[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
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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.
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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
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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\
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\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.''
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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.
---------------------------------------------------------------------------
\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).
---------------------------------------------------------------------------
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.
______