[Senate Hearing 112-423]
[From the U.S. Government Publishing Office]



                                                        S. Hrg. 112-423
 
                   INTERNET INFRASTRUCTURE IN NATIVE 
                    COMMUNITIES: EQUAL ACCESS TO E-
                     COMMERCE, JOBS AND THE GLOBAL 
                              MARKETPLACE

=======================================================================

                                HEARING

                               before the

                      COMMITTEE ON INDIAN AFFAIRS
                          UNITED STATES SENATE

                      ONE HUNDRED TWELFTH CONGRESS

                             FIRST SESSION

                               __________

                            OCTOBER 6, 2011

                               __________

         Printed for the use of the Committee on Indian Affairs




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                      COMMITTEE ON INDIAN AFFAIRS

                   DANIEL K. AKAKA, Hawaii, Chairman
                 JOHN BARRASSO, Wyoming, Vice Chairman
DANIEL K. INOUYE, Hawaii             JOHN McCAIN, Arizona
KENT CONRAD, North Dakota            LISA MURKOWSKI, Alaska
TIM JOHNSON, South Dakota            JOHN HOEVEN, North Dakota
MARIA CANTWELL, Washington           MIKE CRAPO, Idaho
JON TESTER, Montana                  MIKE JOHANNS, Nebraska
TOM UDALL, New Mexico
AL FRANKEN, Minnesota
      Loretta A. Tuell, Majority Staff Director and Chief Counsel
     David A. Mullon Jr., Minority Staff Director and Chief Counsel


                            C O N T E N T S

                              ----------                              
                                                                   Page
Hearing held on October 6, 2011..................................     1
Statement of Senator Akaka.......................................     1
Statement of Senator Franken.....................................     3
Statement of Senator Murkowski...................................    34
Statement of Senator Tester......................................     2
Statement of Senator Udall.......................................     3

                               Witnesses

Blackwell, Geoffrey C., Chief, Office of Native Affairs and 
  Policy, Federal Communications Commission......................     4
    Prepared statement with attachment...........................     6
Danner, Robin Puanani, President/CEO, Council for Native Hawaiian 
  Advancement....................................................    77
    Prepared statement...........................................    79
Gray-Proctor, Margo, Board Chairwoman, National Center for 
  American Indian Enterprise Development.........................    41
    Prepared statement with attachment...........................    43
Hays, Howard, M.D., M.S.P.H., Acting Chief Information Officer, 
  Indian Health Service, U.S. Department of Health and Human 
  Services.......................................................    22
    Prepared statement...........................................    25
Marrs, Carl, CEO, Old Harbor Native Corporation and the Kodiak-
  Kenai Cable Company............................................    67
    Prepared statement...........................................    69
Morgan, Lance G., Ceo, Ho-Chunk, Inc.............................    36
    Prepared statement...........................................    38
Pollock, Michael J., Managing Director, Spectrum Gaming Group LLC    55
    Prepared statement...........................................    56
Porter, Hon. Robert Odawi, President, Seneca Nation of Indians...    60
    Prepared statement...........................................    63

                                Appendix

Akaka, Daniel K., letter, dated October 21, 2011 to the FCC......   110
Gerlaugh, Darrell, Chairman, National Tribal Telecommunications 
  Association, prepared statement................................    89
Mejia, Hon. Margie, Chairwoman, Lytton Rancheria, prepared 
  statement......................................................    99
Sneve, Shirley K., Executive Director, Native American Public 
  Telecommunications.............................................   101
Valandra, Joseph, Chairman, Tehan Woglake, Inc., prepared 
  statement with attachment......................................   104


   INTERNET INFRASTRUCTURE IN NATIVE COMMUNITIES: EQUAL ACCESS TO E-
                     COMMERCE, JOBS AND THE GLOBAL 
                              MARKETPLACE

                              ----------                              


                       THURSDAY, OCTOBER 6, 2011


                                       U.S. Senate,
                               Committee on Indian Affairs,
                                                    Washington, DC.
    The Committee met, pursuant to notice, at 2:15 p.m. in room 
628, Dirksen Senate Office Building, Hon. Daniel K. Akaka, 
Chairman of the Committee, presiding.

          OPENING STATEMENT OF HON. DANIEL K. AKAKA, 
                    U.S. SENATOR FROM HAWAII

    The Chairman. I call this hearing of the Committee on 
Indian Affairs to order. Aloha and thank you all for being with 
us at this hearing today, which is on Internet Infrastructure 
in Native Communities: Equal Access to E-Commerce, Jobs and the 
Global Marketplace.
    I am very pleased to chair this hearing, because investing 
in telecommunications infrastructure is the best way we can 
help remote Native communities participate in the global 
marketplace while maintaining the unique character and culture 
of their homelands.
    In Hawaii, we live in the most remote location on Earth, 
alone in the middle of the Pacific Ocean. We rely on 
telecommunications infrastructure to keep us connected to the 
rest of the world and to help keep our economy running. Within 
our State, we have Hawaiian Home Lands, similar to Indian 
reservations or Alaska Native communities. These communities, 
like many Native communities, had little access to critical 
health, educational and economic development opportunities 
available in more urban locations where Internet and related 
telecommunications infrastructure are readily available.
    With an investment by FCC the majority of the Hawaiian Home 
Lands communities are now connected with fiber optic cable, the 
infrastructure necessary to deliver equitable access to 
Internet and the global marketplace today and for years to 
come.
    Many Native people have had to choose between staying home 
and connected to their language, culture and relations, or 
leaving home to pursue economic opportunity and jobs. Now in 
the information age and with the right investments in 
infrastructure, we have a real opportunity to remove this 
barrier. We can close distances in ways we have never been able 
to do before so Native communities can create economic, 
professional and educational opportunities at home.
    As this chart clearly shows, there is a need for Internet 
infrastructure in Native communities.
    I want to extend a special mahalo, or thank you, to all of 
those who have traveled far to join us today. Now I would like 
to turn to my colleagues, beginning with Senator Tester.

                 STATEMENT OF HON. JON TESTER, 
                   U.S. SENATOR FROM MONTANA

    Senator Tester. Thank you, Mr. Chairman. I appreciate your 
holding this hearing on improving telecommunications in Indian 
Country. And I want to thank the witnesses for being here. We 
look forward to hearing what you have to say.
    In these days, cell phone and the Internet affects just 
about everything that we do. That should Indian Country more 
than it does right now. In fact, there is probably a greater 
need for telecom access across Indian Country, particularly in 
geographically isolated parts of Indian Country, such as those 
in rural Montana. For example, hospitals and medical clinics 
increasingly use technology to take advantage of tele-medicine 
opportunities that are improving and saving lives.
    Of course, our top priority here in the Senate, job 
creation Although cell service and the Internet by itself 
doesn't create many jobs, access to it is critical. Without 
access, businesses cannot compete in today's global economy.
    Access is also critical for public safety. Last week in 
this room we talked about improving public safety in Indian 
Country. As I know from living in rural Montana, too many 
people don't have access to public safety, because they don't 
have access to the phone service they need to cal 911 or 
anybody else who can help.
    And of course, education. To be competitive in today's job 
market, the student who graduate from our schools need a well-
rounded education. That includes both lessons of their culture 
and about the rest of the world. Internet access can bring the 
world to our reservations. And it can also bring lessons about 
our reservations to the rest of the world.
    I am proud of the Confederated Salish and Kootenai and the 
Fort Peck Tribes in Montana on this front. The Salish Kootenai 
College is a national leaded in using technology to create 
online curriculum and include their traditional culture to 
their students, students throughout the world.
    The situation is slowly getting better, but we still have a 
long way to go. This Committee has been working to improve 
access for a decade, but serious disparities still exist. I 
look forward to hearing from our witnesses today. We have 
studied the problem for years, and we know a lot about 
barriers. What we need today are solutions. I look forward to 
hearing your ideas.
    Thank you, Mr. Chairman.
    The Chairman. Thank you very much, Senator Tester.
    Senator Udall?

                 STATEMENT OF HON. TOM UDALL, 
                  U.S. SENATOR FROM NEW MEXICO

    Senator Udall. Thank you, Senator Akaka, for holding this 
hearing on this important issue to Native American communities 
and to Native Hawaiian communities.
    Members of this Committee have traveled throughout Indian 
Country and witnessed many of the hardships on Tribal lands. 
This hearing is an important opportunity to call attention to a 
communications crisis, a crisis that most Americans are not 
aware of.
    Most people probably cannot imagine life without a 
telephone. Yet today more than 30 percent of households in 
Indian Country do not have access to basic telephone service. 
For members of the Navajo Nation in particular, the situation 
is even worse. Statistics do not adequately convey the 
hardships created by this lack of telephone service. Not having 
a land line or cell phone reception can mean the difference 
between life and death. Imagine not being able to call an 
ambulance when you or your loved one is in medical danger.
    A man outside Gallup, New Mexico missed two opportunities 
for a lifesaving kidney transplant because he lacked telephone 
service at home and could not be contacted in time. Members of 
this community know how essential it is that our Nation's 
Tribal lands are not bypassed when broadband networks are built 
across the Nation.
    Although they are among the least connected, these areas 
are precisely where broadband technology can help the most. By 
overcoming physical distance and geographic isolation, 
broadband can help improve economic development, education and 
access to health care.
    I am pleased that FCC Chairman Genachowski is paying 
particular attention to this communications crisis that all the 
FCC commissioners have pledged their support for addressing 
this appalling digital divide affecting Native Americans. 
Today, draft proposals for Universal Service Fund reform will 
become available. I intend to carefully review them. Despite 
spending more than $8 billion last year, the universal service 
fund has failed Indian Country when it comes to ensuring basic 
telephone service. We cannot fail again when it comes to 
building modern broadband networks.
    Thank you again, Chairman Akaka, and I yield back
    The Chairman. Thank you, Senator Udall.
    Senator Franken?

                 STATEMENT OF HON. AL FRANKEN, 
                  U.S. SENATOR FROM MINNESOTA

    Senator Franken. Thank you, Mr. Chairman, for holding this 
very important hearing. I thank the witnesses in advance, I 
have read your testimony and I want to thank you for your work.
    Before we begin today, I think it is important to recognize 
the passing of one of the greatest technology visionaries of 
the last century, Steve Jobs. I was watching the news coverage 
last night. I couldn't help but take note of just the 
tremendous outpouring that has surrounded his passing. I think 
this outpouring is in large part because the technology that 
Steve Jobs developed has transformed how we live and work in 
this community. I am guessing many of you have iPods or iPads 
and iPhones on you today. And I would put them on vibrate 
during the hearing.
    [Laughter.]
    Senator Franken. But I think it is important to remember 
that Steve Jobs started building devices in his garage. Young 
entrepreneurs and innovators who are starting out like Steve 
Jobs did many decades ago need Internet access to have a shot 
at developing the latest cutting edge device or gadget or web-
based business. It shouldn't matter if that entrepreneur is 
working out of a garage in the Bay Area or out of a garage on 
the Red Lake Reservation in Minnesota. Both people should have 
equal access to high speed broadband and equal access to the 
American dream.
    The Internet is not a luxury item any more. It is a 
necessity today, and it is only going to become an even greater 
necessity in the years to come. Unfortunately, Native American 
communities continue to lag way behind in broadband access. 
This puts these at a huge disadvantage in an already troubled 
economic climate.
    I am happy that we have the opportunity today, thanks to 
the Chairman, to examine the causes of the Native American 
digital divide and determine what we in Congress and what the 
FCC can do to remedy this problem. We have several 
distinguished witnesses appearing before the Committee today, 
and again, I would like to thank the first panel and the second 
for taking time to discuss this important issue. I look forward 
to hearing from our witnesses about how we can improve Internet 
infrastructure in Native American communities.
    Thanks again, Mr. Chairman.
    The Chairman. Thank you very much, Senator Franken.
    As Chairman, it is my goal to ensure that we hear from all 
who want to contribute to the discussion. The hearing record, 
therefore, will be open for two weeks from today and I 
encourage everyone to submit your comments through written 
testimony.
    I want to remind the witnesses to please limit your oral 
testimony to five minutes today.
    Serving in our first panel is Mr. Geoffrey Blackwell, Chief 
of the Office of Native Affairs and Policy, within the Consumer 
and Governmental Affairs Bureau at the Federal Communications 
Commission, located in Washington, D.C. And Dr. Howard Hays, 
Acting Chief Information Officer at the Indian Health Service 
within the Department of Health and Human Services, also 
located in Washington, D.C.
    Welcome to you on our first panel to this hearing. Mr. 
Blackwell, will you please proceed with your testimony?

  STATEMENT OF GEOFFREY C. BLACKWELL, CHIEF, OFFICE OF NATIVE 
     AFFAIRS AND POLICY, FEDERAL COMMUNICATIONS COMMISSION

    Mr. Blackwell. Chairman Akaka, Senator Tester, Senator 
Udall, Senator Franken, members of the Committee, aloha and 
thank you for the opportunity to testify today.
    The lack of communications service in Native America is 
alarming. The most recent reliable census data indicates that 
only 67.9 percent of Tribal homes have basic telephone service. 
More troubling, less than 10 percent have access to broadband, 
the lifeblood of our 21st century economy, education, health 
care and public safety.
    Broadband can do much to level the negative impacts of 
history on Native communities. But it must be available, 
affordable and accessible to meet its promise. Diverse and 
comprehensive needs make it clear that one size fits none, and 
almost no critical infrastructure has come to Tribal lands 
without Federal investment, oversight and regulation. The 
enormity of our mission is vast.
    The purpose of the Office of Native Affairs and Policy is 
to change the way we approach these problems. We are one year 
old now, and we are charged with developing and driving a 
Native agenda across the Commission. But, changing our rules 
alone is not enough. Complex problems require new approaches 
and mechanisms, and as well as active efforts both in 
Washington and far into the field to develop well though-out 
solutions.
    Under Chairman Genachowski's leadership, with the 
longstanding support of Commissioner Copps and throughout the 
entire Commission and all of its bureaus and offices, there is 
a new way of doing Native business at the FCC. Native nations 
are central in that new paradigm. Our work with them is a 
strategic partnership in which we exercise the Commission's 
trust relationship with Native nations.
    To fulfill our mission, we are fostering the Commission's 
government to government dialogue directly with Native nations 
to understand their needs and empower their solutions. Our 
approach is to work together to identify and remove barriers 
and build models that engage their anchor institutions. We seek 
to place Tribal nations and Native communities themselves in 
the center of those solutions, whether through self-
provisioning of services or through new Tribal-centric methods 
of deployment with industry, public or private partners.
    Our work with the new FCC Native Nations Broadband Task 
Force will ensure that Native concerns are considered in all 
relevant Commission proceedings and that new recommendations 
are developed. This active, invested involvement of Native 
nations is critically important to finding lasting solutions.
    To transform the landscape, our office cannot be just 
another outsider from Washington. Instead, it must be a 
knowledgeable and respected Indian Country insider. Upon being 
established, we actually rolled out the Office in Native 
America, while also working across the Commission to surface 
actions and proposals. During our first year of operation, we 
continued our commitment to working with Native leaders where 
the challenges occur, logging thousands of miles from here west 
to the Hawaiian Home Lands. We have gone deep into Tribal lands 
and Native communities, traveling to places the Commission has 
never been before, and seeking the input of American Indian, 
Alaska Native and Native Hawaiian leaders.
    Several times on Tribal lands, we have had to reset our 
phones and log off and log back in. In distance diagnosis 
sessions and classrooms at the Native end of the signals, we 
saw the human element of the lack of services and the 
limitations of connectivity, speed and reliability. Now we have 
that knowledge in hand and we are acting on it.
    Under the Chairman's leadership, the Commission launched a 
series of groundbreaking proceedings at its March 3rd meeting 
named Native Nations Day. From rules expanding Tribal priority 
broadcasting opportunities to proposed rule for new mobile 
wireless licensing to an omnibus inquiry on a range of issues 
related to broadband adoption and deployment, the proceedings 
of Native Nations Day serve as a foundation for consultation 
and critical rulemakings. These include an inquiry on a Native 
Nations priority to remove barriers to entry within our rules, 
the creation of a Native Nations broadband fund for a myriad of 
deployment purposes, and a Commission-wide uniform definition 
of Tribal lands.
    Critical to the work of our office is our close 
coordination with others across the Commission, and we will 
continue to provide guidance on a variety of other rulemakings 
and actions. During both our travels and in many meetings here 
in Washington, we have heard many comments, priorities and 
concerns. One such priority is the accurate measurement of the 
actual state of broadband availability on Tribal lands. Many 
tribes have articulated concerns about both the depth and 
accuracy of this data on their lands.
    Increased coordination among relevant Federal agencies and 
a meaningful involvement of the Native Nations, embracing them 
as partners, would address potential unintended barriers to 
entry.
    In conclusion, we have heard several recurring themes from 
Native leaders: continue to meet and listen to us, to use what 
we tell you to bring connectivity to our communities. The 
overarching message is that if consultations and training 
sessions are to be productive, and if efforts to place Native 
nations at the center of the process are to succeed, we must 
see the problems first-hand, work where they exist and endeavor 
to find solutions in concert. We welcome this challenge.
    Thank you again for the opportunity to testify this 
afternoon. Mahalo. I look forward to any questions you may 
have.
    [The prepared statement of Mr. Blackwell follows:]

 Prepared Statement of Geoffrey C. Blackwell, Chief, Office of Native 
         Affairs and Policy, Federal Communications Commission
    Chairman Akaka, Vice Chairman Barrasso, and Members of the 
Committee, thank you for the opportunity to testify today about the 
importance of broadband infrastructures in Native Nations and 
Communities, and the Commission's efforts to work with Native leaders 
to find viable solutions.
    The lack of all communications services in Indian Country is 
alarming. Our most recent reliable census data indicates that over 70 
years of development and expansion of the telecommunications industry 
has resulted in only 67.9 percent of residents of Tribal lands enjoying 
basic telephone service. The statistics for broadband penetration are 
even more troubling--less than 10 percent of residents of Native 
Nations have access to the lifeblood of our 21st century economy, 
educational opportunities, health care, and public safety.
    This past April, I told the Senate Commerce Committee what many on 
the Senate Committee on Indian Affairs already know--that these too 
familiar statistics paint only part of the picture and behind them 
lurks a stark and complex reality. The negative impacts of history fell 
particularly hard on Tribal and Native Communities. One result of this 
history is an endemic lack of many critical infrastructures. In fact, 
almost no critical infrastructure has come to Tribal lands without 
federal investment, oversight, and regulation. Broadband opportunities 
can do much to level this history in bringing health care, education, 
jobs, and the opportunities of hope to Native Nations, but broadband 
must be available, accessible, and affordable to meet its great 
promise.
    The purpose of the Office of Native Affairs and Policy is to change 
the approach to the communications problems of Native America. Our work 
with Native Nations is a new strategic partnership, one in which we 
effectuate and exercise the trust relationship that the Commission 
shares with Native Nations. There are numerous and comprehensive 
communications needs throughout Indian Country, and there is great 
diversity within those critical needs. The need for telemedicine is 
greatest for some Tribal Nations, while the needs for educational 
technology or public safety are paramount for others. In many Native 
places, Indian Reservations for instance, connectivity often occurs 
only in border towns and along major transportation routes crossing 
over Tribal lands. It is clear that one size fits none, and the 
enormity of our mission is vast. Changing our rules alone is not 
enough. Complex problems require new approaches and mechanisms, and 
active efforts both in Washington and in far into the field to develop 
and coordinate well thought-out solutions.
    Created by a unanimous vote of the Commission on August 12, 2010 
and implementing a recommendation of the National Broadband Plan, the 
Office of Native Affairs and Policy is now just over a year old. The 
Office is responsible for developing and driving a Tribal agenda at the 
Commission and serves as the Commission's primary point of contact on 
all Native issues. The Office is charged with bringing the benefits of 
a modern communications infrastructure to all Native communities by, 
among other things, ensuring robust government-to-government 
consultation with Federally-recognized Tribal governments and other 
Native organizations; working with Commissioners, Bureaus, and Offices, 
as well as with other government agencies and private organizations, to 
develop and implement policies for assisting Native communities; and 
ensuring that Native concerns and voices are considered in all relevant 
Commission proceedings and initiatives. Under Chairman Genachowski's 
leadership, and with the involvement of the entire Commission and all 
of its Bureaus and Offices, there is a new way of doing Native business 
at the Commission, and Native Nations are central in that new paradigm.
The Efforts of the Office of Native Affairs and Policy
    Our approach is to work together to identify and remove barriers to 
solutions and build models with Native Nations that engage their core 
community or anchor institutions. We seek to place Native Nations 
themselves in the center of those solutions, whether it is through 
actual self-provisioning of communications services or through new 
``Tribal-centric'' or ``Nativecentric'' methods of deployment with 
industry, public, or private partners. These models must respect the 
cultural values and sovereign priorities of Native communities and be 
infused with the local knowledge that will lead to better local 
involvement and opportunities for success. As Tribes govern with a 
unique understanding of their communities, their vested and active 
involvement is critically important to finding lasting solutions in 
their communities.
    To fulfill its mission, the Office is fostering the Commission's 
ongoing government-to-government dialogue with Native Nations by 
working directly with them to understand their needs and empower them 
to provide their own solutions. New opportunities must be created for 
Native Nations and those who work with them to find sustainable 
solutions. To fulfill our mission and transform the communications 
landscape, our Office cannot be just another outsider from Washington. 
Instead, the Office must be a knowledgeable and respected Indian 
Country insider. We must foster and maintain an expert understanding 
and familiarity with Tribal lands and Native Communities. Collectively, 
our four senior staff members have over 40 years of experience working 
in the trenches of the Commission and directly with Native Nations. We 
are adding to those ranks and we stand ready for the challenge.
    One year ago, immediately upon being established, we hit the ground 
running. We actually rolled out the introduction of our new Office in 
Native America on a ``listening tour,'' while at the same time working 
across the Commission to surface actions and proposals. We have 
continued with our commitment to working with Native leaders in their 
own reservations and homelands, where the problems actually exist. 
Side-by-side with our Native Nation colleagues, we have ``kicked the 
dirt'' within numerous Native Nations, and discussed how we can help 
them with their development and deployment plans. Several times, we 
have had to reset our phones and blackberries, log off and log back in, 
and set our out-of-office automatic reply messages to let folks know we 
are traveling in very unconnected regions.
    Within our first year of operations, we traveled to and met with 
Tribal leaders in Arizona, California, Idaho, Montana, Nevada, New 
Mexico, North Dakota, Oklahoma, South Dakota, Utah, and Washington, as 
well as within Hawaiian Home Lands. Other remote and underserved areas 
of the country, including those within Alaska, are at the top of our 
future travel priorities. We logged thousands of miles and traveled to 
places where the Commission has never been before, experiencing the 
lack of connectivity from the other end of the digital divide, and 
seeking the input of American Indian, Alaska Native, and Native 
Hawaiian leaders. We will continue to go deep into the Native Nations, 
meeting collectively and individually with Tribal leaders, Tribal 
Councils, Native associations, Tribally-owned and operated 
communications providers, Tribal broadcasters and broadband providers, 
as well as with Native consumers and businesses.
    To obtain a firsthand view of the complexity of the problems, we 
have been to some of the most unserved areas of the Nation. To see the 
challenges Native Nations face, we visited some of the most remote 
schools in the country, such as the Jack Norton School on the Yurok 
Reservation in California, which is the only school in the state that 
still operates on a diesel generator. The school is planned to receive 
its first ever Internet service in a new build out based on an 
experimental license the Commission granted and one-time federal grant 
money from the Rural Utilities Service's Community Connect program. We 
learned more about the important and life-changing impact of broadband 
when we engaged in distance education discussions from classrooms at 
the Native end of the signals. We learned the true value of high speed 
Internet connections on the island of Moloka'i, where we accepted the 
gracious invitation of an oncology patient at the Native end of the 
line and sat in on her diagnosis session with her doctors in Honolulu. 
Hearing the somber diagnosis, like her, we too struggled to read the 
expressions on the doctors' faces with the lower speed and, therefore, 
lower resolution connection. In Native Communities, one sees the human 
element of the lack of communications and broadband services, and the 
limitations of connectivity, speed, and reliability.
    On many occasions we saw impressive solutions juxtaposed with 
overwhelming great need. For example, on the Cheyenne River Sioux 
Reservation, we saw the oldest Tribally-owned and operated wireline 
telecommunications company, the Cheyenne River Sioux Tribe Telephone 
Authority, deploying fiber to a remote internal valley in their lands. 
At the Standing Rock Sioux Tribe, we met with their leaders and the 
management of the Tribe's exciting new wireless company, Standing Rock 
Telecom, Inc. Two weeks later, we spoke with elected leaders and 
educators of the Karuk Tribe in the upriver region of the Klamath River 
in far northern California, who experience little or no wireline or 
wireless telephone connectivity on their lands. High speed Internet is 
available only at a local computer center. While in Utah some weeks 
earlier, we met with the leaders of the Confederated Tribes of the 
Goshute Indian Reservation, who explained that they have been operating 
for over eight years under a communications state-of-emergency 
articulated by their Tribal Council--with few comprehensive and 
immediate solutions in sight. Similar examples exist throughout Indian 
Country and Native Communities.
    In addition to our travels to Tribal lands, we have met with many 
dozen Native Nations and entities at the Commission's headquarters on a 
myriad of issues involving broadband, broadcast, and telephony matters. 
On both our travels and in Washington, we have heard many common 
priorities and concerns. One such priority is the accurate measurement 
of the actual state of broadband availability on Tribal lands. Many 
Tribes have articulated concerns about both the depth and accuracy of 
the data on the state of services on their lands. Tribal and Native 
community leaders have asked how this data is verified by the state and 
federal agencies involved.
    In the case of the Goshute Confederated Tribes, during the late 
September Native American Summit in Salt Lake City, we witnessed their 
explanation to the Utah state broadband mapping manager that the gross 
overestimation of the wireless broadband coverage on their reservation 
actually precluded them from applying for federal grants and loans for 
a Tribal project that would address the lack of services. The Utah 
state broadband mapping coordinator explained that the federal grant 
did not have funding to verify the data. Increased coordination among 
the relevant federal agencies and a meaningful involvement of the 
Native Nations, embracing them as partners, would begin to address 
these unintended barriers-to-entry.
The Proceedings of March 3, 2011--''Native Nations Day''--New 
        Commission Approaches
    Under the Chairman's leadership, the Commission launched a series 
of groundbreaking endeavors at its March 3rd Open Meeting, on a day the 
Commission named ``Native Nations Day.'' It was a day of ``firsts''-- 
the first time that the Commission used its meeting agenda to address 
matters entirely and specifically developed for Native Nations; the 
first time that Tribal leaders formally addressed the Commission at the 
start of an Open Meeting; and the first time that the Commission 
initiated a comprehensive inquiry and rulemaking proceeding focused 
exclusively on Native communications needs.
    From rules expanding broadcast opportunities, to proposed rules for 
new mobile wireless licensing opportunities, to an omnibus inquiry on a 
range of issues related to broadband adoption and deployment on Tribal 
lands, the proceedings of Native Nations Day will in part serve as the 
foundation for the nation-to-nation consultation with Native Nations 
that is a critical component of the Commission's rulemaking process.
    The Rural Radio Tribal Priority Order. Native Nations want to 
provide information and community news to their people, and are looking 
at radio programming to promote and preserve Native culture and 
language, and to advance cultural dialogue. KUYI on the Hopi 
Reservation, KLND on the Standing Rock Reservation, and KIDE on the 
Hoopa Valley Reservation are prime examples of such cultural 
enterprise. Last year, the Commission took steps to address the 
imbalance in the number of radio stations licensed to Native Nations 
and communities, as compared to the rest of the country, when it 
adopted an historic Tribal Priority designed to award a decisive 
preference to any federally recognized American Indian Tribe or Alaska 
Native Village seeking to establish its first non-commercial radio 
station on its Tribal lands. The Tribal Priority was greeted with 
enthusiasm by Native Nations, but it was noted that certain Native 
Nations, because of their historical or geographic circumstances, might 
not be able to take advantage of the priority. In a Second Report and 
Order adopted on Native Nations Day, the Commission addressed these 
special circumstances by adopting provisions to address the needs of 
non-landed Native Nations and those with small or irregularly shaped 
lands that make it difficult to meet some of the requirements of the 
Tribal Priority. In addition, the Commission adopted a Notice of 
Proposed Rulemaking seeking comment on proposals to apply the Tribal 
Priority to certain commercial FM channel allotments and potentially 
obviating the need to go to auction. This proceeding is pending at the 
Commission, and the hope is that these new mechanisms can help Native 
Nations deploy services in this critical and widely adopted media 
technology, as they also build designs and resources for new advanced 
broadband platforms.
    The Wireless Spectrum Tribal Lands Notice of Proposed Rulemaking. 
While competitive market forces have spurred robust wireless 
communications services in many areas of our country, wireless 
connectivity for Native Nations remains at significantly lower levels. 
Native Nations have expressed to us many concerns that the situations 
they face at home involve the very basics of public safety--the 
inability to make a wireless call in an emergency. Native Nations have 
asked the Commission for greater access to robust wireless spectrum to 
meet the challenges of terrain and distance that many Native 
communities face and, for some time now, the need for this action has 
been critical. On Native Nations Day, the Commission adopted a Notice 
of Proposed Rulemaking to promote greater use of spectrum to help close 
the communications gap on Tribal lands and to ensure that Native 
Nations are at the center of the decisionmaking process. This NPRM, one 
of the most important requests from Native Nations in the last decade, 
strives to put licenses in the hands of those who will value the 
spectrum and build out on Tribal lands. This proceeding is pending at 
the Commission. Three of the five proposals launched in the NPRM would 
create new opportunities for Native Nations to gain access to spectrum 
through Commercial Mobile Radio Services licenses, while the other two 
proposals are designed to create new incentives for existing licensees 
to deploy wireless services.
    The Native Nations Notice of Inquiry. The Commission has said on 
many occasions that broadband is indispensable infrastructure for 
economic growth and job creation, and nowhere is that need more acutely 
felt than on Tribal lands. The lack of robust broadband services--and, 
in fact, even basic communications services--contributes to the 
challenges Native Nations face in building strong economies with 
diverse businesses and development projects. On Native Nations Day, 
therefore, the Commission launched a broad-based inquiry into a wide 
range of communications issues facing Native Nations--an inquiry that 
will provide a foundation for updating the Commission's rules and 
policies to provide greater economic, market entry, and communications 
adoption opportunities and incentives for Native Nations. The result of 
a broad collaborative effort across the Commission, led by the Office 
of Native Affairs and Policy, the Notice will lay the groundwork for 
policies that can help Native Nations build economic and educational 
opportunities for their own Tribal lands. The Notice seeks comment on 
the best ways to support sustainable broadband deployment, adoption, 
and digital literacy training on Tribal lands. Among other important 
questions, the Commission asks about the possibility of expanding the 
Tribal Priority concept into a Native Nations Priority, to identify and 
remove barriers to entry, rather than using a case-by-case waiver 
approach, thus making it easier for Native Nations to provide other 
services--wireless, wireline, and satellite--to their communities. The 
Commission also asks about opportunities to use communications services 
to help Native Nations address public safety challenges on Tribal 
lands, including the broad lack of 911 and E-911 services, and the 
needs of persons with disabilities on Tribal lands.
    Recognizing that, given their unique challenges and significant 
obstacles to broadband deployment, Native Nations need substantially 
greater financial support than is presently available, the Notice of 
Inquiry also seeks comment on a recommendation of the National 
Broadband Plan to establish a Native Nations Broadband Fund. The 
National Broadband Plan notes that grants from a new Native Nations 
Broadband Fund could be used for a variety of purposes, including 
bringing high-capacity connectivity to governmental headquarters or 
other anchor institutions, deployment planning, infrastructure build 
out, feasibility studies, technical assistance, business plan 
development and implementation, digital literacy, and outreach. In the 
Notice of Inquiry adopted on Native Nations Day, the Commission seeks 
comment on a number of issues associated with the establishment of the 
Native Nations Broadband Fund, including the need for such a fund, the 
purposes for which it would be used, and the level of funding. The 
public comment period for the Notice recently ended, and we are in the 
process of assessing the record and determining next steps for each of 
the issues addressed in the Notice.
    The Low-Income Program Notice of Proposed Rulemaking. The Low-
Income program of the universal service fund, commonly known as 
Lifeline and Link Up, has been, and continues to be, a critically 
important component in extending the reach of communications services 
to Native Nations. But with a telephone penetration rate hovering below 
70 percent and a broadband penetration rate well below ten percent, 
much remains to be done. According to Gila River Telecommunications, 
Inc., a Tribally-owned telecommunications company, the telephone 
penetration rate for the Gila River Indian Community stands at 86 
percent, still well below the national average of 98 percent but 
significantly above the average on Tribal lands. Gila River attributes 
its success in expanding the reach of telephone service largely to 
Lifeline, given that roughly 91 percent of the Community's elders 
participate in Lifeline. At the afternoon session of its March 3rd Open 
Meeting, the Commission adopted a Notice of Proposed Rulemaking in 
which it proposes to reform and modernize Lifeline and Link Up--issues 
of great interest to Native Nations. The Commission is preparing to 
take action in the near future to address many of the issues raised in 
the Notice of Proposed Rulemaking.
    Universal Service Reform--The Connect America Fund and The Mobility 
Fund. As part of a major rulemaking procedure, the Commission is 
preparing in the very near future to reform and modernize the High Cost 
component of the universal service fund, with a proposed transition to 
a Connect America Fund, including a Mobility Fund. The Office of Native 
Affairs and Policy is working closely with the Wireline Competition 
Bureau and the Wireless Telecommunications Bureau to finalize policies 
that will increase broadband availability--including mobile broadband--
in Native Nations, while preserving existing services. In finalizing 
reforms, we are focused on the unique challenges facing Native Nations, 
which may not be suitable for a one-size-fits-all solution.
    The FCC-Native Nations Broadband Task Force. One of the top 
requests from Native Nations in the National Broadband Plan was the 
creation of a new FCC-Native Nations Broadband Task Force that would 
ensure that the Commission's consultation with Native Nations is an 
ongoing, continuous dialogue and a shared effort between partners. 
Chairman Genachowski fulfilled this request when, on Native Nations 
Day, he appointed to the Task Force 19 members representing Native 
Nations and 11 members representing Bureaus and Offices across the 
Commission. The Task Force has met twice since its inception--once via 
conference call and once in person--and is formulating plans to meet 
again in the near term. The Task Force will ensure that Native concerns 
are considered in all relevant Commission proceedings and will work to 
develop additional recommendations for promoting broadband deployment 
and adoption on Tribal lands. The Task Force will also coordinate with 
external entities, including other federal departments and agencies. 
These efforts will culminate in more efficient ways of working with our 
Native Nation partners, the industries, and the institutions of Native 
Nations.
Conclusion
    The Office of Native Affairs and Policy is ready to continue 
rolling up our sleeves and pulling out our laptops as we continue our 
mission. Native Nations Day was a success, and the Commission is proud 
of the work it has done so far. However, we must build on that success 
and the success of our other activities since the creation of the 
Office a mere 14 months ago. Among other things, one of our top 
priorities is to overhaul, update, and increase the collaborative value 
of the Commission's Indian Telecom Initiatives, or ITI, program, moving 
it from version 2.0 to version 10.0 and even beyond. We look forward to 
increasing the effectiveness and value of these regional workshops, 
trainings, consultation, and networking events. We also look forward to 
establishing, by the end of the year, a federal interagency broadband 
working group that engages other federal agencies concerned with Native 
Nations and with missions on Tribal lands related to broadband and 
communications deployment, such as education, health, public safety, 
energy, cultural preservation, and economic empowerment. With a new 
inter-agency initiative on Native broadband, the Federal Government can 
coordinate both internally and directly with Native Nations on 
broadband-related policies and programs.
    Internally, we look forward to working with colleagues across the 
Commission to increase the value of the information tools that the 
Commission has for Native Nations and Communities. For example, the 
Commission's Spectrum Dashboard 2.0, which was unveiled in March, 
allows users to view the licenses and spectrum leases that cover 
specific or all Tribal lands. We plan to continue holding meetings with 
Native Nations to discuss how this and other Commission information 
tools can be improved and more responsive to the needs of Tribal 
communications planners. We also look forward to reviving an internal 
training and speaker series for decision makers and colleagues across 
the Commission on how to work with Native Nations and the basics of how 
to coordinate and conduct consultations with Native Nations.
    In conclusion, we have heard several recurring themes in our 
conversations with Native leaders--continue to meet with us, listen to 
us, and use what we tell you to bring communications on Tribal lands 
into the 21st century. The overarching message is that, if 
consultations are to be successful, if future education and training 
sessions are to be well-attended and productive, and if efforts to 
inform, educate, and put Native Nations at the center of the 
decisionmaking process are to succeed, we must do our work with Native 
Nations largely within their Native communities. Native Nations are 
aware of our Office's abilities and many have told us that, in order to 
best help them solve communications problems, we must work with them 
where the problems exist, see the problems first-hand, and endeavor to 
find the solutions in concert with them. We welcome all of these 
opportunities.
    Thank you again for the opportunity to testify this afternoon. I 
look forward to answering any questions you may have.
    Attachment

    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    

    The Chairman. Thank you very much, Mr. Blackwell.
    Dr. Hays, will you please proceed with your testimony?

    STATEMENT OF HOWARD HAYS, M.D., M.S.P.H., ACTING CHIEF 
       INFORMATION OFFICER, INDIAN HEALTH SERVICE, U.S. 
            DEPARTMENT OF HEALTH AND HUMAN SERVICES

    Dr. Hays. Mr. Chairman and members of the Committee, good 
afternoon. I am Dr. Howard Hays, Acting Chief Information 
Officer for the Indian Health Service.
    I am pleased to have the opportunity to testify on 
innovation in health care technology within the Indian Health 
System and its benefits to Native communities with respect to 
e-commerce, jobs and the global marketplace.
    As you know, the Indian Health Service offers a 
comprehensive health care delivery system to 1.9 million 
members of federally-recognized American Indian and Alaska 
Native tribes through federally and Tribally operated hospitals 
and clinics and urban Indian health programs in 35 States. The 
mission of the agency is to raise the physical, mental, social 
and spiritual health of American Indian and Alaska Native 
people to the highest level in partnership with the tribes and 
the communities that we serve.
    The Indian Health Service is a health care agency, and our 
testimony today will focus on technology infrastructure in 
Indian communities in the context of health care, tele-medicine 
in particular, both its current state and the potential for the 
future.
    Despite improvements in health status for a number of 
conditions over the decades, American Indians and Alaska 
Natives continue to face disparities in access to care, 
preventable morbidity and mortality, and the burden of chronic 
disease. The prevalence of heart disease and diabetes remains 
considerably higher among the Native populations, as does the 
risk from certain mental health disorders compared to other 
racial and ethnic groups. The distribution of the American 
Indian and Alaska Native populations and our health care 
facilities over some of the most beautiful but isolated and 
under-served parts of the Country increases the challenges of 
health care delivery, especially where specialty care and 
consultation are concerned.
    This is where tele-health services can have their greatest 
impact. Tele-health is an increasingly critical part of 
patient-centered care. The diverse tool kit of tele-health 
includes real-time teleconferencing, store and forward 
consultation, remote patient monitoring, and mobile health, or 
m-health. These rapidly evolving tools and capabilities enhance 
timely consultation, diagnosis and treatment, supporting best 
practice approaches to care. They also enable new models of 
care that emphasize relationships and communication while 
facilitating improved quality, cost effectiveness and value.
    The IHS has embraced tele-health since the 1970s when a 
collaboration among the IHS, NASA, the Department of Health, 
Education and Welfare, and the Papago, or Tohono O'odham, Tribe 
created the STARPAHC project. STARPAHC provided realtime 
satellite-based communication across the very large Tohono 
O'odham Reservation in Southern Arizona.
    More recent examples of IHS success with tele-health 
service delivery innovation include the Alaska Federal Health 
Care Access Network, or AFHCAN, and the IHS Joslin Vision 
Network Tele-Ophthalmology Program. AFHCAN started in 2001 and 
provides tele-health services to over 300 Alaska villages and 
Federal sites. Over 106,000 tele-health cases have been created 
in AFHCAN over the past decade. Using store and forward 
technology, AFHCAN has been shown to greatly reduce waiting 
times for specialty care and dramatically reduce travel costs.
    The Joslin Vision Network Tele-Ophthalmology Program now 
serves 78 sites in 22 States. JVN sends retinal photographs to 
a central reading center where specialists can diagnose early 
diabetic retinopathy and recommend interventions to reduce the 
risk of blindness. Over 50,000 patient examinations have been 
completed through the JVN program, including 10,000 patients in 
2010 who had never previously been screened.
    Tele-behavior health services are growing rapidly across 
the Indian Health Care system with many facilities relying on 
tele-health to reach mental health providers that would not 
otherwise be available to patients. Our partners in tele-
behavioral health service delivery include the University of 
New Mexico and the University of Colorado.
    Chronic disease management using tele-health technologies 
is being implemented by 12 IHS and Tribal facilities 
participating in our Improving Patient Care initiative. These 
sites will use remote home blood pressure monitoring to enhance 
care coordination of patients with diabetes and poorly-
controlled blood pressure. Also, a new tele-trauma 
collaboration between IHS and the University of New Mexico 
Regional Trauma Center provides timely consultation and 
evaluation of CT scans for patients seen at the Gallup Indian 
Medical Center, improving the early and accurate evaluation of 
patients with head injuries and helping to decrease unnecessary 
patient transfers.
    Other services such as dermatology, cardiology, nutrition, 
radiology and pharmacy are provided by tele-health in certain 
Indian Health locations. But few of these services are 
available system-wide, and substantial variation exists across 
Indian Health regarding the availability of tele-health tools 
and the infrastructure to support using them. Network 
infrastructure in many locations is insufficient and requires 
upgrading. Operational capacity for expanded implementation, 
training and technical support is often sub-optimal. And many 
programs lack the clinical and support staff to coordinate and 
perform the services. Secure interfaces between systems need to 
be developed and the policies and standard that will permit the 
leveraging of new mobile health technologies in many cases 
remains to be established.
    Finally, reimbursement policies for tele-health services 
lags behind the available technologies, constraining the 
availability of Indian Health facilities to promote adoption 
and change. The variability in system capabilities and 
utilization of tele-health tools hampers the ability of the 
Indian Health System to expand regional successes into national 
models of care. With strategic use of innovation on a scale 
that can extend quality health care, public health support and 
learning capacity to all American Indian and Alaska Native 
communities.
    The expansion and success of tele-medicine in Indian 
communities is linked to their economies as well. More jobs are 
needed to support health care and related technologies in a 
21st century economy. These jobs require new skills and many of 
the skills needed to support tele-health are similar to those 
required to support community services, education and 
businesses.
    Moreover, the infrastructure that supports tele-health also 
supports video conferencing and online training, expanding 
access to education and advanced degrees. Investment in 
Internet infrastructure and bandwidth will produce positive 
results for both health care and economic growth in Indian 
communities. The IHS and its Tribal partners embrace innovation 
in health care delivery for Native communities. Health 
information technology holds great promise for our models of 
care in the expanded educational and economic needs of the 
communities we serve. We look forward to the opportunity to 
work together to help reach this goal.
    Mr. Chairman, this concludes my testimony. I will be happy 
to answer any questions the Committee may have.
    [The prepared statement of Dr. Hays follows:]

    Prepared Statement of Howard Hays, M.D., M.S.P.H., Acting Chief 
 Information Officer, Indian Health Service, U.S. Department of Health 
                           and Human Services

    Mr. Chairman and Members of the Committee:
    Good afternoon, I am Dr. Howard Hays, Acting Chief Information 
Officer for the Indian Health Service (IHS). I am pleased to have this 
opportunity to testify on the Indian health system's use of health care 
technology innovation, and the potential for such innovation to improve 
access in Native communities to e-commerce, jobs, and the global 
marketplace.
    The IHS plays a unique role in the U.S. Department of Health and 
Human Services to meet the Federal trust responsibility to provide 
health care to American Indians and Alaska Natives. The IHS provides 
comprehensive health service delivery to 1.9 million members of 
Federally-recognized American Indian and Alaska Native (AI/AN) Tribes 
through a system of Federal and Tribally operated health facilities and 
Urban health programs based on treaties, judicial determinations, and 
Acts of Congress. The mission of the agency is to raise the physical, 
mental, social, and spiritual health of AI/ANs to the highest level, in 
partnership with the population we serve. The agency aims to assure 
that comprehensive, culturally acceptable personal and public health 
services are available and accessible to the service population. Our 
foundation is to promote healthy AI/AN people, communities, and 
cultures, and to honor the inherent sovereign rights of Tribes.
    The IHS works in partnership with the Tribal governments and 
communities it serves and benefits from the guidance of local, regional 
and national Indian health boards in all aspects of the Indian health 
care delivery system. Additionally, under the Indian Self-Determination 
and Education Assistance Act (ISDEAA), many Tribes across the country 
have assumed full authority for all or part of health care delivery 
within their communities, including hospital operations.
Access to Quality Healthcare
    Over the past 40 years, there have been many improvements in health 
status for American Indians and Alaska Natives. For example, mortality 
from unintentional injuries, homicides, alcohol-related deaths, and 
tuberculosis have significantly decreased. \1\ Despite these 
improvements, disparities in access to care, preventable morbidity and 
mortality, and the burden of chronic disease persist. For example, the 
prevalence of heart disease and diabetes is considerably higher among 
AI/ANs compared with the rest of the U.S. population. \2\ American 
Indians and Alaska Natives are also at higher risk for certain mental 
health disorders compared with other racial/ethnic groups.
---------------------------------------------------------------------------
    \1\ Trends in Indian Health, 2002-2003 Edition. Available at http:/
/www.ihs.gov/NonMedicalPrograms/IHS_stats/
index.cfm?module=hqPubTrends03
    \2\ Barnes, P. M., P. F. Adams, and E. Powell-Griner. Health 
Characteristics of the American Indian or Alaska Native Adult 
Population: United States, 2004-2008. National Health Statistics 
Reports 20. Hyattsville, MD: National Center for Health Statistics, 
2010.
---------------------------------------------------------------------------
    Such challenges make innovation a vital priority within Indian 
healthcare. Innovative processes and tools enable our care delivery 
system to adapt and help meet the changing needs of the communities we 
serve. National efforts, such as the Improving Patient Care initiative, 
exemplify the IHS's commitment to performance improvement in health 
care delivery. This commitment is also demonstrated by the expanding 
use of health information technology. Health Information Technology 
(HIT) is a key category of innovation in health care; in Indian health, 
HIT supports and facilitates an array of activities focused on 
effective healthcare delivery and efficient resource management. In 
partnership with Tribes and Tribal programs, and with priorities set by 
the joint Tribal/Federal Information Systems Advisory Committee (ISAC), 
the IHS emphasizes the timely use of health information technology and 
delivery system innovation to address the preventive and treatment 
needs of our patients, families, and communities. While HIT innovation 
takes many forms, such as electronic health records, personal health 
records, and related information systems, I would like to speak today 
specifically about telehealth service delivery, an important example of 
the IHS emphasis on access and quality in our service delivery model.
Telehealth Innovation
    Telehealth is an increasingly critical part of patient-centered 
care--within a community orientation and population health perspective. 
The diverse ``toolkit'' of telehealth includes real-time 
videoconferencing, ``store-and-forward'' consultation, remote patient 
monitoring, and ``mHealth'' or mobile health. These rapidly-evolving 
tools and capabilities enhance timely consultation, diagnosis, and 
treatment, supporting best practice approaches to care. They enable new 
models of quality service delivery, models that emphasize relationships 
and communication while facilitating improved health care quality, 
cost-effectiveness, and value. In the IHS, delivering the right care in 
the right place at the right time is a top priority. But telehealth 
permits two additional ``rights'': the use of right innovation tools in 
ways that promote the right patient-care team relationships.
    The use of telehealth is not new to Indian country. In the early 
1970s, the IHS pioneered mobile telehealth service through the ``Space 
Technology Applied to Rural Papago Advanced Health Care'' (STARPAHC) 
project. A collaboration among the IHS, National Aeronautics and Space 
Administration, Health Education and Welfare, and the Papago (Tohono 
O'odham) Tribe, STARPAHC represented a novel use of leading edge 
technology and communications to provide mobile outreach to Tribal 
communities in southern Arizona. Over 25 years later, Indian health 
again demonstrated leadership in telehealth service delivery 
innovation, through the collaborative development of the Alaska Federal 
Health Care Access Network (AFHCAN) and the IHS Joslin Vison Network 
Tele-Ophthalmology Program. Both of these recent programs evidence the 
continued commitment to innovation within Indian health. Both have 
demonstrated the vital role of collaboration in service delivery. Both 
have also shown impressive results.
    Operational since 2001, the AFHCAN provides telehealth services to 
over 300 Alaska villages and federal sites across Alaska. In the past 
decade, more than 106,000 telehealth cases have been created within the 
Alaska Tribal Health System alone, for primary and specialty care. This 
secure system of timely ``store-and-forward'' consultation has improved 
access to quality care, reduced costs, and improved efficiency in 
measurable ways. For example, the use of tele-consultation via the 
AFHCAN telehealth solution has significantly reduced waiting times for 
Ear, Nose and Throat (ENT) specialist evaluations, decreasing the 
percentage of patients who wait 4 or more months for an ENT evaluation 
in one Alaska village community from 48 percent, before telehealth, to 
less than 3 percent after telehealth began. \3\ It has resulted in 
earlier diagnosis of treatable conditions and an improvement in 
specialist efficiency. \4\ Almost 75 percent of tele-consultations at 
the Alaska Native Medical Center are now completed in one business day. 
The expanded us of telehealth in Alaska has increased access to health 
care while significantly decreasing patient related travel costs. Such 
savings create opportunities for additional care.
---------------------------------------------------------------------------
    \3\ Hofstetter, P. J., J. Kokesh, A. S. Ferguson, and L. J. Hood. 
``The Impact of Telehealth on Wait Time for ENT Specialty Care.'' 
Telemedicine and e-Health 16, no. 5 (2010): 551-56.
    \4\ Kokesh, J., A. S. Ferguson, and C. Patricoski. ``The Alaska 
Experience Using Store-and-Forward Telemedicine for ENT Care in 
Alaska.'' Otolaryngologic Clinics of North America in press.
---------------------------------------------------------------------------
    Similarly, the IHS Joslin Vision Network (JVN) Tele-Ophthalmology 
Program has demonstrated impressive results. Diabetes is 2.2 times more 
prevalent among AI/ANs than among the general U.S. population. \5\ The 
IHS JVN solution is deployed throughout Indian country for the remote 
diagnosis and management of diabetic retinopathy, the leading cause of 
blindness in the United States. To date, the IHS JVN solution has been 
installed at 78 sites in 22 states, with additional communities served 
through a portable deployment strategy. Since the program's inception, 
almost 50,000 patient examinations have been completed. Of note, in 
2010, over 10,000 patients with diabetes who had not previously 
received an annual retinal examination received such an examination. 
Published data documents both the diagnostic accuracy and cost-
efficiency of this important innovation.
---------------------------------------------------------------------------
    \5\ Centers for Disease Control and Prevention. 2007 National 
Diabetes Fact Sheet. Available at http://www.cdc.gov/diabetes/pubs/
estimates07.htm#4
---------------------------------------------------------------------------
    Telehealth has been used in Indian health to support primary and 
specialty health care in over 30 clinical disciplines. Its utilization 
in Indian health continues to expand. Additional examples of care 
models undergoing change as a result of telehealth include:

   Behavioral health. Telehealth visits in behavioral health 
        are growing at a significant rate across Indian health, with 
        many Indian health facilities now relying on mental health and 
        behavioral health service through telehealth. This service is 
        providing access to care that was either previously unavailable 
        or only available through significant travel and expense. The 
        IHS Tele-Behavioral Health Center of Excellence in Albuquerque 
        supports such behavioral health service expansion through 
        direct care via videoconferencing, assistance with standards 
        and operational specifications, and partnerships with expertise 
        at the University of New Mexico Center for Rural and Community 
        Behavioral Health and the University of Colorado Health 
        Sciences Center.

   Chronic disease management. Through the Improving Patient 
        Care initiative, 12 IHS and Tribal facilities are piloting the 
        use of home blood pressure monitoring, as part of a new model 
        of care coordination for patients with diabetes and poorly 
        controlled blood pressure.

   Nutrition. Over four years, tele-nutrition services from a 
        single program office in Arizona have provided real-time 
        medical nutrition therapy in over 1600 patient visits, in 6 
        Native communities, across 3 states--patients who otherwise 
        would not have received such services. In addition, over 150 
        hours of nutrition training have been provided to community-
        based diabetes outreach workers and fitness instructors.

   Specialty services. Dermatology, cardiology, radiology, 
        pharmacy, and many other services are increasingly provided via 
        telehealth. One novel project involves remote neurosurgical 
        consultation for head trauma. A collaboration between the IHS 
        Navajo Area and the University of New Mexico Regional Trauma 
        Center, this service has improved timely consultation for head 
        trauma management to the Gallup Indian Medical Center, 
        resulting in rapid and accurate evaluation of head injury and a 
        significant decrease in unnecessary patient transfers.

    Each year, an increasing number of IHS, Tribal, and Urban health 
facilities and programs gain using telehealth and related innovation. 
As noted, this experience spans many clinical disciplines. But it also 
supports educational and other health system needs. Of special note, 
telehealth tools facilitate new approaches to e-learning and training. 
Web-based tools, video-conferencing, and emerging capabilities via 
cellular and smart phones are revolutionizing access to medical 
information and training. Such capabilities hold significant promise 
for health education, health promotion and disease prevention, 
epidemiology and communicable disease tracking, social support, and 
human resource development. These tools are an increasingly important 
part of workforce development; on-line coursework permits many 
employees and community members to remain in their local communities. 
This avoids expensive travel, job displacement, and extended leave from 
or relocation of families. In addition, it facilitates leadership 
succession planning, allowing capable employees to remain in their 
jobs, within Indian health, while pursuing advanced degrees and 
training.
Challenges
    Despite such successes, not all AI/AN communities benefit from 
emerging telehealth-enabled service models. Critical variation exists 
across Indian health regarding the availability of telehealth tools and 
the infrastructure to use them. Of note:

   Proven telehealth solutions, such as AFHCAN and JVN, are not 
        available to all;

   Operational capacity for expanded implementation, training, 
        and technical support is insufficient;

   Critical clinical and program support staff is limited;

   Diverse information systems require secure integration of 
        patient health information;

   Network infrastructure requires upgrading;

   New mobile health capability demands updated security 
        standards and policies; and

   Lagging insurance reimbursement policy for telehealth 
        services constrains the ability of Indian health facilities to 
        promote change.

    These challenges result in variability in system capacities and the 
use of innovative tools. Such variability hampers the ability to expand 
regional successes into national models of care. The inability to 
develop such models of care restricts strategic use of innovation on a 
scale that can extend quality health care, public health support, and 
learning capacity to all AI/AN communities.
Health Care Innovation and E-Commerce
    The IHS is committed to delivering the highest quality care to 
American Indians and Alaska Natives. Importantly, we recognize that the 
challenges and barriers to health care innovation are also challenges 
and barriers to other priorities in the communities we serve. And these 
other priorities--jobs, economic opportunity, safety and emergency 
services--are vital to personal health and a community's health status.
    Investment in health information technology and telehealth 
capability may help address multiple priorities. In addition to 
enabling improved access to quality health care, telehealth tools can 
enable economic opportunity for Native communities as well. More jobs 
are needed in local communities to support health care needs in a 21st 
century economy. These jobs require new skills; many of the skills 
needed to support telehealth are similar skills for other community 
services, schools and social services, and small businesses. As already 
noted, telehealth tools such as videoconferencing and on-line training 
can expand access to education and advanced degrees. Such training 
decreases unnecessary travel, saving money for communities and 
community members. It increases the ability of local hospitals and 
businesses to recruit and retain staff that otherwise may be required 
to leave communities to pursue their education and training. It aids 
Indian health in leadership succession planning. It even allows Tribal 
health programs to develop service models in which the expertise can be 
provided by those programs to other regions and geographies, rather 
than the often-experienced situation in which Native communities are 
dependent on expertise from specialty groups in urban environments. For 
example, some of the best experience in the U.S. in specialist tele-
consultation lies within Indian health care. The opportunity to share 
such experience--across Indian health and with other health care 
organizations--may represent a strategic business opportunity for 
Tribal programs, one that could be realized if some of the already 
noted infrastructure requirements were addressed.
A Dynamic Environment
    New technology such as the smart phone is changing our world. This 
change brings exciting opportunities for health care. It also drives 
reconsideration of service models, resource needs, and partnership 
possibilities. Technology innovation, of course, is only part of the 
answer. How the technology is used, what changes are needed to maximize 
that use, what service models best leverage new technological 
capabilities--these are the types of questions that necessitate careful 
review and resource support. It will also be important to identify the 
similarities and differences in how new infrastructure may support 
diverse community needs. For example, expanded broadband infrastructure 
will benefit many organizations and activities in Native American 
communities. New 3G and 4G cellular networks will enable health 
programs to extend care into patients' homes. But security and privacy 
may mandate that the same health program's telecommunication network be 
appropriately partitioned, rather than shared. Consequently, a total 
community requirement for broadband should be considered so that 
sufficient capacity can be obtained to meet collective needs, rather 
than a situation in which there is competition within Native 
communities for limited broadband capacity.
Summary
    The IHS and its Tribal partners actively embrace the expanded use 
of innovation in health care delivery for Native communities. Health 
information technology, such as telehealth, holds great promise for our 
models of care and the expanded educational and economic needs of the 
communities we serve. The realization of this promise necessitates 
additional policy and resource assistance so that barriers to the 
appropriate use of such innovation may be reduced or eliminated. We 
look forward to the opportunity to work together to help reach this 
goal.
    Mr. Chairman this concludes my testimony. I will be happy to answer 
any questions the committee may have. Thank you for the opportunity to 
speak with you today.

    The Chairman. Thank you very much, Dr. Hays.
    I know that some of my colleagues are limited in how long 
they will be able to stay for today's hearing. So I am going to 
ask each of the witnesses on the first panel one question and 
then defer to my colleagues to ask their questions. If time 
permits, I will have a second round. Otherwise, I will submit 
additional questions in writing for the record.
    Mr. Blackwell, one of the major concerns that has been 
identified by tribes and by the General Accounting Office is 
the lack of accurate data about infrastructure in Indian 
Country. Is this something the FCC is aware of? And what are 
your recommendations for collecting such accurate data?
    Mr. Blackwell. Yes, Mr. Chairman, this is something we are 
aware of. Many of the tribes we met with, both here in 
Washington and in the field, have voiced their concerns about 
the accuracy and the depth of the data concerning the state of 
deployment of broadband on their lands. The Broadband Data 
Improvement Act and the State Broadband Data and Development 
Program are housed within the National Telecommunications 
Information Administration within the Department of Commerce. 
We have a memorandum of understanding, we have an MOU with them 
to provide technical assistance to them.
    We have coordinated with them in our office, the folks who 
are working on that mapping. In our office, we believe that 
through some targeted interagency coordination and including 
Tribal governments themselves, we can discuss that further, 
come to an understanding of where the tribes' concerns are and 
perhaps begin to address some of those basic, underlying 
realities.
    The Chairman. Thank you.
    Dr. Hays, as you know, IHS provides health service delivery 
to 565 federally-recognized tribes. Do all of these tribe have 
equal access to tele-medicine? If not, what is IHS doing to 
address this issue?
    Dr. Hays. As I outlined in my statement, the access is an 
issue across many of these locations. The reasons for that may 
include infrastructure, the Internet infrastructure that is the 
subject of this hearing, as well as the availability of the 
staff to carry out and provide and coordinate these services. 
And one of the other barriers is the reimbursement policies 
that don't actually allow for reimbursement for certain of the 
services. That makes it difficult for the programs to institute 
these types of services, if they can't make the business case 
that they will be able to support the services through 
appropriate reimbursement policies.
    The various IHS programs are making information about these 
technologies available. Each program will determine, each 
location will determine what is most appropriate for the 
services that they deliver and will institute them as they are 
able to, given the limitations of the technologies and 
availability of services that exist.
    The Chairman. Thank you, Dr. Hays
    Senator Tester?
    Senator Tester. Thank you, Mr. Chairman. Mr. Blackwell, we 
will start out. You tell me if this goal is what we are trying 
to achieve here, and that is to connect every household and 
every location in Indian Country. Is that where we want to 
head?
    Mr. Blackwell. That is certainly where the tribes want to 
head. That is what they are telling us.
    Senator Tester. Okay. And I think that is a laudable goal, 
I think there are some real benefits in that. In Indian Country 
in Montana and I think in a lot of places throughout the 
Country, where you have a lot of unemployment, so you have 
situations where people have to decide between food, sometime 
medicine, absolutely heating in a place like Montana, 
transportation. These services don't come for free. So even if 
the service is laid there, how are we going to address those 
kinds of issues? Have we thought that far ahead?
    I am not saying negative, what I am saying is, these are 
challenges that are real. And the Internet can offer some 
opportunities to stop the unemployment part of it, about jobs. 
So I just wondered, how does this maze of pieces line up in the 
end, do you see?
    Mr. Blackwell. That is a very good question. The extreme 
economic challenge of deploying such a capital-intensive 
critical infrastructure is different in every region of Indian 
Country. One of the things that has been a constant theme, and 
what the Commission has learned over the last 10 years, is that 
the inclusion of Tribal nations themselves into the model often 
gives a much greater chance of success of that model taking 
root.
    To draw upon what you have just said, one of the most eye-
opening experiences I had several years ago was when I met the 
oldest Tribally owned and operated telephone company in the 
United States, the Cheyenne River Sioux Tribe Telephone 
Authority. Within their umbrella of companies is a propane 
company. And the reason why the Tribal government put that 
there is so that in winter, when the propane dollar is as 
important as the telephone dollar, as you alluded to, the 
company can deliver the propane and power the service to a 
lifeline level of assistance and then be able to keep the phone 
on and keep the propane flowing at the same time.
    Senator Tester. Okay. Dr. Hays, let's approach it from a 
health care standpoint. Health care professionals are hard to 
get in rural America, they are particularly hard to get in 
Indian Country. I am of the belief that with tele-health, you 
can deliver a product, it may not be as good as the eyeball to 
eyeball product, but in some cases it could be better, 
depending on the level of professionalism at the other end.
    Has IHS done any, and you guys are hard pressed for dough, 
I know that, because I hear about it regularly, life or limb, 
all that stuff. Has IHS done any sort of projecting on how much 
money, or how much further they could make the dollar work if 
there was good tele-health availability in many of the 
hospitals around the Country, particularly as it applies to 
Indian Country?
    Dr. Hays. We have looked at the possibilities for tele-
health expansion. I can't say that we have a dollar figure tied 
to that, although we have looked at, because each program has 
to determine what is the best way to deliver the services that 
they have and which technologies they would have to use. We 
have spent some effort looking at what are the possibilities. 
But I am not aware of a dollar figure that we could apply to 
those technologies. There are a lot of possibilities there. We 
would be happy to provide more detail for the record if you 
would like.
    Senator Tester. If you have them. I don't want you to spend 
your lifetime doing them, but by the same token, I think there 
is an opportunity here to make the dollars go further in areas 
where we are in tight budget times. I know for a fact IHS never 
has enough money, for whatever reason. I also know for a fact 
that we can't get health care professionals in many parts of 
rural America. In Indian Country, it is exponentially even 
worse.
    It would just seem to me that there is an opportunity here, 
once the infrastructure is built, that that pay-back could be 
pretty significant through better health care and through 
better opportunities to have access to health care, 
particularly in Indian Country. That is just a little soap box 
stuff. Thank you, Mr. Chairman.
    The Chairman. Thank you very much, Senator Tester.
    Senator Franken, your questions?
    Senator Franken. Thank you, Mr. Chairman.
    Mr. Blackwell, the Universal Service Fund currently 
provides funding to schools and libraries for Internet access. 
The Internet is obviously an incredible resource for students. 
And almost a necessary one right now.
    It is my understanding, however, that libraries in Tribal 
areas have had difficulty accessing these funds because of some 
States' laws. What work has the FCC done and what work can 
Congress do to ensure that Tribal area libraries and schools 
have adequate Internet access?
    Mr. Blackwell. This is a matter we have heard about from 
certain parts of Indian Country for a few years. I was not 
completely aware that it was still an issue in certain places. 
One of the things we have done in the Office of Native Affairs 
and Policy is launch a comprehensive omnibus notice of inquiry 
into various issues. Through that vehicle, we possibly can take 
a look into this. But I do believe that our Wireland 
Competition Bureau [phonetically], in coordination with our 
Office of Native Affairs and Policy, we might be able to look 
more deeply into the issue and follow up with you and this 
Committee.
    Senator Franken. Thank you. I would appreciate that.
    You wrote in your testimony, you didn't do it here in your 
five minute pared down testimony, really a story that really 
struck me about witnessing a tele-medicine procedure in which a 
Native woman was told that she had cancer. And kind of 
struggling along with her, because of the bad hookup. The lack 
of speed and the flickering of the hookup, trying to read the 
doctors' faces to see, along with her, to see how serious it 
was.
    Can you just describe that? This really brings a human, it 
really touched me, it brings a real, an actual human being and 
a real human emotion and a real human price to what this 
inferior kind of connectivity brings. Can you talk about that 
for just a moment?
    Mr. Blackwell. Yes, Senator, I can. I appreciate your 
question, because it helps me deliver on a promise that I made 
to her to bring that knowledge back to Washington.
    I had always heard about the generosity of the island 
people. I had never seen it to that extent. That really came 
true. On the island of Molokai, she asks if we could sit in on 
her oncology consultation. It was with Queens Hospital at 
Honolulu. It was during that consultation that she learned that 
she had a relapse. And the speed of the connectivity was not 
fast enough for us. One of the things I noticed was that we 
were all sort of leaning forward, looking at the three doctors 
at the other end of the line, trying to determine just how 
grave the look on their face was.
    And afterwards, she immediately began the treatment, but 
she asked for me to come back to the area where she was 
receiving treatment. I thanked her for that. I told her it was 
really a life experience. And I asked her if she had that 
experience as well, trouble reading the expression of her 
doctor.
    Senator Franken. You were on the doctor's end? Which end 
were you on?
    Mr. Blackwell. No, sir, I was sitting next to her on 
Molokai. And the doctors were in Honolulu. A plane flight away. 
And she agreed, she said that it was, but that it was better to 
have her husband by her side and to be able to talk about what 
was happening immediately rather than to have that knowledge 
and not be able to talk with him about it for two days before 
she returned home. So that genuinely was the human side of it
    Senator Franken. Dr. Hays, this does show the human side of 
it. Are you guys coordinating, are Indian Health Service and 
the FCC coordinating to make sure that we optimize this so that 
tele-medicine can come to Indian Country at the right speed, so 
that someone, when they are getting a diagnosis, can read the 
doctor's face?
    Dr. Hays. Yes. I have to say that the FCC has been very 
interested in working with us to understand the needs in the 
communities and to advocate on behalf of Indian Health Service 
being able to provide better connectivity and better services. 
So without question.
    Senator Franken. Thank you, Mr. Chairman.
    The Chairman. Thank you very much, Senator Franken.
    Mr. Blackwell, earlier today the Chairman of the FCC 
unveiled a proposal to reform and modernize the Universal 
Service and to carry a conversation system. This brings to bear 
because of the question with Senator Franken on the Universal 
Service Fund.
    My question to you is, what is the FCC's plan for including 
tribes in the Universal Service Fund?
    Mr. Blackwell. I appreciate your question. Modernizing the 
Universal Service Fund and the Intercarrier Compensation 
Process is critical to connecting consumers in Indian Country 
to 21st century broadband. We have heard many of the same 
concerns that you have heard in many meetings we have had on 
USF reform with Tribal governments and companies serving Native 
nations.
    Earlier today, the Chairman delivered remarks on proposed 
reforms. During his remarks, he designed the Connect America 
Goals Fund of ensuring universal availability of mobile 
broadband through a new mobility fund to extend deployment of 
the state of the art mobile broadband to more than 100,00 road 
miles. I would like to quote from his remarks. Actually, he 
brought a copy of them that I would like to submit to the 
record, because they are the most authoritative, hot off the 
presses, most recent.
    The Chairman. We will include it in the record.
    Mr. Blackwell. Thank you. The Chairman said, ``This will 
begin with a one-time shot in the arm to accelerate deployment 
of 4G networks. Thereafter, the mobility fund will provide 
significant ongoing support for rural mobile broadband, which 
will include dedicated support for Tribal areas, where 
broadband and mobile services remain far behind the national 
average.''
    Mr. Chairman, a major part of our role in the Office of 
Native Affairs and Policy is to ensure that Native voices are 
heard and understood throughout the Commission on all of the 
rulemakings that impact them. We will ensure that these 
concerns and the views of Native communities are considered 
right up until the Commission makes a decision and promulgates 
rule and adopts an order in this important proceeding.
    The Chairman. Thank you. It is good to hear.
    Dr. Hays, a 2006 GAO report identifies the issue of 
inadequate data when it comes to telecommunication services in 
Native communities. The question is, does IHS have a data 
collection system for the tele-medicine programs?
    Dr. Hays. My understanding, sir, was that that report had 
mostly to do with telephone service and that sort of thing. As 
far as ours, we collect data, we have the ability to collect 
data on the number of tele-health services that are provided in 
the context of patient care. So if the question is about our 
ability to know what services are being provided through tele-
health, the answer to that is yes for the most part.
    In terms of our ability to know exactly where tele-health 
services are being delivered, we collect that through 
conversations and surveys of our areas and our facilities as 
opposed to data collection.
    The Chairman. Thank you.
    Are there any further questions?
    Senator Tester. Yes, Mr. Chairman, if I might.
    The Chairman. Yes, Senator Tester.
    Senator Tester. Thank you. I will start with Mr. Blackwell 
again. Through your consultations with the tribes, have you 
been able to determine what the priorities are, whether it is 
cell phone or Internet?
    Mr. Blackwell. It differs from tribe to tribe, Senator. 
Really, our office is working with every corner of the 
Commission possible to surface as many opportunities for tribes 
as they desire. That would include TV and radio, as well.
    Senator Tester. Dr. Hays, kind of peeling off the question 
that the Chairman just asked you, if I heard you answer that 
correctly, you said that you know where the services are 
provided via tele-health, but you are uncertain what locations 
have tele-health?
    Dr. Hays. No. What I intended to say there is that if a 
service is delivered through a tele-health method, and we are 
able to tell from looking at our electronic medical record if 
it was a tele-health service or not, so we can get some data on 
the number of individual service events that are tele-health. 
That is not universally true, but depending on the type of 
event. But in terms of the number of sites at which tele-health 
is being used, we don't have a data base of that, but we aware 
through conversations with our areas and discussions with the 
tribes what types of services they are provdiing.
    Senator Tester. The reason I asked that as one of my 
questions was, do you know how many sites you have tele-health 
opportunities. Obviously the answer to that is no?
    Dr. Hays. I would almost argue that every site has tele-
health opportunities in terms of the potential to use tele-
health.
    Senator Tester. But if they don't have the broadband, they 
don't.
    Dr. Hays. It depends on the type of technology that you are 
describing. But the answer to that in general is yes. If there 
is no connectivity to the location, you are going to have 
trouble delivering tele-health services.
    Senator Tester. Right. So what I kind of wanted to get an 
idea of, and you may or may not be able to answer this 
question, and if you can't and you can later, I would love to 
hear the answers. I will even just go Montana-specific. How 
many of the clinics have tele-health capabilities?
    Dr. Hays. There are several facilities in the Billings area 
in Montana that provide different types of tele-health 
services. For example, there are seven in the Billings area 
that actually provide tele-psychiatry to the VA.
    Senator Tester. How about in Indian Country? For instance 
Crow, or Northern Cheyenne? That is in the Billings area.
    Dr. Hays. Exactly.
    Senator Tester. If we had a Native American person go down 
to the clinic, and they had, let's say they had a mental health 
issue, do they have capabilities to access that? I am not 
concerned about Missoula or Billings or Great Falls. But I am 
concerned about Browning, well, I am concerned about those, 
too, don't get me wrong. But I am concerned more from a 
connectivity standpoint, what is going on in Arden and Browning 
and places where they have clinics.
    Dr. Hays. Each clinic has different sorts of tele-health 
available. But I could provide more information in detail about 
them. But there are couple provdiing tele-nutrition, for 
example, others have access to tele-dermatology. It depends on 
what they have set up locally.
    Senator Tester. I would love to, in just an overall kind of 
a snapshot of what is in the U.S. as far access, in Indian 
Country, on reservations.
    Dr. Hays. Yes, sir, we will provide that.
    Senator Tester. That would be great. Thank you very much, 
Mr. Chairman.
    The Chairman. Thank you very much, Senator Tester.
    Senator Murkowski, if you have any comments or questions to 
this panel, please proceed.

               STATEMENT OF HON. LISA MURKOWSKI, 
                    U.S. SENATOR FROM ALASKA

    Senator Murkowski. Thank you, Mr. Chairman. I appreciate 
the hearing and I apologize that I wasn't here for your opening 
comments.
    Senator Tester, if you want to see great tele-medicine in 
action, I am going to invite you up to Alaska. We do some good 
thing up there, and we do it because of necessity. Without 
having roads that connect us, we figured out how to do some 
good things.
    But we are limited in our capacity to do that when you 
don't have that broadband. So we need to work on that. But we 
have some good things going.
    Senator Tester. Can I come up when the salmon are running?
    Senator Murkowski. We will take you any time, and if you 
want to come with the salmon, we will show you where the best 
salmon are.
    Mr. Blackwell, I wanted to ask you a couple of questions, 
and this relates to the Universal Service Fund and the efforts 
within the FCC that propose reforming them. As you know, the 
Universal Service Administration company makes payments from a 
central fund to pay for programs like Lifeline, rural health 
care, schools and libraries and the high cost program. The high 
cost program is one where we basically work to ensure that 
reasonable rates for telecom services are comparable to 
customers in some of the urban areas.
    In Alaska, this is pretty important to us. We are primary 
beneficiary of the high cost program, as are many of the other 
rural areas. But for us, it is really pretty key. Without this 
funding for rural service providers, service rates for our 
sparsely populated remote areas I think would increase to 
levels that I don't think would be acceptable.
    I am concerned that the FCC is there looking to reform that 
they have not adequately considered the unique situation that 
we face up there in Alaska, just very remote situations. I do 
understand that you have a report that will outline the FCC 
reform plan. I guess I am looking for some form of assurance 
here this afternoon that Alaska will not be disproportionately 
affected by these FCC reforms. If you can comment on that, and 
perhaps give me some kind of an assessment, if you will, or a 
preview of what these new reforms might look like.
    Mr. Blackwell. Senator, I can certainly appreciate your 
concern. This order is, circulation before the Commissioners is 
imminent, so I have to be careful here. But I can tell you that 
first, I will tell you that I will most certainly take your 
concerns to the Chairman and the Commissioners and make sure 
that what you have asked is heard by them.
    I can tell you through the Office of Native Affairs and 
Policy, we have met with several different folks from Alaska, 
across Alaska, different offices, the Alaska Telecom 
Association. We met with several rural telephone companies in 
Alaska that have Native ownership. We have also met with the 
governor's office, personally went to a meeting of the Alaska 
Telecom Association. These are all meetings that our Office of 
Native Affairs and Policy has fostered. We have taken all the 
input that they have given us and put into the record in this 
matter as well.
    The Commission has had a longstanding, for a long time, has 
paid attention in the Universal Service content to Alaska. Upon 
occasion, we have been involved in things like the waivers of 
the after-hours e-rate rules for schools in Alaska, for 
community members to be able to use the connectivity after 
hours. So I can assure you that attention is being paid to 
Alaska. And I will do that again in follow-up.
    Senator Murkowski. I appreciate that commitment. I do 
recognize that this is imminent, that it should be out very, 
very quickly. So you may be constrained. But I guess I do just 
want to have that assurance. And you have indicated that you 
have been looking at it for a long time and I appreciate that. 
But we are quite concerned about what that impact may be. So I 
appreciate your taking that back to the Commission.
    Is the FCC going to continue its commitment to help some of 
our mst disadvantaged Americans as it transforms the Universal 
Service Fund into this Connect America Fund? How do we maintain 
that commitment there?
    Mr. Blackwell. One of the things that the Chairman outlined 
earlier is that within the Connect America fund there will be a 
mobile Connect America fund. A portion of that will be 
dedicated to Tribal lands in the United States, including those 
Tribal lands within Alaska. That would be the first part of the 
mobility fund, it would be a one time disbursement. Then there 
would be ongoing, recurring, dedicated support for Tribal 
lands.
    Senator Murkowski. So you are ensuring that throughout this 
process, we don't drop the ball in terms of that commitment, 
then?
    Mr. Blackwell. Yes.
    Senator Murkowski. Okay, good.
    Then just very quickly here, and I mentioned the high cost 
program and our concerns with that. Do you anticipate suffering 
much in terms of cuts to this high cost program? And I know it 
is difficult to try to forecast that, as we are all trying to 
figure out what is going on here with budget issues. Just give 
me your sense.
    Mr. Blackwell. I am not sure I would be able to do that, 
Senator, based on where the item stands right now. It is, 
circulation is imminent by the Chairman to the Commissioners 
for consideration of a vote on October 27th.
    Senator Murkowski. Okay. I think, Mr. Chairman, that is all 
I have. I don't have anything for Dr. Hays, but appreciate both 
of you gentlemen appearing in this hearing. And I appreciate 
you, Mr. Chairman, bringing it forward. Thank you.
    The Chairman. Thank you very much, Senator Murkowski.
    I want to thank this panel very much. You have been very 
informative. We have had some responses that we like, and there 
are others that we have to work on together on this. So I thank 
you again very much for your testimony and your responses. 
Thank you.
    I would like to invite the second panel to the witness 
table. Serving on our second panel is Mr. Lance Morgan, 
President and Chief Executive Officer of Ho-Chunk, Inc., 
located in Winnebago, Nebraska; Ms. Margo Gray-Proctor, the 
Board Chair of the National Center for American Indian 
Enterprise Development, located in Mesa, Arizona; and Mr. 
Michael J. Pollock, Managing Director of the Spectrum Gaming 
Group, located in Linwood, New Jersey.
    I want to welcome all of you here to this hearing. I would 
like to ask Mr. Morgan to please proceed with your testimony.

       STATEMENT OF LANCE G. MORGAN, CEO, HO-CHUNK, INC.

    Mr. Morgan. Chairman Akaka, thank you for the opportunity 
to address the Senate Indian Affairs Committee.
    I have submitted written testimony that talks about several 
subjects, and I will just touch on a few of them. One of them 
is Internet access. We have Internet access on our reservation. 
Our issue is primarily cost-related and capacity. So it is a 
slightly different animal.
    The only story I will tell us that we get a bill from our 
phone company, and in it is an advertisement for the non-Indian 
communities, offering them the exact same service at 50 percent 
off. I think they were dumb enough to put it in our bill, too.
    Those are really our problems. As we grow as a company, we 
have to invest real dollars into that ourselves, because no one 
else will do that. And that is a real problem for us.
    We also run an e-commerce site called Indianz.com, which is 
primarily a news and information site. I told the story in the 
written testimony, but basically it is a pretty important news 
and information source in Indian Country. It has been 
instrumental in getting that out there. It is about 20,000 
users a day, making it the largest Indian-oriented, Native 
America website
    But I want to spend the bulk of my time talking about the 
Internet in terms of the commerce aspect of it. First of all, 
the Internet has been an absolute boon for government 
contracting. I run now what is an international corporation 
from rural Nebraska. Cornfields surround us. We run the company 
through online services like HR, payroll, accounting, Internet, 
video conferencing. I was once on a video conference in my 
office in Nebraska with our housing company in Minnesota and 
they came in and kicked me off because there was an emergency 
with our office in Mexico City. So they switched over to that 
one. So that gives you some kind of sense of the issues that we 
face.
    In the government contracting arena, prior to the Internet, 
tribes didn't have information. We didn't have knowledge, we 
didn't have access. We didn't have the same abilities as large 
corporations and so we were relegated to the subcontractor 
arena, where a prime contract would get the contract and we 
would do some task on our reservation. If you travel the upper 
Midwest, it is littered with factories that used to do 
something and that are struggling to sort of be relevant in a 
modern economy.
    But in 1986, the Government did the Native 8(A) Act. Not 
much happened with that, really, until the Internet boom 
started in the late 1990s. That is when the information became 
equal. That is when our ability to access partners, to access 
information about contracts, to do the kinds of things that big 
companies had the advantage in before, that is when Tribal 
contracting actually took off. So the Internet actually has 
been a primary factor in the rise of Tribal contracting, which 
has had a lot of success in our world. I know there is some 
controversy about that, but I think that is another issue for 
another day. I have been here before on that subject.
    The bigger issue in my perspective, I spend time as a CEO 
and also as a lawyer. I run into the Internet quite a bit. I 
hadn't thought about it until someone asked me to do this 
testimony. But the Internet is sort of an extension of the 
battleground that tribes face. Now, tribes have been fighting 
with States since they were called colonies, we have been 
fighting over control, we have been fighting over money, power, 
land, you name it.
    The States themselves have been held at bay lately. They 
were doing pretty good the first couple hundred years, but 
lately, tribes have sovereign immunity. We have been able to 
keep them away from us with that. So what the States do, is 
they developed a system of indirect control. They threatened 
those who deal with tribes. And tribes do not function in a 
vacuum, so they have to participate in the economy. But the 
States basically can figure out ways to move up the economic 
chain.
    But the Internet is fuzzy. You don't quite know who is out 
there. You can't stop it directly. And it has caused them some 
problems. The Internet tobacco issue was a major issue a few 
years ago. In that world, the attorney general of New York went 
to the FedEx and UPS and got them to quit shipping. He went to 
the credit card companies and got them to quit processing. 
There was no law against. He just threatened them and they did 
it.
    The Post Office didn't bow to that sort of pressure and 
hence the PACT Act came in and stopped it. That is something 
new and very unusual for us, to see the outsourcing of Federal 
power to a State government causes us some concern, especially 
when they are dealing directly with us and they have such a 
poor track record. But it is their new play book. They can't 
deal with us directly because of sovereign immunity. Indirectly 
they have problems because it is fuzzy on the Internet. And 
tribes are increasingly dealing with each other, and they each 
have sovereign immunity, and that protects each other.
    So now their next solution is to come to Congress and see 
if they can get you to pass something to hurt us. That is a 
problem for us, because tribes are geographically isolated.
    But the Internet levels the playing field in our world. In 
that world, it allows us to do things that are innovative. IT 
doesn't have to be cigarettes, necessarily, but it could be 
insurance, it could be lending, it could be retail. It could be 
any sort of innovative thing that is out there.
    But what I am worried about is the States can come in, they 
want to control it, they want the money. I am worried that some 
little clever PR person will come up with some slogan, like in 
the PACT Act, we were supporting terrorists, of all things. And 
they will come up with some simple message and they will try to 
get it to you through Congress and take some control over us. 
We think that system probably needs to stop.
    I am going to read you the last couple of sentences from my 
written testimony in conclusion, because I want to be sure. 
This type of exploitation of tribes needed to be stopped a long 
time ago. But we have so many laws and legal precedents making 
it legal that we can't unwind these anachronisms. But Congress 
has the power to prevent this same old system from reemerging 
in the new economy that is made by the Internet.
    I ask that you be vigilant in our defense as we struggle to 
emerge from the depths of generations of exploitation, control 
and poverty.
    Thank you very much.
    [The prepared statement of Mr. Morgan follows:]

       Prepared Statement of Lance G. Morgan, Ceo, Ho-Chunk, Inc.

Introduction
    I am the CEO of Ho-Chunk, Inc., a successful Tribal economic 
development corporation. I am the managing partner of Fredericks, 
Peebles & Morgan, the largest law firm in the country that focuses 
exclusively on Tribal law, and in my spare time I teach Tribal economic 
policy and law at Arizona State University and the University of 
Arizona. I mention these jobs because I see the Internet from several 
perspectives in Indian Country. The Internet in Indian Country is 
several things. It allows my tribe to maintain an international 
corporation from a previously remote and rural location but at a higher 
relative cost than comparable regions. It also allows our website 
Indianz.com to disseminate Tribal news and information at a level and 
speed never seen before. More importantly it is an economic opportunity 
that is increasingly becoming a battleground over regulation and 
taxation.
    In this testimony I intend to discuss each issue, but I believe 
that the emerging battleground issue is by far the most important 
because it has the most potential for both growth and for conflict.

Internet Access Cost
    A lot of the focus of federal resources has been on making sure 
Indian Country has access to the Internet. That is an important goal, 
but from my tribe's perspective it is no longer a priority. Our tribe 
has Internet access from our local phone company. However, our economic 
growth is now constrained by the lack of Internet capacity in our 
community. Also our access costs are about 50 percent more than in 
nearby urban areas where competition is plentiful. Strangely our access 
is also more expensive than comparable non-Indian rural communities 
from our area. I actually have received advertisements in my Internet 
bill offering the exact same service at greatly reduced rates in 
neighboring non-Indian communities from our phone company.
    When we started Ho-Chunk, Inc. in 1994, we only had dial up. But 
when the local phone company refused our request to bring DSL service 
into our community, we brought high speed Internet to our company only 
by leasing lines and creating our own access. This potentially made us 
a competitor to the local rural phone company and then they almost 
immediately started offering DSL service. In a neighboring Native 
community where we have business operations, we basically promised to 
order twice as many lines as we needed to make the service worthwhile 
to install in that community. Now both communities have DSL service, 
but at higher than average rates.
    Since our initial push of the local phone company, we have 
developed dramatically and we severely strain the capacity of our 
current Internet service. We now have multiple T1 lines coming into our 
corporate headquarters and we beam the Internet access by microwave 
about 1000 yards to our other corporate facilities located in our newly 
developed community called the Ho-Chunk Village. The capacity of this 
system is now a serious growth constraint and has become an efficiency 
problem when running web based programs.
    We applied for a highly competitive rural innovations HUD grant to 
cover the cost of developing a fiber optic network for high speed 
Internet and a community wide Wi-Fi network. We did not receive the 
grant. We have now allocated $200,000 from our Tribal capital to the 
project, which strains our resources and takes away from other vital 
social and economic projects. However, we need to upgrade or risk 
becoming too inefficient to function, much less grow.
    Interestingly, the mere threat of the grant application was enough 
for the local phone company to dramatically reduce the tribe's Internet 
access costs (Not Ho-Chunk, Inc.'s), but they required a multi-year 
commitment, which I presume is intended to limit competition. The local 
price reduction for the tribe itself didn't help the local home user 
lower their costs, but it does illustrate how competition in our 
environment can lead to better service and lower costs.
    One last example related to affordability. We provide guest access 
to some of our corporate facilities and it is not uncommon for people 
to be sitting in their cars using our wireless service outside our 
buildings.

Indianz.com
    Ho-Chunk, Inc. also owns the Internet news and information site 
Indianz.com. Indianz.com was started by three Native Americans in 1999 
to aggregate news and information about all things Native American on 
the Internet. In 2000, Ho-Chunk, Inc. merged our e-commerce site 
Allnative.com with Indianz.com.
    As part of our original partnership, all editorial and content is 
controlled by two of the original partners. Ho-Chunk, Inc. exercises no 
control over content because it was important to us that the site's 
content not be encumbered by our economic or political interests. 
Despite now owning the entire company, the original employees still 
have absolute control over content and we intend to maintain that 
editorial independence.
    Indianz.com has experienced phenomenal growth and we believe it is 
the most visited and influential Native American oriented site on the 
Internet. It has 16 million hits per month, 5 million pages views a 
month and 20,000 unique visits a day. Its usage is too high to be 
hosted by our on-reservation servers, which are already capacity 
constrained.
    Indianz.com is used by most people as a quick reference tool to see 
the latest Native American issues. Indianz.com does some original 
reporting, but primarily offers a brief synopsis of existing articles 
and provides the link to the corresponding article. It also provides a 
very helpful list of previous articles on the same subject as reference 
and background information.
    Our goal was that Indianz.com would grow as a news and information 
site and Allnative.com would be a primary advertiser and Indianz.com's 
success would drive Internet traffic to our ecommerce site. It worked 
phenomenally for 10 years. AllNative.com sold all things Native and 
distributed over 1 million catalogs over the last several years, but 
its primary product gradually became Native made tobacco products. This 
business was basically destroyed by the PACT Act, which prevented the 
mailing of Tribal tobacco products. Because the tobacco business was 
supplementing the other Native products business like jewelry, art and 
clothing, we completely shut down the products business 1 month after 
the PACT Act became effective. The shutdown hurt dozens of local and 
regional artists and craftspeople. It also put Indianz.com at risk 
financially.
    Indianz.com is not a large revenue generator for Ho-Chunk, Inc. 
Without the support of our ecommerce site, it is marginal from a purely 
financial perspective. Its primary revenue sources are now banner ads 
and job advertisements.
    Internally, Indianz.com is also viewed as a marketing tool for our 
other corporate and affiliated entities. However, it's impact goes far 
beyond just the finances. I think its primary function has been to 
consolidate a fragmented news sector into one place where those 
interested in Native issues can quickly and easily survey the Native 
news world and that has a unique value and an important role in Indian 
Country. Information, knowledge and education are what we are now and 
our company considers that to be very valuable.

Economic Opportunity and Risks
    The Internet has been a boon for Indian Country in several ways. 
Ho-Chunk, Inc. is headquartered in rural Nebraska, but we have 
operations in over a dozen states and in four foreign countries. We 
sell houses in Canada and work for the Federal Government in Mexico, 
Iraq and Afghanistan. All of our domestic and international operations 
are run from the Winnebago Tribe of Nebraska's reservation. All of our 
primary offices are linked by email, web-based accounting and human 
resource programs, internal Intranets and video conferencing. While 
sitting in my office in Nebraska, I once got bumped out of a video 
conference with our sales team for our housing company in Northern 
Minnesota to deal with an emergency issue with our government 
contracting people in Mexico City.

Government Contracting
    The Internet has made this kind of international company possible 
on the reservation. Prior to the Internet, a Tribal company wouldn't 
have had the resources to compete with the reporting, financial, and 
human resource infrastructure of larger companies. The Internet has 
been especially valuable in the government contracting arena where 
partnerships are common and communication and rapid access to 
information is vital to success.
    The rise of SBA 8a program in Indian Country has been largely 
facilitated by the Internet. Without it, the large contractors would 
have all the access to information, contracting officers, and potential 
partners. It has allowed Tribal entities to be prime contractors. Prior 
to the Internet's development, Tribal government contracting was 
largely sub contractor work where tribes would be assigned some low 
level task and largely left out of the higher end of the contract due 
to lack of contacts, lack of information and lack of knowledge. Now a 
Tribal company can use the Internet to have contract information 
delivered to them each day by email They can search for possible 
partners and advertise their skill sets and past performance on the 
Internet.

Civil Regulatory Issues and State Control
    There is another area where tribes have used the Internet to 
develop their economies. They have passed laws to create civil 
regulatory advantages for economic gain. This is not an unusual 
economic development strategy. States pass laws creating varying rules, 
regulations and tax rates to attract capital and development all the 
time. Tribes have been largely prevented from doing this by powerful 
state interests being influenced by the desire for control, tax revenue 
or the economic interests of non-Tribal competitors. The legal system 
also has created dozens of exceptions allowing state incursion in our 
regulatory environment which prevents tribes from being too aggressive. 
Largely due to sovereign immunity, states cannot directly enforce their 
will upon tribes. Therefore, the states have evolved a system of 
indirect control. Under this indirect system, the states move the 
incidence of tax to off reservation entities. They regulate the non-
Indian company and threaten it will civil or even criminal liability if 
they follow the Tribal law instead of the state. Companies are forced 
to choose between which law to follow or which tax to pay. This can 
result in double taxation or more likely it will result in the 
reservation being the last place to be developed, if at all. Tribes are 
then forced to make the decision to have nothing or to ``take what they 
can get.'' This sort of exploitation and control is quite common and 
unfortunately considered quite legal under multiple U.S. Supreme Court 
opinions.
    The Internet has been the wild card in this nicely established 
system of state control. The players are not as defined and harder to 
directly influence by the states. Therefore, the state system of 
controlling tribes indirectly is not nearly as effective. Also, a 
growing number of Tribal companies are interacting with each other and 
typically will have sovereign immunity which further insulates them 
from state demands.
    Tribes have been establishing their own laws and legal systems 
outside of state control to create an economy. The Native Internet 
Tobacco business is one example of such a development. States wanted 
control over the tax and Master Settlement Agreement revenue, but had 
no direct way to stop the tribes from selling their products. The 
products were made on reservations and sold on reservations. All of 
this economic activity took place outside of state jurisdiction and 
often by Tribally owned entities with sovereign immunity.
    There is no limit to how far a state will go in this area. The 
Attorney General of New York, the now infamous Elliot Spitzer, 
threatened the credit card companies and they voluntarily quit 
processing Tribal credit card transactions. That didn't stop the 
business so he then threatened UPS and Federal Express and they quit 
shipping our products. All of this happened without any law or legal 
case deciding this issue. When the U.S. Post Office refused to bow to 
pressure, the states worked with Congress to pass the PACT Act, which 
prevented the Post Office from shipping Tribal products. This 
effectively ended the Internet business and put thousands of Native 
Americans out of work and wiped out large portions of Tribal 
governments tax income. It is ironic to us that it is now almost 
illegal for us to make, tax and sell a product which was invented by 
tribes.

Future Civil Regulatory Issues
    States are often highly regulated places. Tribes can now use their 
own powers to pass laws creating regulatory advantages in areas of 
taxation, insurance, lending, and others. The emerging Tribal Internet 
lending business is just another example of this type of growth. The 
states don't like it, but they don't have an easy indirect target to 
threaten, and thereby, isolate and control tribes.
    However, I am concerned because the states now have a new playbook. 
They requested the Federal Government to pass the PACT ACT giving them 
indirect control over tribes by making it illegal to ship Tribal 
products and I believe they will try this tactic again in other areas. 
This committee is well positioned to see these threats to Tribal 
economic and political sovereignty and has a responsibility to prevent 
this type of control from evolving again.
    In summary, the states use a vertical strategy to cut off tribes 
from the stream of commerce by simply moving up the economic chain and 
passing a law to threaten those who deal with tribes. The Internet has 
largely stumped this strategy. Now after their success with the PACT 
Act, they think they can go all the way to the top and have Congress 
pass laws giving them indirect power and control over tribes. This type 
of exploitation of tribes needed to be stopped a long time ago, but we 
have so many laws and legal precedents making it legal that we can't 
unwind these anachronisms. But Congress has the power to prevent this 
same old system from reemerging in the new economy that is made 
possible by the Internet. I ask that you be vigilant in our defense as 
we struggle to emerge from the depths of generations of exploitation, 
control and poverty.
    Thank you for your consideration.

    The Chairman. Thank you very much, Mr. Morgan, for your 
testimony. I just wanted to note that your full testimonies 
will be included in the record for all of the witnesses.
    Ms. Gray-Proctor, will you please proceed with your 
testimony?

            STATEMENT OF MARGO GRAY-PROCTOR, BOARD 
        CHAIRWOMAN, NATIONAL CENTER FOR AMERICAN INDIAN 
                     ENTERPRISE DEVELOPMENT

    Ms. Gray-Proctor. Chairman Akaka, I am Margo Gray-Proctor, 
President of Horizon Engineering Services Company in Tulsa, 
Oklahoma. I am a proud citizen of the Osage Nation and Board 
Chairwoman of the National Center for American Indian 
Enterprise Development.
    For the National Center and my company, trying to reach 
clients in Indian Country can be difficult and frustrating for 
us and for them. I couldn't establish my business on the Osage 
Reservation in part because we needed access to better 
telecommunications and high speed Internet to transmit large 
files of engineering plans and grow our business locally and 
nationally.
    Indian Country has lagged far behind in modern deployment. 
And the digital divide gets wider every day. Without Internet 
access, according to the National Congress of American Indians, 
about 32 percent of Native Americans have no phone service and 
to echo what Geoffrey Blackwell had said, about 68 percent of 
the Tribal lands have only analog phone service. And only 10 
percent penetration rate exists for fixed broadband 
infrastructure for high speed Internet access on Tribal lands, 
compared to a 95 percent rate for Americans living in urban 
areas. This 10 percent Internet penetration rate is appalling.
    High speed Internet access is the key to the National 
Center's work, and it is essential to Tribal self-sufficiency 
and self-determination.
    The lack of access, especially to Internet service, remains 
the major obstacle to economic growth, job creation and 
prosperity in Indian Country. Without Internet access, Native 
entrepreneurs and businesses can't reach local, regional, 
national and global markets. They can't search for jobs or 
business opportunities. They can't access SBA's online 
entrepreneurial tool kit to learn how to even start a business. 
They can't create a website, they can't introduce themselves, 
market and sell their products and services, or advertise for 
job opportunities. They are basically invisible.
    They can't complete registration forms required to sell to 
government agencies or find out contract opportunities or be 
paid if they do sell to the U.S. Government.
    The National Center has served as the longest-serving 
national Native business assistance provider in the U.S. Last 
year alone, the National Service served 5,567 clients. That 
helped create over 1,300 jobs and win over $240 million in 
contracts. And all the other economic activity that we created 
through our events, over the last decade, we helped Native 
companies generate $6.3 billion in contract awards and 
financing.
    If Native businesses were proportionate to that size, the 
Native population in the U.S., their gross receipts, would 
exceed $160 billion. That level of business activity could be 
achieved if all Native entrepreneurs and businesses had access 
to the high speed Internet. The National Center stands ready to 
make this happen through its soon to be 12 centers nationwide.
    We launched our national Native teaming alliance this year. 
Recently, we are launching the Native American Global Trade 
Center, which will be in Milwaukee.
    Here are some examples of how the Internet access has 
helped National Center clients further their business 
development. Chickasaw Nation's high speed Internet access has 
supported enormous growth of its government contracting 
operations and its international sales of chocolates. Tulalip 
Tribes used Federal stimulus funds to bring high speed Internet 
to five tribes, reservations and rural communities in 
Washington State to connect locally, nationally, globally 
through web-based businesses and video conference.
    Red Lake Band launched seven businesses on its reservation 
due to having high speed Internet access. The Coeur d'Alene 
Tribe in Idaho launched its own Internet service provider with 
broadband towers across its reservation to power its government 
contracting and other enterprises. Now it is bringing Internet 
access by fiber optic cable to every home on the reservation.
    But there still are big gaps. One area where the Federal 
trust responsibility has not been fulfilled, and its allocation 
of the Universal Service Fund fees, to where we are desperately 
needed, substantially under-served Tribal areas. This fund 
contains billions of dollars collected on an ongoing basis. 
There is no good reason not to dedicate some of this money to 
finance deployment of broadband and Internet infrastructure to 
under-served areas and other pats of the Country.
    By dedicating a portion of these collected fees, this will 
spur Tribal and other Native business development, the FCC can 
meet its Federal trust obligations, foster sovereign solutions 
for job creation and economic growth. The Congress can also act 
to enhance adequate fund Internet infrastructure deployment to 
improve Internet service in Indian Country. The National Center 
just approved a policy agenda, and it is attached to my written 
statement.
    These are just a few of our recommendations to support a 
full broadband Internet telecommunication access in Indian 
Country. To encourage more collaboration amongst the Federal 
agencies responsible for broadband policies and funding 
Internet infrastructure deployment. Collect more current data 
on Internet penetration in Indian Country, so that precious 
Federal funding can be better targeted to areas most in need of 
the Internet access.
    Lastly, we are asking for the prompt enactment of the 
Carcieri fix, to minimize further barriers to Tribal land 
acquisition for Internet infrastructure, energy manufacturing, 
and other economic development. We also ask that there would be 
developed the Farm Bill amendments and the Indian Country 
Internet access, beef up USDA's Office of Tribal Affairs, 
create a Native liaison in RUS to coordinate outreach and 
technical assistance for tribes on Internet infrastructure 
deployment, and apply for the SUTA provisions to all USDA 
programs and authorizing specific amounts for SUTA 
appropriations.
    Thank you.
    [The prepared statement of Ms. Gray-Proctor follows:]

 Prepared Statement of Margo Gray-Proctor, Board Chairwoman, National 
           Center for American Indian Enterprise Development

I. Introduction
    Chairman Akaka and Ranking Member Barasso, the National Center for 
American Indian Enterprise Development (the ``National Center'' or 
``NCAIED'') commends the Senate Committee on Indian Affairs for 
convening this important oversight hearing on ``Internet Infrastructure 
in Native Communities: Equal Access to E-Commerce, Jobs and the Global 
Marketplace.'' I am Margo Gray Proctor, President of Horizon 
Engineering Services Company in Tulsa, Oklahoma, and a proud citizen of 
the Osage Nation. I present this testimony today on behalf of the 
National Center's Board of Directors, which I chair.
    From my experience with the National Center, and as a business 
owner, I know that trying to reach clients and potential clients in 
Indian Country can be an enormous, frustrating challenge--for us and 
for them. I moved my own business from rural Pawhuska, Oklahoma in part 
because we needed access to better telecommunications and high speed 
Internet service essential to transmitting large files of engineering 
plans, and growing our business locally and nationally.
    First Americans traded amongst each other long before foreigners 
settled on Tribal communities' productive lands and federal treaties 
reduced Tribal lands to more remote areas in exchange for promises of 
federal protection and support. For centuries since, Indian Country has 
lagged far behind modern development, and the ``Digital Divide'' gets 
wider by the day without Internet access. According to the National 
Congress of American Indians (NCAI), about 32 percent of Native 
Americans have no phone service, about 68 percent of Tribal lands have 
only analog phone service, and only a 10 percent penetration rate 
exists for fixed broadband infrastructure for high speed Internet 
access on Tribal lands, compared to a 95 percent rate for Americans 
living in housing units with such broadband access.
    Dial-up Internet transmissions take forever, get interrupted 
easily, and cannot transfer documents reliably. Frustration, not 
business, gets generated. A 10 percent Internet penetration rate is 
appalling when high speed Internet access is so critical to Tribal 
self-sufficiency and self-determination.
    President Obama highlighted broadband as a key component of his 
plan for ``winning the future'' and accelerated broadband deployment 
through the American Reinvestment and Recovery Act. Continued emphasis 
on high speed Internet access is essential to the President's plan and 
to the National Center's mission of business development and job 
creation in Indian Country.

II. Background on the National Center
    The National Center, organized over 42 years ago, is the longest 
serving Native American business development assistance provider in the 
United States. It is a national organization, governed by a Native 
Board of Directors who are leaders in their fields. The National 
Center's mission to promote and advocate commerce for Tribal and 
private Native businesses, and its vision is American Indian self-
sufficiency by leading economic development and promoting commerce in 
Indian Country. In the past year alone, the National Center served 
5,567 clients, helped retain or create over 1,300 jobs, win $120 
million in contracts, and produce another $120 million in economic 
activity. Over the last decade, the National Center's bid matching at 
RES and other business assistance activities have helped companies 
generate at least $6.3 billion in contract awards and financings.
    The National Center operates a national network of non-profit 
centers in Arizona, California, Washington (covering Idaho and Oregon), 
Virginia, Georgia, Mississippi, New Mexico, and soon will open offices 
in Alaska and Wisconsin. These centers assist clients ranging from 
first generation Native entrepreneurs to sophisticated Tribal 
enterprises in developing business feasibility studies, business plans, 
banking relationships and lines of credit, marketing, growth 
strategies, procurement technical assistance, and assistance in lining 
up financing and bonding. Our federal partners include the Department 
of Commerce's Minority Business Development Agency (MBDA) and the 
Defense Logistics Agency, and we help them fulfill their missions by: 
providing business development assistance; coaching contractors on 
completing applications for certifications and registrations; finding 
capable Native companies to fulfill federal requirements; and providing 
contractors guidance on programs administered by various federal, state 
or Tribal agencies, including financing, contracting, bonding, 
certifications and teaming programs. The National Center's primary 
private sector partners serve on its National Resource Council, 
composed of many Fortune 500 corporations, other major companies, 
Native-owned enterprises and Alaska Native corporations from many 
different industry sectors. The Resource Council members help support 
National Center operations and offer potential teaming opportunities 
for the smaller companies we assist in government and commercial 
contracting.
    Earlier this year, the National Center completed a strategic 
restructuring process in order to reach additional opportunities for 
Native business, commerce and economic development. We are launching a 
membership program with its own registered trademark, Native-to-Native 
(N2N), to strengthen our national network of partners and increase 
contracting and retail opportunities for Native businesses nationwide 
and globally. Soon, the National Center will establish a new Native 
American Global Trade Center in the Midwest that will become a hub 
involved in building a new national database of Native businesses and 
products, developing a Tribal International Trade Manual, identifying 
international trade opportunities for clients to export their products, 
and coordinating international trade missions for member businesses. 
Recent award of a major Small Business Teaming grant from the Small 
Business Administration (SBA) will enable the National Center to 
increase its Midwest presence with two National Center Teaming Alliance 
offices and another elsewhere, for a total of 12 offices nationwide.
    The National Center also produces various national and regional 
events that train, promote and market Native enterprises to the public 
and private sectors. Its premier annual national event is the 
phenomenally successful Reservation Economic Summit & American Indian 
Business Trade Fair (``RES''), the largest and longest running American 
Indian Business Conference and Trade Show in the country. A noteworthy 
feature of the conference is the ``Procurement Pavilion,'' the Nation's 
largest business matchmaking event for Native owned businesses. At RES 
2011, nearly 3,000 individuals and 400 exhibiters attended, including 
tribes, ANCs, Native enterprises, Fortune 500 and other major corporate 
representatives as well as federal, state, local and Tribal political 
and procurement officials. Trade delegations from Canada, Turkey and 
China also attended. The RES 2011 Procurement Pavilion featured 111 
buyer tables, with 142 buyers representing 97 buying organizations, 
including federal, state, and Tribal governments, large prime 
contractors. Leading the charge in promoting N2N business 
relationships, the National Center has encouraged purchasing decision-
makers of Tribal governments, Tribally owned businesses, ANCs, and 
large individually-owned Native companies to utilize Native American, 
minority, and other small businesses for their purchasing requirements. 
Every year, more Native-owned companies and entrepreneurs are 
participating as ``Buyers'' in the RES Procurement Pavilion to find 
Native- and minority-owned businesses as subcontractors.
    Over the years, the National Center estimates that its operations 
have assisted over 480 Indian tribes and more than 25,000 Native 
enterprises, and have trained over 10,000 Tribal members in various 
aspects of business development. Its success rate--helping to generate 
over $6.3 billion in contract awards and financings in recent years--
jumped significantly with high speed Internet.

III. ``Access'' Challenges to Native Business Development
    Estimates place the total American Indian/Alaska Native (AI/AN) 
population at 4.12 million (1.5 percent of the total U.S. population), 
with the highest proportion of all AI/AN residents in Alaska (19 
percent), Oklahoma (11 percent), followed by California, Arizona, Texas 
and New Mexico. Lack of access to jobs and tools for business and 
economic growth is a monumental challenge.
Disproportionately High Unemployment
    Always higher than for non-Native individuals, the unemployment 
rates for AI/AN are disproportionately greater in certain regions. A 
2010 Economic Policy Institute study reported that, between 2007 and 
2010, the AI unemployment rate doubled (7.7 percent to 15.2 percent, 
1.6 times more than the non-Native increase) and the AN unemployment 
rate more than tripled (6.3 percent to 21.3 percent). Regional AI/AN 
unemployment rates were highest in Alaska, the Midwest and Northern 
Plains regions.

Regional Disparities in Business Growth
    The above regions also posted the fewest Native-owned businesses. 
The U.S. Census Bureau's latest Survey of Business Owners (2002-2007) 
showed growth in the number of Native-owned non-farm businesses up to 
236,967 (up17.7 percent over the previous 5 years), employing 184,416 
people and generating $34.4 billion in receipts. This Census Survey, 
taken before the 2008 recession, did not include any Tribal-owned 
businesses. Regions with the largest number of Native businesses were 
California (13 percent), Oklahoma (8.9 percent) and Texas (8 percent), 
areas with benefits conducive to business growth, including much 
greater Internet access, transportation options, infrastructure 
support, and ample domestic and international business opportunities.
Significant Internet and Other Access Problems Persist
    Lack of access to Internet service, transportation, infrastructure 
and financing of all sorts (lending, equity investments, surety 
bonding, bond financing, etc.) remains the major obstacle to growth, 
job creation and prosperity in Indian Country. Not surprising, the 
regions with the fewest Native-owned businesses, and highest AI/AN 
unemployment, are those with the largest expanse of rural or remote 
areas and least access to Internet/telecommunications service, adequate 
transportation, and infrastructure. According to the National Congress 
of American Indians (NCAI), while 98 percent of Americans have access 
to telephone service, an estimated 32 percent of AI/AN have none, with 
analog telephone penetration rates on Tribal lands at only 67.9 
percent. NCAI reports even greater disparity in Internet access on 
Tribal lands, with less than 10 percent penetration compared to 95 
percent of Americans living in housing units with access to fixed 
broadband infrastructure. As to transportation, Indian reservation 
roads comprise over 104,000 miles of public roads needing improvements 
(over 65 percent are unimproved earth and gravel) and 24 percent of the 
bridges are deficient. Poor access to transportation and financing 
hampers tribes' ability to develop their energy and other natural 
resources that their Indian lands may bear. And, access to capital 
never seems to improve; in 2001, the Department of Treasury estimated 
$44 billion in unmet capital needs in Indian Country and that figure 
surely has spiked with the economic downturn since 2008.

Importance of Internet Access to E-Commerce, Jobs and the Global 
        Marketplace
    Internet access makes business progress and success possible in 
Native, national and global marketplaces. Broadband serves as the 
engine to overtake and seize the opportunities in these markets. The 
Internet facilitates conducting business, or learning how. Companies 
introduce and market themselves through their websites. They sell 
products and services, and advertise job opportunities, online. If you 
are searching and applying for jobs, learning how to start a business, 
seeking financing, trying to sell to the government, or registering for 
classes or conferences, you have to use the Internet. Nowadays, 
government contracting depends almost entirely on Internet access. To 
sell to the Federal Government, you must register electronically with 
US Federal Contractor Registration. Central Contractor Registration 
(CCR) enables a company to learn about federal contract opportunities 
and to be paid online for products and services procured. Companies 
apply online for various preference programs and certifications to do 
business with federal, state and Tribal government agencies.
    Both the Obama Administration and the Congress recognize that 
developing new small businesses is vital to both Indian Country and the 
national economy, and growth potential lies in access to high speed 
Internet access. The SBA website shows that small firms represent 99.7 
percent of all employer firms, employ over half of all private sector 
employees, and have combined payrolls making up 44 percent of the total 
U.S. private payroll. An estimated 3.5 percent of the adult population 
starts a business each year, according to the Kauffman Index of 
Entrepreneurial Activity: National Report 1996-2005. AI/AN businesses 
make up the smallest group of small businesses, however. These 
businesses can generate impressive economic output in the U.S. economy, 
an estimated $34.4 billion from 2002-2007, according to the U.S. Census 
Bureau, 2007 Survey of Business Owners. The MBDA projects that if AI/AN 
businesses were proportionately represented in the U.S. economy, their 
gross receipts would exceed $160 billion! That level of business 
activity could be achieved if all Native entrepreneurs and businesses 
had adequate access to high speed Internet service.
    The above figures reiterate the importance of public and private 
sector initiatives that promote Native and other small businesses' 
success. For example, both the SBA and the MBDA websites provide access 
to substantial amounts of information valuable to small businesses, and 
SBA's website hosts some great tools and online trainings on how to 
start and operate a business. All the federal contracting agencies, and 
Fed.Biz.Opps, provide countless opportunities for small business. 
Without Internet access, however, Native entrepreneurs cannot go online 
to SBA's Entrepreneurial Tool Box to learn how to start a business. 
They cannot register with CCR, or sell products or services in more 
than their local marketplace.

National Center Experiences with Internet Access
    The National Center's Board of Directors recognizes the importance 
of Internet access to Native business development, based on our 
personal experiences. For example:

   Board member, Karlene Hunter founded Lakota Express on the 
        Pine Ridge Reservation where the poverty and unemployment rates 
        exceed most in the United States. In the mid 1990s, Lakota 
        Express wanted to open a call center and direct mail 
        operations, but its commercial business purpose could not 
        qualify for access to the reservation's communication lines 
        dedicated to the Tribal government and the Tribal college. With 
        the help of then Senator Tom Daschle, the company was able to 
        bring in its own T-1 lines for voice and data transmission to 
        make calls and send and receive printed documents. Soon 26 new 
        full-time and 30 part-time jobs were created for Tribal and 
        non-Tribal members.

   Board member, Michelle Holiday, just visited Navajo Nation 
        in New Mexico and could not get service to use her cell, or 
        email, to reach a Tribal employee at Tohajiilee (formerly known 
        as Canoncito). At Navajo, about 60 percent of residents lack 
        basic telephone service, and limited Internet service is dial-
        up only. Soon that situation will change, however, because 
        Navajo Nation Telecommunications Regulatory Commission has 
        received a $32.2 million grant from the National 
        Telecommunications and Information Service (NTIA) to achieve 4G 
        connectivity throughout the vast reservation within the next 
        two years. The private match was $13.8 million. The Navajo 
        Tribal Utility Authority will be deploying 550 miles of new 
        aerial fiber-optic cable and 59 new or modified microwave 
        towers covering 15,000 square miles in Arizona, Utah and New 
        Mexico. This job-creating project, once completed, will bring 
        broadband Internet service to about 30,000 households, 1,000 
        businesses, and 1,100 institutions located across Navajo 
        Nation.

    National Center clients' experiences also offer some good examples 
of how essential Internet access is to Tribal business development:

   Chickasaw Nation has built a powerhouse of successful 
        businesses in a variety of industry sectors. The National 
        Center is especially proud of its client, Chickasaw Nation 
        Industries, one of the leading government contracting 
        operations. Not only is its high speed Internet access 
        essential to its government contracting (as explained earlier), 
        but it has made possible extraordinary international commercial 
        sales of its company that produces Bedre' Fine Chocolates.

   The Tulalip Tribes also have been leaders in business and 
        economic development, often in partnership with the National 
        Center. Our centers have helped them find Native subcontractors 
        for Tribal construction projects, and they have hosted many of 
        our Native American Procurement Conferences over the years. In 
        2009, the Tulalips used federal stimulus funds to bring high-
        speed Internet to five other tribes' reservations and rural 
        communities in Washington State--communities that have largely 
        been ignored by cable or telecommunications companies. They 
        connected their broadband network to a Seattle-based exchange 
        that gave them a cheaper and faster Internet connection, and 
        generated technology jobs. The Tulalips created a nonprofit 
        cooperative and applied $12 million to push that network into 
        remote parts of the state that have been beyond the reach of 
        broadband. The new Internet access will allow all these tribes 
        and rural communities to connect to each other and to areas 
        across the country and the globe, and will foster web-based 
        businesses, videoconferencing and other technologies.

   The Red Lake Band of Chippewa Indians of Minnesota launched 
        7 businesses on its reservation because they were able to 
        arrange high speed Internet access.

   The Coeur d'Alene Tribe in Idaho launched its own Internet 
        service provider with broadband towers across its reservation 
        to power its government contracting and other enterprises. Now 
        the Tribe is bringing Internet access by fiber optic cable to 
        every home on the reservation.

    The Internet is essential to the National Center as well as to the 
Native entrepreneurs and businesses we advise on technology tools and 
assist in navigating web portals, electronic application procedures, 
and E-Commerce sites. As a special web-based tool, the National Center 
is embarking on a major upgrade of NativeEdge, a webportal dedicated to 
Native American Indian business development. NativeEdge was designed to 
facilitate the attainment of sustainable economic development within 
Native communities. The website houses a comprehensive inventory of 
resources, information and guidance for Native entrepreneurs, tribes 
and Tribal entities to promote economic growth in Indian Country. The 
National Center is enhancing the NativeEdge web portal to be fully 
interactive, with access to a user-friendly search engine, so that 
users can define their interests and the type of assistance they seek 
by registering through an online form. NativeEdge will include the 
following database management system components:

   Native American Jobs--Career-minded Native Americans can 
        search the job database for employment opportunities on a 
        nationwide basis. Tribes, Native businesses, corporations, and 
        government entities seeking a diverse employee base can post 
        their open positions here.

   Bid Opportunities--Native American suppliers, and buyers 
        looking for them, can post bids, RFPs and contracting 
        opportunities here at no cost. New customers, vendors and 
        suppliers can be found, and registered users can search the on-
        line database for available bid opportunities on a nationwide 
        basis.

   National Center Teaming Alliance--The site will be augmented 
        with additional services made possible through the Small 
        Business Teaming Pilot Program so that small businesses will be 
        able to create partnerships with other small and larger 
        businesses to pursue larger contracts, bid opportunities and 
        procurements.

    To make NativeEdge truly helpful to Indian Country, obviously all 
of its potential users must have access to the Internet.
Efforts to Improve Internet Infrastructure Deployment in Indian Country
    The Federal Government has made strides in recent years to increase 
Internet infrastructure deployment in Native communities, especially 
with the Recovery Act's infusion of funds for broadband deployment 
through programs of the NTIA, U.S. Department of Agriculture (USDA), 
and Federal Communications Commission (FCC). These federal agencies 
should be commended for their hard work in expending wisely and rapidly 
all the broadband resources made available through the Recovery Act. In 
addition, they have redoubled efforts pursuant to Executive Order 13175 
to conduct Tribal consultations and implement new Tribal Consultation 
Policies. All three agencies have increased their outreach to Indian 
Country to explain how to apply for available grant and loan programs 
so as to deploy broadband and telecommunications infrastructure and 
high speed Internet service to Tribal communities and Native 
businesses. The National Center especially commends Chickasaw Nation 
Tribal member Geoffrey Blackwell for his extraordinary leadership in 
this field, from his service at the FCC during the Clinton 
Administration, and his heightened position in the Obama Administration 
as the FCC's Chief of Native Affairs and Policy, Consumer and 
Governmental Affairs Bureau.
    The National Center has facilitated several of these outreach 
efforts by hosting training sessions, roundtable discussions and 
consultations at our annual RES conferences. RES 2004 featured a major 
presentation on ``Indian America--Building Economies through 
Diversification, Tourism and Technology'' by the FCC's Wireless 
Telecommunications Bureau Chief. RES 2010 featured a training session 
on ``Federal Programs to Develop Broadband Infrastructure in Indian 
Country'' that promoted USDA's Broadband Initiatives Program and NTIA's 
Broadband Technology Opportunities Program (BTOP). Also at RES 2010, 
USDA's Rural Utilities Service (RUS) conducted a Tribal consultation 
and listening session on the ``Substantially Underserved Trust Areas'' 
(SUTA) provisions of the 2008 Farm Bill designed to increase broadband 
deployment on Tribal reservations. At RES 2011, FCC and USDA officials 
conducted a learning session on ``Broadband Opportunities Enhancing 
Native Economic Development'' and the FCC conducted Tribal 
consultations on ``Broadband Rollout in Indian Country.''
    The Recovery Act made major contributions to broadband deployment 
with over $4 billion for NTIA's BTOP grants and over $3.4 billion for 
RUS' broadband infrastructure projects. Six Tribal telcom authorities 
received BTOP grants for infrastructure and public computer projects, 
and an estimated 65 BTOP projects will benefit Tribal communities. RUS 
awards benefitted 31 Tribal communities. Still, it is important to note 
that both agencies received far more applications than they could fund 
(outstripping BTOP's available funds tenfold!) As reported in the 
preamble to RUS' March 14, 2011 Interim Rule on Rural Broadband, USDA's 
Economic Research Service analysis concluded that broadband investment 
in rural areas yields significant economic and socio-economic gains:

        Analysis suggests that rural economies benefit generally from 
        broadband availability. In comparing counties that had 
        broadband access relatively early (by 2000) with similarly 
        situated counties that had little or no broadband access as of 
        2000, employment growth was higher and nonfarm private earnings 
        greater in counties with a longer history of broadband 
        activity. By 2007, most households (82 percent) with in-home 
        Internet access had a broadband connection . . . however . . . 
        only 70 percent of rural households with in-home Internet 
        access had a broadband connection . . . 

        Most employment growth in the U.S. over the last several 
        decades has been in the service sector, a sector especially 
        conducive for broadband applications. Broadband allows rural 
        areas to compete for low- and high-end service jobs, from call 
        centers to software development . . . Rural businesses have 
        been adopting more e-commerce and Internet practices, improving 
        efficiency and expanding market reach . . . [B]roadband is a 
        key to economic growth. For rural businesses, broadband gives 
        access to national and international markets and enables new, 
        small, and home-based businesses to thrive.

    Since FY 2002, RUS's Tribal Community Connect Grants, Rural 
Broadband Loan Program and Telecommunications Infrastructure Loan 
Program have benefitted many Tribal communities, Tribal enterprises and 
Tribal members' businesses with access to telecommunications and 
Internet service to conduct their business transactions. Many of these 
Tribal enterprises and Native businesses have been or become National 
Center clients. Several National Center Board members have witnessed 
broadband deployment in their own Tribal communities (Navajo, Laguna, 
and Hopi). The new SUTA provisions give the RUS' Administrator 
flexibility to facilitate even more Rural Broadband deployment by 
making available financing with interest rates as low as 2 percent with 
extended repayment terms, waiving anti-duplication provisions and 
matching fund and equity requirements, and giving highest priority to 
designated projects in substantially underserved trust areas. RUS plans 
to expand SUTA's application in additional rules now being developed.
    One area where the federal trust responsibility has NOT been 
fulfilled is in the allocation of Universal Service Fund fees to where 
they are desperately needed--substantially underserved Tribal areas. 
This Fund contains billions of dollars collected on an ongoing basis. 
There is no good reason not to dedicate some of this money to finance 
deployment of broadband and other Internet infrastructure in 
underserved Tribal areas and other parts of Indian Country. Tribal 
members should not be counted as just additional users of a non-Tribal 
communications system. Service solutions must work for both the end-
users and the operator with a business model sympathetic to Native 
concerns, especially when a tribe is the operator. A set-aside should 
be created to fund service to substantially underserved Tribal areas. 
By dedicating a portion of the collected fees, as well as some 
spectrum, to spur Tribal and other Native business development, the FCC 
can meet its federal trust obligations and foster sovereign solutions 
for job creation and economic growth.
    The United Nations recently pronounced recently that access to the 
Internet is a basic human right, as it facilitates civic engagement, 
assists economic development initiatives, promotes long distance 
learning and telemedicine, and serves as an invaluable source of 
information. The Obama Administration has acted accordingly through its 
Tribal Consultations Policies and continues to implement its Internet 
related initiatives and rules as quickly as possible. The Congress also 
must rise to the occasion and do its part to enhance and adequately 
fund programs to increase Internet infrastructure deployment and 
improve Internet service to the many Native communities where it is 
long overdue.

VI. Specific Recommendations for Improvements
    The National Center's recently released Native Business and 
Economic Development Policy Agency (attached to this testimony) lists 
all of our top public policy priorities. Outlined below are some 
specific recommendations for this Committee and others on ways to 
expand Internet infrastructure and facilitate E-Commerce and job 
creation in our Native communities.

A. Support Full Broadband and Telecommunications Access in Indian 
        Country

1. Encourage More Collaboration Among Federal Agencies
    All the federal agencies charged with broadband and 
telecommunications improvement and deployment in Indian Country (e.g., 
FCC, RUS, NTIA) must work more closely together, coordinate their 
programs, and make more information available to Indian Country about 
the availability of grants, loans, loan guarantees and other financing 
options to support feasibility studies and technical assistance, as 
well as deployment of Internet infrastructure on Tribal lands. 
Interagency collaboration on alternative financing options (e.g., 
Indian loan guarantees, Tribal governmental bonds, new market tax 
credits, etc.) should include representatives from the Departments of 
the Interior and Treasury.

2. Require Collection of More Current Data on Internet Penetration
    Much of the information collected and reported is outdated and 
conflicting. To target their precious available funding better, the 
federal agencies must collect more current data on actual penetration 
of Internet service in Indian Country, rather than rely on estimated 
projections developed years ago.

3. Develop Farm Bill Amendments Targeted to Indian Country Internet 
        Access
    One such amendment should beef up the USDA Secretary's Office of 
Tribal Affairs with adequate funding to continue the excellent 
leadership this office has provided on Indian Country issues. Another 
amendment should authorize an Indian Country liaison to work within RUS 
to help coordinate outreach efforts and technical assistance for tribes 
on programs for broadband deployment. A third amendment should ensure 
that the SUTA provisions apply to all RUS and Rural Development 
programs that benefit Indian Country, and are adequately funded.

4. Create Set-Asides in All Federal Broadband Programs
    The SUTA provisions authorize RUS to prioritize broadband funding 
for underserved Tribal areas, but they contain no specific amounts to 
be appropriated. Specific amounts should be authorized to be 
appropriated for SUTA broadband deployments, or a certain portion or 
percentage of the overall amount appropriated for broadband and 
telecommunications infrastructure loans should be set aside for SUTA 
deployments. Another RUS program, the Community Connect Grant Program, 
is ideally suited to Indian Country because only communities with no 
broadband connections are eligible to apply. As the program is very 
oversubscribed at its current funding level of only $18 million, 
doubling its funding would result in major benefits to Indian Country. 
A Tribal set-aside or priority funding should be considered for the 
other RUS and NTIA programs as well.

5. Create a Native Nations Broadband Fund
    Tribal focused funding within the Universal Service Fund (USF) 
would provide targeted funding for broadband deployment in Indian 
Country. Broadband Internet service access and mobility services should 
be included in the list of services provided by the USF. Allocating 
spectrum for Tribal communities also should be explored.

B. Clarify and Streamline Acquisition and Leasing of Trust Lands

1. Clarify Trust Acquisition Authority
    The National Center thanks the Committee for reporting to the full 
Senate legislation to eliminate confusion from the Supreme Court 
decision in Carcieri v. Salazar by clarifying 1934 Indian 
Reorganization Act provisions to ensure that all federally recognized 
tribes are eligible for the benefits of Section 5 of the Act, 
regardless of whether they were ``under federal jurisdiction'' in 1934. 
We also applaud the Committee's continuing efforts to educate Senate 
colleagues of the need to clarify trust land status so as not to create 
barriers to Internet infrastructure deployment, energy, manufacturing 
and other similar business and economic development projects, and law 
enforcement activities.

2. Allow Greater Tribal Self-Determination in Leasing Tribal Lands
    Approve legislation to permit any tribe to develop its own leasing 
regulations and seek BIA approval of such regulations so that the tribe 
will be able to lease Tribal lands Internet infrastructure, housing or 
other community development purposes without BIA prior-approval.

C. Approve Native American Business Development Provisions
    After careful deliberations, last year the Senate Committee on 
Indian Affairs developed several very signification proposals to 
enhance business and economic development in Indian Country. Below are 
the provisions that the National Center urges the Committee to take up 
again and promptly move forward:

1. Native American Business Development Program
    After several years, there is now consensus on provisions (most 
recently contained in last year's S. 3534) to authorize the SBA's 
Office of Native American Affairs (ONAA), headed by an Associate 
Administrator, and grants for Native American Business Centers so that 
more business management, financial and procurement technical 
assistance can be made available in more locations throughout Indian 
Country. SBA's ONAA must have more authority to claim a fair share of 
the funds already appropriated for SBA's entrepreneurial development 
program overall. Without specific authorization to access those 
entrepreneurial development program funds, the ONAA will continue to be 
substantially disadvantaged in trying to provide adequate outreach and 
assistance across the country with its grossly inadequate budget of 
only $1,250,000 (down from $5,000,000 annually during the Clinton 
Administration).

2. Surety Bonding
    The Indian Finance Act should be amended to expand existing 
authority for the Secretary of the Interior to issue surety bond 
guarantees either independently or supplemental to a surety bond 
guarantee issued by SBA, up to 100 percent of amounts covered by a 
surety bond issued for construction, renovation, demolition, and even 
broadband deployment work performed or to be performed by an Indian 
individual or Indian economic enterprise. Often Tribal and individual 
Indian-owned construction companies engaging in construction 
contracting (whether under federal, state, local or Tribal government 
contracts, or commercial contracts) face significant barriers to 
securing any surety bonding at all. Many insurance/surety companies 
choose not to work with Tribal contractors, because they do not 
understand Tribal sovereignty and do not want to work with Tribal 
courts. Technical assistance and training for contractors seeking 
surety bonding also would help them mitigate risk, build capacity, 
improve performance, grow and create more jobs. The National Center's 
business assistance centers provide this type of guidance now, but more 
targeted assistance related to surety bonding is needed.

3. Indian Loan Guarantee Program Enhancement
    The Indian Finance Act authorized the Secretary of the Interior to 
provide guaranteed loans to businesses that are majority-owned by 
tribes or Indians. Implementing regulations require Tribal businesses 
to provide collateral worth at least 20 percent of the loan principal. 
Too frequently, this equity requirement inhibits the launch of on-
reservation enterprises or development projects that employ reservation 
residents. Last year's Indian Jobs proposal recommended amending the 
loan guarantee provisions to establish a tiered system, based on the 
number of on-reservation jobs created, that would provide more 
favorable equity terms and authorize an increase in the amount 
guaranteed up to 100 percent for energy and manufacturing businesses. 
Provisions could be added to assist with Internet infrastructure 
deployment. These changes would make the Indian loan guarantee program 
far more helpful to the establishment of Tribally-owned energy or 
manufacturing businesses, and potential employment of more local 
reservation residents.

4. Buy Indian Act Amendments
    Enacted in 1910, the Buy Indian Act obliquely states simply that 
``so far as may be practicable Indian labor shall be employed, and 
purchases of the products of Indian industry may be made in open market 
in the discretion of the Secretary of the Interior.'' (25 U.S.C. 47). 
Last year's proposal included provisions to clarify and strengthen Buy 
Indian procurement procedures to apply to an agency fulfilling its 
requirements by making use of funds appropriated for the benefit of 
Indians. Such procedures would foster increased award of contracts to 
Indian economic enterprises by procurement personnel of the Department 
of the Interior, Indian Health Service, and other agencies receiving 
funds appropriated for the benefit of Indians. Also proposed was 
creation of a Data Center for the collection of information on the 
experience, capabilities and eligibility of Indian economic 
enterprises, and reporting requirements on agency use of the Buy Indian 
Act and information collected by the Data Center. At a minimum, the 
Committee should request briefings by the agencies, or conduct a 
roundtable discussion or oversight hearing to receive status reports 
from these contracting agencies on their past performance in 
contracting with Native contractors of all types, and their plans for 
increasing that contracting support. Witnesses from Indian country also 
should be invited to report on their efforts, successful and 
unsuccessful, to convince these agencies to award contracts, park 
concessions, etc. to qualified Native contractors.

V. Conclusion
    The National Center thanks the Committee in advance for considering 
our comments and recommendations.
    Attachment
      Full Native Business and Economic Development Policy Agenda
    Approved by the Board of Directors of The National Center for 
American Indian Enterprise Development--September 7, 2011
    On September 7, 2011, the Board of Directors of the National Center 
for American Indian Enterprise Development approved a broad business 
and economic development policy agenda. As the National Center embarks 
on its 5th decade as the leading advocate and longest-serving provider 
of Native business development assistance, it will advance its policy 
agenda with the goal of promoting job creation, business capacity 
building, greater access to the internet, capital and contracting, 
infrastructure improvement, and increased commerce--in Indian Country, 
nationally and globally.
    The National Center will promote this Native Business and Economic 
Development Policy Agenda through its national advocacy activities, its 
growing number (soon 12) business and procurement technical assistance 
offices across the United States, its national and regional events, and 
in partnership with other national Native organizations. In the pages 
that follow, the National Center outlines its top policy priorities for 
Native business and economic development, Tribal sovereignty, capacity 
building and job creation.

The National Center's Top Native Economic Development and Jobs 
        Priorities
    The National Center urges prompt action on the public policy 
initiatives within the four categories of issues listed below: Tribal 
Sovereignty and Capacity Building, and Job Creation; Native Business 
Development and Best Practices; Access to Capital; and Tax Issues.

I. Tribal Sovereignty, Capacity Building, and Job Creation

A. Full Broadband and Telecommunication Access in Indian Country
    Collaborate with the federal agencies promoting broadband access 
and telecommunications improvements and expansion into Indian Country 
(e.g., USDA Rural Development and Utility Services, Commerce's National 
Telecommunication Information Service, and Federal Communications 
Commission) and other national Native organizations developing 
initiatives to facilitate communications services and related 
infrastructure deployment and spur Tribal and other Native business, 
economic, and community development (Administration action needed).

B. Expedite Land Acquisition and Leasing of Tribal Lands
    1. Clarify Trust Acquisition Authority: Eliminate confusion from 
the Carcieri decision by enacting legislation to clarify 1934 Indian 
Reorganization Act provisions to ensure that all federally recognized 
tribes are eligible for the benefits of Section 5 of the Act, 
regardless of whether they were ``under federal jurisdiction'' in 1934 
(e.g., S. 676, H.R. 1234 and 1291).
    2. Approve Greater Flexibility and Streamlined Procedures for Land 
Acquisitions and Leasing of Indian Lands: Prioritize timely completion 
of BIA procedures for acquisition and leasing of Indian lands so as to 
enhance economic development. Revise BIA leasing procedures to allow 
tribes to select and use certified, licensed appraisers.
    3. Expedite BIA Actions on Land Acquisitions and Leases: BIA must 
expedite approval of pending trust acquisition and leasing 
applications.
    4. Allow Greater Tribal Self-Determination in Leasing Tribal Lands: 
Permit any tribe to develop its own leasing regulations and seek BIA 
approval of such regulations so that the tribe will be able to lease 
Tribal lands for housing or other community development purposes 
without BIA prior-approval (e.g., H.R. 1599).

C. Streamline Federal Employment, Training and Other Support Programs
    1. Make Permanent the ``477'' Jobs Program Integration Concept: The 
Indian Employment, Training, and Related Services Demonstration Act 
(Public Law 102-477) should be made permanent to allow tribes to 
combine formula funded federal grants for employment and training into 
a single budget and reporting system (as in Section 5 of S. 3471 of 
2010). Refine the accountability system, working through Tribal 
consultation with affected agencies (Departments of Interior, Labor, 
Health and Human Services, and Education). (OMB could approve the 
reforms.)
    2. Collaborate on Integration of Other Training and Education 
Programs: Support initiatives to enhance Tribal colleges and their 
development of business-related curricula and job skills training 
programs. Permit tribes or Tribal organizations to submit proposals for 
coordinated federal program assistance to support a community, economic 
or business development project that is consistent with the goals of 
those programs (e.g., H.R. 1599).

II.Native Business Development and Best Practices

A. Expand Native American Business Development Services
    1. Small Business Administration: The SBA should allocate more 
funding (at least $2 million up from $1.25 million) to its Assistant 
Administrator of the Office of Native American Affairs (``ONAA'') to 
provide greater support for Native entrepreneurial development, and 
require Small Business Development Centers to team with existing Native 
business centers to expand services to more Tribal-owned and 
individually owned Native businesses. The ONAA should be formally 
authorized, headed by an Associate Administrator, have its own budget 
of at least $2 million, and have grant authority to target existing 
entrepreneurial development funds to support more Native American 
business centers (e.g., S. 3534 in 2010).
    2. Department of Commerce: The Minority Business Development Agency 
(MBDA) should receive at least $31 million and allocate more support to 
its 8 Native American Business Enterprise Centers and to the Office of 
Native American Business Development; and the Department should 
allocate more funding to the Office of the Secretary's Senior Advisor 
for Native American Affairs (as proposed in the pending House 
appropriations bill). These programs should focus more attention on 
Native business expansion both nationally and internationally, 
including intra- and inter-Tribal commerce, export assistance, trade 
mission involvement, and tourism.
    3. Department of Defense: The Defense Logistics Agency's 
Procurement Technical Assistance Program should receive $34.3 million 
for FY 2012, with $3.6 million set aside for 6 American Indian 
Procurement Technical Assistance Centers (as in pending 
appropriations).

B. Enhance Native Contracting Preferences
    1. Strengthen and Enforce Buy Indian Act Requirements: Update, 
implement and enforce Department of the Interior Buy Indian Act 
regulations (finalize pending BIA regulations). Apply Buy Indian 
requirements to other agencies to encourage greater use of Indian 
contractors for requirements to be fulfilled using federal funds 
appropriated for the benefit of Indians (as in Section 7 of S. 3471 in 
2010).
    2. Preserve the Native 8(a) Program: Protect SBA's 8(a) Business 
Development Program provisions that benefit contracting companies owned 
by tribes, Alaska Native regional and village corporations (ANCs), 
Native Hawaiian Organizations (NHOs), and individuals who are American 
Indian, Alaska Native or Native Hawaiian. Prevent any further erosion 
of the 8(a) preferences for tribes, ANCs and NHOs beyond the Section 
811 requirements for justification and approval of sole source awards 
over $20 million.
    3. Maintain the 5 percent Indian Incentive Program: Provide at 
least $15 million for the DOD 5% Indian Incentive Program to enable 
federal contractors to receive an incentive of 5 percent of the value 
of work subcontracted to Native contractors (as in pending 
appropriations).

C. Open Trade and Export Promotion Opportunities
    Collaborate with the Department of Commerce's International Trade 
Administration, MBDA and Senior Advisor for Native American Affairs, 
and the SBA's Office of International Trade and Native American 
Affairs, to increase efforts to ensure that Tribal political and 
business leaders, and more Native-owned business leaders, are included 
in U.S. trade delegations and missions involving government and private 
participants. SBA, and Commerce, and their respective officials charged 
with Native American Affairs and International Trade duties should meet 
with national Native business organizations to determine how to ensure 
that the U.S. Export Assistance Centers around the country can receive 
more training and assistance on Indian business issues and provide more 
outreach and support regarding export of Native goods and other trade-
related activities.

D. Increase Support for Data Collection on Business Development, Job 
        Creation, and Best Management and Other Best Business Practices
    All federal agencies with finance-related responsibilities to 
Indian Country (e.g., BIA, SBA, MBDA, USDA, HUD, and the new Consumer 
Financial Protection Bureau (CFPB)) should make available data on the 
number of Native-owned business credit applications submitted, and 
loans and loan and surety bond guarantees approved and declined, so 
that a more reliable database on Tribal and Native business and 
economic development activities can be developed. The new CFPB already 
is statutorily required to collect information concerning credit 
applications of women- and minority-owned businesses. SBA, MBDA, USDA, 
and HUD funds should be made available to support collection of more 
data on Native businesses by industry sector, their growth and their 
job creation, and best management practices and other best practices in 
business.

III. Access to Capital

A. Expand Use of BIA Loan and Bond Guarantees
    The BIA's program for loan and surety bond guarantees should be 
fortified with highly skilled finance staff that can better deploy 
funds provided for guarantee issuance, as follows--
    1. Indian Loan Guarantees: BIA's Office of Indian Energy and 
Economic Development (OIEED) should develop more flexible equity terms 
and higher (up to 100 percent) guarantee limits, especially for energy 
projects and manufacturing businesses, and ensure that more loans can 
be made and guaranteed promptly, perhaps with priority given to startup 
or expansion of on-reservation enterprises or development projects that 
employ reservation residents. (Many improvements can be made 
administratively, but changes in equity requirements many need a 
regulation change, or legislation as in Section 3 of S. 3471 in 2010.)
    2. Surety Bond Guarantees: Implement existing authority for BIA to 
issue surety bond guarantees supplemental to a surety bond guarantee 
issued by SBA, up to 100 percent of amounts covered by a surety bond so 
that Tribal and individual Indian-owned companies can obtain bid and 
performance bonds and qualify for award of construction and other 
federal, state, local or Tribal contracts, and commercial contracts. 
(Only administrative action is needed to implement existing authority; 
legislation, as in Section 4 of S. 3471 in 2010, would be needed to 
allow BIA to issue surety bond guarantees on its own.)
    3. Tribal Economic Development Bonds: Explore amending the Indian 
Finance Act and Internal Revenue Code to authorize the BIA federal 
guarantee credit subsidy to be used to back Tribal economic development 
bond offerings and possibly other Tribal tax exempt bonds. (Legislative 
action needed to authorize this expanded authority and appropriate 
funds for a larger credit subsidy to support such bond guarantees.)

B. Improve and Tailor Capital Access Programs to Native Borrowers
    1. Codify and Enhance the Native CDFI Assistance Program: Include 
specific Native CDFI provisions in the CDFI Fund authorization and 
sustain Native CDFI funding. (Both authorization and appropriations 
actions are needed.)
    2. Advocate for More Training of Staff Working Federal Loan 
Processing: Urge SBA (especially SBA Loan Processing Center staff), 
BIA, USDA, OCC, FDIC and Federal Reserve to provide more training for 
their personnel on Indian business and lending issues, and conduct some 
of interagency training sessions to foster greater agency collaboration 
in efforts to improve access to capital for Native borrowers. 
(Administrative action is needed.)
    3. Co-Host More Access to Capital Special Sessions and Workshops: 
Collaborate with on-going federal workshops on capital access. For RES 
2012, plan and co-host Plenary Sessions on Native Lending Issues, 
Learning Sessions on special issues, and a new Pavilion event where 
Native businesses can meet one-on-one with bankers and other lenders.
    4. Encourage Further Tailoring of Federal Loan and Guarantee 
Programs: Assess at RES and other sessions what further changes should 
be made to federal loan and guarantee programs, and collaborate in 
developing proposals for such refinements.
    5. Join Calls for Use of Community Reinvestment Act and Other 
Requirements: As the Center for American Progress recommended, federal 
agencies should clarify that CRA credits can be applied to investments 
in alternative energy facilities, energy efficiency enhancements. A 
Native community development component should be added to the CRA exam 
for large banks and even some intermediate or small banks. These banks' 
performance should be reviewed and improved, and their performance 
evaluations should include analysis of their bank services to tribes 
and Tribal- and other Native-owned businesses. (Administrative actions 
are needed.)

IV.Tax Issues

A. Enhance Tribal Tax Exempt Bonding Authorities
    Eliminate the ``essential government function'' test now used to 
qualify Tribal projects for tax exempt financing, and expand Tribal tax 
exempt private activity bond authority to include commercial projects 
with economic, environmental or other social value. Exempt Tribal 
governments' bond issuances from Securities and Exchange Commission 
registration requirements. Deem projects of Section 17 corporations and 
other wholly owned Tribal entities as qualifying projects for tax 
exempt financing. (All require legislative action; H.R. 1599 contains 
the first two proposals.)

B. Clarify Tax Exempt Status of Tribes and Tribal Enterprises
    While the tax exempt status of tribes and Tribal enterprises 
chartered under Section 17 is fairly well settled, clarification is 
needed that a Tribal enterprise chartered under a Tribal corporation 
code or a limited liability code is similarly exempt from federal 
corporate taxation and state taxation. A tribe's percentage ownership 
of a project also should be exempt from such forms of taxation. 
(Administrative clarification in BIA leasing regulations is needed, if 
not legislation.)

C. Extend or Make Permanent Employment and Investment Tax Provisions
    The Indian employment tax credit and accelerated depreciation of 
investments on reservation lands should be extended for longer periods 
or made permanent to ensure that these provisions result, as intended, 
in incentivizing business investments in Indian Country. Such 
investments should be made in conjunction with Tribal development 
plans. So that Section 17 corporations and other wholly Tribal owned 
entities also can benefit, provisions should be included to allow these 
Tribal enterprises to sell these tax credits on the secondary market. 
(Legislative action would be required.)

    The Chairman. Thank you very much, Ms. Gray-Proctor.
    Mr. Pollock, will you please proceed with your testimony?

 STATEMENT OF MICHAEL J. POLLOCK, MANAGING DIRECTOR, SPECTRUM 
                        GAMING GROUP LLC

    Mr. Pollock. Mr. Chairman, thank you for this opportunity. 
I have been asked to address the very specific issue of 
Internet gaming.
    I have spent significant time in recent months meeting with 
Native American leaders both in Washington and throughout the 
United States. The common question I hear is, what will 
Internet gaming mean for our Indian nation, our casinos, our 
future.
    I suggest that with the politics of this issue in such a 
state of flux, such a question is impossible to answer with any 
degree of certainty. A more relevant question, I suggest, is 
what should Internet gaming mean for our Indian nation, our 
casinos, our future. And that question is more easily 
addressed, because we know the business model that most Indian 
and commercial casinos follow. And we know the potential of 
Internet gaming.
    Internet gaming is widely viewed as a revenue stream for 
government. What is less readily apparent is that Internet 
gaming also represents a significant marketing opportunity for 
Indian casinos. Internet gaming offers the ability to reach 
customers easily and at low cost, to identify their potential 
and to cultivate those customers and reward them through the 
ability to earn a visit at their brick and mortar casinos.
    In other words, what I am saying is, there is more than one 
revenue stream that can be generated. If Internet gaming is 
allowed to develop as simply one revenue stream, then I 
suggested the United States has squandered a once in a century 
opportunity. We all look to Europe in Internet gaming as the 
model, because that is where it exists legally and that is 
where people want to, or consider importing to the United 
States.
    It has limited applicability, because in Europe, it does 
not have the brick and mortar industry that we have here on 
Tribal lands and in commercial casinos. Hundreds of billions of 
dollars have already been invested in casinos across the 
Country, commercial and Native American operations, in part 
because government sought to create more than just tax 
revenues. They sought to create jobs, to invigorate downtowns, 
to spur tourism and to assist many Indian nations in developing 
a sustainable business model to create career opportunities for 
their members and their communities.
    These goals assume that adults, gaming and non-gaming 
alike, will generate real, not virtual visits to casinos. That 
is how you generate employment and how you generate sufficient 
returns in all that invested capital. This hearing is subtitled 
Equal Access to E-Commerce Jobs and the Global Marketplace. 
What I am suggesting from a public policy standpoint is that 
you recognize the advantages of ``unequal'' access, in which 
operators, particularly Tribal operators, have brick and mortar 
casinos, have a real and sustainable advantage as Internet 
gaming develops, should it develop.
    And that is the essence of my comments, and I am ready to 
answer any questions. Thank you.
    [The prepared statement of Mr. Pollock follows:]

 Prepared Statement of Michael J. Pollock, Managing Director, Spectrum 
                            Gaming Group LLC

    Thank you for this opportunity to address the Committee on this 
important matter. We believe that the goal of providing equal access to 
the opportunities afforded by Internet wagering can be advanced if 
gaming policies in the United States are coordinated. Indeed, we 
believe that the existing policies regarding brick-and-mortar casinos 
be coordinated with the proposed policies regarding Internet wagering 
if you seek to maximize the benefit.
    I have spent significant time in recent months meeting with Native 
American leaders both in Washington and throughout the United States. 
The common question I hear is: What will Internet gaming mean for our 
Indian nation, our casinos, our future?
    I suggest that, with the politics of this issue in such a state of 
flux, such a question is impossible to answer with any degree of 
certainty. A more relevant question, then, is: What should Internet 
gaming mean for our Indian nation, our casinos, our future?
    That question is more easily addressed because we know the business 
model that most Indian and commercial casinos follow, and we know the 
potential of Internet gaming.
    Internet gaming represents a significant revenue stream for 
government. What is less readily apparent is that Internet gaming also 
represents a significant marketing opportunity for Indian casinos. 
Internet gaming offers the ability to reach customers easily and at low 
cost, to identify customers' potential, and to cultivate customers and 
reward them through the ability to earn visits at their brick-and-
mortar casinos.
    If Internet gaming is allowed to develop as simply a revenue 
stream, then I suggest the United States has squandered a once-in-a-
century opportunity.
    In Europe, for example, Internet gaming has developed largely as an 
independent revenue stream. The European model, however, has limited 
applicability in the United States, largely because Europe does not 
have anything close to the brick-and-mortar gaming-industry 
infrastructure that has developed throughout the United States.
    Hundreds of billions of dollars have already been invested in 
casinos across the country--both commercial and Native American 
operations--in part because authorizing governments sought to create 
more than tax revenues. They sought to create jobs, to invigorate 
downtowns, to spur tourism, and to assist many Indian nations in 
developing sustainable business models to create career opportunities 
for their members and their communities.
    Those goals assume that gaming and non-gaming adults alike will 
generate real, not virtual, visits to casinos. That is how you generate 
employment, and how you generate sufficient returns on all that 
invested capital.
    The sub-title of this hearing is ``Equal Access to E-Commerce, Jobs 
and the Global Marketplace.'' From a public-policy standpoint, I 
respectfully suggest that this committee recognize the advantages of 
``unequal access.''
    We assume that effective regulatory and licensing requirements will 
be part of any legislative package, whether at the federal or state 
level. We assume that sufficient controls will be required to address 
issues such as underage gambling or problem gambling. I respectfully 
suggest adding another assumption: Existing and future operators of 
Indian and commercial casinos should be among the primary beneficiaries 
of Internet wagering if you seek to maximize the benefits of Internet 
wagering.
    Congress lacks the power to ensure that all providers of legal 
Internet wagering will benefit equally, or even that all providers will 
benefit at all. I am simply suggesting that the existing policies 
regarding brick-and-mortar casinos be coordinated with the proposed 
policies regarding Internet wagering if you seek to reach your stated 
policy goals.
    Thank you again for this opportunity.

    The Chairman. Thank you very much, Mr. Pollock, for your 
testimony.
    Mr. Morgan, in your testimony you have illustrated the 
reasons why e-commerce is so attractive to Indian communities. 
But that success often comes with increased scrutiny from State 
and Federal entities. My question to you is, in what ways can 
the Committee ensure that Tribes have equal access to market 
opportunities?
    Mr. Morgan. That is an excellent question. I think from the 
Federal level, I think they play a very big role. The primary 
dispute in my world as a CEO is with State regulations and 
States' attempt to control and State taxation issues. There is 
a system of sort of fighting that out. The tribes themselves 
have been able to largely bypass that system with Internet-
related activities. The States have been frustrated
    So what concerns me is that the States will attempt to come 
to Congress to get a fix, we will call it the Internet fix, to 
see if they can take some control over what we are doing in 
that context.
    The reason I am concerned about it is because it has 
happened many, many times before, in the pre-Internet era, and 
it just happened again with the PACT Act. So I think that the 
States are sort of repetitive in their approach. And I think 
there are lots of issues coming up right now, whether it is 
Internet gaming or lending or any other sort of innovative 
retail sales tax issues, those types of things, where the State 
is going to try to impose their will on some level.
    And there is no direct way to do it, because the Internet 
bypasses their normal system of control by threatening those 
who deal directly with us. It leapfrogs their roadblocks and 
puts us in the stream of commerce. So the only other person who 
can stop us is Uncle Sam. So we want to make sure that we are 
his favorite nephew and they take care of us. Because they are 
going to come. And they are going to come in a way that sound 
reasonable and it is going to sound like it is a big problem. 
But what they are coming for is to take our money and to 
isolate us once again.
    So the answer to your question is, just defend our rights 
and let us have a fair and open chance to at least discuss our 
perspective.
    The Chairman. Thank you very much, Mr. Morgan.
    Ms. Gray-Proctor, building broadband infrastructure relies 
on quality access to capital. What does NCAIED recommend to 
improve lending? And why do lenders continue to pull back from 
investing in Native communities?
    Ms. Gray-Proctor. I am probably not the right person to ask 
on that, because I am on the other side of it. I am a 
businesswoman. But we hear that many times from many of our 
Tribal enterprises, of the challenge of access to capital. For 
instance, you look at how many banks that we have within Indian 
communities, there is a handful. Why is that? Because of course 
you go with the regulations that banking brings. It is also 
because of the land issue, the trust land that is there. They 
can't own it, they can't hold it, they can't, if you don't 
fulfil your obligation of your loan, they can't take it.
    So there are quite a few different challenges, just the 
land and the trust and some of those land issues have. But what 
we see is how this applies with the Internet and broadband on 
Indian land, is that it also gives us access to lending if it 
is high speed. It is just not whether we have it, we want our 
entrepreneurs to be able to do online banking, to be able to be 
paid by the U.S. Government whether they get a government 
contract, whether it is an 8(a) contract, a government 
contract, a Tribal contract. A lot of it has to be directly 
deposited into an account.
    As what we say, Native to Native business is that whether 
you have a government client or you have a Tribal client, all 
commerce is done anywhere is whether it is on an iPhone, I am 
not just saying specifically a phone, but a cell phone, the 
iPad or the tablets, business is done that way. I have been 
doing that while I have been on this visit here. Sitting back 
here, I am conducting business while we are here.
    But I can tell you that some friends of mine who live in 
Montana, or whether in Minnesota, who live in rural areas, 
can't do it. So that is what we are here to speak about, is 
that we need to level the playing field, like Mr. Morgan had 
said.
    The Chairman. Thank you.
    Mr. Pollock, online gaming is currently legal in 85 
nations. If Internet gaming becomes legal in the United States, 
are tribes poised to participate in this market in a way that 
would allow them to fully benefit from that opportunity?
    Mr. Pollock. Some are better poised than others. The 
essence of what I am trying to say, in multiple forums, is that 
they should be poised. And the legislation or regulations that 
authorize Internet gaming should recognize that they need to 
leverage what they offer, their existing gaming properties. 
Because they are enormous assets.
    It can go two ways. Either they are going to be forced to 
compete against websites that are not tied to any brick or 
mortar casino, Tribal or commercial, in which case you have an 
unlevel playing field. But if they are able to leverage their 
assets, their existing assets, to bring people onsite, those 
are the types of opportunities that are going to allow them to 
be poised. They can be poised, not all are.
    The Chairman. Thank you for your response.
    Mr. Morgan, how has the Internet expanded Ho-Chunk Inc.'s 
ability to participated in government contracting business?
    Mr. Morgan. I would like to address the last question 
briefly. It hadn't occurred to me before, but if you want to 
help Indian Tribes do the Internet gaming, then do it outside 
of IGRA, where the States have this power to make us do 
something if they want to. Otherwise, it will be an impediment 
to our development in that area. So perhaps Internet gaming 
could be something different, outside of that arena.
    As far as, and I addressed this in my testimony a little 
bit earlier, but without the Internet, Tribes would be stuck in 
their geographic areas with low capital and really without the 
corporate infrastructure. I am talking about people on the 
ground in D.C., the people on the ground in international areas 
to execute. We would be unable to compete, really, on high-
level government contracting. I don't know if I made this point 
exactly before, but our world was the world of the low-income 
provider subcontractor. But 8(a), the Native 8(a) combined with 
the Internet, and the increased flow of information, I get an 
email every day telling me what new contract opportunities are 
out there. That could have never happened before.
    It has allowed us to move up the food chain and be the 
prime contractor, which gives us knowledge, gives us more 
income, which gives us more capabilities. And it is the kind of 
thing that feeds on itself. What you have seen arise in our 
world is small, rural companies who used to just do whatever 
somebody gave them small to do, to international, 
sophisticated, providing high level services to the government, 
all from these rural areas that you never would have dreamed 
possible just 10 and 15 years ago.
    So the Internet and the information flow that that allows 
and the advertising, partnering, all these kind of things, has 
been absolutely critical to that world. It has opened up our 
eyes to what is possible, instead of just being told what we 
could do on the low end of the scale.
    The Chairman. Thank you, Mr. Morgan.
    Ms. Gray-Proctor, NCAIED has identified new opportunities 
for Tribes in the global marketplace. How can access to 
broadband provide opportunities for Tribes outside the U.S.? 
What other tools do Tribes need to be global market players?
    Ms. Gray-Proctor. Thank you for that question. That is one 
thing I am absolutely passionate about, is our Tribes, our 
Native Tribes, plus our Native-owned businesses, to be on the 
global marketplace. A year ago, I had the opportunity to go to 
Turkey on a trade mission. It just opened my eyes to what 
Indian Country has the capacity to do.
    That is why we launched the Native American Global Trade 
Center. What it will be is one location where all the different 
businesses, Tribal enterprises, can add their information, and 
do collective buying, to do international trade all over the 
world, which opens up the American dream, the Native American 
dream for all of us to be able to go after that. It levels the 
playing field, as we have been hearing all day.
    The opportunity that this will give, whether it is a 
business in Nebraska, a Tribal enterprise in Nebraska, to do 
work over in, whether it is Turkey, Australia, any other 
country, because they want to work with the tribes here. You 
look at the natural resources, you look at the energy, we look 
at the tourism component of what Indian Country has to offer, 
the scenic byways, learning about the different cultures. This 
would be good, it is good for Indian Country and it would be 
good for America. Because it gives us the opportunity to tell 
our story on our terms. It is our ability to do business on our 
terms and to be a player in the global market, again on our 
terms.
    And that is why I think it is so great that we have this 
oversight, and to have you listen to us and how we can move the 
Internet and the opportunity and these rural communities for 
another young Native woman who wants to be in business and 
understand how to be able to do that through the Internet. 
Right now, for instance, like SBA has the entrepreneurial tool 
box, how to get into business. Well, it is a little difficult 
for us to tell someone how to begin to start their business, to 
do a startup, when they don't even have access to that to 
understand what those tools are. So sometimes we have to fax 
those papers to them. It stops progress.
    So to be on the global market, we are really excited about 
it, to have all the Tribal enterprises, the tribes. Because 
each one of them have those resources, whether it is, we have 
some tribes that sell light bulbs to light, then you have 
another tribe in the First Nations who has timber. They want to 
be able to trade. It is going to have that opportunity to do, 
be our own Wall Street, in a way. Thanks.
    The Chairman. Thank you very much, Ms. Gray-Proctor.
    Mr. Pollock, it often takes several sessions of Congress 
for legislation to be examined before it is passed. Given the 
most recent discussion drafts of Internet gaming, do you have 
any concerns about tribes being able to fully benefit from the 
Internet gaming market?
    Mr. Pollock. It is an interesting question, Mr. Chairman. 
When we first started looking at this, and we were talking 
particularly to staff members who were charged with drafting 
some of the earliest iterations of, in this case, Federal 
Internet gambling legislation, in some of the earliest 
iterations, the interests of Tribal casinos was not even 
considered. I found that particularly mind-boggling, put into 
silos, you are Indian casinos, we are talking about Internet 
gaming. They are entirely different matters.
    And they are not entirely different matters. They do need 
to be coordinated. And we have seen somewhat of a progression 
in terms of getting away from that silo mentality toward taking 
those interests into account. I suggest that there are 
additional ways going forward to help ensure that Tribal 
operators do have that very important equal access. To have not 
been as present in the existing legislation that I have seen, 
to the extent that they could be.
    The Chairman. Thank you very much, Mr. Pollock.
    Senator Murkowski, any questions of Panel Two?
    Senator Murkowski. Mr. Chairman, I don't have any questions 
for this panel, but I do appreciate what they have provided to 
the Committee here today, their perspectives. I appreciate not 
only what they presented here, but their written testimony and 
all that they have done. Thank you.
    The Chairman. Thank you very much, Senator Murkowski.
    I want to thank this panel, too, very much, for your 
testimony, your responses. Without question, it will be helpful 
in our discussing these issues further. We will continue to do 
that. So thank you very much.
    I would like to invite the third panel to the witness 
table. Serving on our third panel is the Honorable Robert Odawi 
Porter, President of the Seneca Nation of Indians, located in 
Irving, New York; Mr. Carl H. Marrs, Chief Executive Officer of 
the Old Harbor Native Corporation, located in Anchorage, 
Alaska; and Ms. Robin Danner, the President and CEO of the 
Council for Native Hawaiian Advancement, in Honolulu.
    I welcome all of you and ask President Porter to please 
proceed with your testimony.

STATEMENT OF HON. ROBERT ODAWI PORTER, PRESIDENT, SENECA NATION 
                           OF INDIANS

    Mr. Porter. Nya-weh Ske-no. Mr. Chairman and members of the 
Committee, I want to thank you for being here, and I want to 
thank you for your good health.
    I am here today to summarize my testimony that I have 
otherwise submitted in written form.
    My name is Robert Odawi Porter, I am a Herring Clan Seneca 
from the Allegany Territory of the Seneca Nation, as well as 
being a lawyer and a law professor. Last fall, I was honored to 
be elected as our 67th Nation President.
    The Seneca Nation is one of America's earliest allies, 
living in peace with the American people since the signing of 
the Canandaigua Treaty nearly 217 years ago. Over the past two 
centuries, our nation has entered into numerous agreements and 
treaties with the United States. We have always sought to live 
up to our side of the relationship, as we have been guided by 
the teachings of the Guswhenta, or the Two Row Wampum, that 
requires of us that we maintain respect between us as peoples.
    I wish I could tell you that the United Sates has been as 
committed to our relationship over the years as we have. In the 
Canandaigua Treaty, the United States guaranteed that it would 
always recognize the Seneca Nation's free use and enjoyment of 
our lands. Because of this treaty-protected freedom, our nation 
has been able to achieve economic success and recovery from the 
devastating loss of our lands and our natural resources.
    Both our nation government and individual Seneca people 
have benefitted from this treaty-protected freedom, which we 
have used to trade with non-Indians, especially in our gaming 
and tobacco businesses. But today, as always, we are under 
siege by hostile forces such as the State of New York and 
private sector predators, who seek to deprive us of our recent 
economic prosperity and return us to the poverty of the prior 
area.
    As this Committee examines the application of e-commerce in 
Indian Country, honoring the sovereign right of my nation as 
well as all Indian nations, to control our own trade from our 
own territory should be the primary focus. It is important to 
keep in mind that at the forefront of this inquiry, the fact 
that the Seneca Nation, like other Indian nations, are 
governments, not merely private corporate entities. We govern 
the people and economic activity within our own territories, 
and we use the revenues we generate to support government 
operations and services for our people.
    Unfortunately, the United States Government has too 
frequently forgotten this fact. The American economy is 
inherently expansionist, but American economic activity has 
chronically and habitually either raided Indian Country like a 
band of pirates or simply bypassed us completely. Most of our 
aboriginal lands and nearly everything associated with them 
have been taken from us. Whenever non-Indians have 
``discovered'' that the Indians possessed something of value to 
non-Indians, the non-Indians have grabbed it for themselves.
    I would be remiss if I did not mention specifically the 
actions taken by the United States during my lifetime to take 
10,000 acres of my homeland for the Kinsua Dam and Reservoir, 
so that a hydroelectric license could be granted to a mega-
corporation to earn hundreds of billions of dollars at our 
expense. Indeed, the 1964 Federal legislation that provided for 
relocation assistance to our people whose homes were burned so 
that this could happen directed that the Interior Secretary 
plan for our termination. Today, I ask that this legislation be 
repealed.
    Indeed, somehow Indian gaming slipped through the cracks of 
this otherwise sordid history. For the past two decades, a 
modicum of prosperity has resumed for Indian nations with 
territories near large population centers where gaming was 
otherwise not supported. But now the big casino industry and 
cash-starved States are pursuing casino gaming in nearly every 
State market, including our surrounding State of New York.
    These actions erode Tribal exclusivity and thus Tribal 
market share. The discovery of Tribal government gaming by non-
Indian interests, like times of old, is now leading to its 
confiscation.
    One lesson that Indian Country must draw from this 
experience is that we must develop diversified Tribal economies 
as our corner of the casino gaming market is taken from us. But 
can Indian economic diversification outpace these tidal waves 
of non-Indian confiscation of our resources? Well, not if 
Congress continues to break our treaties like it did last year.
    Until last year, the Seneca Nation had a robust trading 
economy, based in large part on the sale of tobacco sales to 
non-Indians over the Internet. As with gaming, our Internet 
tobacco trade slipped through the cracks of history and for a 
time brought prosperity to many Seneca people.
    But last year, jealous big tobacco interests colluded with 
the avaricious appetites of State taxing authorities to 
persuade the Congress that they alone, not Indian nations, 
should govern the trade in tobacco products over the Internet. 
Over our strenuous objections, Congress last year enacted the 
Prevent All Cigarette Trafficking Act of 2010, the so-called 
PACT Act. This Act single-handedly destroyed our Internet 
tobacco trade, bringing the booming Seneca e-commerce trade to 
a grinding halt and killing about 2,000 jobs.
    If this Committee and the Congress believe that Internet 
commerce is the new American economic frontier, and the key to 
new jobs and economic growth, then what can we learn from our 
history with Indian gaming and the Indian tobacco trade? One 
lesson is unavoidable. The property rights of Indian nations 
must be respected and protected. Isn't it time non-Indians 
respect the inherent and treaty-recognized rights of Indian 
nations to control what happens on and from our own land? That 
is exactly what the United States promised to us in the 
Canandaigua Treaty 217 years ago.
    I and many Tribal leaders have no patience for the pitiful 
lip service being paid in these hallways to a false concern for 
Indian jobs and diverse Tribal economies. If that concern is 
real, then please honor Indian treaties. Let Indian nations 
trade as sovereigns. Stop undermining Indian casino gaming and 
the Indian tobacco trade. And for goodness sakes, please don't 
put Indian nations at the back of the Internet gaming bus 
before it leaves the station.
    Internet gaming has been likened to another modern day gold 
rush. Big gaming interests and big States have staked their 
claims and pushed for a Federal law that would give them an 
instant monopoly over Internet gaming operations. This brazen 
power grab is premised on the fiction that only Nevada and New 
Jersey interests are sophisticated enough to operate Indian 
gaming in the first wave. Like the land companies and oil 
companies before them, these gaming moguls see Indian gaming as 
a competitive threat and are determined to push Indian gaming 
away from the table or at best, deal Indian gaming a short 
hand.
    The truth is that the Seneca nation and dozens of other 
Tribal gaming operations are as sophisticated, if not more 
sophisticated, in terms of management, security, oversight and 
regulation than the biggest and best operators in Atlantic City 
and Las Vegas. After all, before the PACT Act wiped it out, 
Senecas operated one of the most robust Internet commerce 
operations in America. It is an affront to our dignity for the 
Congress to give any credence to the insulting notion that the 
Seneca Nation is somehow not ready or is inexperienced or is 
otherwise ill-equipped to conduct and regulate Internet gaming 
from nation territory.
    This Congress shapes the laws that govern e-commerce and 
must respect and honor our treaty rights to conduct business 
from our land, on our own terms and without restraint from any 
outside power. I urge this Committee to ensure that no Internet 
gaming legislation is enacted unless it guarantees to Indian 
nations the right to define the terms and reap all of the 
benefits for all Internet gaming that originates from Indian 
Country.
    We insist that you protect our inherent sovereign right to 
regulate commerce and activities in our territory, including 
Internet commerce on what remains of what we have, without 
regard to where our customers are located. Thank you for the 
opportunity to provide this testimony today. Nya-weh.
    [The prepared statement of Mr. Porter follows:]

   Prepared Statement of Hon. Robert Odawi Porter, President, Seneca 
                           Nation of Indians
Introduction
    Nya-weh Ske-no. Mr. Chairman and members of the Committee, I am 
thankful that you are well and I am pleased to appear today to discuss 
briefly the written testimony I am submitting for the record on behalf 
of the Seneca Nation of Indians.
    The Seneca Nation of Indians (``Nation'') is one of America's 
earliest allies, historically aligned with the other members of the 
historic Haudenosaunee (Six Nations Iroquois) Confederacy and living in 
peace with the American people since the signing of the Canandaigua 
Treaty nearly 217 years ago on November 11, 1794, 7 Stat. 44. Our 
Nation has entered into numerous treaties and agreements with the 
United States since that time and we have always sought to live up to 
our side of this relationship, despite repeated instances in which the 
United States has not done so.
    The most important promise made to us by the United States under 
the Canandaigua Treaty is that the Seneca Nation would be recognized as 
a sovereign nation and that the title of our lands would remain secure. 
Specifically, the United States made a commitment to us that it made no 
other Indian nation--that we would retain the ``free use and 
enjoyment'' of our lands. This promise has served as the basis for a 
level of freedom possessed by the Seneca people that we believe is 
unmatched by other indigenous peoples in the United States.
    Because of this treaty-protected freedom, our Nation has been able 
to achieve success in recovering from nearly 200 years of economic 
deprivation inflicted upon us by the United States due to devastating 
losses of our lands and resources. Both our Nation government and 
individual Senecas have benefited from the opportunity to expanding 
into economic trade with non-Indians during the last 40 years, focusing 
primarily on the gaming and tobacco businesses. We have fought hard for 
our recent economic success--just as we have fought hard to protect our 
lands--but the fact remains that we are under constant assault from 
hostile forces such as the State of New York and private sector 
predators who seek to deprive us of economic prosperity and return us 
to the poverty of a prior era.

Seneca Nation's Territories Are Immune From State Taxation and Federal 
        Regulation
    The Seneca Nation, our people and our lands, have been immune from 
state taxation and federal regulation since the day the United States 
of America was formed. Solemn agreement after agreement has reiterated 
this state tax immunity and our Nation's inherent, sovereign right to 
regulate all conduct within our Territories free of interference by the 
United States. As I have mentioned, the most notable of these 
agreements is the Treaty of Canandaigua of 1794.
    This federal treaty obligation--

   To protect the immunity of the Seneca Nation and its 
        Territories from the reach of taxation by the State of New 
        York; and

   To protect our inherent, sovereign right to free trade; and

   To preserve our recognized right to regulate economic 
        conduct within our Territories to the exclusion of the State of 
        New York and the United States;

    --should be the focus of any inquiry of this Committee into how e-
commerce and e-trade from within Indian Country should be handled. And 
make no mistake about it, the Seneca Nation is fully capable of this. 
We have years of experience governing our own economy and trade with 
others. What follows is but one example of this.

The Seneca Nation of Indians Enforces Its Own Comprehensive Laws Within 
        Its Own Territory
    The Seneca Nation regulates and enforces all economic activity 
within our Territories. For example, our Council enacted a 
comprehensive Import-Export Law in 2006 to regulate sales of tobacco 
and other products from its Territories. The Nation's Import-Export 
Commission regulates all aspects of tobacco and other product sales. 
Among its other functions, the Commission--

   Requires that only Nation-licensed stamping agents may 
        import tobacco products into Nation Territories;

   Prevents the sale of tobacco products without the affixation 
        of a Nation import stamp and payment of the required import 
        fee;

   Defines unstamped cigarettes as contraband;

   Requires accurate accounting of all stamps issued to Nation 
        authorized stamping agents;

   Prohibits cigarette sales in excess of 9,800 cigarettes 
        (lower than the Federal threshold);

   Imposes severe penalties, including loss of business 
        license, for trafficking in contraband cigarettes; and

   Prevents the sale of tobacco products to minors under age 
        18.

    As a result of the enactment and enforcement of its own Tribal law, 
the Nation has gained regulatory control of tobacco and other sales 
activities on its Territories. The Nation's aggressive implementation 
of its Import-Export law has greatly enhanced its capacity to cooperate 
with the federal Bureau of Alcohol, Tobacco, Firearms and Explosives 
(BATFE) and the federal Alcohol, Tobacco Tax, and Trade Bureau (ATTTB) 
in enforcing the law on the Nation's Territories. Please be assured 
that as a government with law enforcement responsibilities for our 
Territories, the Seneca Nation of Indians is committed to cooperation 
with federal authorities in the implementation of federal and Tribal 
law. The Nation is a leading player on the national stage with respect 
to eliminating illegal tobacco trafficking activity, and has likely 
done more to curtail contraband trafficking than any State agency, 
including that of New York State.
    I raise this example to remind everyone that Indian tribes, like 
the Seneca Nation, are governments. We govern the people and activity 
within our own Territories. This is reflected in the U.S. Constitution 
that governs how the United States government is supposed to deal with 
us--nation to nation. How America has actually dealt with Indian 
nations, however, is twisted into unconstitutional shapes.

Seneca Nation History Is Replete With Irony
    If you look at American history from the perspective of a Seneca 
Nation citizen--or of any American Indian for that matter--it is filled 
with irony.
    American economic development has chronically and habitually by-
passed Indian Country or has extracted value and then abandoned Indian 
Country like a mere colony. Our history is one of nearly complete loss 
of what we once had. We have lost our lands and nearly everything 
associated with them. We have lost our natural resources, such as the 
beaver belt and the buffalo herds. We have lost our stores of gold, 
uranium, oil, gas, salt, and gravel. We have had the use of our 
remaining lands taken for railroads, highways, and reservoirs for 
hydroelectric dams. Just 45 years ago, the United States again broke 
the Canandaigua Treaty and took 10,000 acres of our Allegany Territory 
for the Kinzua Reservoir so that a license could be granted to a 
private mega-corporation to make millions of dollars from the sacrifice 
of our lands and the burning of our homes. When not actually 
confiscated, we have had coercive agreements pushed down our throats 
for only pennies on the dollar of the actual value taken by outsiders.
    In his Wealth of Nations, Adam Smith, the moral philosopher whose 
economic theory underpins modern-day American capitalism, said:

        ``Civil government, so far as it is instituted for the security 
        of property, is in reality instituted for the defense . . . of 
        those who have some property against those who have none at 
        all.''

    When it comes to Indian property holders, there is no question that 
the U.S. government has abandoned Adam Smith's rule, completely 
subverting the natural order of property ownership. All too often the 
United States has appropriated, or has allowed states and others to 
steal, like common thieves, valuable property held by Native peoples. 
This, whether anyone likes it or not, is the common strain of American 
history towards the aboriginal occupants of this land. For Americans 
who care about justice, this history should be a source of shame and 
embarrassment.

Discovery Has Led to Confiscation
    The storyline of American Indian history has been the same, time 
after time. When non-Indians ``discover'' that the Indians possess 
something of value to the non-Indians . . . then the non-Indians grab 
it for themselves. No money can adequately compensate Indian Country 
for these takings, and precious little money has ever been offered.
    Recently, Indian gaming slipped through the cracks of this history 
and for the last 30 years a thousand flowers bloomed for Indian Nations 
with territories near large population centers in states where the law 
frowned upon gambling. Because gambling was disfavored by state law but 
craved by state citizens, neighboring Indian gaming markets thrived. 
The recognition by the U.S. Supreme Court of Tribal sovereignty in the 
pivotal Cabazon case, although constrained soon thereafter by the 
Indian Gaming Regulatory Act, resulted in a temporary but tangible 
advantage for some Tribal economies.
    But now big casino industry and cash-starved states are embracing 
casino gaming in nearly every state market. This is eroding Tribal 
exclusivity and thus, Tribal gaming market share. Once again, Indians 
have been discovered to possess something the non-Indian economic 
interests want for themselves. As inevitable as the sun's rising in the 
East, discovery of Tribal government gaming is leading to its 
confiscation. This erosion makes it an absolute imperative that those 
of us who lead our Native Nations must develop diversified Tribal 
economies that can survive as our corner on the casino gaming market 
shrinks and shrinks.

Can Indian Diversification Outpace the Tidal Waves of Non-Indian 
        Confiscation?
    Until last year, Seneca Nation had a robust and diversified trading 
economy based in large part on the sale of tobacco and fuel products to 
non-Indians. Unlike many other places in Indian Country, Seneca Nation 
Territories had a decades-old, private sector economy comprised of 
competitively-driven Seneca entrepreneurs. Our Seneca entrepreneurs 
traded products for years in bricks and mortar, over the counter 
transactions and, when the World Wide Web offered additional avenues 
for trade and commerce, they expanded their market reach into the 
Internet tobacco trade.
    Like with gaming, our Indian Internet trade in tobacco slipped 
through the cracks of history and for a time a thousand flowers 
bloomed. Because tobacco use was disfavored by state law but craved by 
state citizens, the Indian Internet tobacco trade thrived. But when 
jealous Big Tobacco industry interests combined with the avaricious 
appetites of state taxing authorities, their envy colluded to persuade 
the U.S. Congress that they alone, not Indian Nations, and their terms, 
not ours, should govern trade in tobacco products.
    Last year, the U.S. Senate and the U.S. House chose to over-ride 
strenuous objections from the Seneca Nation and enact the Prevent All 
Cigarette Trafficking Act of 2010, the so-called PACT Act. That Act 
single-handedly destroyed our Internet tobacco trade. It levied 
prohibitively costly fines and penalties on anyone connected with the 
common carriers and the U.S. Postal Service from moving our trade in 
tobacco products. It brought Seneca Nation's booming e-commerce trade 
to a grinding halt and threw hundreds of families out of work.
The American Frontier or Indian Country?
    This Committee, with this hearing, as well as many other observers 
of the American economic future, appears to believe that e-commerce is 
the new American economic ``frontier''. That Internet commerce and 
trade is the future. If it is, what warning signals can we learn for 
Indian Country and our allies on this Committee and in Congress and the 
Administration? What lessons can we draw from the history of how the 
United States, and the various states, and American economic interests, 
have shaped the American frontier, from timber and gold and water to 
gaming 25 years ago and to the Indian tobacco trade last year?
    One lesson is unavoidable. Isn't it time the property rights of 
Indian Nations are respected and protected? If not now, when? Isn't it 
time non-Indians respect the inherent and treaty-recognized rights of 
Indian Nations to control what happens on and from our own land? That's 
exactly what the Treaty of Canandaigua promised the Seneca Nation and 
the Seneca people.
    I and many Tribal leaders have no patience for the pitiful lip-
service being paid in these hallways to a false concern for Indian jobs 
and the diversification of Native economies.
    If that concern is real, then honor Indian treaties. Respect Tribal 
sovereignty. Let Indian nations trade as sovereigns. Stop undermining 
Indian casino gaming. Stop obliterating the Indian tobacco trade. And 
for goodness sake, don't put Indian nations at the back of the Internet 
gaming bus before it leaves the station.
Internet Gaming--A 21st Century Gold Rush
    In recent years the Big Gaming interests, not unlike Big Tobacco, 
have allied themselves with state regulatory interests in Nevada and 
New Jersey and pushed for federal Internet gaming legislation that 
would bestow upon them a monopolistic control of Internet gambling 
operations. That brazen power grab is premised on the fiction that the 
big Nevada and New Jersey interests are alone sophisticated enough to 
operate Internet gaming in the first wave.
    Like land homesteaders and gold stake claimers before them, these 
Nevada and New Jersey moguls see Indian gaming as a competitive threat 
and are determined to shove Indian gaming away from the table or, at 
best, deal Indian gaming a short hand.
    The truth is this: the Seneca Nation and dozens of other Tribal 
gaming operations are as or more sophisticated in terms of management, 
security, oversight and regulation than the biggest and best operators 
in Atlantic City and Las Vegas. In addition, until this Congress and 
this Administration recently shut it down with enactment of the PACT 
Act, the Seneca Nation regulated one of the most robust Internet 
commerce operations in America--the tobacco trade. It is an affront to 
our dignity for the Congress to give any credence to the insulting 
notion that the Seneca Nation is somehow ``not ready'' or inexperienced 
or otherwise ill-equipped to conduct Internet gaming from Nation 
Territory, according to Nation laws and regulations, anywhere the 
Internet markets take our game and our trade.
    Our treaty rights to conduct commerce--from our land, on our own 
terms, and without restraint by any outside power--must be respected 
and honored. That must apply to both over-the-counter trade and 
Internet commerce.
    This Congress and this Administration bowed to Big Tobacco and Big 
State interests last year with the PACT Act and devastated the Seneca 
economy. I urge this Committee, to find its true identity--as a strong 
ally of Tribal sovereignty and as a stalwart defender of Indian 
treaties--and fight to the death to ensure that no Internet gaming 
legislation is enacted unless it guarantees to Indian Nations the right 
to set all terms and reap all benefits of all e-commerce that 
originates on Indian Country.
    Internet gaming developments are the most recent, modern-day threat 
to Tribal sovereignty. I must ask this Committee--will Congress roll 
over once again and, PACT-like, squash Tribal sovereignty and Tribal 
ingenuity by acquiescing to the powerful Internet gaming interests in 
Nevada and New Jersey and the cash-envious state and federal 
treasuries?
    I don't think you will. Your hearing today heartens me, and I 
think, many others. I encourage you to take the record you have heard 
today and work to ensure that Tribal sovereignty applies to all e-
commerce emanating from Indian Country to all customers without regard 
to where the customers are located.
    The technology of 21st century trade and e-commerce challenges old 
notions of territory and borders and boundaries. The locus of where a 
``sale'' is made, and controlled, must be returned to the place where 
the trader is located. In the case of Tribal sovereignty, that would 
return sovereign control of all e-commerce originating on Indian land 
to the Indian Nation.
Conclusion
    The Seneca Nation asks that this Committee ensure that the U.S. 
Congress, in conformity with its responsibility under the U.S. 
Constitution, honor our treaties and protect our inherent, sovereign 
right to regulate all commerce and conduct on what remains of our 
Indian Country. Thank you for this opportunity to provide testimony and 
we ask that it be made part of the record of this hearing.
    Nya-weh.

    The Chairman. Thank you, Mr. Porter.
    Mr. Marrs, will you please begin with your testimony?

STATEMENT OF CARL MARRS, CEO, OLD HARBOR NATIVE CORPORATION AND 
                 THE KODIAK-KENAI CABLE COMPANY

    Mr. Marrs. Thank you, Mr. Chairman and Senator Murkowski. 
Thank you for the opportunity to testify before the Committee 
today on the subject of Internet infrastructure in Native 
communities.
    I submitted a longer written statement, which I would ask 
be made part of the record. Meanwhile, I will summarize some of 
the key issues. I had a whole litany of what I did in the past, 
my history, but the two of you know me, so I will dispense with 
that.
    The Chairman. Your full testimony will be included in the 
record.
    Mr. Marrs. I was going to give you that background on 
myself to convey to you that I have really been involved, in 
one way or another, almost since the beginning of ANCSA. Seeing 
first-hand the positive aspects of the Act, and the negative 
aspects of the Alaska Native Claims Settlement Act. Like all 
indigenous people of America, the struggles for equality 
continue, even with Congressional mandates, in every 
Administration I remember. We have to fight our way through the 
bureaucratic system and through that process, mostly lose what 
we thought we gained in Congressional legislation.
    There are many hurdles for all indigenous people of America 
to still climb. This is not just limited to Alaska. But my job 
is to focus on what we can do for our people in Alaska, and the 
focus of this hearing is one of the best areas to start to help 
pull a struggling society up and bring it into the 21st 
century.
    The subject of equal access to e-commerce, jobs and global 
marketplace is vitally important, not only to the issue of 
access to the Internet, and all the windows of opportunity that 
it brings with it, but to all aspects of Native American life. 
As members of this Committee, you are all aware it has been a 
struggle for many years and continues to be a struggle for 
Alaska Natives and American Indians, Native Hawaiians to gain a 
foothold in Congress in a Country in which they are the 
Nation's First Peoples.
    Mr. Chairman, all weather, highly reliable, high capacity, 
high speed broadband is where our future is. If we have a 
chance of saving our villages, our culture, our subsistence 
lifestyle, it is by getting genuine all weather, reliable high 
speed, high capacity broadband connectivity in our rural areas 
of Alaska.
    What does real-time broadband have to do with saving our 
culture? Subsistence way of life for our villages? It has 
everything to do with it. We are losing people to urban areas 
because there are so few jobs available in rural areas 
generally. Without some sort of income in the villages in 
combination, subsistence and cash-based economies of today, our 
young people are having to move to where they can work, make 
money and provide for themselves and their families.
    Once they have moved away from the village, seldom do they 
move back. For many, though, if they were able to make a living 
in their villages and provide for their families and educate 
their children, they would choose to stay and continue to live 
in the village.
    If they don't, over time they will lose touch with their 
culture and their way of life. This is a tragic situation that 
is exacerbated by the economic meltdown the Nation as a whole 
has been experiencing in recent years. Having genuine high 
speed, all weather, robust broadband capacity in our rural 
areas gives them a fighting chance to stay in their villages 
and live their traditional culture and subsistence way of life 
to the greatest extent possible. With this technology, people 
would be able to obtain advanced education and training, 
including college degrees, and earn a decent wage through many 
of the jobs that are now being carried at home over the 
Internet.
    Mr. Chairman, my written testimony details most of the 
reasons for the need for high speed broadband and why it is so 
important to people in rural Alaska. In addition, there is a 
map that is attached that will show you what we had proposed in 
the 2009 economic stimulus package. But that was not approved.
    Having a sub-sea fiber system that would serve all of 
western Alaska, including the Aleutian Chain, with branching 
units off a fiber backbone system, and operated by a carrier's 
carrier, would open new horizons for people living in the 
largest unserved rural areas of the United States. Today, 
unfortunately, individual carriers building out systems that 
serve smaller areas intend to create monopolies in most cases, 
don't really help rural Alaska, because they are really a 
closed system. In most cases, such systems are paid for by the 
Federal Government through grants and USF funds. At the end of 
the day though, the system doesn't allow for assured 
competition which is needed to assure quality service.
    Having a backbone system, as we propose, with being a 
carriers' carrier, would allow the backbone system to charge 
one price to all carriers, or mid and last mile providers. It 
would thereby create the kind of competition that is needed to 
bring pricing down in rural Alaska that would allow the people 
to use he system they need to use to create jobs in their 
villages and reside where they have their roots and history, 
and to live their culture, while have a foot in and being a 
contributor to the 21st century.
    We appreciate any and all actions by this Committee to help 
facilitate the expansion of such broadband to Native 
communities in Alaska, and believe that you could do nothing 
greater of importance to the lives of all Native Americans 
throughout the Nation than to help ensure such technology is 
available to them as soon as it can become a reality.
    If I may have the leeway, Mr. Chairman, at this point, in 
light of the Chairman's announcement to retire at the end of 
this Congress, I would like to say a couple of things. First, 
Mr. Chairman, you have been a long-time friend of mine. You 
have been a friend as well to Native Americans, including 
Alaska Natives, Native Hawaiians. You are from the old school, 
being a genuinely gracious and thoughtful member of Congress, 
you are a great statesman. I will miss you acutely after you 
leave Congress. Hopefully I won't be around that much longer, 
either.
    Your grace and commitment to high principles is without 
peer. I wish you well and appreciate all that you have done for 
indigenous people in the Country.
    Relevant to the discussion about the need for broadband for 
Native Americans, Native Alaskans and Native Hawaiians, I want 
to express my strong support for the Federal recognition of 
Native Hawaiians. Alaska Natives have a close relationship with 
their brothers and sisters from Hawaii. We stand firmly beside 
them and behind you, Senator Akaka, and Senator Inouye and your 
colleagues.
    In passing the Native Hawaiian Government Recognition Act, 
the federally-recognized Hawaiian government will play a 
significant role in assisting the Federal Government to assure 
broadband infrastructure and therefor e-commerce opportunities. 
So thank you very much, Mr. Chairman.
    [The prepared statement of Mr. Marrs follows:]

 Prepared Statement of Carl Marrs, CEO, Old Harbor Native Corporation 
                   and the Kodiak-Kenai Cable Company

    Chairman Akaka, Vice Chairman Barrasso, Members of the Committee:
    Camai' (hello), my name is Carl Marrs. Thank you for the 
opportunity to testify today before this distinguished Committee on the 
subject of ``Internet Infrastructure in Native Communities: Equal 
Access to E-Commerce, Jobs and the Global Marketplace.'' Thank you also 
for holding an oversight hearing on this subject matter that is vital 
to Alaska Natives.
    I serve as the Chief Executive Officer of the Old Harbor Native 
Corporation (OHNC) authorized by Congress and incorporated pursuant to 
the Alaska Native Claims Settlement Act (ANCSA). I'm here to testify on 
behalf of this corporation and its subsidiary, the Kodiak-Kenai Cable 
Company (KKCC). Further, my testimony is directly relevant to, and 
hopefully will be of benefit to, all Alaska Natives who do not have 
access to genuine, all-weather, highly reliable, high-capacity, and 
high-speed broadband.
    I am an Alutiiq and was born and raised in Seldovia, Alaska in the 
South-central region of the state. I'm a Tribal Member of the Native 
Tribe of Seldovia and a shareholder of Seldovia Village Corporation and 
of the Cook Inlet Regional Corporation. Both of these Native 
corporations were also authorized and mandated by the United States 
Congress through its passage of ANCSA in 1971. I served in the U.S. 
Marine Corp from 1970-1972. In 1973, I went to work for Cook Inlet 
Region Inc. (CIRI) starting as a land trainee and in 1995 I was 
appointed the President and CEO, serving over 30 years with CIRI. I 
have been involved in many Alaska Native Claims Settlement Act issues 
since the beginning and have seen many positive changes, but there are 
still many challenges to ensure that Alaska Natives, especially those 
in rural Alaska have the ability and tools to advance them from the 
alarming unemployment and poverty rates, teenage suicide rates, health 
and social issues, and other maladies that stem from a near absence of 
paying jobs many communities currently experience.

Overview
    As most in the U.S. recognize, real time high-speed, high-capacity, 
reliable access to the Internet is an imperative in today's global 
economy so as to see real jobs created through E-commerce. This reality 
was the genesis of OHNC's major effort to bring all-weather, fiber 
optic marine cable based broadband to a hub on Kodiak Island. Once that 
was achieved as it was in 2007, the corporation's goal has been to 
extend that telecommunications capability to all other Native 
communities in the Kodiak Archipelago. KKCC is in the midst of doing 
that.
    Further, extending that capability to other Alaska Natives (and 
non-Natives living in rural Alaska) in remote, unserved and underserved 
areas of Alaska led the OHNC to attempt to obtain NTIA and RUS grants 
and loans under the 2009 stimulus package. This quest to take high-
speed, high-capacity, all-weather broadband to other Alaska Native 
villages was set back when the application for stimulus funding did not 
receive approval. Notwithstanding that set-back, the corporation is 
still supportive of this goal and hopes that it can become realized in 
the not-too-distant future.
    The stakes are high in human terms in rural Native Communities in 
Alaska. Our youth need new and robust ways to obtain a good education, 
including advanced education and vocational skills and training, and 
ways to make a living, while residing in their villages. Before 
broadband, this dilemma seemed almost insolvable. With access to such 
technology, providing state of the art telemedicine, education, 
cultural and social enrichment, and economic development become much 
more achievable.

Background of ANCSA and the Village of Old Harbor
    Old Harbor Native Corporation is one of 252 Alaska Native village 
corporations authorized by Congress in 1971 with its passage of ANCSA. 
The purpose of that Act was to settle aboriginal claims of Alaska 
Natives to the lands that were purchased by the United States from 
Russia in 1867. A key part of the impetus to finally settle such 
aboriginal claims was that the United States needed to delineate and 
clear title to land for a right-of-way for the construction of the 
Trans-Alaska Pipeline to transport oil discovered at Prudhoe Bay to the 
Valdez Marine Terminal.
    The Native Claims Settlement Act was signed into law in 1971, and a 
few short years later, the pipeline was constructed and oil began 
flowing to Valdez and on to the market. The pipeline has been a major 
national energy security accomplishment since the oil has helped meet a 
significant portion of the daily U.S. demand of our nation for 
petroleum-based products. That pipeline also accounts for a significant 
portion of our nation's daily domestic oil production and it is the 
largest economic engine in our state. The discovery of oil and its 
development and production has helped our state to develop into a major 
economic player in the nation's energy-based economy. More importantly 
for the Native shareholders I represent, it has provided Alaska with a 
means to create jobs, investment and economic activity while our 
village corporations work to grow our own local economies.
    In addition to being a national priority and imperative, ANCSA was 
developed by Congress as a visionary means of utilizing the free-
enterprise system to help indigenous people economically. This was 
accomplished in ways that Congress and the Administration of President 
Richard Nixon thought would be more capable of bringing about economic 
advancement to Alaska Natives than would be possible through a 
Reservation-based, more traditional system as was used by the Federal 
Government in the lower-48 states with Indian Tribes.
    Under the Act, Alaska Natives were authorized and mandated to 
utilize the corporate structure to hold land and capital and were given 
great latitude to pursue their own economic futures for the benefit of 
their shareholders. No one was fully prepared to shift from a 
traditional culture and economy to one that was based on Alaska Natives 
becoming CEOs and Members and Officers of Corporation Boards of 
Directors. This was extremely challenging for our Native Leaders. Just 
as the original 13 colonies struggled to transition economically to a 
confederation after the signing of the Declaration of Independence, and 
as several boom and bust cycles across the United States have 
demonstrated since the Revolutionary War, learning to create, finance 
and grow an economy is a challenging feat.
    However, I am proud to say that since the passage of ANSCA in 1971, 
the growth, education, experience and leadership that Alaska Natives 
have gained about self-governance and corporate affairs in just the 
last 40 years, in stark contrast to the eons spent living as 
subsistence hunters and fishermen, is one of the most radical societal 
transformations in modern history. With some assistance from federal 
programs that helped such corporations to participate in federal 
contracting, many village and regional Native Corporations have become 
economic engines in Alaska representing approximately 12 percent of the 
gross state product and you can find such Native corporation offices 
and employees working on job sites all across the country and 
internationally. In other words, the hope and vision of those who 
crafted ANCSA are now starting to become realized in spite of many 
bumps in the road.
    Old Harbor Native Corporation was incorporated in 1973 and 
originally enrolled 329 shareholders under the Settlement Act. Today, 
there are approximately 335 shareholders residing primarily in Old 
Harbor, nearby in Kodiak, and in Anchorage as well as some outside of 
Alaska. The community of Old Harbor is rich in history and culture with 
the Ocean Bay Culture of Alutiiq Natives on Sitkalidak Island located 
across the Sitkalidak Strait from the village. That island is owned by 
OHNC and evidence of our people's use of the land dates back 7,500 
years in terms of human occupancy.
    The people of this village and other Alutiiq Natives survived 
``contact'' with outsiders as seafaring nations reached the shores of 
Kodiak Island. The first Russian settlement in Alaska was at Three 
Saints Bay about 8 miles from the current village of Old Harbor. This 
and other contacts with the outside world brought infectious disease 
epidemics for which Natives had no natural immunities to protect 
themselves. Such epidemics devastated many communities on Kodiak.
    In relatively recent history, this village saw a number of homes 
and infrastructure destroyed by the 1964 earthquake and tsunami that 
hit Alaska. In that tsunami, many villagers ran up the mountains behind 
the village to safety. The water rose above the entranceway and window 
sills of the Three Saints Church in the village, one of the oldest 
churches in North America. After the waters receded, villagers were 
stunned to see that none of the water had come inside the church! The 
people and the church had been delivered from the dangers posed by that 
tsunami and they continue to consider this event to be truly 
miraculous.
    The village has a proud history and tradition of subsistence 
hunting, generations of subsistence and commercial fishing and a strong 
feeling of family and self-reliance.

Importance of Education, Training and Access to Technology
    Old Harbor has long recognized that a key to its long-term survival 
and viability is the investment in education and training of its 
shareholders. One example of such ``investments'' in our people is the 
current Director of the Alutiiq Museum in Kodiak, Alaska. This young 
man received scholarships through our Native Corporation's scholarship 
program. He received his Ph.D. from Harvard in anthropology and lived 
with nomads in Russia for nearly two years as part of his studies. 
Further, just two years ago, he became a recipient of a MacArthur 
Foundation ``Genius'' award for his work in Alutiiq anthropology and 
archaeology. Also, Katherine Gottlieb another OHNC shareholder is a 
recipient of that same award. The village feels blessed and seeks to do 
all that it can to ensure that this rich legacy of education and 
achievement continues for its villagers. The work of its Native 
Corporation is one of the keys to achieving that goal.
    In the 40 years that have passed since the enactment of ANCSA, the 
people of the village have worked hard to transition from a subsistence 
lifestyle to a combination of subsistence and a cash economy. In 1973, 
few Alaska Native villages, had people with the requisite experience to 
incorporate and run a for-profit corporation. It has, therefore, been a 
long, hard struggle for Alaska Natives in general, to help provide 
economic opportunity for its people, which is still a work in progress.
    In addition to transitioning to a village entity operating under a 
corporate structure for economic development purposes, the village also 
has had to deal with the challenges, remoteness, and logistical 
obstacles and costs inherent in living on an island with the only 
transportation to and from the village being by air or water. The 
village still faces these challenges today as treacherous weather, high 
winds, lost access to fishing, and limited and expensive transportation 
options remain a continual way of life for villagers and makes doing 
almost anything with other parts of the state or nation or the world a 
formidable challenge. As a result, the village long ago recognized that 
it had to take proactive steps through its city, Tribal and corporate 
structure to close some of the technological gaps that adversely impact 
opportunities for new ways to make a living, obtain an education, 
acquire health care and achieve basic communications options for the 
village.
    In 2002, OHNC, after identifying the need for a fiber optic cable 
telecommunication system connecting Kodiak Island and the Western Kenai 
Peninsula with Anchorage, formed the Kodiak-Kenai Cable Company (KKCC) 
to engineer, construct and operate the first of its kind subsea fiber 
optic-cable system to serve the Kodiak region and provide redundancy to 
the existing cable system linking Alaska with the lower-48 and the rest 
of the world.
    Over several years, the Corporation, joined by Ouzinkie Native 
Corporation and working with the Alaska Aerospace Development 
Corporation (AADC), proceeded with the design, financing and permitting 
of the Kodiak-Kenai Fiber Link Project (KKFL). Construction of the $38 
million dollar project was completed in 2006 within budget and ahead of 
schedule and KKCC began providing service to telecommunication common 
carriers in 2007. The system, with landing sites in Anchorage, Kenai, 
Homer, Kodiak, Narrow Cape and Seward, serves approximately 10 (ten) 
percent of the State's population and provides high-speed broadband 
connectivity via a secure, state-of-the art submarine fiber-optic 
cable.
    The Company operates as a ``carriers' carrier'' offering high-
speed, broadband capacity and services to local and long-distance 
exchange carriers for Internet, telephone and other data and video 
services to promote full and open competition in these remote 
underserved markets.
    The KKCC system aids national defense and marine safety for one of 
the largest fishing fleets in the world by providing secure 
telecommunication services to the nation's largest Coast Guard base 
located on Kodiak Island. The system also serves the Alaska Aerospace 
Development Corporation (AADC) Kodiak Rocket Launch Facility, located 
at Narrow Cape on Kodiak Island. As the only access point to secure, 
high speed fiber optic connectivity in the region, this strategic asset 
is considered critical to the development of the Ground-based Midcourse 
Missile Defense System. In addition, just last week the U.S. Military 
launched a Minotaur IV+ rocket, with a TacSat-4 satellite as its 
payload, into orbit from this launch facility. This would not be 
feasible without the access to reliable, all-weather, high-speed fiber 
optic cable-based broadband that the KKFL project provided. According 
to news reports the satellite will enable a new level of communication 
coordination among various branches of the military.
    A goal of OHNC is to extend the high-speed connectivity that is 
presently available in Kodiak to the outlying villages of the Kodiak 
Archipelago. For several years, OHNC had a government contract to 
digitize documents. Because such high-speed connectivity was not 
available in Old Harbor, the work had to be conducted in Anchorage by 
shareholders of OHNC. That provided high-tech jobs and was most helpful 
to all who worked on the project. However, had the broadband technology 
been in place in the village, that work could have been carried out in 
the rural village thereby providing high-tech jobs in that remote 
village that is in dire need of economic opportunities.
    As a SBA 8(a) company performing government contract services, OHNC 
wants to employ as many shareholders as possible. The purpose of our 
corporation is to benefit our shareholders. This drive to employ or 
otherwise benefit shareholders comes from within as well as from the 
U.S. Government/SBA, whom we consider to be our clients in any contract 
work we secure. However, all parties recognize the enormous challenge 
in finding contracts where work can be performed in a rural and 
isolated village. Doing large contract manufacturing, repairs and 
construction for contracts is not likely to make sense in a rural 
village. But much electronic and computer-based work can be done in 
remote villages and communities in Alaska and across the U.S. if 
broadband telecommunications infrastructure exists. This includes both 
fiber optic-based backbones as the main highways for the regions and 
additional fixed and wireless technologies to connect the end users 
with the backbone fiber.
    The improved telecommunications speed and service reliability 
offered by our fiber optic cable enhances economic, educational 
opportunities and health services for all the communities served by 
this system. The importance of a redundant system is underscored by the 
reliability requirements for a project serving communities and other 
varied and important interests. As designed the system is more than 
sufficient to meet the total current requirements of Kodiak Island and 
the Kenai Peninsula and it may be upgraded as necessary to meet future 
traffic demand.

The Need for Broadband in Rural Alaska
    High-speed broadband cable has changed the way the world shares 
information, does business, conducts research and delivers education. 
Nearly 40 percent of Alaska's land area (equal to nearly ten percent of 
the land mass of the 48 contiguous states)--the entire western half and 
North Slope of the state--does not have reliable, high-speed broadband 
connectivity. It is served instead by sporadic satellite service which 
is plagued by limited capacity and frequent disruptions. Participation 
in the modern global economy requires broadband connectivity. 
Communities without access to broadband are at a clear disadvantage. 
Even recent investments in infrastructure for select areas of western 
Alaska will end up relying on limited microwave middle mile 
connectivity rather than direct fiber optic interconnections to key 
regional hubs. It is likely that with the growth of mobile devices and 
the move by consumers to robust mobile video and downloadable 
applications that this new microwave infrastructure will reach its 
service capacity much sooner than originally anticipated.

Effort to Extend Benefits of KKFL to Other Unserved Areas
    Among the benefits offered by the KKFL is the ability to handle 
large packets of telemedicine data. Today, as opposed to prior to the 
KKFL's construction, medical specialists in Anchorage and elsewhere are 
able to assist doctors in Kodiak in the diagnosis and treatment, 
including emergency surgery, of patients in Kodiak, especially when 
movement of a patient to the mainland is not feasible or safe. This 
technology helps save lives and improves the level of health and 
medical care to rural Alaska, including particularly Alaska Natives who 
are oftentimes hard pressed to travel to Anchorage for medical care by 
reason of cost or weather.
    As a result of its successful start up and operation of the KKFL 
system KKCC began to investigate whether these same benefits of such 
technology could be taken to other rural areas of Alaska, including 
Western Alaska, which is the largest ``unserved'' rural geographic 
region of the United States. OHNC started working in early 2009 towards 
providing a main fiber optic cable backbone to all of western Alaska 
through the construction of the Northern Fiber Optic Link (NFOL) which 
will extend the Kodiak Kenai Fiber Link system from Kodiak Island to 
the Aleutian Islands, Western Alaska and the North Slope with landing 
points at King Cove, Unalaska (Dutch Harbor), Naknek (King Salmon), 
Dillingham, Bethel, Nome, Kotzebue, Barrow, and Prudhoe Bay 
(Deadhorse). This is the last remaining geographic region of the U.S. 
that lacks a main fiber optic backbone, and if the U.S. hopes to close 
the technological gap across the entire country, this area cannot be 
forgotten and it needs to be addressed.
    KKCC plans to continue to operate as a neutral ``carrier's 
carrier'' open to all carriers on an equal and non-monopolistic basis 
to promote competition among service providers. This business model 
allows KKCC to offer competitive pricing to OHNC carrier customers 
without also competing against them at the local level for retail and 
enterprise customers. This approach would spur further investments in 
new innovation, competition and increased service offerings for all the 
residents of Western Alaska and the North Slope were it to become a 
reality at a reduced cost over time, thanks in part to Universal 
Service Funding mechanism and support. In addition, the system would 
support critical fisheries research, climate and oceanic data 
collection, marine vessel monitoring and tracking (which is increasing 
through the Bering Strait and Arctic as the areas covered by ice 
diminish in size) Coast Guard activities, national defense, homeland 
security, health care, education, residential use, commerce, business 
and individual mobile usage.
    Broadband service allows for the transmission of voice, data, and 
media services into homes and businesses at much faster speeds than 
satellite or landline dial-up service. Multiple applications can run 
simultaneously, including software, music, and video downloads 
occurring in seconds rather than hours, as has been the case in many 
areas of Alaska, and businesses can take advantage of real-time two way 
teleconferencing rather than spending money and time on travel. This is 
especially critical in high-cost rural areas of Alaska.
    Broadband in schools, universities, and libraries supports distance 
learning, research, and real-time video instruction. In hospitals, 
doctors' offices, and community clinics, broadband can facilitate 
remote medical consultations, patient care, and resource sharing, 
reducing the need for patients to travel long distances to receive 
medical care. Federal, state, and local governments use broadband to 
provide e-government services to citizens.

Education--Distance Learning (or e-learning)
    Geographic isolation, limited course offerings (especially advanced 
courses) and shortages of qualified teachers are some of the barriers 
faced when planning course curriculums for students in these regions. 
The NFOL would improve delivery of education to rural areas whose 
teachers and students do not have access to the technology resources 
that are available to other teachers and students in most urban area of 
the U.S. With little opportunities for advanced education in the 
regions, the youth are required to leave their families in order to 
further their education.
    In small villages once the student population falls below 10 
students the state run school closes its doors. With high speed 
broadband that policy could be revisited since students could work with 
teachers and other students online in other parts of Alaska or around 
the world rather than being forced to leave their villages to acquire 
an education. In addition, in small communities that do not have a full 
range of college prep courses or AP courses, getting students online 
literally opens up a world's worth of curriculum to them in real time.

Better Healthcare Through Telemedicine
    Telemedicine is the use of electronic information and 
telecommunications technologies to support long-distance clinical 
health care, patient and professional health-related education, public 
health and health administration. Technologies used in telemedicine 
typically are: videoconferencing, the Internet, store-and-forward 
imaging, streaming media, and terrestrial and wireless communications. 
The move to digital health records management places even more burdens 
on health care administrators in rural areas that lack broadband 
services.
    Telemedicine reduces the high cost of health care allowing patients 
to be provided with tele-consultation and treatment to reveal a 
significant cost savings in expenses towards travel, stay, and 
treatment at the individual level.
    Telemedicine allows a patient and primary physician in rural areas 
to consult real time with a specialist through two-way video and audio 
communication. It enables a physician to conduct a clinical examination 
of a patient across great distances and deliver their expertise where 
and when needed, regardless of geography. One such example involves a 
family physician whose patient had a cervical spine fracture. Unsure 
whether the patient needed air ambulance transport to the nearest 
medical facility, the primary provider was able to consult with a 
neurosurgeon off site in another community. They reviewed the patient's 
x-rays and CAT scan, and jointly determined that while the patient did 
need a prompt referral he did not need to be transported by air 
ambulance, saving cost and time away from work and family.
    The experience of the community in Kodiak after the installation of 
the KKFL system is remarkable. Shortly after the cable was installed, 
doctors at the Kodiak hospital were able to consult with doctors in 
Anchorage via video conferencing to perform procedures to save the arm 
of commercial fisherman who had severely damaged it in a fishing 
accident. According to medical staff at the facility, had the fiber not 
been installed, if the patient was forced to wait for transportation to 
Anchorage he may have lost his arm and may have died as a result of the 
severity of his wounds. But with the ability to walk local doctors 
through procedures via video conferencing with that data stream being 
carried over the fiber optic cable in high-definition, the outcome for 
the fisherman was positive.
    In another example, a resident of Kodiak could not be moved by air 
to Anchorage by virtue of the patient's condition, but needed immediate 
attention by a team of specialists. This was accomplished by the high-
definition linkage that fiber optics provided to the hospital in Kodiak 
that was a not available prior to this new technology coming on line.
    In contrast, as we worked to develop the Northern Fiber Optic Link, 
we heard from rural health clinic administrators who tell us the new 
federal mandate to digital health records will be nearly impossible 
using current satellite technology. Specifically they calculated it 
would take 27 hours to upload some of the required records if they had 
to use satellite, whereas with fiber optic cable it would take only 
minutes to comply.

Public Safety
    The NFOL would provide real time transfer of information necessary 
to access improved public safety services which greatly improves the 
ability to resolve public safety issues facing these communities, 
including rural judicial and administrative hearings via video 
conference, staffing of public safety offices, improved hiring 
processes, sexual abuse and domestic violence issues, alcohol related 
issues, roadway safety, crime lab research, forensic scientific 
analysis, and enhanced homeland security and national defense 
capabilities.
    The Village Public Safety Officer Program began in the late 1970s 
as a means of providing rural Alaskan communities with needed public 
safety services at the local level. The program was created to reduce 
the loss of life due to fires, drownings, lost person, and the lack of 
immediate emergency response.
    The Program was designed to train and employ individuals residing 
in the village as first responders to public safety emergencies such as 
search and rescue, fire protection, emergency medical assistance, crime 
prevention and basic law enforcement. The presence of these officers 
has had a significant impact on improving the quality of life in the 
participating villages. Accordingly, the Village Public Safety Officers 
(VPSO) are generally the first to respond to many calls for assistance 
from community members.

Sustainable Communities
    Allowing the residents of these regions the educational, employment 
and healthcare opportunities available in today's world, while 
preserving their ancestral heritage, and improving the quality of life 
for the communities they raise their families in would be among the 
many benefits of the Northern Fiber Optic Link project as it is with 
the KKFL.

Economic Diversification
    Much of the region relies on commercial fishing as its main 
industry. Tourism related activities, while critical to much of the 
state, have small impacts on the economies of these communities which 
are only accessible by air travel, and lack the infrastructure 
necessary to support large scale tourism.
    There will be indirect employment created by access to new 
information and new employment opportunities as a result of expanded 
and reliable fiber optic based service. A well-informed populace may 
generate new perspectives and ideas that could help diversify the 
region and state's economy beyond the state's heavy economic dependency 
on resource extraction. Such a long-term solution is key in the effort 
to displace revenues associated with oil production and federal 
spending.

Proposed System Design and Architecture
    The NFOL system would be a seamless fiber optic cable system with a 
design that is more than sufficient to meet the total current 
requirements of users and provide significant additional capacity to 
accommodate future demand.
    If fully built out it would act as the backbone for eventual access 
for the first time to robust broadband capacity for 142 rural 
communities, 143 federally recognized Indian Tribes (25 percent of all 
Tribes in the U.S.) and a total of 256 federal Tribal organizations 
(nearly 50 percent of all Tribal organizations in the U.S.) thereby 
connecting the region's indigenous peoples, hospitals, medical clinics, 
schools, remote university campuses, public safety offices, U.S. Coast 
Guard communications sites, commerce, industry and researchers with 
real-time telecommunications and Internet services.

Benefits of Expanded Broadband for Research and Science
    The Northern Fiber Link would provide real-time remote sensing and 
other advanced capabilities for environmental research, dramatically 
improving timelines and effectiveness of oceans research on species 
migration and populations, temperature fluctuations, and salinity 
thereby helping to provide early warning of weather events and through 
that provide help to people, including avoiding potential epidemics 
such as bird-flu, climate and earthquake research and other populous-
affecting areas of study. This type of system would be very beneficial 
to the studies of Arctic warming which can and is affecting the world.
    After conducting lengthy discussions with members of the scientific 
community, researchers and policy experts, and after review of similar 
projects and projected needs for the Arctic and Bering Seas, KKCC 
undertook to include in the system backbone configuration three Science 
Node Interfaces for use in the future. Each Science Node consists of 
the ability to service the signal and power requirements of the future 
ocean observatories over cable link separate from the NFOL 
communication links. The data traffic from the observatories 
transported over this separate cable would then be multiplexed onto the 
NFOL network at the cable landing station for access by research teams 
involved with the supported science projects from any location around 
the world.

Conclusion
    It is apparent to us without having a real-time system deployed in 
those rural areas of the State of Alaska it will be many years until 
Alaska comes into the 21st century economy. With the government funding 
only small phases at a time, with individual carriers there will be no 
or very little competition in those areas for some time to come, if 
ever, thereby creating unintended monopolies that can and most likely 
would keep prices high and a good portion of that price paid by the 
government through the Universal Service Funds. What is needed is a 
backbone such as NFOL is proposing that is opened to all carriers at 
the same pricing therefore creating competition in those rural areas of 
Alaska to bring down the cost and saving the government millions in USF 
funds in the future.
    KKCC is actively attempting to move forward with the proposed NFOL 
system and is grateful for the opportunity to share with the Committee 
OHNC's experience to date in deploying high-speed fiber optic 
telecommunications services to Native populations. While OHNC is proud 
of what it has achieved to date in extending this technology to Kenai, 
Homer and Kodiak and the surrounding area, much more needs to be done 
to remedy the substantial telecommunications gap experienced by Alaska 
Natives. That is why this corporation has worked so hard and expended 
considerable resources to bring fiber optic connectivity to Kodiak and 
is trying to extend that capability to other Alaska communities, 
including in particular rural and remote communities in Western Alaska.
    We look forward to working with Committee members in the future to 
help close this enormous service gap, this ``digital divide'', that 
exists in rural areas of Alaska but in particular in Western and 
Northern Alaska for the benefit of Alaska Natives and non-Natives who 
live at the far extremities of the United States logistical, commercial 
and telecommunications links.






    The Chairman. Thank you, Mr. Marrs, for those comments.
    Ms. Danner, will you please proceed with your statement?

 STATEMENT OF ROBIN PUANANI DANNER, PRESIDENT/CEO, COUNCIL FOR 
                  NATIVE HAWAIIAN ADVANCEMENT

    Ms. Danner. Aloha, Chairman Akaka and members of the 
Committee, Senator Murkowski.
    For the record, my name is Robin Puanani Danner, I am the 
President of the Council for Native Hawaiian Advancement, most 
comparable to organizations like NCAI and AFN. The Council is 
governed by a 21 member board of directors consisting of Native 
Hawaiian leaders from across the State and over 150 member 
organizations.
    I am also the director on the National Board of the 
InterTribal Economic Alliance, which is a consortium of Tribal 
and Native leaders that are working together for economic 
opportunities in our respective States and trust lands, Indian 
reservations, Alaska Native villages and Hawaiian Home Lands.
    I would like to thank you, Chairman and the Vice Chairman, 
for today's discussion on Internet infrastructure and the 
opportunities for e-commerce to increase Tribal and Native 
participation in the national and global markets.
    Like American Indians and Alaska Natives, our trust lands 
at home are located in some of the most geographically remote 
and rural areas of the State. Lands in my home land were 
selected by the Federal Government when Congress enacted the 
Hawaiian Homes Commission Act of 1920, a few short 14 years 
after the Indian Allotment Act of 1906, and were based largely 
on identifying areas that at the time were the least desirable 
by non-Native interests and plantation owners.
    This is a hard truth which we do not bemoan today, but we 
have to acknowledge to address the reality that as our people 
were pushed to the mountainsides to isolated areas of every 
county, these lands were almost completely ignored as 
technologies, capital sources and infrastructure were planned 
and deployed in every other area of the State over the last 
many decades. This is likely the case in the other 34 States 
where Native trust lands exist, including Alaska.
    This hard truth haunts all of us today, because while these 
land decisions in isolation from infrastructure development do 
not seem to impact the larger community of our respective 
States and our Nation, the reality is that our lands and our 
people and our full potential have been sidelined a bit, 
putting a lid on one of America's most powerful and natural 
resources as a Country, our ability to innovate, to create 
commerce, to apply ingenuity and self-reliance. And Chairman, 
to build and thrive where we live, where our elders will be 
laid to rest, where our children are nurtured and where we are 
fully capable to contribute to the national well-being.
    For example, in my trust land homestead on the island of 
Kauai, once fiber optic cabling was made possible by accessing 
RUS and Universal Service Fund, to begin the process of 
catching our lands up on Internet infrastructure, we can see 
and feel transformation, truly. In a few short years of having 
high speed, commercial quality connectivity in my homestead, we 
opened the first and only business ever to be located in our 
homestead, the first and only time in 90 years, since the 
enactment of our Hawaiian Homeland Trust, to have actual jobs 
created and located inside the boundaries of my homestead. We 
incorporated a social enterprise, not owned by investors, but 
owned by Hawaiian community, very similar to Tribal 
corporations and Alaska Native corporations.
    Hawaiian Homestead Technology opened its doors with the 
resources of people, desks, hardware and software, and one 
fiber optic pipeline the world outside. By partnering with our 
local community college to deliver computer boot camp for the 
first dozen employees to ever walk to work in our homestead, we 
went on to train and create over 50 jobs, an amazing number 
compared to the tiny population base of most rural communities.
    As a group of Hawaiians in the middle of the Pacific, a 
single fiber optic cable connected us to 10 Tribal and Alaska 
Native partners in seven States to work on document 
digitization projects for the Department of Defense. An 
extraordinary journey working with, among others, the Mandan 
Hidatsa Arikira of North Dakota, the Zuni in New Mexico, the 
Osage in Oklahoma, the Aleut in Alaska, our friends from Fort 
Peck in Montana. Three hundred more jobs created with our 
partners. It was another first for us as Hawaiians.
    From where we live, we can now work. From where we live, we 
can engage in national commerce. From where we live, we can 
joint venture with other American firms thousahnds of miles 
away. We are experiencing economic transformation. And as a 
result, our surrounding counties, our State, will be able to 
tap into the economic contributions we know we are fully 
capable of.
    In closing, our formal testimony, Senator, covers in more 
detail the spectrum of what Internet infrastructure can and 
will do for trust lands and Alaska Native villages, from 
distance learning to tele-medicine, from creating technology 
firms to call centers, that end soruce to Native America over 
outsourcing to foreign countries. We ask the Committee to 
strongly support the Tribal Broadband Fund described in the 
National Broadband plan and with emphasis to make accessible 
the Universal Service Fund to all trust lands in all 35 States, 
to bring our lands up to par with the rest of the Country.
    It was the Universal Service Fund and the RUS at USDA that 
brought electrification and communications to the rural towns 
and farms in the heartlands of the Country. It was visionary 
and the right thing to do 50 years ago, to build that backbone 
infrastructure for rural America. And it is the right thing to 
do and just as visionary today to do so for Native America and 
the trust lands established by the Congress.
    Moreover, we ask the Committee to move policy that 
absolutely includes the definition of trust lands and ANCSA 
lands in the eligibility of incredible capital programs like 
new market tax credits and the CDFI bond guarantee program that 
Treasury is going to roll out in 2012. Eligibility criteria, 
such as rural and low income, have helped the capital markets 
to seek out these areas for investment. We need trust lands to 
be an equal eligibility criteria, to ensure that that capital 
also finds our communities, whether they are on the Aleutian 
Chain or in Molokai or in Montana.
    So I would like to thank you for the opportunity to present 
our testimony for the record and this short summary on the 
Committee's important topic. Mahalo.
    [The prepared statement of Ms. Danner follows:]

Prepared Statement of Robin Puanani Danner, President/CEO, Council for 
                      Native Hawaiian Advancement

    Aloha Chairman Akaka and Members of the Senate Committee on Indian 
Affairs,
    My name is Robin Puanani Danner. I am the President and Chief 
Executive Officer of the Council for Native Hawaiian Advancement 
(CNHA), founded in 2001 to enhance the cultural, economic, civic 
engagement and community development of Native Hawaiians. CNHA, with a 
membership of over 150 Native Hawaiian Organizations, dedicated to 
addressing the challenges in our communities from education to 
business, affordable housing to cultural preservation, is a statewide 
advocate most comparable to the National Congress of American Indians 
(NCAI), and the Alaska Federation of Natives (AFN).
    I am Native Hawaiian, born on the island of Kauai, raised in the 
fishing village of Niumalu, the Indian reservations of the Apache, 
Navajo and Hopi, and spent many years among the Alaska Native peoples. 
For the last 13 years, I have lived on my Native homestead issued under 
the Hawaiian Homes Commission Act, with my children and husband. My 
background includes former positions in finance as a bank executive, a 
Tribal Housing Authority executive director, and county housing 
director serving Native populations.
    I am also a director on the board of the Homestead Community 
Development Corporation, founded to promote commerce and economic 
opportunities on trust lands in the state of Hawaii. In addition, I am 
a director on the board of the Inter Tribal Economic Alliance, founded 
in 2002 to create jobs and economic development on Indian reservations, 
Alaska Native villages and Native Hawaiian Home Lands.
    Thank you for your oversight hearing on the topic of Internet 
Infrastructure: Equal Access to E-Commerce, Jobs and the Global 
Marketplace with a particular emphasis on the challenges and potential 
solutions available to Native communities on trust lands established by 
the Federal Government.

Native Hawaiians and the Federal Trust Relationship
    As the Committee knows, Native Hawaiians are among the families of 
Native peoples of the United States, and although not as well known, 
are included in the federal Indian policy and trust relationship. In 
1920, the U.S. Congress enacted the Hawaiian Homes Commission Act 
(HHCA), establishing a federal land trust that nearly mirrors the 
content of the 1906 Indian Allotment Act. In 1959, the U.S. Congress 
enacted the Hawaii Admissions Act, which includes language to further 
recognize the trust relationship with Native Hawaiians. Over the last 
90 years, the U.S. Congress has enacted over 150 statutes recognizing 
my people as Native, like American Indians and Alaska Natives, using 
the plenary power authorized under the U.S. Constitution to address a 
myriad of issues.
    Similar to the Office of Insular Affairs for the territorial 
peoples of the U.S. and the Bureau of Indian Affairs for American 
Indians and Alaska Natives in the Department of the Interior, Congress 
created the Office of Native Hawaiian Relations to continue the process 
of reconciliation in accordance with P.L. 103-150, the Apology 
Resolution, and to oversee the trust responsibilities of the United 
States to Native Hawaiians, with a particular emphasis on the HHCA and 
the 1995 Hawaiian Home Land Recovery Act.
    One of the conditions of Hawaii statehood enacted by the United 
States was a compact between the federal and state governments, to 
administer the HHCA referenced above through the establishment in 1961 
of the state of Hawaii Department of Hawaiian Home Lands (DHHL). The 
Hawaii state constitution incorporates and embraces the United States' 
trust relationship to Native Hawaiians, which was further strengthened 
by the Hawaii 1978 Constitutional Convention which established a second 
state agency, the Office of Hawaiian Affairs (OHA). Each of these state 
agencies are public trusts of the people of Hawaii, not representing 
Native Hawaiians, but rather representing all of the people of our 
state to deliver on the trust mandates established under federal law 
and state law. There are similar ``Offices of Indian Affairs'' in other 
state governments, including Utah and Arizona.
    In 2011, the state of Hawaii enacted Act 195, to recognize a Native 
Hawaiian government, as have been done more than 60 times in other 
states of the union. In 2011, this honorable committee, the Senate 
Committee on Indian Affairs, voted to approve the Native Hawaiian 
Government Reorganization Act, to similarly recognize the self-
governance of Native Hawaiians, creating parity with the more than 560 
Native governments in approximately 35 states of the country.
    In summary, the relationship of Native Hawaiians to state and 
federal governments, mirrors the policies and agencies of our 
counterpart Native peoples in the other 49 states. The Department of 
Hawaiian Home Lands (DHHL) and the Office of Hawaiian Affairs (OHA) are 
Hawaii state agencies with trust responsibilities to Native Hawaiians. 
Similarly, the United States Government has acknowledged its federal 
trust responsibility to Native Hawaiians and administers it through 
agencies such as the Departments of the Interior, Health and Human 
Services, and Housing and Urban Development.

Native Hawaiian Trust Lands and Internet Infrastructure
    Approximately 200,000 acres of Native Hawaiian trust lands created 
by the Federal Government exists in every county in Hawaii. 35,000 
Native Hawaiians and their families reside on these trust lands, in 
mostly rural communities. The challenges of remoteness, access to 
capital, limited economic opportunities, and the unique characteristics 
of trust lands are consistent with the challenges in Indian Country.
    The hearing topic of Internet Infrastructure: Equal Access to E-
Commerce, Jobs and the Global Marketplace is exactly on point, and a 
critical issue not only for Indian reservations, but also our Hawaiian 
Home Land trust. Just as renewable energy technology and access to it, 
will be a significant factor in the economic well-being of communities 
across the country, so it is with Internet connectivity which is tied 
directly to backbone infrastructure. The following subject areas are 
notable to the hearing topic and Native Hawaiians:
    Access to Distance Learning--When our trust land communities have 
qualitative Internet infrastructure, we have been able to maximize 
opportunities for Internet based distance learning. Kamehameha Schools 
a Native Hawaiian private nonprofit institution and rural public 
charter schools located in trust land areas, are able to deliver more 
efficiently, educational and cultural curriculum to over 7,000 children 
statewide. College preparatory, vocational skills, and indeed, the all-
important computer skills and use of the Internet are made readily 
available. The key to achieving this reality in every trust land area 
is Internet Infrastructure.
    Access to Telemedicine--When our trust land communities have 
qualitative Internet infrastructure, healthcare costs have a real 
chance for cost-savings, as well as real-time service access to medical 
expertise over the Internet. The potential for a robust telemedicine 
program serving rural populations hinges entirely on the bandwidth 
availability and coordinated community based Internet access. The key 
to achieving this reality in every trust land areas is Internet 
Infrastructure.
    Access to Commerce, Markets and Job Creation--When our trust land 
communities have qualitative Internet infrastructure, extraordinary 
opportunities in commerce and job creation become possible. For 
example, in 2003, a small rural Hawaiian home land community was able 
to launch a successful technology company to train and employ more than 
50 individuals, and deliver high end document conversion products to 
commercial and government clients. The company, Hawaiian Homestead 
Technology (HHT), went on to partner over the last 7 years, with the 
InterTribal Information Technology Company (IITC), a consortium of 
multiple Tribal firms in seven states creating upwards of 300 jobs 
during peak demand periods. Its primary client--the United States 
military. Internet infrastructure to our trust land areas, created 
efficiencies through the reduction of thousands of square feet of 
storage of documents at government sites, and perhaps most exciting for 
our employees, the opportunity to keep our troops safe by providing 
maintenance manuals and parts inventories to military personnel at 
their fingertips.
    The single most important component creating the ability to open 
HHT in Hawaii and each of the Tribal firms in New Mexico, North Dakota, 
South Dakota, Wyoming, Montana, Oklahoma, and Alaska, to employ rural 
residents and deliver product, was access to high speed, commercial 
level Internet connectivity. The incredible impact, beyond economics 
inside our Native areas, but also to the surrounding areas is 
generational change, monumental change. Economic self determination is 
the most powerful momentum available to trust land communities and 
peoples. It opens the door to possibilities only dreamed of, and lends 
energy to the pursuit of solutions from the inside.
    Another example worth discussion on the topic of E-Commerce, 
Markets and Job Creation, is in micro enterprise and artisan trades. 
Qualitative Internet infrastructure opens the world to our cultural 
markets and artisan products, not only creating economic self 
sufficiency on an individual artisan basis, but creating an industry 
that is most meaningful with Native authenticity and control. In 
several of our trust land communities, Internet access has created 
viable outdoor marketplace spaces to build visitor industry commerce 
where our Native peoples determine the space, the interactive 
engagement, the frame and content of our story telling and sharing. 
Creating these markets, growing commerce where we live, and reaching 
patrons, simply requires qualitative Internet connectivity. It is 
required in today's competitive world and in today's business 
environment

National Equity and Opportunity Recommendations
    Opportunities to create jobs where our people live, across industry 
sectors, to deliver services to customers across the nation and 
globally, is within our reach to create a permanent change to our 
collective economic futures as Native peoples. We must complete the 
journey. In the middle of this century, breaking open the economic 
potential of the heartlands of the United States was hindered by the 
lack of utilities, communications and electrification. President 
Roosevelt and the Congress of that day, recognized the potential and 
put forward bold solutions including the creation of the Rural Utility 
Service at the U.S. Department of Agriculture. The same applies today 
with access to broadband. It is the infrastructure upon which commerce 
in the 21st century is based. It is imperative that the Federal 
Government not waver in making the long-term investment in providing 
access to broadband for Native communities thereby ensuring that Native 
communities will not continue to be left behind. Whether economic 
opportunities are in energy, in farming or ranching, in government 
services, or the food service sector, quality connectivity is a 
mandatory component of doing business, of creating jobs, of preparing 
our youth and fully participating in the prosperity and commerce of the 
country.
    Fully Fund a Native Nations Broadband Fund as recommended in the 
National Broadband Plan, to support, strengthen and grow Native and 
Tribal telecommunication providers that primarily serve trust land 
areas:

        (1) provide technical and financial assistance for regulated 
        service launch to help Native governments and communities to 
        assess and plan regulated and broadband services;

        (2) support administrative and operational costs in High-Cost 
        areas to help Native communities sustain key broadband and 
        infrastructure service in their communities;

        (3) connect both ``under'' and ``unserved'' Native areas to 
        assist Native communities in attaining parity of service and 
        technology through regulated support;

        (4) sustain current Tribal regulatory services--the safety net 
        support which helps Tribal governments to continue with 
        regulatory telecommunications to their communities;

        (5) provide Native broadband Lifeline and Linkup Funds to help 
        Native consumers to be able to afford residential broadband 
        service;

        (6) provide Native public safety support to ensure appropriate 
        public safety responses in life and death situations;

        (7) provide Native broadband mapping to help Native governments 
        and communities to attain essential data for broadband 
        deployment and public-safety planning;

        (8) connect key Native public institutions to help Native 
        governments and communities to connect critical public 
        institutions to broadband;

        (9) support Native mass media universal access to help Native 
        governments and organizations to provide essential public and 
        local information toNative residents; and

        (10) provide safety-net broadband mobility network to help 
        Native governments and communities to supplement the lack of 
        infrastructure, broadband, or public safety networks with a 
        broadband mobility safety-net 911 access network.

    Establish Trust Land Areas as Automatically Eligible for Federal 
Programs Targeted for Rural, Under-Served or Low Income Populations and 
Areas. The 2008 Farm Bill (P.L. 110-234) established language defining 
Substantially Underserved Trust Areas (SUTA) for the purposes of 
eligibility for federal funds administered by the Department of 
Agriculture's Rural Utility Service. This definition should be widely 
applied to all federal programs targeted for rural, underserved or low 
income populations and areas.
    For example, the New Market Tax Credits program, created in 2000 
and administered by the U.S. Treasury Department's Community 
Development Financial Institution (CDFI) fund, delivers $3 billion 
annually in capital incentives through tax credits to individuals and 
corporations to make investments in distressed communities across the 
country. Eligibility for the program is largely limited to qualified 
census tracts based on median income levels. Utilization of the SUTA 
definition for purposes of eligibility for programs such as the New 
Market Tax Credit program and the CDFI Bond Guarantee program would 
ensure that trust land areas and Native peoples are not left behind in 
accessing capital to accomplish the enormous need for Internet 
infrastructure. We must complete the journey. We must connect the long 
standing needs of Indian Country and trust land areas to the mainstream 
capital programs developed for rural, underserved and low income 
populations and geographical areas.
    Mahalo for the opportunity to express our priorities as Native 
Hawaiians, and within the larger context of Native peoples in the 
United States.

    The Chairman. Thank you. Thank you very much, Ms. Danner, 
and this panel.
    I am going to ask one a question of each of you, then I 
will ask Senator Murkowski for her comments and questions.
    President Porter, Tribes currently make up 40 percent of 
all gaming revenue in the Country. If Internet gaming was 
legalized, do you think the Seneca Nation and other Tribes 
would be able to effectively compete in the Internet gaming 
industry?
    Mr. Porter. Senator, I don't have any question in my mind 
that we would be able to compete and we would thrive. So long 
as the rules are fair, as long as we are given the same 
opportunity, I know we can do well in this business.
    But discussion plans envisioned, as I understand it, some 
notion of a head start for the non-Indian gaming interest. So 
that is obviously not the kind of starting point that you want 
to have if you are going to get into a new business.
    So long as the rules are fair and they are even, I do 
believe that our businesses can do well.
    The Chairman. Mr. Marrs, your testimony, I like the impacts 
that reliable Internet access has had on the health, safety and 
education of community members. What types of assistance did 
your corporation receive to develop the infrastructure that 
allowed for these positive outcomes?
    Mr. Marrs. Mr. Chairman, originally we had started a system 
from Anchorage to Kenai, Homer to Kodiak, back to Seward. Old 
Harbor Native Corporation being very small in nature, and not 
heavily funded, was able to get Congress to help out in that 
system, because of the need for real-time capacity through the 
missile launch system.
    So we developed a sub-sea fiber system that now services 
Kodiak. And in fact, hopefully this week, we will light up 
through microwave both Ouzinkie and Port Lions, two villages on 
the island, so that they have real-time capacity also.
    Now, what that has done for the community of Kodiak, in 
discussions with Providence Hospital, it has saved some 17 
lives since we have lit it, in the sense that the weather was 
down, they now have real-time capacity so doctors in Anchorage 
or Seattle can be online working with doctors in Kodiak and go 
through operations, or they haven't had to fly them out. They 
have cut back on their nursing staff at night and on weekends, 
so it saves them a tremendous amount of money, because they can 
monitor everybody on a real-time basis in the hospital beds as 
if they were in Anchorage.
    So if you extend that out, now, this is a carrier's carrier 
system, we own the system, we sell capacity to carriers, and 
then they compete in the retail market, we don't get into the 
retail side of it. That was the concept of Internet system sub-
sea fiber cable, to connect all of Western Alaska, the Aleutian 
Chain, back up to Prudhoe Bay, and supply villages through 
either microwave and/or wi-fi. That is an expensive 
proposition, I guess not in the sense of things today, but it 
is expensive to build that cable as a backbone. But it would 
create competition and bring in the capability of real time in 
all those villages in Western Alaska, which is missing today 
because satellite can't handle that kind of load.
    The Chairman. Thank you, Mr. Marrs.
    Ms. Danner, do you have any comments or recommendations 
regarding leveraging Federal and other resources to increase 
Native community connectivity?
    Ms. Danner. Great question and thank you so much. There are 
things that we can do that do not increase the budget, the 
Federal budget. There are existing programs, Federal programs, 
including the Universal Service Fund. But two that I mentioned 
specifically, the new market tax credit, which the Congress has 
been appropriating $3 billion a year for the last 10 years. And 
this program is a public-private program out of Treasury that 
helps incentivize private capital into disadvantaged areas.
    I truly believe that one of the actions that can be taken 
without budgetary impact is to create the definition of 
American Indian Reservations, Alaska Native Villages and lands 
and Hawaiian Homelands to be automatically an eligible 
investment area in addition to the two existing criteria that 
the program has already established, which is low-income and 
rural. If we just do that, give our Native lands an opportunity 
to be an eligible criteria, the investors will find our lands, 
will find refinery projects, solar renewable energy projects. 
They will find the resources that are available across our 
Native lands. And that capital will flow to help in those 
areas, including Internet connectivity.
    In the 2010 Jobs Act, my concern is that Congress passed an 
awesome program that is going to be coming out of Treasury in 
2012, which is the CFI bond guarantee program, already 
appropriated at $1 billion a year, and it is going to be 
distributed across the Country in $100 million blocks. Amazing 
what a $100 million block could do on Navajo or in Alaska or on 
Hawaiian Homelands, if we could be attractive to those capital 
sources. And we will be attractive if the Congress can embrace, 
the Committee can support and embrace the establishment of 
American Indian reservations, Alaska Native villages and 
Hawaiian Homelands as an eligibility criteria, no funding 
required, to just open up the capital markets to our areas that 
they have not been looking at heretofore. That would be one of 
my most prominent recommendations to leverage what already 
exists without increasing the Federal budget.
    The Chairman. Thank you very much.
    Senator Murkowski?
    Senator Murkowski. Thank you, Mr. Chairman. And thank you, 
each of you, for your testimony this afternoon.
    Robin, I think you used the term economic transformation. I 
think when appreciate the world that can be opened up, whether 
it is a village in interior Alaska or out in the Pacific 
Islands, the world that is opened up through access to the 
Internet truly can be transformative when we talk about our 
economic opportunities.
    I think sometimes in Alaska, we feel a little bit left 
behind. And Carl, I really appreciate your coming all this way 
to testify because this is an important issue. And your written 
testimony I think was very, very comprehensive in terms of 
laying out some of the challenges that we face in a large, 
geographically large State like Alaska, but also how we have 
taken those challenges and really turned them into 
opportunities to be leaders. I do intend to get Senator Tester 
up to Alaska, and maybe you might need to help us go find some 
fish there, Carl, but to show what we have been able to do when 
it comes to tele-medicine, to the distance learning, and how we 
have figured out how we can provide a connection to real 
experts, whether it is in education or in health care.
    I was struck by one sentence in your testimony, Carl, 
talking about the size and scope of what we are dealing with. 
You mentioned that nearly 40 percent of Alaska's land area, 
which we have 586,000 square miles in the State of Alaska, 40 
percent of that doesn't have reliable high speed broadband 
connectivity. You mentioned that this is the entire western 
half of the State, the North Slope area.
    I have had one of my staff folks tell me what that would 
translate into on a map of the lower 48. And it would 
essentially be the equivalent of Virginia, West Virginia, 
Kentucky, North Carolina, South Carolina, Tennessee and parts 
of Ohio, having an inadequate, an absolutely inadequate access 
to what everybody else in the Country has come to know and 
expect, and it is how we operate on a daily basis.
    I can tell you that the people of Virginia, West Virginia, 
Kentucky, North Carolina, South Carolina, Tennessee and parts 
of Ohio would not accept the fact that they could not be part 
of the communications world of this century. And yet we are 
behind things. So this is the significance and the importance 
of what we are doing here.
    I do think it is important that we understand how this, 
through access, we really can make a difference in the lives of 
so many who choose to live in their homelands and want to 
remain there, and how we continue that subsistence lifestyle, 
how we continue to be able to be connected to the culture. And 
we can be connected to our roots through this transformative 
technology that allows us to be connected to the whole world.
    You had mentioned that with the Kodiak Kenai Cable Company, 
what you have done, you have laid the first ever sub-sea fiber 
optic cable system. So we have fiber optics in the State, but 
we also have satellite. I don't think a lot of folks understand 
that these differences can impact the community in terms of the 
benefits that are provided by access to Internet Service. How 
does that make a difference out in rural Alaska, the fact that 
some is made available by fiber, some by satellite? How does it 
all fit together?
    Mr. Marrs. Mr. Chairman, Senator Murkowski, satellite was a 
great tool 20 years ago or 50 years ago. I might put it to you 
this way. There are a certain limited amount of T1 lines that 
go into a broadband width of what we would call an OC3. An OC3 
I think has like, I believe it is 28 T1 line capabilities. A T1 
line, if you take and run four movies simultaneously, at the 
same time, you will fill that T1 line.
    The whole process has changed tremendously from mostly 
voice years ago to more and more data, and as we go to video 
streaming, it takes up massive amount of capacity. Satellite 
can't handle that. Satellite can handle maybe up to OC48. And 
they still have to prioritize that.
    So something that should take 5 seconds to download may 
take you 20 minutes, and you may not get it downloaded at all 
because of interruption with sunspots or a multitude of other 
things.
    Having the capacity, when we built the KKCC system to 
Kodiak, everybody said that is way too much capacity, it is an 
OC48, you will never fill it up. Well, not only did it fill up, 
we are over capacity. So we just upgraded it. We upgraded it, 
now we have the capacity of running 30 OC192s. That is a 
massive amount of space. And that will take some time to fill 
up.
    Now, if we run a fiber optic system around the State back 
to Prudhoe, so we have redundancy, that would fill that up 
pretty fast. Because now you are loading in all the villages 
all the way up Western Alaska, they all have the same access, 
same capability. Today they don't have that. They don't have 
video streaming. They don't have the kinds of things that 
everybody else has, communication is limited.
    We would serve those through microwave and other processes, 
the wi-fi, that could be available within those villages 
connected to a fiber optic system. As I said earlier, we are 
hopefully next week lighting up the microwave system to 
Ouzinkie and Port Lions, which will provide the same speed as 
our fiber cable at 156 bits per second. So people will be able 
to use it, be able to do video streaming, doing all the things 
that they can do, creating jobs within those communities.
    We want to build it on, next year we plan to build the same 
thing off to Old Harbor. Old Harbor is just a little farther 
away, takes a little different technology. But we plan to build 
that out, at our own cost. We have spent over a million dollars 
putting in two microwave systems to Ouzinkie and Port Lions, 
because we couldn't get anybody else to go with us, and we 
promised we would get that system in. So we carried out that 
promise, we built it out. We spent $2.5 million upgrading the 
system, so we would make sure we had the capacity to Kodiak.
    It is a very expensive thing to do. But when you are 
talking about funding health, funding programs for the 
environment, funding the universities, funding the school 
systems, over time this will save a tremendous amount of money 
on behalf of the Federal Government that is now spending 
hundreds of millions with the USF funds.
    Since I brought that up, one thing that worried me, as the 
gentleman from the FCC said in this sort of transformation from 
USF fund to connect America, he was going to make sure that all 
Tribal lands were taken care of. In Alaska, we don't have 
Tribal lands. And I want to make sure that he is talking about 
the villages in Alaska that have ANCSA lands, they are not 
Tribal. And that little wording can cost us hundreds of 
millions. So one thing, as a Senator, I think you can make sure 
they take care of that problem.
    But again you are right. The system from Kodiak up around, 
would be around $400 million to build. But over time, it will 
save ten times that, or a hundred times that, in costs to the 
Federal Government and the State government.
    Senator Murkowski. I appreciate that.
    Mr. Chairman, I think it is a reminder that whether it is 
in Alaska or perhaps in other areas in Indian Country, the 
rotary dial telephone still works. But everybody else in the 
Country is using a smart phone. We have to make sure that we 
are competing. And the way that we compete is to truly have a 
level of access and connectivity that is equal and really 
working for all of us.
    I appreciate your efforts, and Mr. Chairman, thank you for 
the hearing.
    The Chairman. Thank you very much, Senator Murkowski, for 
your questions.
    I will do a second round here. President Porter, some 
Tribes are concerned that the current discussion draft for 
legalizing Internet gaming would lead to taxation of Tribal 
revenues and would open up the Indian Gaming Regulatory Act to 
amendment. Do you think Tribes can participate in Internet 
gaming while still upholding Tribal sovereignty?
    Mr. Porter. The short answer is yes. I think the predicate 
for that is that our self-government and our Tribal regulation 
be recognized to the extent that there is any Federal 
legislation to deal with the topic. We have our own internal 
ability to regulate our conduct. IGRA, for example, puts a 
mechanism in place so that we have our own gaming regulatory 
agencies. We provide more in terms of staff and resources to 
the regulation of our own facilities than we believe that the 
State even does with respect to these matters under their 
authority.
    So it is something that I know that we are quite capable of 
in our Seneca Nation. But I know many Indian nations are fully 
capable of self-regulating and being able to ensure that 
competition is fair and in accordance with the appropriate 
rules.
    The Chairman. Thank you.
    Ms. Danner, based on your partnerships across the Country 
and working knowledge of the needs and similarities among 
Alaska Natives, American Indians and Native Hawaiians, what can 
we do to enhance equitable connectivity for Native communities 
across the Country?
    Ms. Danner. First and foremost, I would ask the Committee 
to keep a watchful eye on the Universal Service Fund reforms 
that are being published today and that the FCC will be voting 
on on October 27th. We must not allow the goal post to be moved 
on Natives. After it was so successfully implemented for rural 
America, not with spotty electrification or spotty phone 
service, but the full-on backbone infrastructure that was built 
across the Country that today is a benefit to all of the 
Country by having that backbone built.
    We simply cannot allow or afford to look the other way if 
the reforms move the goal posts on trust lands that did not get 
to benefit from President Roosevelt's vision for the 
electrification and communications network. So what we have to 
do is work with the USDA, with FCC and with the capital 
programs that exist, we almost don't even need to create new 
capital programs, Senator. The RUS is the cheapest capital in 
the world that is available to electric co-ops, et cetera. All 
part of that 50 year ago Universal Service Fund, RUS program. 
What we need to do is take that successful model and apply it 
for the first time in a concentrated way to the dots on the 
maps that you have up here in your Committee hearing room that 
got missed by the first wave. We need to have the second wave, 
and to make sure that the reforms of the Universal Service Fund 
are equally, equitably applied to Alaska Native villages, 
American Indian reservations and Hawaiian Home Lands.
    The Chairman. Thank you very much, Ms. Danner.
    Again, I want to thank this panel very much for your 
responses. It will help us in our work in this area, and we 
intend to continue to work with you. I think over the past few 
years, we have made some great improvement and progress, but we 
have lots to do, and that is what we are looking at.
    So your responses to our questions will help us try to do 
that. I continue to tell you that we need to do this together 
and get your advice, as well, as we move along here.
    So I want to thank our witnesses for participating in 
today's hearing and for taking a technical issue and making it 
understandable and relevant. Equitable access to the Internet 
and related resources is one key way we can help Native 
communities spur economic development and job creation in their 
communities. We can help close the distances and get better 
health, education and job opportunities into Native 
communities.
    I look forward to working with my colleagues to continue 
this discussion in Congress. And again, I look forward to 
working with you.
    This hearing is adjourned.
    [Whereupon, at 4:40, the Committee was adjourned.]

                            A P P E N D I X

   Prepared Statement of Darrell Gerlaugh, Chairman, National Tribal 
                     Telecommunications Association

I. Introduction
    The National Tribal Telecommunications Association (NTTA) hereby 
submits this testimony on the very important matter of bringing 
Broadband and telecommunications infrastructure to Native American 
communities.
    NTTA is a national trade association representing Tribally owned 
telecommunications companies and their Native customers. Twelve Tribal 
Nations are members of NTTA having created their own telecommunications 
services. These twelve Nations are: Cheyenne River Sioux; Tohono 
O'odham; Gila River; San Carlos Apache; Fort Mojave; Salt River Pima 
Maricopa; Mescalero Apache; Hopi; Standing Rock Sioux; Warm Springs; 
Crow Creek Sioux; and Pine Ridge Sioux communities. Nine of the Tribes 
are regulated telecommunications companies (Cheyenne River Sioux; 
Tohono O'odham; Gila River; San Carlos; Fort Mojave; Salt River Pima 
Maricopa; Hopi; Mescalero Apache and Standing Rock Sioux.)
    NTTA members serve and are a part of their respective Tribal 
communities. This testimony addresses the concerns and recommendations 
of NTTA.

II. The Crisis in Indian Country and the need for Broadband Service
    Native American communities are the worst connected communities in 
the United States.
    Ninety-eight percent of all Americans have voice dialtone. Yet only 
60-70 percent of Native residents are connected, a disparity of over 35 
percent compared to non-Native communities. 1 out of 3 Native Americans 
cannot pick up a land-line phone to call 911. (In Navajo land, one 
person in two cannot pick up a phone to dial 911.) It is estimated that 
less than 10 percent of Native families have access to broadband 
service, nearly a 400 percent disparity compared to non-Native 
communities.
    This has a dramatic impact on Tribal sovereignty and the ability of 
Native Nations to provide essential public service to their 
communities. Government services, medical and public safety services, 
education, economic development, human services and administration of 
justice are drastically hampered by the lack of high-speed advanced 
technology infrastructure. Internet is still a far horizon in this 
analog divide for Native America.

III. Federal Trust Responsibility and the mandates of Universal Service 
        under the Communications Act
    The Federal Communications Commission (FCC) is responsible for 
administering the Universal Service access to telecommunications 
services and basic public interest needs of all subscriber communities. 
The Federal government has a Trust Obligation to all Native Nations to 
ensure that they have access to basic telecommunications services and 
the FCC has embraced a Trust responsibility to Native Nations. Yet 
Native communities continue to lag behind every community in the United 
States in telecommunications connectivity and with the changes in the 
regulatory support mechanisms driving infrastructure to broadband 
service, Native communities may be left further behind all other 
communities in the United States.
    The FCC seeks to modernize USF and ICC for Broadband, control the 
size of the USF as it transitions to support broadband, increase 
accountability, and maximize the value of program resources for 
consumers. As the FCC undertakes regulatory reform and transition, NTTA 
has repeatedly urged the Commission take extraordinary regulatory 
action to connect Tribal lands and honor the Federal Trust obligation 
to Tribal Nations. While balancing complex industry needs with service 
solutions, the FCC must deliver palpable results for Tribal lands. \1\
---------------------------------------------------------------------------
    \1\ Section 254(b)(2): ``The Joint Board and the Commission shall 
base policies for the preservation and advancement of universal. . .'in 
all regions of the nation' '', and 254(b)(3): ``Consumers in all 
regions of the Nation, . . .should have access to telecommunications 
and information services. . .that are reasonably comparable to those 
services provided in urban areas and that are available at rates that 
are reasonably comparable to rates charged for similar services in 
urban areas.''
---------------------------------------------------------------------------
IV. Executive Summary of NTTA recommendations to the FCC and need for 
        Congressional support and oversight
    The National Tribal Telecommunications Association has submitted 
policy recommendations to the FCC over the past 7 years urging the 
Commission to improve the targeting of resources to address the crisis 
of lack of telecommunications service (and Broadband) in Indian 
Country. More recently, the Commission, through the Notice of Proposed 
Rulemakings for a National Broadband Plan and specific rulemakings to 
reform the Universal Service Fund and the Inter-carrier Compensation 
programs and the prospective Connect America Fund, has sought comments 
on regulatory changes that might impact Native Nations. NTTA is deeply 
concerned that the FCC has been steeped with industry carve-out 
solutions that do not and will not adequately address the needs of 
Native Nations.
    In the final comments to the FCC, NTTA summarized essential policy 
changes and regulatory waivers and adjustments that must be undertaken 
if Native Nations are ever going to attain parity of service, parity of 
technology, and parity of infrastructure with non-Native communities. 
NTTA has recommended (in summary synopsis here):

        1) In the upheaval of regulatory change and the fabrication of 
        industry-centric solutions, the FCC must not lose sight of the 
        unique needs of and specific solutions for Native communities;

        2) To reinforce the sovereignty of Native Nations, the FCC 
        should defer to Tribal Government's choice of Eligible 
        Telecommunications Carrier (ETC) providers on Tribal lands;

        3) The FCC must support Native Nation's efforts to provide 
        their own regulatory solutions;

        4) The FCC should extend the Mass Media Native Priority to all 
        communications service support for Native Nations:

        5) The FCC should create a Native Broadband Fund to support the 
        deployment and adoption of broadband in all Native communities;

        6) The FCC should ensure that Tribal Nation's efforts to serve 
        their communities are adequately funded and sustained;

        7) The FCC should consult with Tribal governments and require 
        ETCs to consult with Tribal governments;

        8) The FCC should ensure that limited support funding for 
        Native communities are predicated on need, not the lowest cost 
        infrastructure proposals by providers.

        9) The FCC should adopt a Native Broadband Lifeline and Linkup 
        program;

        10)The FCC should provide sufficient spectrum for Native 
        Nations to use for public interest needs and broadband service;

V. General Regulatory Policy Recommendations for the FCC and Congress
    Recognizing the need to improve the efficiency of the Universal 
Service Fund and the Inter-carrier Compensation programs in the 
transition to the Connect America Fund, NTTA supports the need to 
improve efficiency of the federal programs, but urges the FCC not to 
lose sight of the needs of Native communities and the potential growth 
of the digital and analog divide between Native Nations and non-Native 
communities.
    With a view toward maximizing limited Universal Service Fund 
dollars, NTTA recommends the following:

        1) Increase contribution to the USF/CAF to include all services 
        that use the Public Switched Telecommunications Network, 
        regardless of technology and category of service; \2\
---------------------------------------------------------------------------
    \2\ Section 254(b) (4): ``All providers of telecommunications 
services should make an equitable and nondiscriminatory contribution to 
the preservation and advancement of universal services.''

        2) Limit USF/CAF recipients to one provider in each service 
---------------------------------------------------------------------------
        area as the Carrier of Last Resort;

        3) Fund only activities or networks that expand or prepare the 
        Public Switched Telephone Network to support Broadband capacity 
        and service reach (pursuant to the basic mission of universal 
        service: to support the cost of providing a public network to 
        rural communities);

        4) Apply incentives to encourage carriers to move more quickly 
        to expand Broadband networks, particularly to unserved areas, 
        without pulling the rug out from rate-of-return telecos that 
        are serving markets that have little commercial appeal or 
        viable return on investment.

VI. Tribal Solutions
    The FCC has long recognized the unique relationship with Tribal 
Nations. \3\ Yet Tribal lands continue to suffer the results of 
historic and pervasive under-service to Tribal communities.
---------------------------------------------------------------------------
    \3\ See the Commission's Twelfth Report and Order; First Rural 
Radio Report and Order, 47 U.S.C.  307(b) (Section 307(b)); Statement 
of Policy on Establishing a Government-to-Government Relationship with 
Indian Tribes, Policy Statement, 16 FCC Red 4078 (2000) (Tribal Policy 
Statement); Connecting America: The National Broadband Plan, 146-48 
(rel. Mar. 16, 2010).
---------------------------------------------------------------------------
    NTTA urges the FCC to take extraordinary regulatory actions and 
target specific resources on Native Nations.

A.The FCC Should Defer the Choice of Eligible Telecommunications 
        Carriers on Tribal lands to the Tribal Government
    Discussions about solutions for under-service typically focus on 
governmental mandates and actions or on carriers and their obligations 
to meet service needs. This traditional matrix excludes the most 
important stakeholder, the consumer, from participating in service 
policy.
    Since Tribal Nations are historic victims of pervasive under-
service, the FCC should honor the unique relationship between the 
Federal government and Native Nations by deferring the choice of 
regulatory providers for Tribal lands to Tribal governments. By giving 
Tribal Nations as a consumer the powerful leverage over Universal 
Service support, Tribal governments as consumers may be able to change 
the quality and conduct of service on Native lands. By deferring to and 
empowering Tribal Nations to choose their regulatory providers, the FCC 
will be strengthening the sovereignty and self-sufficiency of Native 
Nations.
    A corollary to this federal deference to Tribal Nation carrier 
choice is the obligation by all non-Tribal ETCs to attain legal 
permission to serve Native communities. ETCs need to attain Tribal 
permission to serve Tribal lands and adhere to all the legal 
requirements of doing business on Tribal lands. (See the later 
discussion on consultation.)
    Another corollary to Native Nation deference is the need for the 
FCC to honor the request by Native Nations to designate their entire 
Native community (or lands) as a single service area. Unifying the 
entire Native community as a single service area strengthens Tribal 
sovereignty.
    The Committee's and Congress's support of this policy imperative is 
crucial to ensuring Native Nations attain telecommunications and 
Broadband parity.

B. The FCC Should Support Tribal Nations' Decision to Provide 
        Regulatory Service to Their Own Community
    The FCC should support Native Nations' efforts to provide 
regulatory service to their own community. Should a Tribe seek to apply 
for Section 214(e) (6) ETC status, in deference to the unique 
relationship between the Federal government and Native Nations, the FCC 
should apply all regulatory resources to support the Tribal effort to 
provide regulatory service to the Native community-including 
designating the Native community as a single service area. The FCC 
should apply other regulatory relief to assist Native Nations, such as 
streamlining and expediting certificates of convenience; waiving the 
parent trap provisions governing support status for purchased service 
areas; waiving Part 36 and other ETC delays for universal service 
support. The FCC should provide such Universal Service or Connect 
America funding and safety-net protections as are needed for Native 
Nations to serve their own communities.
    In the course of Tribal Nations becoming more self-sufficient by 
choosing to provide their own regulatory services, the FCC should ease 
the regulatory burdens on Native governments and their delegated 
providers. In previous comments to the FCC, NTTA urged the FCC to 
address needed regulatory changes to that end.
    In the FCC orders for the Mescalero Apache Telecom, Inc., \4\ and 
Hopi Telecommunications, Inc., \5\ the Tribal applicants had to seek a 
series of waivers from Commission rules in order to begin immediate 
service and attain cost recoveries. These costly and time-consuming 
waivers included a waiver of the definition of ``Study Area'' from the 
Part 36 Glossary-Appendix of the rules; 61.41(c) (2), 69.3(e) (11), 
36.611, and 36.612 of the Commission's rules. Waiver of section 
61.41(c) (2) permitted the Tribal telecos to operate under rate-of-
return regulation after acquiring access lines that were under price-
cap regulation. Waiver of section 69.3(e) (11) permitted Tribal teleco 
participation in the National Exchange Carrier Association, Inc. (NECA) 
common line tariff effective at the close of the approved transaction. 
Waiver of sections 36.611 and 36.612 allowed the Tribal teleco to 
immediately begin receiving high-cost loop support based upon projected 
costs, rather than historical costs.
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    \4\ Jan. 18, 2001; CC Docket 96-45.
    \5\ Jan. 31, 2007; CC Docket 96-45.
---------------------------------------------------------------------------
    In addition, the Tribes had to apply for waivers from section 
54.305 of the Commission's rules. Waiver of section 54.305 of the 
Commission's rules permitted Tribal telecos to receive high-cost 
universal service support based on the average cost of the lines under 
their ownership, rather than receiving the same per-line levels of 
high-cost support for which the acquired access lines were eligible 
prior to their transfer from preceding carriers. (This Parent Trap 
Rule, 54.305(b), should be rescinded, particularly for Tribal telecos 
purchasing their certificates from previous carriers.)
    NTTA proposes the FCC permit Tribal Governments and entities 
representing Native communities automatically receive these waivers as 
a matter of course in deference to Tribal sovereignty and the FCC's 
Trust responsibility.
    Embracing these regulatory changes would facilitate the Tribal 
option to apply ``self-help'' to meet the needs of their community and 
accelerate what will be an uncertain transition path for broadband 
deployment on Tribal lands. These changes will strengthen Native 
Nations' efforts toward self-sufficiency and reinforce the sovereignty 
of Native Nations.
    The Committee's and Congress's support of this policy imperative is 
crucial to ensuring Native Nations attain telecommunications and 
Broadband parity.

C. The FCC Should Extend Its Mass Media Tribal Priority to All Sectors 
        of Communications Service Based on Tribal Sovereignty and 
        Pervasive Under-Service for All Communications Services on 
        Native Lands
    The Commission has historically called for unique policy treatment 
for Native American tribes because of historic under-service, the 
Federal Trust Responsibility, the Universal Service mandates of the 
Communications Act, and the Commission's own adopted Tribal Trust 
Policy. \6\ The FCC has given special accord to Tribal governments: 
``we are mindful of our obligation to work with Indian Tribes on a 
government-to-government basis consistent with the principles of Tribal 
self-governance'' (Mescalero Apache Telecom, Inc. Order, FCC 01-13) The 
Commission also recognized the public interest need to assist Native 
communities: ``The Commission has recognized that Native American 
communities have the lowest reported level of telephone subscribership 
in America'' (Sacred Winds Communications Inc. Order, DA 06-1645).
---------------------------------------------------------------------------
    \6\ Again, see the Commission's Twelfth Report and Order; First 
Rural Radio Report and Order, 47 U.S.C.  307(b) (Section 307(b)); 
Statement of Policy on Establishing a Government-to-Government 
Relationship with Indian Tribes, Policy Statement, 16 FCC Red 4078 
(2000) (Tribal Policy Statement); Connecting America: The National 
Broadband Plan, 146-48 (rel. Mar. 16, 2010).
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    The Commission can be applauded for taking particular attention to 
the status and plight of Native communities in America in the National 
Broadband Plan and the Connect America Fund and Universal Service 
Reform proposals.
    Having set up a Native priority for Mass Media licensing, the FCC 
should extend the Native priority to all sectors of Communications 
service as Native Nations are underserved for all forms of 
communications. NTTA has described the lack of parity for wireline, 
broadband, and spectrum service between Native Nations and non-Native 
communities.
    Sections 214, 254, 307 and 309 cite the public interest for the FCC 
to act or intervene on behalf of ``unserved areas'' and ``underserved'' 
customers. Sufficient data shows the lack of parity service between 
Native and non-Native communities for the FCC to apply a priority for 
all Federal Communications Commission resources to assist Native 
Nations.
    The Committee's and Congress's support of this policy imperative is 
crucial to ensuring Native Nations attain telecommunications and 
Broadband parity.

D. The FCC Should Create a Native Broadband Fund to Support the 
        Expansion of Broadband Service to Tribal Lands
    NTTA strongly urges the FCC to create a Native Broadband Fund as 
the Commission's National Broadband Plan suggests.
    In previous comments to the FCC, NTTA stated:

        ``NTTA has commented previously on disparity between Tribal and 
        Native communities and non-Native communities. Over 98 percent 
        of Americans have access to voice dialtone while only 63-69 
        percent of Native Americans do. This is a 30-35 percent 
        disparity. Nearly 50 percent of rural America has access to 
        Broadband. Less than 10 percent of Native Americans do. This is 
        nearly a 40 percent disparity.''

    As the disparity grows, and as the FCC deliberates reducing the 
support for telecommunications service for current rural providers, the 
need for establishment of a Native Nations Broadband Fund becomes 
paramount.
    There is an imperative for the Commission to finally deliver on the 
needs of Native Nations. The FCC acknowledges the unique circumstances 
of Tribal and Native communities as Trust beneficiaries, as sovereign 
nations, \7\ and as victims of historic telecommunications 
underservice. This compels the FCC to target specific funding, 
resources and strategy at meeting the needs of Native Nations and 
communities. A Native Nations Broadband Fund would have the mission of 
targeting scarce resources to attaining parity of advanced technology 
for Native Nations and communities.
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    \7\ ``We also find that this result is consistent with our 
obligations under the historic federal trust relationship between the 
Federal Government and federally-recognized Indian tribes to encourage 
Tribal sovereignty and self-governance and to ensure a standard of 
livability for members of Indian tribes on Tribal lands,'' para. 33, 
Mescalero Apache Telecommunications, Inc. (Jan. 18, 2001, CC Docket 96-
45)
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    NTTA has proposed a ten-title regulatory framework for meeting the 
broadband needs of Native communities. Unlike grant programs under the 
Department of Agriculture and the Department of Commerce that have 
previously supported broadband efforts in Native communities--and 
should be promoted and funded for the immediate future--this Commission 
Native Broadband Fund should be implemented by the FCC and funded 
through the uncapped portion of the Universal Service (and the future 
Connect America) Fund to promote regulatory service to Native 
communities.
    The proposed 10-Title Fund will support 4 crucial platforms in 
Native communities to promote both the transition to Broadband service 
and meet the basic needs of every Native community: (1) the Public 
Switched Telephone Network; (2) the Public-Safety Network; (3) the 
Public Media Network, and, (4) the Safety-Net Mobility Network.
    In order to support adoption in very low-Income and economic 
devastated areas, NTTA recognizes the crucial need to support 
residential Low-Income customers with a Native Broadband Lifeline and 
Linkup program, along with a program to provide community access to the 
Internet and broadband by connecting Native anchor public institutions.
    The NTTA proposal also recognizes several crucial additional 
activities needed to sustain broadband service in Native communities, 
including Native Broadband mapping, technical planning and adoption 
assistance, and inclusion of corporate/operational costs required to 
sustain regulated Native telecommunications services in high-cost and 
remote rural areas.
    The following is NTTA's proposal to provide comprehensive 
assistance to Native communities to attain regulated Broadband service.
Key Platforms
    Public Switched Network in Unserved and Underserved Areas: The FCC 
must support deployment of a high-capacity Public Switched Network 
which serves as a foundation to support all technologies and 
communications services on Tribal lands;

    Public-Safety Network: The FCC must support deployment and reform 
of Public Safety Networks in Native Communities, including 
construction, 911 PSAP reform and reconfiguration, E-911 mapping, and 
technology interoperability and regional cooperative efforts;

    Public-Media Network: The FCC must support deployment of public 
community mass media networks to bring public-safety, governmental, 
health and education, resource, and cultural information to the 
community;

    Safety-Net Mobility Network: The FCC must support deployment of 
Mobility Networks as a safety-net backhaul support for and linkage to 
the PSTN network in Native communities;

Support for the Community
    Broadband Lifeline and Linkup: The FCC must ensure that Native 
residents who cannot afford residential Broadband service be able to 
access the Internet and access the educational, economic development, 
public safety and governmental resources the Broadband provides;

    Anchor/Public Institutions: The FCC must help Native Governments to 
meet Tribal public interest obligations by connecting anchor and public 
institutions to the Internet with current and future broadband 
capacity;

    Preserve Existing Tribal regulatory services: The FCC must support 
Tribal efforts to serve their own communities, see discussion below on 
Tribal Safety-Net.

Essential Activities to Attaining and Sustaining Broadband Service
    Native Broadband Mapping: Because state Broadband mapping efforts 
have failed to adequately or comprehensively map Tribal lands, the FCC 
should assist Native Nations to implement a Native Broadband mapping 
effort through Native planning and management over the project (such 
mapping should identify barriers to broadband deployment and adoption, 
inventory existing infrastructure, and identify resource options);

    Native Planning and Adoption Assistance: the FCC and the RUS should 
provide necessary financial assistance, and technical assistance for 
Native Nations to plan regulatory and broadband service to their 
communities;

    Native Broadband Sustainability Cost Support: the FCC should 
support the additional operational and corporate costs essential to 
sustaining a regulatory broadband service by Tribal governments (see 
discussion below on a second-tier Native Broadband Service support.)

How Would a Native Broadband Fund be implemented?
    NTTA is assessing the costs for the Native Nations Broadband Fund.
    NTTA proposes a streamlined approach on Fund administration by 
using USAC to administer and manage the Fund with a Board appointed by 
the Commission comprised of essential Tribal and Native community and 
industry experts knowledgeable about community telecommunications 
needs, telecommunications service operations, and Tribal and Native 
regulatory policies.
    Native Broadband Funding will be targeted to ``underserved'' Native 
communities, defined as communities with: (1) underservice for public 
switched infrastructure; (2) underservice for Broadband service; and, 
(3) underservice for wireless access.
    Failure by the FCC to target and fund the networks and activities 
outlined by NTTA's proposed Native Nations Broadband Fund, 
notwithstanding current fiscal constraints on the Federal Government, 
would be catastrophic for Native Nations and would raise serious 
concerns about the FCC's and Federal government's obligation to Native 
Nations and constitute a severe breech of the universal service 
mandates of the Communications Act of 1934. Native Nations would 
continue to be the worst-served and least-connected communities in the 
United States. The social and economic costs thereof would far exceed 
any investments made herein through the Universal Service Fund and 
through the Connect America Fund.
    The Committee's and Congress's support of this policy imperative is 
crucial to ensuring Native Nations attain telecommunications and 
Broadband parity.

E. The FCC Should Ensure That Current Tribal Efforts to Serve Their Own 
        Communities are Adequately Supported and Sustained
    Because Native Nations are unique with regard to their sovereignty 
and unique also in their uniform lack of access to advanced technology, 
the FCC should create a Tribal Safety-net Universal Service mechanisms 
to ensure that Tribes can provide regulatory service to their community 
and remain sustainable. This proposed support for Tribal regulatory 
service honors the Nation-to-Nation Federal obligation of Trust 
responsibility to Native Nations and assists Native Nations to attain 
universal access to telecommunications service.
    To ensure Tribal communities can move forward and serve their 
communities without losing support under current USF and future CAF 
rules, NTTA proposes a Safety-net mechanism with two components that 
will address the current regulatory service rendered by Native Nations 
and the Native broadband carrier of last resort services of tomorrow.
    The first component of the Native Safety-Net will hold harmless the 
support for the 8 current operating Native telecommunications services. 
These Tribal telecom providers are providing communications service to 
their vulnerable communities (in 1990 census; 6 of the operating Tribes 
had less than 10 percent voice-dialtone; one company has 86 percent of 
their subscribers on lifeline; another has 700 subscribers on 
Lifeline).
    Under the FCC's proposed USF reform changes, Tribal Nations that 
have chartered their own regulatory service to their communities will 
be devasted. In a survey of Tribes providing their own services, Tribal 
company A will suffer 25.5 percent ($1.1 million) loss in support 
revenues; Tribal Company B will suffer 22 percent ($2.5 million) loss 
in support revenues; Tribal Company C will suffer 34 percent ($372,000) 
loss in support revenues; Tribal Company D will suffer 8 percent 
($271,000) loss in support revenues; Tribal Company E will suffer 25 
percent ($658,000) loss in revenues; Tribal Company F will suffer 23 
percent ($1.4 million) loss in revenues; and Tribal Company G will 
suffer 26 percent ($890,000) loss in support revenues.
    Part A of NTTA's proposed Native Safety-Net, ensures that current 
regulated Tribal services will continue to receive 100 percent of their 
current rate of recovery support. Based on the projected impact of 
FCC's proposed USF changes, this Part A Native Safety-Net will only 
require only $8-$10 million to provide full support for rate of return 
costs for Regulatory Tribal services.
    NTTA proposes a Part B (Broadband) Native Safety-Net mechanism to 
embrace the Connect America Fund changes toward Broadband service 
proposed by the Commission. Under part B, any Tribe providing 
regulatory Broadband of last resort service within a Native community 
(or land), meeting all CAF obligations, will be provided a second tier-
support for the excess of regulatory broadband costs over regulatory 
broadband revenues. NTTA proposes that funding for this mechanism come 
from the uncapped portion of the Universal/Connect America Fund, using 
base year 2002 per line support costs. NTTA is uncertain of the cost 
for the Part B mechanism but is willing to project the costs entailed 
for support the efforts of Native Nations to serve their own 
communities. NTTA hopes to consult with the Commission to calculate the 
details and cost of the Native Safety-Net Part B Mechanism.
    The Committee's and Congress's support of this policy imperative is 
crucial to ensuring Native Nations attain telecommunications and 
Broadband parity.

F. The FCC Should Protect and Promote Tribal Sovereignty by Requiring 
        All Non-Tribal ETC's Serving Tribal Lands to Consult With 
        Tribal Governments
    NTTA has commented on consultation with Native Nations by 
regulatory providers. Tribal consultation should occur at three levels. 
First, as the FCC (or Federal Government) undertakes policy 
deliberations that have a substantial or material impact on Native 
Nations, the FCC (or Federal Government) must include Native 
governments in policy deliberations prior to implementation of policies 
that can harm or impact a Native Nation.
    Second, for service to a community, an ETC or ETC applicant should 
consult with the Tribal government or Native community to describe the 
service plan, how the provider plans to serve the entire community, how 
the provider will address quality on an ongoing basis, and how the 
provider will manage customer issues and complaints. The ETC must also 
secure all the requisite legal requirements for doing business in a 
Native community, including securing rights of way approval, business 
permits, and any additional requirements that a Native Nation may 
impose on the provider.
    Third, consultation should be held between the provider, the FCC 
and the Native Nation on renewal of licenses and certifications, taking 
into consideration the ETC's compliance with the terms of the ETC 
application or consultation with the Tribal government. Failure to 
comply with the certification consultation or to comply with the terms 
of licensing or certification or terms of agreement with a Native 
Nation will cause the FCC to de-certify the provider for their ETC 
status (or rescind the licensing) for the Native community or service 
area. In addition, the FCC may cause the ETC or wireless provider to 
return USF funding accrued from representations of lifeline quality of 
service to the Native Nation.
    The Committee's and Congress's support of this policy imperative is 
crucial to ensuring Native Nations attain telecommunications and 
Broadband parity.

G. The FCC Should Ensure Limited Support Monies are Allocated to Tribal 
        Service Areas Based on Need, Not According to Lowest Cost 
        Proposed by a Non-Native Provider
    In the interest of eliminating waste, fraud and abuse and 
increasing efficiency in the use of the Universal Service Fund, the 
Commission has focused on driving support for communications service 
through the lowest cost outcomes--by using reverse auctions.
    Unfortunately, for Native Nations, this very principle of economy 
of scale and bottom-line cost has resulted in the market by-passing 
Native communities. Native communities lie in inherently high-cost 
areas without market competition and commercial incentives. Therefore, 
the cost of connecting Native America will be higher than non-Native 
markets.
    That doesn't mean public support for regulatory service to Native 
communities should not be efficiently managed, rationally calculated or 
price-driven when reasonable. NTTA focuses on the dual concept of 
efficiency and need. Outcomes that demonstrate incremental gains in 
connectivity--regardless of technology--should be held as standards and 
metrics for efficiency, particularly when weighed against market costs. 
When a Native Nation provides regulatory service that increases 
connectivity (and advanced technology parity) on the order of eight 
hundred or nine hundred percent, the Commission and Congress should 
take note of this model to support and improve upon.
    Need is the other essential component for Commission policy 
priority. Native communities remain the least connected and isolated 
communities in America. This should be a concern for those 
administering the universal service man date of the Communications Act 
and particularly in light of the Federal obligation to honor a Trust 
responsibility to Native Nations.
    In the Commission's Mobility Fund proposal, the Commission offered 
a complex strategy of cost auctions stacked nationally to fund mobility 
networks. However, NTTA felt that the e-rate program that has been in 
place since 1997, administering $2.25 billion for schools and libraries 
should be a good model of efficiency and proven methodologies. The e-
rate program prioritizes (universal service) funding through the proxy 
of school lunch programs for need. The Commission can use underservice 
(or school lunch program) or any other proxy for need to drive 
essential funding to communities or service areas. The other efficiency 
attached to the e-rate program is the built-in consultation required to 
service the beneficiary (substitute ``Tribe''). The e-rate program 
requires a pre-negotiated contract to be in place (consultation) before 
bids can be submitted for funding. The e-rate program requires the 
beneficiary to sign-off on vouchers for payment before funds can be 
released to the service contractor (consultation on quality of 
service). And the e-rate program has procedures in place to dismiss a 
non-compliant provider and to replace the provider to complete the 
project (additional consultation.) Why not use a less complicated and 
tried and successful model for service to Native communities? NTTA 
urges the FCC to balance need, with efficiency (and outcomes) in 
reforming essential support programs for Native communities.
    The Committee's and Congress's support of this policy imperative is 
crucial to ensuring Native Nations attain telecommunications and 
Broadband parity.

H. The FCC Should Support Native Low-Income Subscribers With a Native 
        Broadband Lifeline and Linkup Program
    NTTA advocates the creation of a Native Broadband Lifeline and 
Linkup program to give low-income residents access to Broadband 
services. Residential Broadband will be unaffordable for a substantial 
portion of Native communities unless the Commission provides support 
for Native consumers.
    NTTA models the current Enhanced Lifeline program to support an 
additional low-income support down to the final $10 for Broadband 
service, defined by 4 Mbps downstream and 768 Kbps up stream. GRTI's 
proposed waiver of NECA tariff #5 for Tribes may help reduce an 
additional $20 cost to Native low-income subscribers.
    NTTA similarly proposes a Native Broadband Linkup program to 
support Native subscribers that cannot afford hookup costs to access 
residential Broadband service. Adopting the current low-income Linkup 
program, NTTA proposes there be support for first-time broadband 
connection charges and equipment to reach Broadband networks.
    The Committee's and Congress's support of this policy imperative is 
crucial to ensuring Native Nations attain telecommunications and 
Broadband parity.

I. The FCC Should Provide Sufficient Spectrum for Native Lands to Use 
        for Public Interest and Community Broadband Needs
    NTTA has addressed this concern with recommendations for FCC Native 
spectrum policy in comments filed on FCC's Native Communications 
Service Enhancement inquiries.
    The FCC seeks justification for change in the FCC's spectrum policy 
and procedures for Native Nations, including either providing spectrum 
to Native Nations for free or at a reserve price. It is a fact that 
over the past 15 years, NTTA cannot identify one Tribal Nation that has 
succeeded in attaining a wireless service license through the auctions 
proceedings or, under the current auctions procedures, have been able 
to use spectrum to provide broadband service or to meet the public 
interest needs of the Tribal community.
    On the other hand, there is an example of how the FCC was able to 
help a remote Native community get connected with the use of free 
spectrum with an experimental wireless license. The FCC gave the Salt 
River Pima Maricopa community the use of an experimental license to 
provide spectrum in the 3.425-3.442 GHz and 3.475.688-3.492.688 GHz 
band to connect 300 remote Tribal households between 1998 and 2007 with 
fixed wireless technology to provide these families with lifeline voice 
dial-tone. The Salt River community eventually connected these remote 
households over to Saddleback's basic network.
    In NTTA's previous submission, it commented:

        In light of being the ``least connected'' communities in 
        America by wireline, broadband and wireless service, the FCC 
        must undertake extraordinary measures to meet the 
        telecommunications service needs of Native Nations. NTTA urges 
        the FCC to waive auctions and permit Tribal governments 
        exclusive use of spectrum through licensing or permit Tribal 
        open access to spectrum in Native areas to meet the public 
        interest needs of Tribal governments--and to further the public 
        convenience and necessity of connecting Native communities.

    Section 254(b) of the Act iterates key principles for Universal 
Service, including promoting and monitoring quality of services to be 
made available at just, reasonable and affordable rates--(b)(1); to 
provide access to advanced telecommunications and information services 
in all regions of the nation--(b)(2); to ensure consumers in all 
regions of the Nation, including low-income consumers and those in 
rural, insular, and high cost areas, should have access to 
telecommunications and information services, including interexchange 
services and advanced telecommunications and information services, 
comparable to those services provided in urban areas--(b)(3); but to 
most importantly to ``such other principles as the Joint Board and the 
Commission determine are necessary and appropriate for the protection 
of the public interest, convenience, and necessity and are consistent 
with this Act'' 254(b)(7).
    Section 307(b) changes have given Tribal nations priority to 
attaining broadcast licenses. 307(b) gives the FCC the authority--in 
considering applications for licenses, and modifications and renewals 
to make such distribution of licenses, . . ., among the several States 
and communities ``as to provide a fair, efficient, and equitable 
distribution of radio services to each of the same.'' In the voicing 
the same principles of the Native Priority for media license, Section 
309(j)(3) of the Act similarly describes the principle of public 
interest, convenience and necessity in describing the objectives in the 
design of systems of competitive bidding as ``promoting economic 
opportunity and competition. . .and by disseminating licenses among a 
wide variety of applicants, including small businesses, rural telephone 
companies, and businesses owned by members of minority groups and 
women.''
    NTTA has held that competitive auctions are inherently biased 
against Tribal governments and Native communities and thus constitute a 
regulatory barrier to spectrum licensing and spectrum use by Tribal 
governments and Native communities. In addition to the failure of the 
Tribal bidding credit program, NTTA feels the entire process of 
auctions bidding is a regulatory barrier for Tribes. Spectrum licensing 
has done nothing to: (1) promote spectrum licensing by Tribes to serve 
themselves; and (2) enhance or increase the ability of Tribes to use 
spectrum in their service areas for public purpose.
    It is unfortunate that the Act spends far greater focus on the 
method of distribution of spectrum licenses and service distribution 
than it does on the target service beneficiaries. However, in defining 
spectrum licensing requirements, Section 309(j)(4)(C) says in 
prescribing regulations pursuant to competitive bidding, the Commission 
shall ``consistent with the public interest, convenience, and 
necessity, the purposes of this Act, and the characteristics of the 
proposed service, prescribe area designations and bandwidth assignments 
that promote (i) an equitable distribution of licenses and services 
among geographic areas, (ii) economic opportunity for a wide variety of 
applicants, including small businesses, rural telephone companies, and 
businesses owned by members of minority groups and women, and (iii) 
investment in and rapid deployment of new technologies and services.''
    Section 309(j)(4)(D) adds that the Commission shall ``ensure that 
small businesses, rural telephone companies, and businesses owned by 
members of minority groups and women are given the opportunity to 
participate in the provision of spectrum-based services, and, for such 
purposes, consider the use of tax certificates, bidding preferences, 
and other procedures.'' (emphasis added) This language suggests the 
Commission is required to ensure that rural entities and businesses, 
particularly Tribal governments, should be given the opportunity to 
participate in the provision of spectrum-based services, and to use 
extra-ordinary procedures to assist those efforts by Tribes, including 
pilot programs outside of competitive bidding rules.
    Section 309(j)(2) addresses exemptions to the competitive bidding 
rules and includes public safety radio services used by State and local 
governments (surely, Tribal governments are included in this definition 
of governments), that are used to protect the safety of life, health 
and property, and ``are not made commercially available to the 
public.'' One could argue that because the Native communities are the 
least served communities, heretofore, spectrum has not been made 
``commercially available to the public'' in Native communities. In any 
case the strong disparity between Native community access to spectrum 
(and to telecommunications and broadband services) should impel the FCC 
to exempt Tribal governments and Native communities from the auctions 
method of accessing spectrum for community and public use--under the 
principle of public interest, convenience and necessity.
    In Native Nations, governments are responsible for the public 
safety, health, education and economic development of the entire 
community and thus would qualify for an exception to the competitive 
bidding rules. FCC would further public interest, convenience and 
necessity by permitting Tribal governments and Native communities to 
use spectrum to meet their public interest requirements. Native public 
institutions surely fall within these exempted licensing and 
allocations of spectrum.
    To exacerbate the problem of auctions licensing, the Tribal bidding 
credits have been a failure for Native governments and communities. 
Should the FCC insist on continuing the auctions method of allocating 
spectrum on Tribal lands and Native communities, NTTA has proposed 
replacement criteria to apply to any Tribal credits for licensing in 
Native service areas. Foremost among the criteria are (1) the result of 
Tribal ownership of spectrum license, and (2) the ability of Tribal 
governments and the Native community being able to use the spectrum on 
the Native land or community.
    If the FCC ignores Tribal proposals to waive auctions for spectrum 
in Tribal lands or in Native communities, to meet the spirit of the 
Budget Act Amendments of 1992 and the Telecommunications Act of 1996 to 
use auctions to garner funding for federal contribution, the FCC may 
require (permanently or on a pilot basis) payment by Tribes for the 
exclusive use of spectrum in Native service areas. 309(j)(4)(F) 
mandates the Commission shall: ``prescribe methods by which a 
reasonable reserve price will be required, or a minimum bid will be 
established, to obtain any license or permit being assigned pursuant to 
the competitive bidding, unless the Commission determines that such a 
reserve price or minimum bid is not in the public interest.'' (emphasis 
added)
    In reviewing the outcomes of auctions and licensing results over 
the past 15 years, since the passage of the 1996 Telecom Act, Native 
Nations and communities have not benefitted from spectrum licensing 
ownership or enjoyed use of spectrum in their own service areas. This 
is a material breach of the universal service mandate of the 
Communications Act and Trust responsibility of the Federal government 
(and Trust policy as adopted by the FCC) to Native Nations. Public 
Interest demands the FCC implement innovative measures and waive 
traditional regulatory measures in order enable Native governments and 
communities to own spectrum licensing or to use spectrum for its own 
public needs.
    As a catch-all, Section 303(y) of the Act gives the Commission the 
reserved authority to allocate electromagnetic spectrum to provide 
flexibility of use, if ``(2) the Commission finds, after notice and 
opportunity for public comment, that--(A) such an allocation would be 
in the public interest; (B) such use would not deter investment in 
communications services and systems, or technology development and (C) 
such use would not result in harmful interference among users.'' These 
conditions can be imposed on Native communities in order to allocate 
electromagnetic spectrum for use by Tribal governments and Native 
communities.
    The wireless (electromagnetic radio) platform is exclusively in the 
control of the Federal Government. Yet it is the least utilized 
platform for delivering broadband to Native communities. Auctions are 
the key impediment for the full public interest use by Native Nations. 
The FCC can change this outcome with simple and innovative solutions to 
simply put spectrum in the hands of or for the use of Native Nations.
    The Committee's and Congress's support of this policy imperative is 
crucial to ensuring Native Nations attain telecommunications and 
Broadband parity.

VII. Conclusion
    In the flux and upheaval of the FCC's efforts to modernize the 
Universal Service support system, the Commission must not overlook or 
retreat from taking specific and innovative measures to meet the 
challenge of bringing service to the least-connected communities in 
America.
    The unique status of Native sovereign nations and the unique 
relationship between the Federal Government and Native Nations requires 
the Federal Communications Commission and Congress to look outside of 
customary regulatory processes and traditional means of problem solving 
to help Native communities.
    The National Tribal Telecommunications Association is comprised of 
eight Native Nations that have embraced the regulatory path to meeting 
the communications needs of their communities. \8\ Six of these Native 
communities had less than ten percent voice service in 1990. That means 
in 1990 nine of ten residents in these six communities could not dial 
911 for help. Yet today, these communities have improved their reach to 
the outside world by a magnitude of nearly eight hundred percent, 
including providing broadband technology for their communities.
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    \8\ Standing Rock Sioux Tribe has just been approved as an Eligible 
Telecommunications Carrier and Warm Springs Tribe is applying for ETC 
approval.
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    Having traversed the analog and digital divide, NTTA's Tribes offer 
new ideas, imperatives to guide federal policy makers, and foundational 
measures to ensure that all Native communities are connected to the 
world-wide marketplace.
                                 ______
                                 
 Prepared Statement of Hon. Margie Mejia, Chairwoman, Lytton Rancheria





                                 ______
                                 
  Prepared Statement of Shirley K. Sneve, Executive Director, Native 
                   American Public Telecommunications







                                 ______
                                 
  Prepared Statement of Joseph Valandra, Chairman, Tehan Woglake, Inc.















                                 ______
                                 
                                 
                                 
                                 
                                 
                                  
