. Nothing in the FNPRM changes a rule today. Providers currently in a funding year should proceed under existing rules.

Watch the companion proceeding. On the same day, the FCC published "Maximizing Efficiencies in Universal Service Administration," seeking comment on USAC's role, operating costs, and board governance across the entire Universal Service Fund. RHC is one of four USF programs. Structural changes to the administrator touch all of them — as does the ongoing pressure on the high-cost side documented in the Rural Broadband Protection Act rulemaking.

Where this fits in the rural telehealth funding stack

RHC is not the only money and should not be treated as a standalone. Rural health organizations building telehealth capacity typically braid it with USDA's Distance Learning and Telemedicine program — a $27 million FY2026 round that funds the endpoint equipment RHC's connectivity subsidy does not touch — along with HRSA rural health outreach funding and state broadband programs.

The division of labor is clean and worth internalizing: RHC pays for the pipe. DLT pays for what plugs into it. HRSA pays for the people who use it. A telehealth program built on only one of the three tends to discover the gap at the worst possible moment.

The bottom line

The FCC is proposing to make the Rural Health Care Program faster and more predictable: a published eligible services list, processing deadlines borrowed from E-Rate, and an escape hatch from cost studies that have become an administrative sinkhole. Those are genuine improvements, and rural providers should say so on the record where they agree.

What the proceeding does not do is ask whether a cap derived from a 2017 figure can carry a program serving 14,000 providers with 2026 bandwidth demands. Efficiency reforms redistribute scarcity more gracefully. They do not end it.

Four weeks to comment. WC Docket No. 17-310. September 30, 2026.

Sources: Federal Register — Promoting Telehealth in Rural America, FCC 26-54 full text, FCC Fact Sheet, July 16, 2026, FCC — Rural Health Care Program, Benton Institute — FCC to Begin Review of Rural Health Care Program, Benton Institute — FCC Adopts Rural Health Care Program Review, Federal Register — Maximizing Efficiencies in Universal Service Administration.