    Telecommunications: Challenges to Assessing and Improving
    Telecommunications For Native Americans on Tribal Lands
    (11-JAN-06, GAO-06-189).

    An important goal of the Communications Act of 1934, as amended,
    is to ensure access to telecommunications services for all
    Americans. The Federal Communications Commission has made efforts
    to improve the historically low subscribership rates of Native
    Americans on tribal lands. In addition, Congress is considering
    legislation to establish a grant program to help tribes improve
    telecommunications services on their lands. This report discusses
    1) the status of telecommunications subscribership for Native
    Americans living on tribal lands; 2) federal programs available
    for improving telecommunications on these lands; 3) barriers to
    improvements; and 4) how some tribes are addressing these
    barriers.
    -------------------------Indexing Terms-------------------------
    REPORTNUM:   GAO-06-189
        ACCNO:   A44597
      TITLE:     Telecommunications: Challenges to Assessing and Improving
    Telecommunications For Native Americans on Tribal Lands
         DATE:   01/11/2006
      SUBJECT:   Census
    	     Data collection
    	     Federal aid to localities
    	     Indian lands
    	     Internet
    	     Native Americans
    	     Policy evaluation
    	     Population statistics
    	     Surveys
    	     Telecommunication policy
    	     Telecommunications
    	     Telecommunications systems
    	     Telephones
    	     Universal service
    	     Wireless
    	     1990 Decennial Census
    	     2000 Decennial Census
    	     2010 Decennial Census

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    ** figure captions are reproduced.  Tables are included, but    **
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    GAO-06-189

         * Report to Congressional Requesters
              * January 2006
         * TELECOMMUNICATIONS
              * Challenges to Assessing and Improving Telecommunications For
                Native Americans on Tribal Lands
         * Contents
              * Results in Brief
              * Background
              * Tribal Telephone Subscribership Rate Is Substantially Below the
                National Level and Internet Subscribership Rate Is Unknown
                   * Telephone Subscribership for Native American Households on
                     Most Tribal Lands Was Substantially Below the National Rate
                     in 2000
                   * No Federal Data Available on Internet Subscribership Rates
                     For Tribal Lands
              * Native Americans Can Benefit from Several General and
                Tribal-Specific Federal Programs to Improve Telecommunications
                Services
                   * General Programs Available to Improve Telecommunications
                     Services for Tribes
                   * FCC's Programs Targeted to Tribal Lands and Residents
                        * Enhanced Link-Up and Lifeline Programs
                        * Tribal Land Bidding Credit Program
                        * Indian Telecommunications Initiative
                   * Some Issues Involving Tribes Have Arisen with Respect to
                     Federal Universal Service Programs
                        * Designation of Eligible Telecommunications Carriers
                        * Tribal Libraries' Eligibility for E-rate Funding
              * Multiple Barriers Exist to Improving Telecommunications on Tribal
                Lands
                   * Rural Location and Limited Financial Resources Were the Most
                     Often Cited Barriers
                   * Lack of Technically-Trained Tribal Members Can Impede
                     Planning and Was the Third Most Commonly Cited Barrier
                   * Rights-of-Way Issues Were Also Cited as a Barrier to
                     Improved Telecommunications Services on Tribal Lands
              * Tribes Are Addressing Barriers to Improved Telecommunications in
                Different Ways
                   * Several Tribes Are Moving Towards Developing Their Own
                     Telecommunications Systems to Address Multiple Barriers
                        * Coeur d'Alene Tribe
                        * Mescalero Apache
                        * Yakama Nation
                        * Eastern Band of Cherokee
                   * Some Tribes Have Focused on Wireless Technologies to Address
                     Barriers of Rural Location and Rugged Terrain and Limited
                     Financial Resources
                        * Oglala Sioux
                        * Navajo Nation
                   * Some Tribes Are Addressing the Need for More
                     Technically-Trained Tribal Members Through Mentoring and
                     Partnerships
                        * Addressing Need for More Technically-Trained Tribal
                          Members
                        * Using Technical Expertise for Effective Planning
                   * One Tribe is Developing a Right-of-Way Policy to Make the
                     Tribal Approval Process More Timely and Efficient
              * Conclusions
              * Matters for Congressional Consideration
              * Agency Comments
         * Scope and Methodology
         * List of Tribes, Alaska Regional Native Nonprofit Organizations, and
           Other Groups Interviewed
         * Six Tribes' Efforts to Address Telecommunications Barriers
              * The Coeur d'Alene Tribe Developed a System to Provide High-Speed
                Internet Access for Tribal Residents Using an RUS Grant
                   * Background
                   * Barriers
                   * Approaches
              * The Yakama Nation Is Developing a Wireless Telephone System and
                High- Speed Internet over Cable Using Financial Planning to Help
                Deploy Infrastructure
                   * Background
                   * Barriers
                   * Approaches
              * Eastern Band of Cherokee Partnered with Local Business to
                Install, Own and Operate Telecommunications Networks for
                High-Capacity Transmission Services
                   * Background
                   * Barrier
                   * Approach
              * The Mescalero Apache Purchased the Local Telecommunications
                Company and Improved Services Using RUS Loans
                   * Background
                   * Barriers
                   * Approaches
              * The Oglala Sioux Partnered With a Wireless Provider to Create
                Competition and Increase Telephone Subscribership
                   * Background
                   * Barriers
                   * Approaches
              * The Navajo Nation is Addressing Telecommunications Barriers by
                Streamlining Tribal Government Processes, Encouraging
                Competition, and Emphasizing Wireless Technologies
                   * Background
                   * Barriers
                   * Approaches
         * Comments from the Department of the Interior, Bureau of Indian Affairs
         * Comments from the Institute of Museum and Library Services
         * GAO Contact and Staff Acknowledgments
         * PDF6-Ordering Information.pdf
              * Order by Mail or Phone
         * d06189TOC.pdf
              * Contents

    Report to Congressional Requesters

    January 2006

    TELECOMMUNICATIONS

    Challenges to Assessing and Improving Telecommunications For Native
    Americans on Tribal Lands

    Contents

    Tables

    January 11, 2006Letter

    The Honorable John McCain Chairman The Honorable Byron Dorgan Vice
    Chairman Committee on Indian Affairs United States Senate

    The Honorable Daniel K. Inouye Co-Chairman Committee on Commerce, Science
    and Transportation United States Senate

    The telephone subscribership rate for Native Americans living on tribal
    lands has historically lagged behind the overall national rate. This is
    part of a broader infrastructure problem on tribal lands, where conditions
    can make economic development difficult and residents may lack such basics
    as water and sewer systems. Data from the 2000 decennial census show that
    the approximately 588,000 Native Americans living on federal tribal lands
    were among the most economically distressed groups in the United States,
    with about 37 percent of Native Americans living below the federal poverty
    level.1

    An important goal of the Communications Act of 1934, as amended
    (Communications Act) is to preserve and advance universal service. In the
    Communications Act, Congress directs the Federal Communications Commission
    (FCC) to base policies for the preservation and advancement of universal
    service on principles that include, among other things, making quality
    services available at reasonable rates and providing access to advanced
    services throughout the nation. Specifically mentioned in this regard are
    low-income consumers and those in rural, insular, and high-cost
    areas-categories that include many Native Americans living on tribal lands
    in rural or remote locations.2 To help develop and improve
    telecommunications service on tribal lands, Congress is considering
    authorizing a grant program specifically for federally recognized tribes.3
    To assist Congress, you requested that we examine several aspects of
    telecommunications on tribal lands. Accordingly, we reviewed 1) the status
    of telecommunications subscribership (telephone and Internet) for Native
    Americans on tribal lands in the lower 48 states and Alaska; 2) federal
    programs available for improving telecommunications on tribal lands; 3)
    the barriers that exist to improving telecommunications on tribal lands;
    and 4) how some tribes are addressing these barriers.

    To determine the status of telecommunications subscribership for Native
    Americans on tribal lands in the lower 48 states and Alaska (there are no
    federally recognized tribal lands in Hawaii), we analyzed 2000 decennial
    census data for federally recognized reservations and trust lands. We did
    not include Oklahoma Tribal Statistical Areas (OTSAs) in our analysis.4 We
    also interviewed officials representing individual tribes, tribal
    organizations, telecommunications providers, industry organizations, and
    federal agencies. To determine the availability of federal programs that
    provide financial and technical assistance to improve telecommunications
    services on tribal lands, we interviewed officials from several federal
    agencies and obtained information on federal programs. To determine the
    barriers that exist to improving telecommunications services on tribal
    lands and how some tribes have addressed these barriers, we interviewed
    tribal officials, tribal organizations, service providers, equipment
    manufacturers, federal agencies, and others. We reviewed previous studies
    that discussed telecommunications services on tribal lands. Additionally,
    we conducted interviews with officials of 26 tribes and 12 Alaska regional
    native nonprofit organizations, chosen on the basis of demographic and
    other information, such as actions being taken to improve
    telecommunications on their land. For our site visits, we then selected 6
    tribes that had taken some action to overcome one or more of the most
    frequently cited barriers to improving telecommunications. During the
    visits, we interviewed tribal officials and observed the tribes'
    telecommunications systems, ongoing improvement efforts, and challenges.
    While the interviews and site visits cannot be projected to all tribes,
    the information gathered allows us to describe a range of barriers and how
    tribes are addressing these barriers. For more detailed information on how
    tribes were chosen for both the interviews and the site visits, and other
    aspects of our review, see appendix I.

    We conducted our audit work from August 2004 through December 2005 in
    Washington, D.C., and at the Coeur D'Alene Tribe of the Coeur D'Alene
    Reservation, Idaho; Confederated Tribes and Bands of the Yakama Nation,
    Washington; Eastern Band of Cherokee Indians of North Carolina; Oglala
    Sioux Tribe of the Pine Ridge Reservation, South Dakota; Mescalero Apache
    Tribe of the Mescalero Reservation, New Mexico; and Navajo Nation in
    Arizona, New Mexico, and Utah. We assessed the reliability of Census 2000
    data and found the data sufficiently reliable for the types of analyses
    that we conducted in this report. Our work was conducted in accordance
    with generally accepted government auditing standards.

    Results in Brief

    As of 2000, the telephone subscribership rate for Native American
    households on tribal lands was substantially below the national rate,
    while the rate for Internet subscribership on tribal lands was unknown due
    to a lack of data. According to data from the 2000 decennial census, about
    69 percent of Native American households5 on tribal lands in the lower 48
    states had telephone service, which was about 29 percentage points less
    than the national rate of about 98 percent. About 87 percent of Native
    American households in Alaska native villages had telephone service, also
    considerably below the national rate. Telephone subscribership rates for
    Native American households on individual tribal lands in 2000 varied
    widely. A few tribal lands had rates above the national level, but the
    majority of them had rates below the national rate. For example, the
    Kalispel tribal land in Washington had a telephone subscribership rate of
    100 percent, while the tribal lands of the Kickapoo Traditional Tribe of
    Texas had a rate of 34 percent. While this data indicates some progress
    since 1990, changes in telephone subscribership rates since the 2000
    decennial census are not known. In order to provide more current data, the
    U.S. Census Bureau (Census Bureau) has begun to gather telephone
    subscribership data through a new, more frequent survey that will provide
    demographic and socioeconomic data on communities of all sizes, including
    tribal lands. However, because it will take time to accumulate a large
    enough sample to produce data for small communities, annual reports will
    not be available for all small communities, including tribal lands, until
    2010. The rate of Internet subscribership for Native American households
    on tribal lands is unknown because neither the Census Bureau nor FCC
    collects this data at the tribal level. For example, one survey performed
    by the Census Bureau that collects data on Internet subscribership can
    provide estimates for the nation as a whole, but the survey's sample
    cannot provide reliable estimates of Internet subscribership on tribal
    lands. In addition, the Census Bureau's new survey does not include a
    question on Internet subscribership. Without current subscribership data,
    it is difficult to assess progress or the impact of federal programs to
    improve telecommunications on tribal lands. FCC has asked the Census
    Bureau to collect data on Internet subscribership, using this new survey.
    Census Bureau officials told us, however, that the bureau's internal
    policy is to not include questions on its new survey unless the collection
    of that data by the Census Bureau is mandated by law. They do not believe
    that such a mandate exists for the collection of data on Internet
    subscribership by the Census Bureau.

    The Department of Agriculture's Rural Utilities Service (RUS) and FCC are
    responsible for several general programs designed to improve the nation's
    telecommunications infrastructure and make services affordable for all
    consumers, which can benefit tribes and tribal lands. RUS has grant, loan,
    and loan guarantee programs for improving telecommunications in rural
    areas. FCC has several programs (known as "universal service" programs) to
    make telephone service more affordable for low-income consumers and
    consumers living in areas, such as rural areas, where the cost to provide
    service is high. FCC also has a program that ensures that health care
    providers serving rural communities pay no more than their urban
    counterparts for telecommunications services necessary for the provision
    of health care. An additional universal service program, known as E-rate ,
    provides discounts on telecommunications services for schools and
    libraries nationwide. In our interviews with tribal and state officials,
    we learned that some tribal libraries are not eligible to receive E-rate
    funds because of an issue involving federal eligibility criteria. The
    Communications Act stipulates that a library's eligibility for E-rate
    support is dependent on whether the library is eligible for certain state
    library funds. Yet the tribal libraries in at least two states are
    precluded under state law from being eligible for such funds, which has
    the effect of making these libraries ineligible to apply for E-rate funds.
    FCC officials told us that modifying the federal eligibility criteria to
    resolve this situation would require legislative action by the Congress.
    In addition to these general programs, FCC established four programs
    specifically targeted to improving telecommunications for residents of
    tribal lands. Enhanced Link-Up provides a one-time discount on the cost of
    connecting a subscriber to the telephone network and Enhanced Lifeline
    provides ongoing discounts on the cost of monthly service. The third
    program, the Tribal Land Bidding Credit program, provides financial
    incentives to wireless service providers to serve tribal lands. The fourth
    program, the Indian Telecommunications Initiative, disseminates
    information to tribes and tribal organizations on telecommunications
    services on tribal lands, including universal service programs and other
    areas of interest.

    Tribal and government officials, Native American groups, service
    providers, and others with whom we spoke cited several barriers to
    improving telecommunications service on tribal lands. The barriers most
    often cited were the rural, rugged terrain of tribal lands, and tribes'
    limited financial resources. Many tribal officials and service providers
    told us that the rural, rugged terrain of tribal lands can increase the
    cost of installing telecommunications infrastructure to provide or improve
    service. The costs of addressing this barrier, combined with tribes'
    limited financial resources, can deter service providers from investing in
    telecommunications infrastructure on tribal lands because such investments
    are not viewed as cost effective. The third barrier most often cited by
    tribal officials is a shortage of technically trained tribal members to
    plan and implement improvements on tribal lands. A fourth barrier
    mentioned by both tribes and service providers is the difficulty of
    obtaining rights-of-way to deploy telecommunications equipment across some
    tribal lands, a process that involves individual landholders, tribal
    governments, service providers, and the Bureau of Indian Affairs, which
    has fiduciary responsibility for tribal lands.

    Tribes are addressing these barriers in different ways, according to our
    interviews with 26 tribes and 12 Alaska regional native nonprofit
    organizations, and our visits to 6 of these tribes that have taken or are
    taking action to improve their telecommunications. Specifically, to
    address the barriers of rural, rugged terrain and limited financial
    resources that have deterred investment in telecommunications on tribal
    lands, several tribes are moving toward owning or developing their own
    telecommunications systems. These tribes are using federal grants, loans,
    or other assistance; long-range planning; and private-sector partnerships
    to help improve service on their lands. Additionally, at 2 of the sites we
    visited, the tribally owned companies are focusing on extending and
    improving service rather than on maximizing profit. Some tribes have
    focused primarily on developing wireless technologies, which can be less
    expensive to deploy over long distances and rugged terrain, to address
    these same barriers. In addition, 2 tribes we visited are addressing their
    need for improved telecommunications services by encouraging wireless
    companies to compete with wireline providers on their lands. One wireless
    company on each of the reservations obtained status as an eligible
    telecommunications carrier and so is able to access universal service
    funds and profitably provide service in these areas. To address their need
    for more technically-trained tribal members, 2 tribes we visited are
    developing their own training centers as well as establishing training
    relationships with educational institutions. To address the difficulty of
    obtaining rights-of-way to deploy telecommunications equipment across some
    tribal lands, one tribe is developing a right-of-way policy to make the
    tribal approval process more timely and efficient.

    This report includes two matters for congressional consideration. First,
    Congress should consider directing FCC to determine what additional data
    is needed to help assess progress toward the goal of providing access to
    telecommunications services, including high-speed Internet, to Native
    Americans living on tribal lands; determine how this data should regularly
    be collected; and report to Congress on its findings. Second, Congress
    should consider amending the Communications Act of 1934 to facilitate and
    clarify the eligibility of tribal libraries for funding under the E-rate
    program.

    A draft of this report was sent to the following agencies for comment: the
    Bureau of Indian Affairs (BIA), the Census Bureau, National
    Telecommunications and Information Administration (NTIA), FCC, General
    Services Administration, Institute of Museum and Library Services, and
    RUS. RUS and the General Services Administration offered no comments. BIA
    provided written comments, presented in appendix IV, stating that BIA
    recognized the need to update its rights-of-way regulations to include
    advanced telecommunications infrastructure and is working to include this
    in its trust related regulations. BIA will issue a Rights-of-Way Handbook
    in March, 2006, to ensure consistent application of existing regulations.
    The Institute of Museum and Library Services provided written comments,
    presented in appendix V, stating that the report accurately reflected its
    understanding of the relevant issues and concerns. NTIA offered technical
    comments, as did the Census Bureau and FCC, which we have incorporated
    where appropriate. In the draft, we recommended that FCC determine what
    additional data is needed to help assess progress toward the goal of
    providing access to telecommunications services, including high-speed
    Internet, to Native Americans living on tribal lands; determine how this
    data should regularly be collected; and report to Congress on its
    findings. In oral comments responding to this recommendation, FCC agreed
    that additional data is needed, but did not agree that it is the
    organization best positioned to determine what that data should be. FCC
    maintains that other federal agencies and departments possess expertise
    and more direct authorization to carry out this task. We continue to
    believe that FCC, as the agency responsible under the Communications Act
    for the goal of making available, as far as possible, telecommunications
    at reasonable charges to all Americans, is the appropriate agency to
    determine what data is needed to advance the goal of universal service and
    support related policy decisions-especially for Native Americans on tribal
    lands who continue to be disadvantaged in this regard.

    Background

    According to the 2000 Census, approximately 588,000 Native Americans were
    residing on tribal lands.6 Tribal lands vary dramatically in size,
    demographics, and location. They range in size from the Navajo Nation,
    which consists of about 24,000 square miles, to some tribal land areas in
    California comprising less than 1 square mile (see figure 1). Over 176,000
    Native Americans live on the Navajo reservation, while other tribal lands
    have fewer than 50 Native residents. The population on a majority of
    tribal lands is predominantly Native American, but some tribal lands have
    a significant percentage of nonNative Americans. In addition, while most
    tribal lands are located in rural or remote locations, some are located
    near metropolitan areas. Tribes are unique in being sovereign governments
    within the United States. The federal government has recognized the
    sovereign status of tribes since the founding of the United States. The
    U.S. Constitution, treaties, and other federal government actions have
    established tribal sovereignty. To help manage tribal affairs, tribes have
    formed governments or subsidiaries of tribal governments that include
    schools, housing, health, and other types of corporations. In addition,
    the Bureau of Indian Affairs (BIA) in the Department of the Interior has a
    fiduciary responsibility to tribes and assumes some management
    responsibility for all land held in trust for the benefit of the
    individual Native American or tribe.

    Figure 1: Map of Tribal Lands in the United States Based on 2000 Census
    Data (Tribes Included in GAO's 6 Site Visits Are Indicated by Name)a

    aHawaii does not have any federally recognized tribes or tribal lands.
    Since July 2000, a number of bills have been introduced to provide a
    process for the recognition by the United States of a Native Hawaiian
    governing entity. Most recently, on January 25, 2005, H.R. 309 and S.
    147--the Native Hawaiian Government Reorganization Act of 2005--were
    introduced in the House and Senate, respectively.

    This map does not include Oklahoma Tribal Statistical Areas (OTSAs).

    In Alaska, federal law directed the establishment of 12 for profit
    regional corporations, 1 for each geographic region comprised of Natives
    having a common heritage and sharing common interests, and over 200 native
    villages.7 These corporations have become the vehicle for distributing
    land and monetary benefits to Alaska Natives to provide a fair and just
    settlement of aboriginal land claims in Alaska. The Native villages are
    entities within the state that are recognized by BIA to receive services
    from the federal government. The 12 regional corporations have
    corresponding nonprofit arms that provide social services to the villages.

    Native American tribes are among the most economically distressed groups
    in the United States. According to the 2000 Census, about 37 percent of
    Native American households have incomes below the federal poverty
    level-more than double the rate for the U.S. population as a whole.
    Residents of tribal lands often lack basic infrastructure, such as water
    and sewer systems, and telecommunications services. According to tribal
    officials and government agencies, conditions on tribal lands have made
    successful economic development more difficult than in other parts of the
    country. A study done for the federal government, based on research
    gathered in 1999, found that the high cost and small markets associated
    with investment in tribal lands deter business investment.8

    The federal government has long acknowledged the difficulties of providing
    basic services, such as electricity and telephone service, to rural areas
    of the country. The concept of universal telephone service has its origins
    in Section 1 of the Communications Act, which states that the Federal
    Communications Commission was created "for the purpose of regulating
    interstate and foreign commerce in communication by wire and radio so as
    to make available, so far as possible, to all the people of the United
    States a rapid, efficient, nationwide, and worldwide wire and radio
    communication service with adequate facilities at reasonable charges...."9
    The goal of universal service is to ensure that all U.S. residents have
    access to quality telephone service regardless of their household income
    or geographic location. The Telecommunications Act of 1996 reaffirmed the
    commitment to universal service and expanded it to include not just
    traditional telephone service but access to advanced telecommunications
    services (such as high-speed Internet access) for schools, libraries, and
    rural health care providers.

    A 1995 report by the Census Bureau based on 1990 census data noted that
    about 47 percent of Native American households on tribal lands had
    telephone service, compared to about 95 percent of households
    nationally.10 In June 2000, the FCC Chairman noted that the Commission's
    universal service policies "had yielded a remarkable rate of telephone
    subscribership, above 90 percent for the nation as a whole."11 However, he
    also noted that telephone subscribership among the rural poor was roughly
    20 percent lower than the rest of the nation, while Native Americans
    living on tribal lands were only half as likely as other Americans to
    subscribe to telephone service. In August 2000, FCC identified certain
    categories of Americans, including Native Americans, who were having
    difficulty obtaining access to advanced telecommunications services.

    Tribal Telephone Subscribership Rate Is Substantially Below the National
    Level and Internet Subscribership Rate Is Unknown

    According to data from the 2000 decennial census, the rate of telephone
    subscribership for Native American households on tribal lands was
    substantially below the national rate of 97.6 percent. While this data
    indicates some progress since 1990, changes since then are unknown due to
    a lack of more current data. Additionally, the rate of Internet
    subscribership is unknown because no federal survey has been designed to
    capture this information for tribal lands.

    Telephone Subscribership for Native American Households on Most Tribal
    Lands Was Substantially Below the National Rate in 2000

    According to the 2000 decennial census, the telephone subscribership rate
    for Native American households on tribal lands in the lower 48 states was
    68.6 percent, while for Alaska Native Villages it was 87 percent-both
    substantially below the national rate of 97.6 percent.12 Figure 2 shows
    the number of tribal lands within various percentile ranges of telephone
    subscribership for Native American households, based on our analysis of
    2000 decennial census data. We have separated Alaska Native tribal lands
    from the tribal lands in the lower 48 states because telecommunications
    infrastructure in Alaska differs from that of the lower 48 states due to
    Alaska's weather and terrain. The data is shown for 198 tribal lands in
    the lower 48 states and 131 tribal lands in Alaska. Tribal lands with
    fewer than 100 people are not included in the data available from the
    Census Bureau.13 In these areas, there must be at least 100 people in a
    specific group, including American Indian and Alaska Native tribal
    groupings, before data will be shown.

    Figure 2: Telephone Subscribership Rates for Tribal Lands In the Lower 48
    States and Alaska Native Villages, Based on Census 2000 Data

    a Telephone subscribership rates of Native American households with
    telephone service available are based on 2000 Census sample data. Within
    most American Indian and Alaska Native areas, 1 in every 2 households was
    asked detailed questions on population and housing characteristics, such
    as availability of telephone service. This chart contains telephone
    subscribership rates for the 198 lower 48 tribal lands and 131 Alaska
    Native Villages for which the Census Bureau published data regarding
    Native American households. In our analysis, we did not include Oklahoma
    Tribal Statistical Areas.

    As figure 2 shows, there was considerable variation among tribes regarding
    telephone subscribership rates, with some comparable or higher than the
    national rate but most below it-and many substantially so. We found, for
    example, that the Kalispel tribal land in Washington had a telephone
    subscribership rate of 100 percent, while the tribal lands of the Kickapoo
    Traditional Tribe of Texas had a rate of 34 percent. To get a better
    understanding of telephone subscribership rates by individual tribe and
    population size, we reviewed data for the 25 tribal lands with the highest
    number of Native American households. These 25 tribal lands represent
    about 65 percent of all Native American households, as shown in Census
    2000 data. The lands vary greatly in the number of Native American
    households located on them (from about 46,000 for the Navajo Nation to
    about 1,100 for Fort Berthold) and in geographic size, with the Navajo
    Nation's lands comprising about 24,000 square miles and the Eastern Band
    of Cherokee's land comprising about 83 square miles.

    As shown in figure 3, the Native American household telephone
    subscribership rates for these most populous tribal lands were all below
    the national rate of 97.6 percent.14 Nine of the 25 tribal lands,
    representing about 44 percent of Native American households on tribal
    lands in the lower 48 states, had telephone subscribership rates at a
    level below 78 percent-which is about what the national rate was over 40
    years ago when the 1960 decennial census was taken. The subscribership
    rate for the most populous tribal land-the Navajo-was only 38 percent.

    Figure 3: Telephone Subscribership Rates for the 25 Tribal Lands with the
    Most Native American Households,a Based on Census 2000

    aThe Census 2000 data in this report are for the American Indian and/or
    Alaska Native alone or in combination with one or more other races.
    Households are classified by the race of the householder. When the term
    Native American households is used, it refers to the total number of
    occupied housing units where the race of the householder is American
    Indian and/or Alaska Native alone or in combination with one or more other
    races.

    bTelephone subscribership rates of Native American households with
    telephone service available are based on 2000 Census sample data. Within
    most American Indian and Alaska Native areas, 1 in every 2 households was
    asked detailed questions on population and housing characteristics, such
    as availability of telephone service. This chart contains telephone
    subscribership rates for the 25 lands of the 198 lower 48 tribal lands and
    131 Alaska Native Villages with the most number of households for which
    the Census Bureau published data regarding Native American households. In
    our analysis, we did not include Oklahoma Tribal Statistical Areas.

    Because the 2000 decennial census is the most current data available on
    telephone subscribership rates on tribal lands, it is not known whether
    these rates have changed between 2000 and the present. To help improve the
    accuracy of the next decennial census and collect demographic,
    socioeconomic and housing data in a more timely way, the Census Bureau
    developed the American Community Survey (ACS), which includes a question
    on telephone service.15 In January 2005, the Census Bureau began sending
    out the ACS questionnaire to households. Annual results will be available
    for populations on all individual tribal lands by summer 2010, and sooner
    for tribal lands with populations over 20,000. This schedule is based on
    the time it will take to accumulate a large enough sample to produce data
    for areas with populations as small as 600 people.16

    No Federal Data Available on Internet Subscribership Rates For Tribal
    Lands

    The status of Internet subscribership on tribal lands is unknown because
    no federal survey has been designed to track this information. Although
    the Census Bureau and FCC currently collect some national data on Internet
    subscribership, and FCC also collects some state level data, none of their
    survey instruments are designed to estimate Internet subscribership on
    tribal lands. In addition, officials of both agencies told us that to the
    best of their knowledge, no other federal agency collects data on Internet
    subscribership.

    Unlike telephone subscribership data, the 2000 decennial census did not
    collect information on Internet subscribership, nor is the Census Bureau
    currently collecting it on the ACS. The Census Bureau does collect some
    national data on Internet subscribership through the Current Population
    Survey (CPS). However, this monthly survey of households conducted by the
    Census Bureau for the Bureau of Labor Statistics is designed primarily to
    produce national and state estimates for characteristics of the labor
    force. To obtain national and state estimates on Internet subscribership
    rates, supplemental questions on Internet and computer use have been added
    to the CPS questionnaire. According to a Department of Commerce report,
    based on October 2003 CPS data, the Internet subscribership rate for U.S.
    households was about 55 percent.17 However, Commerce Department officials
    told us that the CPS sample cannot provide reliable estimates of Internet
    subscribership on tribal lands because there are not enough tribal land
    households in the sample to provide a reliable measure.

    FCC collects data on the deployment of advanced telecommunications
    capability in the United States, but this data cannot be used to determine
    Internet subscribership rates for tribal lands.18 Pursuant to section 706
    of the Telecommunications Act of 1996, FCC is required to conduct regular
    inquiries concerning the availability of advanced telecommunications
    capability for all Americans. To fulfill its mandate, FCC has issued four
    reports, starting in January 1999, on the availability of advanced
    telecommunications capability in the United States. To obtain data for
    these reports, FCC requires service providers to report the total number
    of high-speed lines (or wireless channels), broken down by type of
    technology, for each state. For each of the technology subtotals,
    providers also report additional detail concerning the percentage of lines
    that are

    connected to residential users19 and a list of the zip codes where they
    have at least one customer of high-speed service. Because the providers
    are not required to report the total number of residential subscribers in
    each zip code to whom they provide high-speed service, and because tribal
    lands do not necessarily correspond to zip codes, this data cannot be used
    to determine the number of residential Internet subscribers on tribal
    lands. Finally, data on the availability of "dial-up" Internet access is
    not provided in these reports for any areas in the country because it is
    not considered an advanced telecommunications capability.

    The FCC has acknowledged that the zip code data present an elementary view
    of where high-speed Internet service subscribers are located.20 In
    particular, its data collection method does not fully describe some
    segments of the population, such as Native Americans residing on tribal
    lands. FCC has recognized that its section 706 data collection efforts in
    rural and underserved areas need improvement to better fulfill Congress'
    mandate.21 Without current subscribership data, it is difficult to assess
    progress or the impact of federal programs to improve telecommunications
    on tribal lands.

    In a September 2004 letter to the Census Bureau, the FCC Chairman at that
    time stated that in order to better implement section 706 of the
    Telecommunications Act, FCC needs to know the rate of Internet
    subscribership, and particularly, the rate of Internet subscribership in
    smaller and more sparsely populated areas of the country, that would
    include tribal lands. Given the limitations of the current Census Bureau
    and FCC data collection efforts, FCC requested the Census Bureau add a
    question to the ACS regarding Internet subscribership. The ACS is designed
    to collect information for communities across the country, including small
    geographic areas such as small towns, tribal lands, and rural areas.

    Both FCC and Census Bureau officials told us that if a question is added
    to the ACS, it would provide Internet subscribership data for the nation
    and smaller geographic areas. An FCC official also noted that a
    comparative survey like the ACS, one that shows the differences of
    Internet subscribership between tribal lands and other geographic areas,
    is far more valuable than a survey that only collects Internet
    subscribership data on tribal lands. Census Bureau officials mentioned to
    us, however, that there are several methodological issues related to
    making changes to the ACS. Because adding questions would lengthen the ACS
    and could result in a reduced response rate, the Census Bureau's current
    practice is to add a question to the ACS only if it is mandated by law.
    They told us that section 706 of the Telecommunications Act mandates that
    FCC, not the Census Bureau, be responsible for collecting data on advanced
    telecommunications. Therefore, Congress would need to pass legislation
    mandating that the Census Bureau collect Internet subscribership data. FCC
    officials told us that currently it is not clear whether FCC will pursue
    collection of Internet subscribership data.

    Native Americans Can Benefit from Several General and Tribal-Specific
    Federal Programs to Improve Telecommunications Services

    The Department of Agriculture's Rural Utilities Service (RUS) and FCC are
    responsible for several programs designed to improve the nation's
    telecommunications infrastructure and make services affordable for all
    consumers. RUS's programs focus on rural telecommunications development,
    while FCC's universal service programs focus on providing support for
    areas where the cost of providing service is high, as well as for
    low-income consumers, schools, libraries, and rural health care
    facilities. All of these general programs can benefit tribal lands and
    Native American consumers. In addition, FCC has recognized the need to
    make special efforts to improve tribal telecommunications by establishing
    additional support programs specifically aimed at benefiting tribal lands
    and their residents. Issues have arisen, however, over some aspects of how
    eligibility for FCC's universal service programs is determined with regard
    to tribal lands.

    General Programs Available to Improve Telecommunications Services for
    Tribes

    Federal efforts to expand telephone service in underserved areas date back
    to 1949 when the Rural Electrification Administration was authorized to
    loan monies to furnish and improve the availability of telephone service
    in rural areas throughout the United States. In 1994, RUS replaced the
    Rural Electrification Administration.22 RUS programs provide support to
    improve rural telecommunications infrastructure through grants, loans, and
    loan guarantees. Eligible participants in the RUS grant, loan, and loan
    guarantee programs include federally recognized tribes. The RUS grant,
    loan, and loan guarantee programs can be used to improve
    telecommunications infrastructure in rural areas, which include many of
    the tribal lands. Tables 1 and 2 provide a summary listing of these grant
    and loan programs and eligible participants, along with recent funding
    levels.

    Table 1: Summary of RUS Grant Programs for Rural Telecommunications

              Program                        Purpose                   2004 Funds
    Community Connect     Provides grants to incorporated          $9 milliona
    Broadband Grants      organizations, federally recognized
                             tribes, state or local governments, and
                             other entities including cooperatives,
                             private corporations or limited
                             liability companies organized on a
                             for-profit or not-for-profit basis who
                             will deploy broadband service in rural
                             communities.
    Distance Learning and Provides grants to incorporated         $25 milliona
    Telemedicine Grants   organizations, federally recognized
                             tribes, state or local governments, and
                             other entities including private
                             corporations organized on a for-profit
                             or not-for-profit basis who operate a
                             rural community facility or deliver
                             distance learning or telemedicine
                             services to entities that operate a
                             rural community facility or to
                             residents of rural areas to encourage
                             and improve telemedicine services and
                             distance learning services.

    Source: Consolidated Appropriations Act of 2004, Pub. L. No. 108-199, 118
    Stat. 3 (2004).

    Note: Figures have been rounded.

    a Fiscal Year 2004 Appropriations

    Table 2: Summary of RUS Loan and Loan Guarantee Programs for Rural
    Telecommunications

               Program                      Description                2004 Funds
    Rural Telecommunications
    Loan Programsa
    Hardship                 Provides loans bearing a 5 percent  $145 millionb
                                interest rate to eligible entities
                                to finance the construction,
                                operation, and/or improvement of
                                telecommunications facilities to
                                provide and improve telephone
                                service in rural areas.a
    Cost of Money            Provides loans bearing an interest          $48.5
                                rate tied to the Department of           millionb
                                Treasury's cost-of-money rate to
                                eligible entities to finance the
                                construction, operation, and/or
                                improvement of telecommunications
                                facilities to provide and improve
                                telephone service in rural areas.a
    Federal Financing Bank   Provides loan guarantees bearing    $320 millionb
    (FFB)c                   interest rates equal to the
                                Department of Treasury's cost of
                                money for debt instruments with
                                similar maturities and options,
                                plus one-eighth of one percent to
                                eligible entities to finance the
                                construction, operation, and/or
                                improvement of telecommunications
                                facilities to provide and improve
                                telephone service in rural areas.a
    Distance Learning and    Provides loans to incorporated              $30.3
    Telemedicine Loans       organizations or partnerships,           millionb
                                federally recognized tribes, state
                                or local governments, and other
                                entities including private
                                corporations organized on a
                                for-profit or not-for-profit basis
                                that operate a rural community
                                facility or deliver distance
                                learning or telemedicine services
                                to entities that operate a rural
                                community facility or to residents
                                or rural areas to encourage and
                                improve telemedicine services and
                                distance learning services in rural
                                areas.
    Rural Broadband Access   Provides loans to eligible                 $602.9
    Loan and Loan Guarantee  applicant cooperative, nonprofit,        millionb
    Program                  limited dividend or mutual
                                associations, limited liability
                                companies, commercial
                                organizations, federally recognized
                                tribes, and under certain
                                circumstances, state or local
                                governments that will deploy
                                broadband services in rural
                                communities.d

    Source: Rural Utilities Service.

    Note: Figures have been rounded.

    aEligible entities include public bodies providing telephone service in
    rural areas as of October 28, 1949, as well as cooperative, nonprofit,
    limited dividend, or mutual associations. Additionally, RUS generally will
    not make a loan to another entity to provide the same telecommunications
    service in an area served by an incumbent RUS telecommunications borrower
    providing such service.

    bThis figure represents fiscal year 2004 loans approved under multiple
    fiscal years' budget authority. Approved loans only indicate that an
    agreement between the lender (RUS, FFB, or a private lender) and a
    borrower has been reached to loan monies.

    cFederal Financing Bank is an instrumentality within the United States
    Department of the Treasury. Section 306 of the Rural Electrification Act
    authorizes RUS to offer 100 percent guarantees of loans made by FFB to
    qualified electric and telecommunications borrowers.

    dAn entity is not eligible if it serves more than 2 percent of the
    telephone subscriber lines installed in the United States.

    FCC also has several general programs to support improved
    telecommunications services. FCC's universal service programs support the
    longstanding goal of making communications services available "so far as
    possible, to all the people of the United States." The universal service
    programs put in place in the 1980s focused on making telephone service
    affordable for low-income consumers and areas where the cost of providing
    service was high. The Telecommunications Act of 1996 extended the scope of
    federal universal service support to make advanced telecommunications
    services (such as high-speed Internet access) available to eligible public
    and nonprofit elementary and secondary schools, libraries, and nonprofit
    rural health care providers at discounted rates. Universal service program
    operations are carried out by a not-for-profit corporation, the Universal
    Service Administrative Company (USAC), under FCC's rules and oversight.
    Table 3 lists key FCC universal service programs and recent funding levels
    that could be used to improve service on tribal lands in areas where the
    cost of providing service is high; lower the cost of service to low-income
    individuals; and support telecommunications services for local schools,
    libraries, and rural health care centers.23

    Table 3: Summary of Key FCC Universal Service Programs

            Program                    Description                     2004 Funds
    High Cost         Provides eligible local telephone          $3.5 billiona
                         companies with funds to serve consumers
                         in remote or rural areas, where the cost
                         of providing service comparable to that
                         available in urban areas is
                         substantially greater than the national
                         average, thereby lowering rates for
                         local and long distance service.
    Low Income        Assists qualifying low-income consumers  $758.8 milliona
    (Lifeline and     through discounts on installation and
    Linkup)           monthly telephone services. Also
                         provides free toll limitation service to
                         prevent or limit the amount of long
                         distance telephone calls. In 2000, FCC
                         augmented this program to provide
                         additional support for residents on
                         tribal lands (known as Enhanced Lifeline
                         and Linkup).
    Schools and       Assists eligible public and non-profit     $2.3 billionb
    Libraries (E-rate elementary and secondary schools and
    )                 libraries through discounts on
                         telecommunications and information
                         services. Discounts are available for
                         local and long distance telephone
                         service, Internet access, internal
                         connections (e.g., wiring and networking
                         schools and libraries), and basic
                         maintenance on internal connections.
    Rural Health Care Assists health care providers located in    $35 millionb
                         rural areas through discounts on
                         telecommunications services. Discounts
                         are provided to make rates for
                         facilities in rural areas reasonably
                         comparable to those in nearby urban
                         areas.c

    Source: USAC.

    Note: Figures have been rounded.

    aThis figure represents USAC's total unaudited disbursements during
    calendar year 2004.

    bThis figure represents a USAC estimate for calendar year 2004.

    cSome public or non-profit health care providers not located in a rural
    area may receive some financial support for long distance charges
    necessary to connect to an Internet service provider.

    In addition to financial assistance, RUS and FCC's Wireless
    Telecommunications Bureau established the VISION program in 2004 as a
    joint policy initiative to provide technical assistance to improve the
    provision of wireless broadband service in rural communities. VISION is
    part of a larger Rural Wireless Outreach Initiative between RUS, FCC's
    Wireless Telecommunications Bureau, and private industry, that is intended
    to coordinate activities and information on financial and other assistance
    regarding telecommunications opportunities for rural communities. The
    program is designed to provide rural communities within the United States
    and its territories with on-site regulatory, legal, engineering, and
    technical assistance to identify barriers and solutions to providing
    wireless broadband services to these communities. Thirteen tribal
    organizations have applied for assistance from this program, though no
    awards had been made as of October 2005.

    The General Services Administration's (GSA) Federal Technology Service
    (FTS) 2001 contract provides telecommunications services to federal
    agencies, the District of Columbia government, tribal governments, and
    insular governments such as American Samoa, at discounted prices. Several
    tribes, such as the Oneida Tribe of Indians of Wisconsin and the Choctaw
    Nation of Oklahoma, have made use of the FTS 2001 contract to improve the
    telecommunications infrastructure on their lands.24

    FCC's Programs Targeted to Tribal Lands and Residents

    Beginning in June 2000, FCC established additional support to improve
    telecommunications infrastructure deployment and subscribership on tribal
    lands. FCC took this step in recognition that Native American communities
    have, on average, the lowest reported telephone subscribership levels in
    the country.

    Enhanced Link-Up and Lifeline Programs

    FCC's Enhanced Link-Up and Lifeline programs, which began in 2000, provide
    additional discounts on the cost of telephone service for tribal and
    nontribal residents of tribal lands who have incomes at or below 135
    percent of the Federal Poverty Guidelines or who participate in one of
    several federal assistance programs, such as food stamps or Medicaid.25
    Enhanced Link-Up provides qualified participants with one-time discounts
    of up to 100 dollars on installation fees. Enhanced Lifeline provides
    ongoing discounts on basic local telephone service that enable some
    qualified participants to pay as little as 1 dollar a month. As with FCC's
    other universal service programs, the service providers are reimbursed
    from FCC's universal service fund for the discounts they give to the
    programs' participants. Tables 4 and 5 list the number of Enhanced Link-Up
    and Lifeline participants (both Native American and nonnative American
    residents of tribal lands) and the amount of support distributed between
    June 2000 and December 2004.

    Table 4: Number of Enhanced Link-Up Participants and Funds Distributed to
    Service Providers

                                  June-Dec.     2001     2002     2003       2004
                                       2000
    Number of Participants         2,040   23,360   29,900   22,290     41,030
    Amount of reimbursements     $61,590 $533,560 $832,660 $615,760 $1,277,340
    to providers

    Source: USAC.

    Note: Years are calendar years. The program began in the middle of 2000.
    Dollar amounts and number of participants have been rounded.

    Table 5: Number of Enhanced Lifeline Participants and Funds Distributed to
    Service Providers

                             June-       2001        2002        2003        2004
                         Dec. 2000
    Number of            18,690     56,820     112,190     147,200     176,390
    Participants
    Amount of          $507,780 $6,960,050 $17,954,810 $24,178,010 $30,346,090
    reimbursements to
    providers

    Source: USAC.

    Note: Years are calendar years. The program began in the middle of 2000.
    Dollar amounts and number of participants have been rounded.

    At present, service providers file quarterly data forms with USAC that are
    used in reimbursing them for the discounts they give to their subscribers
    through the Link-Up and Lifeline programs. This data can be broken out by
    state, but not by tribal land, because the reporting form does not ask
    service providers to indicate the number of participants and amount of
    funding by tribal land. State-level data, however, has limited use in
    measuring the performance of these programs with respect to individual
    tribal lands. Nearly all the states containing tribal lands have more than
    one of them, as shown earlier in figure 1, so their data is a sum total of
    multiple tribal lands.26 Moreover, some tribal lands extend across state
    lines. The Navajo Nation's land, for instance, crosses the borders of
    Arizona, New Mexico, and Utah; and the Standing Rock Sioux's tribal land
    crosses the borders of North and South Dakota. Consequently, the
    participation and funding data relevant to these tribal lands (and others
    like them) are split among the data of multiple states. Because FCC does
    not have data on program participation and funding by individual tribal
    land, some basic questions cannot be answered: what percentage of
    residents of particular tribal lands are benefiting from the programs and
    how have the participation rates on individual tribal lands changed over
    time?

    At one point, FCC took steps to obtain more detailed program data. When
    the Enhanced Link-Up and Lifeline programs were established in 2000, the
    Commission directed one of its bureaus to revise, as necessary, the form
    used by service providers for the general Link-Up and Lifeline programs
    already in operation. In June 2003, FCC sought comment on changes to its
    Lifeline program, including the collection of additional data, and made
    revisions to the form. In December 2003, FCC received approval from the
    Office of Management and Budget for the revised form, which included
    requiring service providers to list the number of their Enhanced Lifeline
    subscribers by individual tribal land. However, in spring 2004, some
    service providers met with FCC officials to voice concerns that the
    collection of such information would be difficult to implement into their
    billing systems, but did not provide specific cost estimates for its
    implementation. In March 2005, FCC indefinitely suspended the use of the
    revised form due to these concerns.27

    Tribal Land Bidding Credit Program

    FCC's Tribal Land Bidding Credit program is designed to provide incentives
    for wireless providers to deploy wireless services across tribal lands.28
    FCC is authorized to auction radiofrequency spectrum to be used for the
    provision of wireless services in the United States. Under the Tribal Land
    Bidding Credit program, FCC reduces the cost of a radiofrequency spectrum
    license to a winning bidder in a spectrum auction if the bidder agrees to
    deploy facilities and provide telecommunications service to qualifying
    tribal lands. The agreement includes constructing and operating a wireless
    system that offers service to at least 75 percent of the population of the
    tribal land area covered by the credit within 3 years of the grant of the
    license. Tribal lands with telephone subscribership below 85 percent are
    eligible for the program.

    The program began in 2000, with the first credits awarded in 2003. In
    total, the program has awarded credits to six licensees who have pledged
    to deploy facilities and provide telecommunications services to 10 tribal
    lands. Most of the credits to date have been awarded to two licensees for

    providing service on three tribal lands. Table 6 lists the dollar value of
    tribal land bidding credits awarded through April 2005.29

    Table 6: Tribal Land Bidding Credits Awarded

          Licensee Name      Tribal Land To Be    Date License(s) Dollar Value of
                                   Served             Awarded      Bidding Credit
    Crown Castle        White Mountain Apache  10/1/2003            $3,157,000
                           (AZ)
    Milky Way Broadband Uintah and Ouray (UT)  11/23/2004             $263,500
    Nemont              Turtle Mountain (ND)   1/12/2005              $137,000
    Communications
    Ronan Telephone     Blackfeet (MT)         1/29/2004              $182,000
    Scott MacIntyre     Walker River Paiute    5/13/2003              $182,000
                           (NV)
    Space Data          Eastern Band of        4/15/2003               $34,300
                           Cherokee (NC)
    Space Data          Ft. McDermitt Paiute   4/15/2003              $269,800
                           and Shoshone (NV and
                           OR)
    Space Data          Hualapai (AZ)          4/15/2003              $102,300
    Space Data          Jicarilla Apache (NM)  4/15/2003               $15,050
    Space Data          Hualapai & Jicarilla   4/15/2003            $1,419,500
                           Apache (AZ and NM)
    Space Data          Navajo (AZ, NM, UT)    1/12/2005               $42,260
    Total                                                           $5,804,710

    Source: FCC.

    Note: Dollar amounts have been rounded.

    At present, it is unclear what the program's long-term impact will be in
    creating a significant incentive to deploy wireless service on tribal
    lands. FCC has acknowledged that the program is underutilized by service
    providers, attributing this to economic and technical factors. Several
    industry and tribal stakeholders expressed concerns that the program has a
    limited ability to improve service on tribal lands. These stakeholders
    stated that the main problem with the program is that tribal land bidding
    credits deal with the least expensive cost element of providing wireless
    service to tribal lands: the spectrum license. In fact, they said that
    spectrum to serve tribal lands can be acquired more economically through
    spectrum leasing arrangements with other licensees than through the Tribal
    Land Bidding Credit program. In their view, the main barrier to deploying
    wireless service on tribal lands is the high cost of network
    infrastructure, such as cellular towers. During 2006, FCC will have an
    opportunity to begin reviewing the actual effect of the program. By then,
    licensees who received Tribal Land Bidding Credits in 2003 are supposed to
    have met the requirement to cover 75 percent of the tribal land area for
    which their credit was awarded.

    Indian Telecommunications Initiative

    In spring 2002, FCC established the Indian Telecommunications Initiative
    (ITI) to provide assistance to improve telecommunications services on
    tribal lands. The Initiative's strategic goals are to improve tribal
    lands' telephone subscribership rates, increase the telecommunications
    infrastructure, and inform consumers about the financial support available
    through federal programs, such as the universal service programs. ITI also
    seeks to promote understanding, cooperation, and trust among tribes,
    government agencies, and the telecommunications industry to address
    telecommunications issues facing tribal lands.

    Since its inception, ITI has organized several informational workshops to
    provide tribes and tribal organizations with information about federal
    telecommunications programs such as Enhanced Lifeline and Link-Up. ITI has
    also used these workshops to disseminate information about FCC rules and
    policies that affect the deployment of telecommunications services on
    tribal lands, such as cellular tower siting procedures. FCC senior
    officials and other staff also attend and participate in a variety of
    meetings on telecommunications issues with tribal officials. FCC has also
    distributed educational materials to tribes and tribal organizations about
    its universal service programs and other issues of interest.

    Some Issues Involving Tribes Have Arisen with Respect to Federal Universal
    Service Programs

    The implementation of universal service programs is largely the joint
    responsibility of federal and state government. However, the sovereign
    status of tribes raises unique issues and concerns. Service providers,
    tribal officials, and others have cited two specific areas of concern. One
    involves FCC's process to determine whether the FCC has jurisdiction to
    designate service providers as eligible to receive universal funds for
    serving tribal lands. A second is related to the statutory limitations of
    tying the eligibility for universal service funding under the E-rate
    program for tribal libraries to state Library Services and Technology Act
    funds.

    Designation of Eligible Telecommunications Carriers

    Some stakeholders we spoke with emphasized that deployment of services on
    tribal lands, particularly by wireless carriers, might be improved if FCC
    had a more timely process for determining its jurisdiction to designate a
    provider wanting to serve tribal lands as an Eligible Telecommunications
    Carrier (ETC). As defined by the Communications Act, service providers
    must be designated as an ETC in order to participate in FCC's universal
    service programs.30 The Act gives the individual states the primary
    responsibility for designating ETCs. Initially, the Act made no provision
    for cases where a service provider might not be subject to state
    jurisdiction, such as those operating on tribal lands. In 1997, Congress
    amended the Act by requiring FCC to determine a service provider's
    eligibility to receive federal universal service funds in cases where a
    state lacks jurisdiction to make an ETC determination.31 In response, FCC
    developed a process by which a service provider seeking ETC status for
    serving a tribal land may petition the Commission to determine whether the
    provider is subject to the state commission's jurisdiction. If the FCC
    finds that the state does not have jurisdiction, FCC can make the ETC
    determination.

    To date, FCC has received ten applications for ETC designations involving
    tribal lands. Six of the applications were from tribally-owned wireline
    service providers, and four were from non-tribally-owned wireless service
    providers.32 FCC provided the tribally-owned wireline providers with ETC
    status within a few months of their application.33 Two different
    non-tribally owned wireless service providers petitioned FCC for ETC
    designation on three separate tribal lands.34 As indicated in table 7, FCC
    granted one of these three petitions in 10 months. Another was withdrawn
    by the provider after more than three years with no FCC decision, while
    the third has been pending at FCC for more than 3 years.

    Table 7: Status of Wireless Providers' ETC Applications on Tribal Lands

        Applicant  Tribal Land To  State  Application     Resolution    Timeframe
                     Be Served               Filed
    Western     Crow           Montana August 1999  Application      3+ years
    Wireless    Reservation                         withdrawn in
                                                       June 2003
    Western     Pine Ridge     South   January 2001 Granted in       10 months
    Wireless    Reservation    Dakota               October 2001
    Smith       Navajo         Utah    May 2002     Still pending    3+ years
    Bagley Inc. Reservation
                   (Utah portion)

    Source: GAO analysis of FCC data.

    FCC has noted that determining whether a state or FCC has ETC jurisdiction
    regarding a tribal land is "a legally complex and fact specific inquiry,
    informed by the principles of tribal sovereignty, federal Indian law,
    treaties, as well as state law."35 When we asked about the long timeframes
    involved with the first and third items in table 7, FCC officials
    explained that they must conduct a case-specific inquiry for each
    application to determine whether the Commission has the authority to make
    an ETC designation. In its 2001 Western Wireless decision, FCC noted that
    it would resolve the Western Wireless ETC decision in light of the
    guidance provided by the Supreme Court in Montana v. United States, 450
    U.S. 544 (1981).36 This case sets out the guiding principle that Indian
    tribes lack jurisdiction to regulate nonmembers on the reservation, but it
    recognized

    two exceptions.37 Applying this framework to the service agreement between
    the Oglala Sioux Tribe and Western Wireless, FCC granted Western Wireless
    ETC status over its service to tribal members living within the Pine Ridge
    reservation.

    FCC has not issued any further guidance on how it will make its ETC
    decisions on tribal lands. FCC officials told us that the information
    needed to make a determination may change from application to application.
    They said that they try to complete these designations in a timely
    fashion, but applicants may not provide sufficient information, and staff
    normally dedicated to these issues may need to focus on other issues
    facing FCC. In 2000, FCC sought public comment on the creation of a
    6-month timeline for the resolution of jurisdictional issues surrounding
    an ETC designation on tribal lands.38 However, in 2003 FCC formally
    decided against creating this timeline because determining FCC's
    jurisdiction over ETC designation on tribal lands "is a legally complex
    inquiry that may require additional time to fully address."39

    Tribal Libraries' Eligibility for E-rate Funding

    Some tribal officials we spoke with emphasized the importance of tribal
    libraries as a means for members to have Internet access and expressed
    concern about their difficulty in obtaining E-rate funding for their
    libraries. Under current eligibility requirements, tribal libraries can
    apply for universal service fund support through the E-rate program
    provided they meet eligibility requirements. The Communications Act
    defines E-rate eligible libraries as those eligible for assistance from a
    state library administrative agency under the Library Services and
    Technology Act (LSTA),40 which provides federal grant funds to support and
    develop library services in the United States. LSTA has two types of
    library grants that primarily relate to governmental entities: one for
    states and one for federally recognized tribes and organizations that
    primarily serve and represent Native Hawaiians.41  To be eligible for
    E-rate funds, a tribal library must be eligible for state LSTA funds and
    not just tribal LSTA funds.

    The eligibility criterion has practical implications for tribal libraries.
    Although we did not survey all the states on this issue, officials in two
    states told us that their state laws preclude tribal libraries within
    their states from being eligible to receive state LSTA funds, which has
    the effect of making them ineligible to receive E-rate funds. Officials in
    Oklahoma said that only county and city libraries are eligible for state
    funding such as LSTA monies. Tribal libraries are not county or city
    libraries and therefore not eligible for Oklahoma's state LSTA funds. One
    former tribal librarian in Oklahoma told us that she did not apply for
    E-rate funding because the state library administrative agency provided
    her with documentation indicating that the tribe was not eligible for
    state LSTA funds. Montana officials told us that their state law also has
    similar limitations regarding tribal libraries' eligibility for state LSTA
    funds.

    The eligibility criterion also has practical implications for the E-rate
    program. Libraries applying for LSTA funds must self-certify their
    eligibility. As part of its integrity process, USAC requires a third party
    verification of the eligibility requirement. Thus, USAC verifies a
    library's eligibility for E-rate funds by asking state library
    administrative agencies to provide written certification of a library's
    eligibility for state LSTA funds.42 This process has prompted a number of
    comments from several of those we interviewed. Some tribal and state
    library agency officials noted that the current eligibility criterion
    infringes on tribal sovereignty by involving the state in tribal library
    E-rate funding. One state librarian, for example, expressed discomfort at
    being put in the position of acting on behalf of a sovereign tribe and
    expressed the strong belief that eligibility for E-rate funding should be
    a matter between the tribe and USAC, without involvement by state
    government agencies. USAC officials told us that they have received some
    E-rate applications from tribal libraries.43 In those cases, a USAC board
    member successfully worked with the states in question to obtain the
    certifications. However, USAC officials and the USAC board member
    emphasized the time-consuming nature of these resolution efforts.

    In fall 2002, FCC, USAC, and the Institute of Museum and Library Services
    (IMLS) officials met to discuss possible remedies for this situation.
    These discussions produced a consensus that a change to the E-rate
    eligibility requirement for libraries defined in the Communications Act
    could facilitate tribal libraries' eligibility for E-rate funding. These
    discussions focused on a modification to the Act that would allow tribal
    libraries eligible for funding from either a state library administrative
    agency or tribal government under the LSTA to be eligible for funding
    under the E-rate program. FCC officials told us that modifications to the
    Act would require legislative action by the Congress, because such
    modifications cannot be made by FCC through a Commission order or
    administrative proceeding.

    Multiple Barriers Exist to Improving Telecommunications on Tribal Lands

    Tribal and government officials, Native American groups, service
    providers, and other entities we interviewed cited several barriers to
    improving telecommunications on tribal lands. The two barriers most often
    cited by officials of the tribes and Alaska regional native non-profit
    organizations we interviewed were the rural location and rugged terrain of
    tribal lands and tribes' limited financial resources. The third most often
    cited barrier was a lack of technically trained tribal members to plan and
    implement improvements in telecommunications. A fourth barrier cited by
    tribal officials and other stakeholders is the complex and costly process
    of obtaining rights-of-way for deploying telecommunications infrastructure
    on tribal lands.

    Rural Location and Limited Financial Resources Were the Most Often Cited
    Barriers

    The rural location and rugged terrain of most tribal lands and tribes'
    limited financial resources were the barriers to improved
    telecommunications most often cited by officials of tribes and Alaska
    Native Villages we interviewed. These two barriers were also cited by
    representatives of service providers and federal agencies. These two
    barriers are interrelated, can deter providers from investing in
    infrastructure on tribal lands, and contribute to the low levels of
    subscribership on many tribal lands.

    Tribal lands are mostly rural and characterized by large land areas,
    rugged terrain such as mountains and canyons, low population density, and
    geographic isolation from metropolitan areas. Figure 4, from the Pine
    Ridge Indian Reservation in South Dakota, illustrates some of these
    characteristics.

    Figure 4: Wireless Tower near Kyle, South Dakota on the Pine Ridge
    reservation (April 2005)

    Generally, these factors make the cost of building and maintaining the
    infrastructure needed to provide service higher than they would be in
    urban settings. For example, more cable per customer is required over
    large, sparsely populated areas, and when those areas are mountainous, it
    can be more difficult and costly to install the cable. The Rural Task
    Force, formed by the Federal-State Joint Board on Universal Service,44
    documented the high costs of serving rural customers in a report issued in
    January 2000, which stated that the average telecommunications
    infrastructure cost per customer for rural providers was $5,000, while the
    average infrastructure cost per customer for non-rural providers was
    $3,000.45 Officials from 17 tribes and 11 Alaska regional native
    non-profit organizations we interviewed told us that the rural location of
    their tribe is a telecommunications barrier.

    Tribes' limited financial resources are also seen as a barrier to
    improving telecommunications services on tribal lands. Many tribal
    lands-including some of those we visited such as the Navajo, the Mescalero
    Apache, the Yakama and the Oglala Sioux-have poverty rates more than twice
    the national rate, as well as high unemployment rates. The 2000 U.S.
    Census showed that the per capita income for residents on tribal lands was
    $9,200 in 1999, less than half the U.S. per capita income of $21,600.
    Officials of 33 of the 38 Native American entities we interviewed told us
    that lack of financial resources was a barrier to improving
    telecommunications services. Several of these tribal officials told us
    that their tribal governments must use their tribes' limited financial
    resources on other priorities such as water and sewer lines, housing, and
    public safety. In addition, high levels of poverty on many tribal lands
    may also make it less likely that tribal residents will subscribe to those
    telephone and Internet services that are available, particularly when
    geographic barriers have increased the costs of those services. For
    example, a Yakama Nation tribal official told us that many residents
    cannot afford a computer or Internet access; some cannot even afford
    telephone service.

    These two factors, the rural location of tribal lands (which increases the
    cost of installing telecommunications infrastructure) and tribes' limited
    financial resources (which can make it difficult for residents and tribal
    governments to pay for services) can combine to deter service providers
    from making investments in telecommunications on tribal lands. This lack
    of investment can result in a lack of service, poor service quality, and
    little or no competition. With regard to a lack of service, an official
    with the Yakama Nation told us that while many tribal residents in the
    more heavily populated areas have access to telephone service, the tribe's
    service provider has not built additional infrastructure to reach less
    populated areas and has no plans to do so in the near future. A
    representative of the company that provides service to the Coeur d'Alene
    tribe told us that high-speed Internet was only available in certain areas
    of the Coeur d'Alene tribal land, that there were no immediate plans to
    expand the service area, and that there were cost issues in providing
    service to the more remote and less densely populated parts of the
    reservation. Another provider's representative told us that providing
    digital subscriber lines (DSL)46 to most parts of the Eastern Band of
    Cherokee's reservation would not be profitable because the land is rugged
    and to connect many of those who live out in remote rural areas would
    require an investment that would be difficult to justify. With regard to
    service quality, of the 38 tribes and tribal representatives we
    interviewed, 9 mentioned service quality as a barrier to improved
    telecommunications. One tribe told us that their local provider has no
    local service office and few technicians, so that the company may take
    days to repair or respond to a problem. With regard to the lack of
    competition, officers of 2 tribes told us that because there is only 1
    provider, they have no choice but to pay the prices being charged for
    services, even though they think the prices are too high.

    Lack of Technically-Trained Tribal Members Can Impede Planning and Was the
    Third Most Commonly Cited Barrier

    The third barrier most commonly cited by tribal representatives was the
    lack of tribal members trained in or knowledgeable about
    telecommunications technologies. Officials of 13 of the 38 Native American
    tribes and tribal organizations we interviewed told us that lack of
    telecommunications training and knowledge among tribal members is a
    barrier to improving their telecommunications. Some of these officials
    said they needed more technically trained members to plan and oversee the
    implementation of telecommunications improvements, as well as to manage
    existing systems. For example, one tribal official told us that he is
    currently understaffed and is running a multi-tribe wireless network with
    just one other person. Another tribal official told us that there is only
    one tribal member with formal training in telecommunications and that the
    tribe needs a well trained person to take charge of the tribe's
    telecommunications needs. An official of the Coeur d'Alene tribe, who has
    technical training, told us that the tribe does not have a sufficient
    number of technically knowledgeable staff members to develop and maintain
    needed telecommunications systems.

    The same Coeur d'Alene tribal official also told us that tribes without
    technically trained staff would be at a disadvantage in negotiating with
    service providers. This official added that having tribal members trained
    in telecommunications was necessary to ensure that a tribe's planned
    improvements included the equipment and technology the tribe wanted and
    needed. In addition, one non-tribal stakeholder mentioned that a lack of
    training prevented tribes from choosing appropriate technologies for their
    specific needs. One industry stakeholder mentioned that tribes needed a
    better understanding of the range and capacity of shared spectrum wireless
    technology so they would not be disappointed by its limitations.47 A 1995
    Office of Technology Assessment study of telecommunications on tribal
    lands stated that most Native American reservations, villages, and
    communities would benefit from developing a plan or vision of how
    telecommunications could best meet their educational, health, economic
    development, and cultural needs.48 In 1999, the Department of Commerce
    estimated that very few tribes had telecommunications plans.49 Of the 38
    tribes and tribal organizations we interviewed, 14 told us they have some
    type of technology plan and 7 more said they had a plan in development.

    Industry stakeholders also told us that having tribal staff knowledgeable
    in telecommunications policies improves the process of deploying services
    on tribal lands. One service provider told us that if tribes delegated
    telecommunications decisions to a tribal governmental committee, the
    company could provide service more effectively and efficiently. Instead,
    when a company has to bring telecommunications decisions before the full
    tribal council, the process can be very time consuming because the full
    tribal council meets infrequently and telecommunications issues are often
    not at the top of the agenda. Another provider told us that having staff
    knowledgeable in telecommunications policies and procedures, such as
    rights of way and contract issues, allows providers to more quickly and
    effectively deploy services because time is not spent negotiating over
    unfamiliar terms.

    Rights-of-Way Issues Were Also Cited as a Barrier to Improved
    Telecommunications Services on Tribal Lands

    According to several service providers and tribal officials, obtaining a
    right-of-way through Indian lands is a time-consuming and expensive
    process that can impede service providers' deployment of
    telecommunications infrastructure.50 The right-of-way process on Indian
    lands is more complex than the right-of-way process for non-Indian lands
    because BIA must approve the application for a right-of-way across Indian
    lands. BIA grants or approves actions affecting title on Indian lands, so
    all service providers installing telecommunications infrastructure on
    Indian lands must work with BIA or its contractor (realty service
    provider) to obtain a right-of-way through Indian lands.51 To fulfill the
    requirements of federal regulations for rights-of-way over Indian lands
    and obtain BIA approval, service providers are required to take multiple
    steps and coordinate with several entities during the application process.
    These steps must be taken to obtain a right-of-way over individual Indian
    allotments as well as tribal lands. Several of the steps involve the
    landowner, which could be an individual landowner, multiple landowners, or
    the tribe, depending on the status of the land. For example, the
    right-of-way process requires a) written consent by the landowner to
    survey the land; b) an appraisal of the land needed for the right-of-way;
    c) negotiations with the landowner to discuss settlement terms; d) written
    approval by the landowner for the right-of-way; and e) BIA approval of the
    right-of-way application.52

    Service providers told us that a lack of clarity in federal regulations
    for rights-of-way over Indian lands can also slow down the right-of-way
    approval process. During the right-of-way approval process, BIA has a
    responsibility to ensure that the right-of-way suits the purpose and size
    of the equipment being installed on the land. However, federal regulations
    do not have guidance or descriptions for advanced telecommunications
    infrastructure, which would assist BIA in evaluating telecommunications
    rights-of-way applications. According to a Department of the Interior
    official, descriptions and guidance for advanced telecommunications
    infrastructure are absent because the regulations were created prior to
    the advent of modern telecommunications equipment. For example, the
    federal regulations have guidance and descriptions for the size of the
    right-of-way needed and voltage levels of electrical equipment that can be
    installed for commercial purposes,53 but similar descriptions and guidance
    are not available for advanced telecommunications rights-of-way. According
    to service providers, this lack of clarity can cause grey areas for BIA
    when it attempts to classify the type of advanced telecommunications
    infrastructure the service provider intends to install and whether it is
    for commercial or residential purposes. This adds time to the right-of-way
    approval process because BIA has to determine if the regulations allow for
    the installation of the applicant's infrastructure. A BIA official
    acknowledged that portions of the federal regulations, including the
    section on telecommunications infrastructure, are outdated. As a result,
    BIA is currently revising the regulations to better apply to modern
    utility technologies, including advanced telecommunications
    infrastructure, but timeframes for completion of this work have not been
    established.

    As mentioned above, BIA requires that service providers obtain approval
    from the individual landowner or the tribe for a right-of-way. Service
    providers told us that obtaining landowner consent for a right-of-way
    across an individual Indian allotment is time consuming and expensive,
    which can delay or deter deployment of telecommunications infrastructure
    on tribal lands. For example, one service provider told us that an
    individual Indian allotment of land can have over 200 owners, and federal
    regulations require the service provider to gain approval from a majority
    of them.54 The official stated that the time and cost of this process is
    compounded by the fact that a telecommunications service line often
    crosses multiple allotments. In addition, if the service provider cannot
    obtain consent for the right-of-way from the majority of landowners, the
    provider is forced to install lines that go around the allotment, which is
    also expensive.

    Tribes Are Addressing Barriers to Improved Telecommunications in Different
    Ways

    Several tribes are moving towards owning or developing part or all of
    their own telecommunications systems to address the barriers of tribal
    lands' rural location and rugged terrain and tribes' limited financial
    resources, which can deter service providers from investing in
    telecommunications on tribal lands. These tribes are using federal grants,
    loans, or other assistance, long-range planning, and private-sector
    partnerships to help improve service on their lands. In addition, some
    tribes have addressed these barriers by focusing on wireless technologies,
    which can be less costly to deploy across large distances and rugged
    terrain. Some tribes are addressing the shortage of technically-trained
    tribal members to plan and implement improvements on tribal lands through
    mentoring and partnerships with educational institutions. To help reduce
    the time and expense required to obtain a right-of-way across tribal
    lands, one tribe is developing a right-of-way policy to make the tribal
    approval process more timely and efficient.

    Several Tribes Are Moving Towards Developing Their Own Telecommunications
    Systems to Address Multiple Barriers

    From our interviews of officials of 26 tribes and 12 Alaska regional
    native non-profit organizations, we found that 22 are addressing the need
    to improve their telecommunications services by developing or owning part
    or all of their own local telecommunications network. Some of those we
    spoke to told us that they were doing this because their provider was
    unwilling to invest in improved telecommunications services, in part due
    to the barriers of the tribe's rural location, rugged terrain, and limited
    financial resources. An additional 10 tribes told us that they have
    considered or are considering owning part or all of their
    telecommunications systems.

    Four of the 6 tribes we visited are developing their own
    telecommunications systems to address the lack of investment by
    telecommunications companies. These tribes are addressing their limited
    financial resources to fund telecommunications improvements by one of
    three methods. Two of the 4 have obtained federal funds, another has
    reduced its use of services from the current provider to help fund its own
    system, and a fourth tribe has partnered with a local business also
    adversely affected by poor telecommunications service. Two of these tribes
    also told us that they have been able to provide better service and lower
    prices than the incumbent provider because they are more concerned about
    providing service than about making a profit.

    Coeur d'Alene Tribe

    The Coeur d'Alene Tribe in Idaho is using an RUS grant to overcome its
    limited financial resources and develop its own high speed wireless
    Internet system. Tribal officials told us that the wireline service
    provider for the Coeur d'Alene Tribe had not deployed the necessary
    equipment to offer high speed Internet access to all residents on tribal
    lands because deploying the equipment was not profitable. (An official of
    the service provider told us that high speed Internet was only available
    in certain areas, that there were no immediate plans to expand the service
    area, and that there were cost issues in expanding service to the more
    remote and less densely populated parts of the reservation.) The tribe
    applied for an RUS Community Connect Broadband grant to purchase and
    deploy a wireless system to provide high-speed Internet access to all
    residents of the tribal land. This type of grant can be used for
    expenditures for a wide array of infrastructure and related needs,
    including necessary equipment that many tribal members cannot afford. For
    example, the grant allows for the purchase of equipment required to
    connect households and businesses to the wireless system, and for the
    construction of a community technology center for training and Internet
    access. The grant is being used to fund 5 towers to ensure that the
    wireless system reaches all populated Coeur d'Alene lands, as well as
    fiber optic cable, technical staff, and operational costs. The grant will
    make high-speed Internet access available to all residents at the
    Community Technology Center, shown in figure 5, at no cost, and high-speed
    Internet access to homes and businesses will be available for purchase.
    The grant will also provide tribal members training in computer use and
    maintenance. Tribal officials told us that after the first 2 years of
    operation, they expect to earn sufficient revenue from system subscribers
    to fund needed maintenance and improvements.

    Figure 5: Coeur d'Alene Community Technology Center (April 2005)

    Mescalero Apache

    The Mescalero Apache in New Mexico used RUS loans to overcome financial
    barriers and establish their own telecommunications company. The tribe
    also borrowed equipment from an equipment manufacturer until it was able
    to purchase its own. Tribal officials told us that their former service
    provider had not invested adequate funds in the telecommunications network
    on Mescalero Apache tribal lands to provide high quality voice or data
    services. They added that, as a result, telephone service was poor and
    high quality voice and data services, such as Internet access, were not
    widely available. The Mescalero Apache Tribal Government purchased the
    telecommunications network from the local telephone company that had been
    providing service on the tribal land. The tribe formed Mescalero Apache
    Telecommunications, Inc. (MATI) to develop this network and directed the
    company to focus on providing services to all Mescalero Apache lands and
    not just on maximizing profit. MATI then rebuilt the system, putting in
    more than 1,000 miles of fiber-optic cable and providing high-speed
    Internet access as well as local and long distance telephone service.
    According to a MATI official, telephone and high-speed Internet access,
    such as DSL, are now nearly universally available within reservation
    boundaries. MATI has deployed various high-speed Internet access services
    to tribal businesses and schools. Figure 6 shows the Mescalero Apache
    School computer lab which utilizes MATI-provided Internet connectivity.

    Figure 6: Computer Lab at the Mescalero Apache School (April 2005)

    Yakama Nation

    The Yakama Nation in Washington established a long-range plan to overcome
    its financial barriers by using funds saved over the past few years
    through reduction of the tribal government's use of telecommunications
    services from its provider. The tribe is using these savings to develop
    its own telecommunications system to provide telephone and high-speed
    Internet access. The tribe is also using monies from the negotiation of
    utility rights-of-way. The tribal government made the decision to develop
    its own telecommunications company several years ago, partly in response
    to the increase in monthly telecommunications charges levied by the local
    provider, which raised the tribe's annual cost from $275,000 to $325,000.
    At that time, the tribe put together a long-range plan that required the
    tribe to reduce its use of the current provider's services, and use the
    resulting savings to develop its own system. A tribal official told us
    that long-range financial planning and careful budgeting have been
    important to the tribe's success and that infrastructure has been
    purchased or installed each year based on what the tribe could afford.
    Since 1998, the tribe has used annual savings from reduced telephone
    services and funds from other services to establish a telecommunications
    company, and then purchase related equipment. The tribe was able to
    purchase this fiber optic cable at 25 percent of its retail price and
    negotiated with a local contractor to install the fiber at a price far
    below the market rate. The tribe plans to sell the equipment necessary to
    connect to the new telecommunications system to tribal members and tribal
    businesses.

    Eastern Band of Cherokee

    The Eastern Band of Cherokee in North Carolina overcame financial barriers
    by partnering with another local business to build a fiber optic cable
    network throughout and beyond its tribal lands to provide high-speed
    Internet access and transport. The Eastern Band of Cherokee's tribal lands
    are located in the Smokey Mountains and are geographically isolated from
    major metropolitan areas that have Internet access points. As a result, it
    is expensive to connect infrastructure in the area to the nearest
    high-speed Internet access points. A tribal official told us that the
    tribe's service provider did not expand or upgrade the telecommunications
    infrastructure on tribal lands because the provider did not find the
    additional investment in infrastructure to be profitable. (The provider
    representative told us that providing DSL to most parts of the reservation
    would not be profitable as the land is rugged and rural, and to connect
    many of those who live out in remote rural areas would require an
    investment that would be difficult to justify.) A tribal official told us
    that one example of the poor service quality is an outage that occurred
    within the past year. All communications services were unavailable for 48
    hours in 6 counties because a cut was made in the company's copper wire.
    Since the system has no backup provision, there was no service until the
    cut was repaired. The Cherokee told us their casino lost millions of
    dollars during the outage, and that the loss for the region as a whole was
    estimated at $72 million. To improve service and offer residents on tribal
    lands high-speed Internet access, the tribe partnered with a local
    corporation that provides electronic income tax filing services, and had
    also suffered financial loss from the recent outage. Together, the tribe
    and the corporation are constructing a fiber optic cable network, both on
    and off tribal lands. Figure 7 shows fiber being deployed for this
    network. The Eastern Band of Cherokee and their partner have formed a
    company that will act as both a wholesaler and a retailer of
    telecommunications services. A company official told us that because of
    the cost of putting in the fiber and the low density of the service area,
    a private, for-profit company would never have made this level of
    investment. Officials of the tribe and the company told us that the tribe
    will use its ownership in these networks and future planned deployment of
    cable and wireless infrastructure to ensure that all residents of tribal
    lands can receive high-speed Internet, VoIP (Voice over Internet
    Protocol), and

    other information and content applications at costs and quality levels
    comparable to or better than metropolitan areas.55

    Figure 7: Fiber Deployment on Eastern Band of Cherokee Reservation (April
    2005)

    Some Tribes Have Focused on Wireless Technologies to Address Barriers of
    Rural Location and Rugged Terrain and Limited Financial Resources

    Several tribes we interviewed have focused their efforts on wireless
    technologies to help address the barriers of tribal lands' rural, rugged
    location and tribes' limited financial resources, with funding for these
    efforts coming from both public and private sources. Service providers and
    equipment manufacturers told us that wireless service is often less
    expensive to deploy across large distances than wireline service because
    wireless infrastructure, such as a tower, is less expensive to deploy than
    a wireline infrastructure.

    Examples of tribes focusing on wireless technologies include the
    following:

    o Several tribes have deployed shared spectrum wireless networks to
    provide high-speed Internet access.56 For example, the Southern California
    Tribal Chairman's Association (SCTCA), a consortium of 17 federally
    recognized tribes, received a grant from a private foundation to establish
    a wireless network, called the Tribal Digital Village Network (TDVNet), to
    provide high-speed Internet access to all 17 tribes. SCTCA tribes are
    located in Southern California in remote and hilly terrain and scattered
    across 150 square miles. In addition to its low cost, TDVNet utilizes
    shared spectrum technologies because the equipment can operate on solar
    power. This is particularly important in remote areas where electrical
    power may not be available. TDVNet staff are also developing Voice over
    Internet Protocol (VoIP) capabilities to provide telephone service over
    high-speed Internet access in those tribal communities where the
    deployment of wireline service is cost prohibitive. The Coeur d' Alene and
    the Washoe Tribe of Nevada and California are deploying similar networks.

    o Service provider officials in Alaska told us that satellite
    telecommunications systems are the only telecommunications options to
    provide telephone service for many Alaska Native Villages because the vast
    distances from these areas to existing infrastructure make wireline
    systems too expensive to install.57 A major Alaska service provider is
    utilizing a combined satellite and shared spectrum wireless network to
    extend high-speed Internet access to many Alaska Native Villages.

    In addition, 2 tribes we visited addressed their need for improved
    telecommunications services by encouraging wireless companies to compete
    with wireline providers for customers on their lands. In both cases, the
    wireless companies have obtained status as an ETC and are able to obtain
    universal service funds, particularly the High Cost Fund and Enhanced
    Lifeline and Enhanced Linkup, to profitably provide service in these
    areas.

    Oglala Sioux

    The Oglala Sioux in South Dakota encouraged a wireless company to provide
    service in the area in order to improve services and reduce the cost of
    telephone service to the tribal land customers. According to tribal and
    wireless service provider officials, the key to developing this solution
    was the wireless provider's ability to use universal service funds to help
    subsidize the costs of its network and offer discounted telephone service
    to tribal land residents. To access universal service funds, the wireless
    provider, with consent from the tribe, applied to FCC for ETC status,
    which was granted in 2001, enabling the wireless provider to access
    universal service funds. The tribe also worked with the provider to create
    an expanded local calling area that included all areas of the reservation
    and the town of Rapid City, South Dakota. According to a tribal official,
    the addition of Rapid City, South Dakota, as part of the local calling
    area was an important cost-saving measure for the tribe because a
    significant number of Oglala Sioux live in the Rapid City area.

    According to tribal and service provider officials, this wireless service
    allows tribal members to reach public safety services from nearly any
    location on tribal lands. A tribal official said that this is particularly
    important due to the tribe's large land area, remote location, and the
    summer and winter weather extremes in the area. The tribal official also
    told us that the wireless provider initially anticipated having about 300
    customers on the Oglala Sioux's Pine Ridge Indian Reservation land, but
    had about 4,000 customers within 1 year of offering service.

    Navajo Nation

    The Navajo government has encouraged 2 wireless providers to offer
    services on Navajo lands in competition with wireline providers. The
    Navajo Nation encourages providers to deploy wireless telecommunications
    networks because providing wireline telecommunications throughout the
    Navajo Nation is cost prohibitive due to the tribe's large land area,
    which is about the size of West Virginia. Census data indicate that
    residents on Navajo lands in Arizona, New Mexico, and Utah are among the
    most economically distressed groups in the United States. Tribal officials
    told us that competition is the best method to lower prices and improve
    services. One wireless provider has been able to access universal service
    funds to make service more affordable. Officials from wireless companies
    told us that access to universal service program funds combined with the
    use of less costly wireless technologies provides a viable business case
    for entry onto Navajo lands.

    Some Tribes Are Addressing the Need for More Technically-Trained Tribal
    Members Through Mentoring and Partnerships

    Some tribes we visited discussed ways they were developing technical
    expertise in telecommunications, while others spoke of the importance of
    the technical expertise they had, particularly in helping them plan for
    telecommunications improvements.

    Addressing Need for More Technically-Trained Tribal Members

    Tribal, industry, and government stakeholders said that training in
    telecommunications technologies provides tribal members with some of the
    necessary skills to operate the tribes' own telecommunications networks.
    Several tribal officials told us that having staff with the technical
    expertise necessary to plan and manage telecommunications improvements was
    critical to their efforts. However, less than half of the tribal officials
    we interviewed told us that their tribes have developed telecommunications
    plans or estimated the cost of planned improvements.

    One tribe that has taken steps to get needed technical training is the
    Coeur d'Alene Tribe. The tribe plans to provide two colleges with access
    to its new high-speed Internet system in exchange for distance learning
    classes and technical training. Similarly, the Yakama Nation has proposed
    to connect a local university to its telecommunications system in exchange
    for technical training for its staff. A Yakama official emphasized that
    having trained staff to manage and maintain the telecommunications system
    once it is operational is very important, and the tribe determined that
    this kind of exchange with a local university would help provide the staff
    with the necessary training.

    The Mescalero Apache Tribe has improved its technical capacity by hiring
    technically trained staff, and has created a technical mentoring program.
    MATI hired tribal and non-tribal members to operate its telephone company.
    Although about half of MATI's staff consists of non-tribal members, tribal
    officials expect to hire more tribal members as they receive the necessary
    training. Many of the employees who are not tribal members are experienced
    and technically proficient. MATI has created a mentoring program
    partnering the experienced and technically trained employees with newer
    employees. The goal is to create a self-sufficient tribal staff with the
    knowledge to understand and operate a telecommunications network. In
    addition, the company offers technical consulting services to other tribes
    that are interested in providing their own telecommunications network.

    MATI also hosts an annual telecommunications conference for tribes and
    municipal governments to inform them about the basics of
    telecommunications finance and technology. In addition, MATI has used its
    technical expertise to explore new ways to deploy telecommunications
    services. Figure 8 shows MATI's Voice over Internet Protocol service
    platform that it utilizes as a means to send voice conversations over the
    Internet.

    Figure 8: MATI's Voice over Internet Protocol Equipment (April 2005)

    To address the current lack of computer and Internet knowledge among its
    tribal members, the Coeur d'Alene Tribe plans to provide training and
    Internet access at the Community Technology Center as long as their budget
    permits. Those attending training will be assisted by the recently hired
    technical staff in repairing and refurbishing computers that belonged to
    tribal offices, and will be allowed to keep the computers for home use
    once the work is complete. The Yakama Nation and Eastern Band of Cherokee
    also plan to train tribal members in computer and Internet use at an
    existing tribal technology center.

    Using Technical Expertise for Effective Planning

    Officials of several tribes told us that having staff with technical
    expertise was critical to their efforts to plan their telecommunications.
    For example, a tribal official of the Rincon Band of Luiseno Mission
    Indians of the Rincon Reservation, told us that a tribal member with
    technical knowledge determined the need for improved Internet access and
    identified the appropriate technology (wireless broadband). He also
    identified a funding opportunity to bring high-speed Internet access to 17
    Southern California tribes, most of which did not have Internet access
    because of geographic barriers and prohibitive infrastructure costs.

    Officials of 14 of the 38 tribes and tribal organizations we interviewed
    told us that they have developed a technology plan. An official of the
    Coeur d'Alene Tribe told us that plans are important to ensure that tribes
    have selected technologies that are appropriate for their tribal needs and
    geography. All 6 of the tribes we visited are taking actions to improve
    their telecommunications based on plans they developed.

    Most of the tribal officials we interviewed told us that their tribes do
    not have cost estimates for improving telecommunications. The Coeur
    d'Alene tribal official told us that determining the cost of new systems
    and making plans to pay for these improvements is important. This official
    added that plans should not only include information about how to finance
    the system, but should also describe the means to pay for training of
    staff so they will have the technical expertise required to maintain and
    manage the current or proposed system. For example, Yakama Nation and
    Coeur d'Alene tribal officials stated that they designed
    telecommunications systems that will produce revenue from customers
    sufficient to pay for improvements, maintenance, and technically trained
    staff.

    One Tribe is Developing a Right-of-Way Policy to Make the Tribal Approval
    Process More Timely and Efficient

    Navajo Nation officials and service providers told us that the Navajo
    Nation's right-of-way approval process is time consuming and expensive,
    which has delayed or deterred the deployment of telecommunications
    infrastructure on Navajo land. For example, an official from one service
    provider told us that this tribal approval process impedes service because
    the timeline for obtaining tribal council approval varies for each
    right-of-way application, tribal departments can differ on the goals and
    price of the right-of-way, and it takes extra time for these departments
    to reach consensus. A Navajo official agreed that their right-of-way
    processes can delay deployment of telecommunications infrastructure and
    increase its cost because timelines vary for each application. Another
    official told us that a major reason for this slow process is that tribal
    entities involved in Navajo's internal rights-of-way process have
    different opinions on the goals and price of telecommunications
    rights-of-ways. For example, some tribal officials expect high up-front
    rights-of-way fees based on their experiences for granting rights-of-way
    for natural resources like coal, which would typically produce a higher
    revenue stream than telecommunications.58

    To address this issue, Navajo officials are developing an approach to
    reduce the time and expense required to obtain tribal consent for a
    telecommunications right-of-way across their land. The Navajo Nation
    Telecommunications Regulatory Commission (NNTRC) has drafted a policy to
    streamline tribal consent for telecommunications rights-of-way. (Figure 9
    shows the NNTRC's headquarters in Window Rock, Arizona.) One of NNTRC's
    functions is to decrease the barriers service providers encounter while
    deploying telecommunications infrastructure on the land. Through
    information gathering sessions between commissioners and service
    providers, the commission determined that the Navajo process for the
    approval of telecommunications rights-of-way needed to be changed because
    the deployment of telecommunications services was being delayed. In order
    for NNTRC to make changes to the Navajo right-of-way process, the Tribal
    Council first granted NNTRC full authority over telecommunications issues,
    such as rights-of-way for telecommunications infrastructure.

    Figure 9: NNTRC's headquarters in Window Rock, AZ (April 2005)

    To address the barriers service providers encounter with the Navajo
    right-of-way process, NNTRC drafted a policy that grants NNTRC the sole
    responsibility for providing tribal approval for a right-of-way. This
    would allow "one stop shopping" for the service providers, who would no
    longer have to coordinate with multiple tribal departments and offices.
    According to a Navajo official, this policy is currently being reviewed
    for approval by several of their tribal government departments. Following
    this approval process, NNTRC intends to implement this policy.

    In addition, NNTRC officials stated that there is a more feasible price
    structure for telecommunications rights-of-way that better reflects the
    market value of telecommunications rights-of-way. This price structure
    would include an upfront payment covering the market value of the land
    plus an additional percent of future earnings from the equipment. The
    officials told us that this type of arrangement would assist the service
    provider's business case because the provider would have to release less
    capital in the beginning of the project, while offering telecommunications
    services to Navajo residents. Once the infrastructure begins to produce a
    revenue stream and has a viable business case, the Navajo Nation would
    receive a percentage of these funds for the life of the infrastructure.

    Conclusions

    Under the principles of universal service, as established by Congress, FCC
    has recognized the need to promote telecommunications deployment and
    subscribership on tribal lands. Despite improvements in both deployment
    and subscribership of telecommunications services, as of 2000, Native
    Americans on tribal lands still lag significantly behind the rest of the
    nation. The underlying cause of this problem is difficult to determine
    because of a paucity of current information about both deployment and
    subscribership of telecommunications for Native Americans on tribal lands.
    Moreover, this lack of adequate data makes it difficult for FCC and
    Congress to assess the extent to which federal efforts designed to
    increase telecommunications deployment and subscribership on these lands
    is succeeding.

    One difficulty we found relates to a statutory provision in the
    Communications Act which precludes some tribal libraries from benefiting
    from a universal service program. The current statutory provision does not
    allow tribal libraries to obtain E-rate funding for libraries unless the
    tribal library is eligible for assistance from a state library
    administrative agency under LSTA. In at least two cases, tribes have not
    applied for E-rate funds because their tribal libraries are not eligible
    for state LSTA funds. However, FCC has stated that it cannot modify the
    eligibility criteria in the statute. Clarifying this issue could help
    bring high-speed Internet access to more residents of tribal lands through
    their tribal libraries.

    In reviewing how some tribes are addressing barriers to improving
    telecommunications services on tribal lands, we found that tribes took a
    variety of approaches for addressing these barriers, suggesting that
    flexibility in planning and implementing telecommunications improvements
    on tribal lands is important. Because circumstances vary widely, we do not
    know the extent to which other tribes and Alaska Native Villages may be
    able to benefit from the experiences of these six. However, given that
    many tribes and Alaska Native Villages face similar barriers, policy
    makers working to assist tribes and Alaska Native Villages in improving
    telecommunications may want to consider the approaches employed by these
    tribes.

    Matters for Congressional Consideration

    Congress should consider directing FCC to determine what additional data
    is needed to help assess progress toward the goal of providing access to
    telecommunications services, including high-speed Internet, for Native
    Americans living on tribal lands; determine how this data should regularly
    be collected; and report to Congress on its findings.

    To facilitate Internet access for tribal libraries, Congress should
    consider amending the Communications Act of 1934 to allow libraries
    eligible for Library Service and Technology Act funds provided by the
    Director of IMLS to either a state library administrative agency or to a
    federally recognized tribe to be eligible for funding under the E-rate
    program.

    Agency Comments

    We provided a draft of this report for comment to BIA, the Census Bureau,
    NTIA, FCC, General Services Administration, Institute of Museum and
    Library Services, and RUS. BIA provided written comments, presented in
    appendix IV, stating that BIA recognized the need to update its
    rights-of-way regulations to include advanced telecommunications
    infrastructure, and is working to include this in its trust related
    regulations. BIA stated that it will issue a Rights-of-Way Handbook in
    March 2006, to ensure consistent application of existing regulations. RUS
    and the General Services Administration responded that they had no
    comments. The Institute of Museum and Library Services provided written
    comments, found in appendix V, stating that the report accurately
    reflected its understanding of the relevant issues and concerns. NTIA
    offered technical comments, as did the Census Bureau and FCC, which we
    have incorporated where appropriate. In the draft report, we recommended
    that the Chairman of the Federal Communications Commission direct FCC
    staff to determine what additional data is needed to help assess progress
    toward the goal of providing access to telecommunications services,
    including high-speed Internet, to Native Americans living on tribal lands;
    determine how this data should be regularly collected; and report to
    Congress on its findings. In oral comments responding to our
    recommendation, FCC agreed that additional data is needed to help assess
    progress toward the goal of providing access to telecommunications
    services, including high-speed Internet. However, FCC did not agree that
    it is the organization best positioned to determine the data needed in
    this context, noting that other federal agencies and departments possess
    expertise and more direct authorization to determine whether and what
    economic and demographic data are needed to support policy making. In view
    of FCC's disagreement with our recommended action, we have made it a
    matter for Congressional consideration. We continue to believe that FCC,
    as the agency responsible under the Communications Act for the goal of
    making available, as far as possible, telecommunications at reasonable
    charges to all Americans, is the appropriate agency to determine what data
    is needed to advance the goal of universal service and support related
    policy decisions-especially for Native Americans on tribal lands who
    continue to be disadvantaged in this regard.

    As agreed with your offices, unless you publicly announce the contents of
    this report earlier, we plan no further distribution of it until 30 days
    after the date of this letter. At that time, we will send copies of this
    report to the appropriate congressional committees, tribal organizations
    and governments, Bureau of Indian Affairs, Census Bureau, Economic
    Development Administration, Federal Communications Commission, General
    Services Administration, Indian Health Service, Institute of Museum and
    Library Services, National Science Foundation, National Telecommunications
    and Information Administration, Rural Utilities Service, Universal Service
    Administrative Company, and the Director of the Office of Management and
    Budget. We will make copies available to others upon request. In addition,
    this report will be available at no cost on the GAO web site at
    http://www.gao.gov . If you have any questions about the report, please
    contact me at (202) 512-2834 or goldsteinm@gao.gov . Contact points for
    our Office of Congressional Relations and Public Affairs

    may be found on the last page of this report. GAO staff who contributed to
    this report are listed in appendix VI.

    Mark L. Goldstein Director, Physical Infrastructure Issues

    Scope and Methodology Appendix I

    The objectives of this report were to determine: 1) the status of
    telecommunications subscribership (telephone and Internet) for Native
    Americans on tribal lands in the lower 48 states and Alaska; 2) federal
    programs available for improving telecommunications services on tribal
    lands; 3) the barriers that exist to improving telecommunications on
    tribal lands; and 4) how some tribes have addressed these barriers.

    To respond to the objectives of this report, we gathered information from
    a variety of sources. Specifically, we gathered information by (1)
    reviewing material relevant to telecommunications on tribal lands from
    federal, state, Native American, academic, non-profit, and private
    sources; (2) interviewing federal and state regulatory agency officials;
    (3) interviewing officials of national and regional Native American
    organizations; (4) interviewing officials of telecommunications provider
    and equipment manufacturer organizations; (5) conducting telephone
    interviews of tribal officials on 26 tribal lands and 12 Alaska regional
    native non-profit organizations; and (6) making site visits to six tribal
    lands.

    To provide information on the status of telecommunications subscribership
    for Native Americans on tribal lands in Alaska and the lower 48 states, we
    analyzed data from the 2000 decennial census. To determine telephone
    subscribership, we used Census 2000 data product, American Indian and
    Alaska Native Summary File. This summary file includes tabulations of the
    population and housing data collected from a sample of the population
    (within most Native American and Alaska Native areas, 1 in every 2
    households). In these areas, there must be at least 100 people in a
    specific group, including Native American and Alaska Native tribal
    groupings, before data will be shown. In our analysis of this 2000 Census
    data we did not include Native individuals or households located in
    Oklahoma Tribal Statistical Areas (OTSA). OTSAs are statistical entities
    identified and delineated by the Census in consultation with federally
    recognized Native American tribes in Oklahoma that do not currently have a
    reservation, but once had a reservation in that state. Boundaries of OTSAs
    are those of the former reservations in Oklahoma, except where modified by
    agreements with neighboring tribes for data presentation purposes. We also
    excluded all other tribal lands in the Census 2000 data that were not
    federally recognized. As a result of these exclusions and the Census
    reporting threshold, the data show 198 lower 48 tribal lands and 131
    Alaska Native Villages for people who indicated their race, alone or in
    combination, as American Indian and/or Alaska Native. We assessed the
    reliability of the data from the Census Bureau by interviewing
    knowledgeable agency officials about data collection methods, particularly
    those pertaining to collection of data on tribal lands, reviewing existing
    documentation on Census data, and conducting electronic testing of the
    data. We determined that the data were sufficiently reliable for the
    purposes of this report.

    To determine the status of Internet subscribership on tribal lands, we
    spoke to the Census Bureau about the Current Population Survey (CPS). The
    CPS is a monthly survey of households conducted by the Census Bureau for
    the Bureau of Labor Statistics, and is designed primarily to produce
    national and state estimates for characteristics of the labor force. To
    obtain national and state estimates on Internet subscribership rates,
    supplemental questions on Internet and computer use have been added to the
    CPS questionnaire. However, the CPS sample cannot provide reliable
    estimates of Internet subscribership on tribal lands.

    To determine the availability of federal programs that improve
    telecommunications on tribal lands, we interviewed agency officials from
    the Federal Communications Commission (FCC), the Universal Service
    Administrative Company (USAC), the Rural Utilities Service (RUS), the
    National Telecommunications and Information Administration (NTIA), the
    Bureau of Indian Affairs (BIA), the Economic Development Administration
    (EDA), the Indian Health Service (IHS), the Institute of Museum and
    Library Services (IMLS), the National Science Foundation (NSF) and the
    General Services Administration (GSA). To determine the funding amounts
    for these programs, we reviewed annual federal budget data and agency
    documents. To learn about FCC programs targeted to tribal lands, we
    interviewed tribal officials, FCC staff, and service providers. To learn
    the amount of funds disbursed and number of program subscribers for
    Enhanced Lifeline and Enhanced Linkup, we obtained information from the
    Universal Service Administrative Company. To assess the reliability of the
    FCC's data for the Enhanced Lifeline and Enhanced Linkup programs, we
    interviewed agency officials knowledgeable about the data and the systems
    that produced them. The FCC does not track this information by tribal
    lands; however, we determined that the data were sufficiently reliable to
    present the total amount of money disbursed by year and the total number
    of subscribers to these programs by year.

    To assess the reliability of FCC's data on Tribal Land Bidding Credits, we
    interviewed agency officials knowledgeable about the data and the systems
    that produced them. We determined that the data were sufficiently reliable
    for the purposes of our report.

    To learn what barriers exist to improve telecommunications services on
    tribal lands, we analyzed information from various federal agencies, such
    as the Census Bureau, FCC, the Department of Commerce, as well as reports
    from a private foundation, the Benton Foundation and a national tribal
    organization, the National Congress of American Indians. We reviewed two
    previous studies of telecommunications technology on tribal lands. We also
    reviewed testimony from hearings before the Senate Committee on Indian
    Affairs and the House of Representatives Committee on Financial Services
    and Committee on Resources. We conducted interviews with national and
    regional tribal organizations, major local service providers, selected
    wireless equipment manufacturers, and non-profit organizations that have
    contributed to improving telecommunications on tribal lands. Finally, we
    conducted interviews with officials of 26 tribes and 12 Alaska regional
    native nonprofit organizations.

    We selected officials of tribal lands for interviews by first separating
    the Alaska Native Villages from the federally recognized reservations in
    the lower 48 states because telecommunications infrastructure in Alaska
    differs from that of the lower 48 due to Alaska's weather and terrain. To
    learn about the barriers facing Alaska Native Villages and the efforts to
    overcome them, we interviewed officials from 12 Alaska regional native
    nonprofit organizations. To learn about the barriers facing tribes in the
    lower 48 states, we interviewed tribal officials from a total of 26 of the
    more than 300 tribal lands of the lower 48 states, selected by using
    demographic and economic indicators from both 1990 and 2000 Census data
    for natives and nonnatives, as well as information from various reports,
    studies and testimonies on individual tribal efforts to improve
    telecommunications.

    To select tribes in the lower 48 states to interview, we focused on the
    larger and more populated tribal lands in the lower 48 states, using
    Census data to select those tribes with populations over 100 persons and
    those tribal lands larger than one square mile. We also excluded tribal
    lands for which there was no 1990 Census data because without this data we
    could not identify change in telephone subscribership rates from 1990 to
    2000. We then grouped the remaining tribal lands into 8 population
    categories, ranging in size from over 30,000 to under 500. Having
    postulated that the major barriers to increased telephone subscribership
    might be associated with poverty, geographic isolation, and lack of
    technical skills, we used the 1990 and 2000 Census data to determine for
    each of these tribal lands the percent of the population at or below the
    poverty level, the mileage of tribal lands from the closest population
    center of over 15,000, the percent of those over 25 without a high school
    diploma, and the change in telephone subscribership rate from 1990 to
    2000. We selected tribal lands from each of the 8 population groups with a
    range of scores on the above described criteria. Within the group of
    tribal lands that met the above criteria, we also strove to select tribal
    lands, where possible, from different geographic regions of the county.
    Using this methodology, we selected 21 tribal lands for interview. We used
    data from the 1990 and 2000 decennial censuses' American Indian and Alaska
    Native summary file.

    In addition to the 21 tribal lands selected, we also selected five tribal
    lands that had made efforts to improve telecommunications. We learned
    about these tribes from our analysis of documents from FCC, a national
    tribal organization, scholars and nonprofit organizations, as well as from
    our interviews with tribes, tribal organizations, service providers and
    equipment manufacturers. Tribes' efforts included establishing tribally
    owned telecommunications companies, introducing new technologies to
    provide Internet access, developing programs to provide technical training
    for tribal members, and establishing a tribal regulatory agency to improve
    telecommunications, including the rights-of-way processes on tribal land.

    The telephone interviews conducted with officials from these 26 tribal
    lands and 12 Alaska regional native nonprofit organizations covered topics
    such as which companies provide wireline and wireless telephone service
    and Internet access on tribal lands; what factors contributed to any
    change in telephone subscribership rates from 1990 to 2000 (as derived
    from Census data); any barriers tribes faced in improving
    telecommunications services on tribal lands; how those barriers had been
    addressed; tribes' experience with applying for various federal programs
    and with providers seeking Eligible Telecommunications Carrier status or
    applying for Tribal Lands Bidding Credits.

    Based on our analysis of the compiled research and interviews, we
    determined that tribes faced barriers in one or more of the following four
    categories: financial, geographic, technical, or rights-of-way. From our
    interviews, we identified 11 tribes as potential candidates for site
    visits because they were confronting one or more of these four barriers,
    had made progress in improving telecommunications services on their lands,
    and as a group, represented a range of population and tribal land sizes,
    as well as geographic locations. We then selected 6 of these tribes for
    site visits, assuring that, as a group, they represented all of the
    identified barriers and were located in different geographic regions of
    the lower 48 states. In addition to interviewing tribal officials at the
    six sites we visited, we also interviewed officials of some of the
    companies that provided telecommunications service to those sites
    regarding their views about the barriers to improving telecommunications
    services on tribal lands.

    We conducted our audit work from August 2004 through December 2005 in
    Washington, D.C., and at the Coeur D'Alene Tribe of the Coeur D'Alene
    Reservation, Idaho; Confederated Tribes and Bands of the Yakama Nation,
    Washington; Eastern Band of Cherokee Indians of North Carolina; Oglala
    Sioux Tribe of the Pine Ridge Reservation, South Dakota; Mescalero Apache
    Tribe of the Mescalero Reservation, New Mexico; and Navajo Nation in
    Arizona, New Mexico, and Utah. Our work was conducted in accordance with
    generally accepted government auditing standards.

    List of Tribes, Alaska Regional Native Nonprofit Organizations, and Other
    Groups Interviewed Appendix II

    Source: GAO.

    Six Tribes' Efforts to Address Telecommunications Barriers Appendix III

    We visited six tribes-the Coeur d'Alene of Idaho, the Yakama of
    Washington, the Eastern Band of Cherokee of North Carolina, the Mescalero
    Apache of New Mexico, the Oglala Sioux of South Dakota, and the Navajo of
    Arizona, New Mexico, and Utah-to determine how they approached their
    particular barriers to improving their telecommunications services. These
    tribes vary in size, geography, and other characteristics. In addition, we
    discussed approaches to overcoming barriers with officials of other
    tribes, service providers, and other entities, and found that tribes use
    numerous approaches to overcome the barriers they face. The approaches
    taken by a tribe often address more than one barrier.

    The Coeur d'Alene Tribe Developed a System to Provide High-Speed Internet
    Access for Tribal Residents Using an RUS Grant

    The Coeur d'Alene, whose tribal lands cover 523 square miles in northern
    Idaho, used an overall strategy of developing the tribe's own system to
    provide high-speed Internet access for tribal members. Within this
    telecommunications strategy, the tribe's particular approaches included
    applying for and obtaining an RUS grant, negotiating for rights-of-ways,
    and developing technical expertise.

    Background

    The Coeur d'Alene's tribal lands are located about 27 miles from Coeur
    d'Alene, Idaho, the nearest population center of 15,000 or more
    inhabitants. According to the 2000 Census, 1,303 Native Americans were
    living on the Coeur d'Alene lands. The estimated per capita income for
    Native Americans on Coeur d'Alene lands was $10,267, or less than half the
    national estimate of $21,587, while the poverty level was 28 percent, 15.6
    percent above the national estimate of 12.4 percent. The unemployment
    level was 18 percent, or 12.2 percent above the national unemployment
    level of 5.8 percent.

    Barriers

    According to tribal officials, the tribe's major barriers to improved
    telecommunications services included the following:

    Financial: Many tribal residents are poor and a tribal official said many
    cannot afford high-speed Internet service. This official told us that the
    Coeur d' Alene face an underemployment problem, as many people are
    employed but are paid low wages and have little money to spend on
    communications services. This official also told us that in addition, the
    tribe itself does not have the funds to pay for telecommunications
    equipment and services for its residents.

    Geographic: Service providers have not expanded the telecommunications
    infrastructure across the tribe's lands or upgraded the infrastructure to
    provide high-speed Internet access, partly because the large land area
    consisting of hilly and mountainous terrain makes expansion of the
    infrastructure expensive. According to a Coeur d'Alene tribal official,
    service providers determined that the cost of infrastructure expansion or
    improvement was too great to offer service to a limited number of tribal
    land residents, many of whom could not afford high speed Internet access.

    Lack of tribal technical capacity: A tribal official told us that the
    tribe does not have a sufficient number of technically knowledgeable staff
    members to develop and maintain needed telecommunications systems.

    Rights-of-way: This became an issue for the tribe after it decided to put
    up its own wireless system. Tribal officials told us that they could not
    afford to pay the prices asked by some landowners and residents within
    reservation boundaries for rights-of-way to locate equipment on their
    land.

    Approaches

    To obtain better telecommunications services, the tribe decided to develop
    its own telecommunications system that would offer high-speed Internet
    access to all residents. One of the tribal members who had received
    technical training and was knowledgeable about high-speed Internet access
    determined that such access was possible at affordable rates and that the
    tribe's large and rugged land area made a wireless system the least
    expensive choice. According to a tribal official, high-speed Internet
    access will improve access to business and educational opportunities,
    telemedicine services, and better enable the tribe to preserve its
    language and history.

    Since the tribe did not have sufficient funds to develop a
    telecommunications system on its own, the technically trained tribal
    member applied for an RUS Community Connect grant. This type of grant can
    be used for expenditures for a wide array of infrastructure and related
    needs, such as household and business connection equipment as well as the
    construction of a community technology center. In May 2003, the tribe was
    awarded a $2.8 million grant that will be used to pay for five towers,
    fiber optic cable, equipment to send and receive wireless signals for all
    tribal households and businesses, technical staff to deploy and operate
    the system for 3 years, operational costs, and the community technology
    center. As of July 2005, the system was complete and operating. The
    technically trained tribe member is now managing the system.

    Once the tribe received the grant, it had to overcome the barriers of 1)
    obtaining rights-of-way in order to locate equipment and 2) developing a
    technically knowledgeable staff to eventually operate the planned system.
    Rather than paying for rights-of-way across private land, the tribe
    acquired the rights-of-way they needed for access roads and equipment in
    exchange for connections to the system. To address the current lack of
    technical knowledge among tribal residents, the tribe is working with two
    local colleges to increase its technical knowledge. The tribe is offering
    the college access to its new broadband system in exchange for distance
    learning classes and technical training. The tribe has also made plans to
    receive technical training from the Mescalero Apache Tribe, which owns its
    own system and provides training in telecommunications. In addition, to
    increase interest among tribal members in Internet access and computer
    usage, the tribal government plans to provide tribal members with training
    and Internet access at the tribe's community technology center for as long
    as its budget will allow. Those attending training will be assisted by the
    recently hired technical staff in repairing and refurbishing computers
    that belong to the tribe and are no longer needed. They will be allowed to
    keep the computers for home use once the work is complete.

    Services are being offered for free for 2 years to the Benewah Medical
    Center, local libraries, fire and police departments on tribal land, as
    well as tribal and local public schools. The system will also make
    telemedicine services available so that those who are uninsured or
    underinsured can obtain the expertise of physicians not located on tribal
    lands. In addition, tribal members and non-tribal members will have
    high-speed Internet access at the community center at no cost. However,
    there will be a fee for high-speed Internet access to homes for tribal and
    non-tribal members living within reservation boundaries. Tribal officials
    told us that, after the first 2 years of operation, they expect to earn
    sufficient revenue from subscribers within tribal boundaries to fund
    needed maintenance and improvements, as well as offset the costs of
    operating the Community Technology Center.

    Additionally, tribal officials told us that they are planning to purchase
    a local cable company to acquire the company's lines and the rights-of-way
    that the company has negotiated across land within reservation boundaries.
    The tribe is hoping to use revenue from the broadband Internet system to
    provide broadband through cable services to current and future customers.
    Tribal officials expect the broadband services to attract businesses and
    are planning to provide technical support to new businesses on tribal
    lands, such as writing software.

    The Yakama Nation Is Developing a Wireless Telephone System and High-Speed
    Internet over Cable Using Financial Planning to Help Deploy Infrastructure

    The Yakama Nation, whose lands encompass 2,153 square miles in south
    central Washington, is developing its own telecommunications system that
    will offer wireless telephone and high-speed Internet access to all tribal
    land residents. The tribe has developed a long-range plan to finance
    development through savings accumulated over several years, mainly by
    reducing the amount of services purchased from the incumbent
    telecommunications provider and negotiating rights-of-way for
    telecommunications infrastructure.

    Background

    The Yakama Nation's tribal lands are located about 24 miles from Yakima,
    Washington, the nearest population center of 15,000 or more inhabitants.
    According to the 2000 Census, 31,646 residents were living on Yakama
    tribal lands, 7,756 of them being Native Americans. Estimated per capita
    income for Native Americans on Yakama lands was $8,816 or less than half
    the national estimate of $21,587, while the poverty level was 31 percent,
    18.6 percent above the national estimate of 12.4 percent. Unemployment
    levels were 23 percent, or 17.2 percent above the national unemployment
    level of 5.8 percent.

    Barriers

    According to the tribal official with whom we spoke, the tribe's major
    barriers to improved telecommunications services included the following:

    Financial: According to the tribal official, in the past few years, the
    tribe's main industry, timber, has not done well, and unemployment rates
    and poverty have been above the national average. Many residents cannot
    afford telephone service and some of those who are not connected cannot
    afford the installation cost to become connected to the current
    infrastructure. The tribal official told us that many tribal members
    cannot afford a computer or Internet access, and the Internet access that
    is available is mostly low-speed dial-up service. The tribal official also
    said that the in the past few years, the local service provider had raised
    its recurring monthly charges, resulting in an annual bill to the tribe of
    $325,000, an increase of $50,000 in annual costs, which was difficult for
    the tribal government to afford.

    Geographic: While many tribal residents in the more heavily populated
    areas have access to telephone service, the tribal official told us that
    the tribe's service provider has not built additional infrastructure to
    reach less populated areas and has no plans to do so in the near future.
    In addition, the tribal member told us that the service provider had
    established calling zones that make calls from one part of the reservation
    to another long distance. This has increased the cost of telephone service
    for both residents and the tribal government.

    Lack of Tribal Technical Capacity: The tribal official stated that the
    tribe does not have a sufficient number of technically knowledgeable
    tribal members to develop and maintain needed telecommunications systems.

    Approaches

    The Yakama Nation is addressing these barriers by developing its own
    telecommunications system that will provide wireless telephone service and
    high-speed Internet access to the tribal government and the community at
    large. The tribal official told us that seven years ago, the tribe
    determined that it could improve telecommunications services by forming
    its own company, offering telecommunications services to tribal residents
    and tribal businesses as well as other homes and businesses, both on and
    off tribal lands. This official also said the tribe has developed a
    business plan to receive its license from the state of Washington to
    operate as a competitive local exchange carrier, allowing it to sell its
    services. The tribal official told us the system will improve education by
    providing high-speed Internet access to tribal schools and offer residents
    greater access to jobs and business opportunities. The tribal official
    also told us that although the system is not yet complete, the Yakama
    Tribal Government buildings are now connected to each other through a
    Local Area Network (LAN) and have high-speed Internet access. This level
    of service has reduced the fees the tribe pays to the local service
    provider, allowing the tribe to increase the funding available for
    developing its own telephone telecommunications system.

    To overcome the funding barrier, the tribe put together a long-range plan
    that required the tribe to reduce its use of the current provider's
    services and then use the savings to develop its own system. Since 1998,
    the tribe has used annual savings from reduced telephone services and
    funds from other services to establish a telecommunications company and
    then purchase needed equipment. The technically trained tribal member who
    headed the planning and development of this system told us that because of
    the downturn in the telecommunications sector in the past few years and
    the long-range plans the tribe had made, the tribe was able to purchase
    surplus fiber at 25 percent of its retail price. In addition, the tribe
    was also able to negotiate with a local contractor for installation of the
    fiber at a price far below market rates. The tribal official told us that
    long-range financial planning and careful budgeting have been important to
    the tribe's success and that infrastructure has been purchased or
    installed each year based on what the tribe could afford.

    The tribe is addressing its lack of technical capacity in a number of
    ways. The tribe has proposed to connect a local university to its
    telecommunications system in exchange for technical training. In addition,
    the tribe plans to train residents in computer and Internet use at an
    existing tribal technology center. The tribal official emphasized that
    determining how the tribe could afford the cost of trained staff to manage
    and maintain the system once it is operational was a very important part
    of their planning. The tribe determined that the system could produce
    revenue to pay for technically trained staff and necessary maintenance by
    offering wireless telephone and high-speed Internet access to areas
    adjacent to tribal lands.

    The tribe plans to erect additional towers; offer homes and businesses the
    opportunity to purchase equipment to connect to the system; and connect
    the tribally-owned system to the public switched network.1 The tribal
    official told us that several locations are available to connect to the
    public switched network and they will select the location that offers the
    tribe the best price. The tribal official estimates that the system will
    be complete in 1 to 2 years.

    Eastern Band of Cherokee Partnered with Local Business to Install, Own and
    Operate Telecommunications Networks for High-Capacity Transmission
    Services

    The Eastern Band of Cherokee, whose tribal lands cover about 82 square
    miles in the Smoky Mountains of western North Carolina, has improved
    telecommunications infrastructure and services, particularly high-capacity
    transmission and Internet-based services, by deploying two fiber networks
    -- a tribally-owned fiber-optic ring within the reservation area, and a
    jointly-owned fiber optic network in three states. To build these
    networks, Eastern Band of Cherokee partnered with a local business,
    provided part of the funding, and is applying for a USDA RUS loan jointly
    with their partner company.

    Background

    The Eastern Band of Cherokee's tribal lands are located about 33 miles
    from Asheville, North Carolina, the nearest population center of 50,000 or
    more inhabitants. According to the 2000 Census, there were 6,132 Native
    Americans living on Eastern Band of Cherokee's tribal land. The estimated
    per capita income for Native Americans on Eastern Band of Cherokee lands
    was $12,248, somewhat more than half the national estimate of $21,587,
    while the poverty level was 24 percent, 11.6 percent above the national
    estimate of 12.4 percent. The unemployment level was 9 percent, or 3.2
    percent above the national unemployment level of 5.8 percent.

    Barrier

    Tribal officials told us that the major barrier to improved
    telecommunication services the Eastern Band of Cherokee faced was:

    Geographic: Tribal lands are geographically isolated by the Smokey
    Mountains and there is low population density in the area. According to a
    tribal telecommunications company official, prices for fiber-optic
    transmission networks and high-speed Internet access points are many times
    higher than in major metropolitan areas, where such connections are
    plentiful and competitively priced. A major contributor to the high cost
    of service is the transmission of data. This official said that voice,
    data, and Internet traffic from this rural mountain community must be
    hauled long distances for aggregation and connection to the national
    backbones of telecommunications and Internet service providers. The
    carriage provided by the local telephone company is priced at rates that
    are distance sensitive, making them some of the highest in the state.
    However, according to a tribal official, despite the local provider's
    prices, the provider's current telecommunications infrastructure on
    Eastern Band of Cherokee's tribal lands is out of date and malfunctions
    frequently, causing interruptions in service.

    Approach

    To improve access to fiber-optic infrastructure and to lower the cost of
    transmission for Internet service providers, as well as for schools,
    hospitals, rural clinics, government agencies and residents on tribal
    lands, the tribe constructed two fiber-optic networks. The first is a
    network that provides access within the reservation; the second is a
    network that provides an interconnecting network through parts of three
    states and is referred to as a middle-mile network. According to one of
    the tribal telecommunications company officials we interviewed, the
    middle-mile network is a very high-capacity network that can move large
    amounts of information at high speeds with plenty of capacity for future
    growth. This official told us that to deploy this middle-mile network, the
    tribe partnered with a private firm, one of the largest electronic tax
    filers in the United States and one of the largest employers in the region
    after the tribe. Together, they formed a joint venture company to
    construct, own, and operate the network. The company official also told us
    that the joint

    venture company leases dark fiber 2 and also operates as a certificated
    competitive local exchange carrier and interexchange carrier in three
    states. The networks support very high capacities for real-time,
    interactive applications such as three-dimensional modeling and
    simulation. The company also offers open access to its dark fiber on
    short-term and long-term leases (up to 20 years) to any requesting entity
    and sells its fiber and services at rates pegged to the wholesale rates
    being charged in large metropolitan areas.

    The company official stated that system deployment began in September,
    2003, with completion expected by the end of 2005 and will consist of
    about 257 miles of underground fiber optic cable. A tribal official told
    us the tribe wanted to help attract new businesses to the area as well as
    help existing companies modernize and expand. Of equal importance to the
    tribe are improvements and enhancements in government services, health
    care and education, and residential Internet access. A telecommunications
    company official told us the joint venture has already begun providing
    wide-area data and Internet transmission services for a four-site hospital
    system in the area, greatly reducing the hospital system's costs and
    providing throughput speeds of only 6 seconds for transmission of x-ray
    images between sites.

    Officials of the tribe and the company told us that the tribe will use its
    ownership in these networks and future planned deployment of cable and
    wireless infrastructure to ensure that all residents of tribal lands can
    receive high-speed Internet, VoIP (Voice over Internet Protocol), and
    other information and content applications at costs and quality levels
    comparable to or better than metropolitan areas. The tribe is currently
    planning facilities and programs for computer training laboratories for
    tribal members to learn about computers, networks, and the Internet, and
    is also planning for workforce retraining programs.

    The Mescalero Apache Purchased the Local Telecommunications Company and
    Improved Services Using RUS Loans

    The Mescalero Apache reservation covers 719 square miles and is located in
    south eastern New Mexico. The Mescalero Apache addressed their
    telecommunications issues by purchasing the local telephone company with
    the help of RUS loans and developing initiatives to improve the tribe's
    technical capacity to provide telephone service and high-speed Internet
    access.

    Background

    According to the 2000 Census, there were 2,932 Native American residents
    living on Mescalero Apache land. The estimated per capita income for
    Native American residents was $7,417, slightly more than one-third the
    national estimate of $21,587, while the level of poverty was 37 percent,
    24.6 percent above the national estimate of 12.4 percent. The unemployment
    level was 17 percent, 11.2 percent above the national unemployment level
    of 5.8 percent.

    Barriers

    According to tribal officials, before the Mescalero Apache purchased the
    local telecommunications company, the tribes' major barriers to improving
    telecommunications service included the following:

    Geographic: The size of the reservation makes the deployment of wireline
    infrastructure expensive and the small number of tribal residents limits
    the ability of the service providers to recoup their investment. Tribal
    officials told us that the former local service provider was unwilling to
    upgrade the telecommunications network on the Mescalero Apache reservation
    to provide high-quality voice or data services.

    Lack of Tribal Technical Capacity: In 1995, the tribal Council passed a
    resolution stating the tribe's intention to purchase the former telephone
    service provider's network. However, the tribe did not have a sufficient
    base of technically knowledgeable tribal members to operate the former
    provider's telephone network.

    Approaches

    To overcome these barriers, the tribal government purchased the former
    wireline service provider's network on the reservation. The tribal
    government then formed the company, Mescalero Apache Telecommunications,
    Inc. (MATI), to develop this network to provide higher quality
    telecommunications services than previously available. MATI then rebuilt
    the network by installing more than 1,000 route miles of fiber optic cable
    to provide high-speed Internet access as well as local and long distance
    telephone service. According to a MATI official, telephone and high-speed
    Internet access are now nearly universally available within the
    reservation and Gigabit Ethernet, which is nearly 1,000 times faster than
    DSL, has been deployed to the Mescalero casino. In addition, this MATI
    official told us that the number of residential telephone subscribers on
    the Mescalero Apache tribal lands has increased from 10 per cent to 97
    percent since these improvements were made to the network.

    To address the geographic issue, the MATI official said that the tribal
    government instructed MATI to focus on providing services to the
    reservation rather than maximizing profit, which could limit investment in
    services.

    Additionally, MATI utilizes various approaches to improve its technical
    capacity to offer higher quality services. Specifically, it developed
    strategic relationships and training to improve the staff's technical
    capabilities to operate telecommunications technologies. For example, the
    MATI official told us that when MATI was starting to provide service, MATI
    was able to borrow a switch from a manufacturer. Currently, MATI has an
    agreement with a VoIP equipment manufacturer to deliver voice calls over
    the Internet. This agreement has allowed MATI to begin to deploy this
    technology to customers outside the reservation over a shared spectrum
    wireless network. The MATI official said that this relationship has also
    allowed MATI to train their personnel on the use of this equipment.

    The MATI official also told us that MATI created a technical mentoring
    program to build tribal telecommunications capacity. Although about half
    of MATI's staff consists of non-tribal members, tribal officials expect to
    hire more tribal members as they receive technical training and non-tribal
    members retire. Newer tribal staff are paired with experienced non-tribal
    staff for the purpose of learning telecommunications technologies. The
    MATI official said that the goal is to create a self-sufficient tribal
    knowledge base to understand and operate the telecommunications network.
    This official said that MATI's development of its technical capabilities
    has also allowed it to offer technical consulting services to other tribes
    that are interested in providing their own telecommunications network. For
    example, Coeur d'Alene tribal officials told us that they plan to use MATI
    staff to train some of their telecommunications staff and increase the
    tribe's technical capacity to operate a telecommunications network. The
    MATI official also told us that MATI hosts an annual telecommunications
    conference for tribes and municipal governments to inform them about the
    basics of telecommunications finance and technology.

    The Oglala Sioux Partnered With a Wireless Provider to Create Competition
    and Increase Telephone Subscribership

    Oglala Sioux lands cover approximately 3,150 square miles and are located
    in southwestern South Dakota. To improve telecommunications services on
    their tribal lands, the Oglala Sioux partnered with Western Wireless
    Corporation (now merged with Alltel), a wireless service provider, to
    offer wireless phone service on their lands in competition with the
    wireline provider. According to tribal and Western Wireless officials,
    access to the Universal Service High Cost Fund and Enhanced Link-Up and
    Lifeline programs allows Western Wireless to recover some infrastructure
    deployment costs and offer discounted telephone service to residents of
    the Oglala Sioux's Pine Ridge Indian Reservation.

    Background

    The Oglala Sioux tribal lands are located in southwestern South Dakota,
    about 80 miles south of Rapid City, South Dakota, the nearest population
    center of 50,000 or more inhabitants. According to the 2000 Census, 14,334
    Native Americans were living on these tribal lands.3 The estimated per
    capita income for Native Americans was $5,624, slightly more than
    one-quarter the national estimate of $21,587, while the poverty level was
    55 percent, more than 40 percent above the national estimate of 12.4
    percent. The unemployment level was 37 percent, or 32.2 percent above the
    national unemployment level of 5.8 percent.4

    Barriers

    According to tribal and industry officials, the tribe's major barriers to
    improved telecommunications services included the following:

    Financial: According to a tribal official, tribal members have limited
    financial resources to purchase telecommunications services. Census data
    indicate that the Pine Ridge Indian Reservation is one of the most
    economically distressed tribal lands in the United States. Over one half
    the population falls below the federal poverty line while unemployment is
    more than six times the national estimate.

    Geographic: The Pine Ridge Indian Reservation is geographically isolated
    and has a low population density, which according to the tribal official,
    has limited the number of companies interested in providing
    telecommunications services. According to the 2000 Census, approximately
    14,000 Oglala Sioux were living on the 3,150 square mile reservation, an
    area about one and half times the size of Delaware. The tribal official
    also told us that geographic isolation of the Pine Ridge Indian
    Reservation also meant that it was difficult for tribal members to reach
    public safety services when traveling through remote areas of the
    reservation.

    Approaches

    To overcome these barriers, the Oglala Sioux partnered with a wireless
    service provider to offer wireless phone service to residents of the Pine
    Ridge Indian Reservation. The Oglala Sioux Tribe and the wireless provider
    signed a service agreement to formalize this partnership. The agreement
    defined the provider's responsibilities to provide wireless phone service
    and the tribe's responsibilities and rights to advertise the service and
    receive leasing fees for the wireless towers on its land.5

    According to a tribal official and provider officials, the key to
    deploying wireless service on the Pine Ridge reservation was the
    provider's ability to access federal universal service funds to subsidize
    its network costs (High Cost fund) and offer discounted telephone service
    (Enhanced Link-Up and Lifeline). In order to access these funds, the
    provider, with consent from the Oglala Sioux Tribe, applied for and
    received an eligible telecommunications carrier (ETC) designation from FCC
    in 2001. This enabled the provider to access High Cost funds as well as
    the Enhanced Link-Up and Lifeline programs, which lower the costs of
    telephone service for low-income customers.

    The provider deployed several towers in diverse areas of the reservation
    to provide wide-spread coverage. The tribe also worked with the provider
    to create an expanded local calling area for its customers that included
    all areas of the reservation as well as Rapid City, South Dakota.
    According to a tribal official, the addition of Rapid City as part of the
    local calling area was an important cost-saving measure for the tribe
    because a significant number of Oglala Sioux live in the Rapid City area.

    A tribal official told us that wireless telephone service has improved
    public safety and the general quality of telecommunications service on the
    Pine Ridge reservation. According to tribal and provider officials, tribal
    members can reach public safety services, such as 911, from nearly any
    location on the reservation. According to a tribal official, this is
    particularly important due to the summer and winter temperature extremes
    on the reservation. The wireline service provider officials also noted
    that the wireless provider's presence as a competitor has helped to
    sharpen their focus on providing high-quality services. A tribal official
    told us that the wireless provider initially anticipated having about 300
    customers on Oglala Sioux tribal lands, but had about 4,000 customers
    within 1 year of offering service.

    The Navajo Nation is Addressing Telecommunications Barriers by
    Streamlining Tribal Government Processes, Encouraging Competition, and
    Emphasizing Wireless Technologies

    The Navajo Nation is the largest federally recognized tribe and tribal
    land in the United States. According to the 2000 Census, the Navajo Nation
    covers over 24,000 square miles, an area roughly the size of West
    Virginia, and extends into the states of Arizona, New Mexico and Utah.6 To
    improve telecommunications on their lands, the Navajo are streamlining the
    tribal rights-of-way process to aid service providers; encouraging
    competition in order to improve prices and service quality; and
    emphasizing wireless technologies better suited to the geography of the
    tribal land.

    Background

    The Navajo Nation's tribal lands are not located near any major
    metropolitan area. According to the 2000 Census, 176,256 Native Americans
    were living on Navajo tribal lands. The estimated per capita income for
    Native Americans on Navajo lands was $6,801, less than one-third the
    national estimate of $21,587, while the poverty level was 44 percent, 31.6
    percent above the national estimate of 12.4 percent. The unemployment
    level was 26 percent, or 21.2 percent above the national unemployment
    level of 5.8 percent.

    Several telecommunications providers, both wireline and wireless, serve
    the Navajo Nation; however, not all areas within the reservation have
    access to voice or data service. Two providers provide high-speed Internet
    connectivity on parts of the reservation. One of them offers DSL to
    households at various places on the reservation. However, an official from
    this company noted that DSL works best if deployed within 15,000 feet of
    the central office, while many residents live beyond the 15,000-foot
    limit. The other provider offers high-speed Internet connections through
    satellite at 110 Navajo Nation chapter houses. However, one tribal
    official told us that the tribal chapter house connections are not
    financially sustainable in the long term. All three states (Arizona, New
    Mexico, and Utah) granted a library designation to the 110 chapter houses,
    and all chapter houses were approved by USAC for library E-rate funds.
    This official also stated that the tribe uses E-rate funds to pay for
    about 85 percent of the annual $3 million cost for satellite connectivity.
    However, the official told us that the tribe must pay the remaining 15
    percent of the cost, or about $450,000, and that Navajo officials consider
    this amount to be a high cost.

    Barriers

    According to tribal officials, the tribe's major barriers to improving
    telecommunications services include the following:

    Geographic: Geographic isolation has increased the cost of providing
    service on Navajo lands and limited the number of companies interested in
    providing telecommunications services. The distances needed to connect
    communities and homes with copper wires or fiber optic cable make wireline
    telecommunications systems expensive. For example, the tribe estimated in
    1999 that it cost about $5,000 to connect a new wireline subscriber. The
    installation of wireless infrastructure is also expensive due to the vast
    network of towers and power access needed to relay signals around the
    rugged landscape. Service providers have told us the cost of deploying
    telecommunications infrastructure on Navajo lands impedes the provision of
    services.

    Rights-of-way: According to tribal officials, several factors combine to
    make obtaining rights-of-way across Navajo trust lands difficult, and
    serve as deterrents to extending and improving the tribe's
    telecommunications infrastructure. Both service provider and tribal
    officials told us that the tribal government's process for approving
    rights-of-way across trust lands is time-consuming and expensive. In
    addition, tribal officials told us that obtaining approval of
    rights-of-way from BIA across Indian allotments within tribal boundaries
    can also be very time-consuming and expensive because ownership of these
    lands has been divided among a large number of heirs, and at least 51
    percent of the heirs must approve any change in the status of the land. In
    some cases, the location of many of these heirs is unknown.

    Approaches

    To address these barriers and improve telecommunications services on the
    reservation, tribal leaders formed the Navajo Nation Telecommunications
    Regulatory Commission (NNTRC). The Navajo Nation requires service
    providers to supply the NNTRC with information about their intended
    service areas, service offerings, and network buildout plans. This
    information allows the NNTRC to review providers' plans for providing
    services and then holds them accountable for fulfilling those plans. The
    NNTRC encourages providers to attend hearings to comment on the barriers
    they encounter to providing telecommunications services. As a result, the
    NNTRC works with the service providers to reduce or remove barriers.

    The NNTRC is addressing geographic barriers by encouraging providers to
    deploy wireless telecommunications systems that are more appropriate for
    the Nation's large geographic area. NNTRC is also addressing the cost of
    services on the Navajo Nation by encouraging multiple providers to offer
    services, thus creating competition. NNTRC officials told us that
    competition is the best method to lower prices and improve services.
    Currently, NNTRC works with wireless companies to encourage them to extend
    their service throughout the Navajo Nation. Officials from wireless
    companies serving and seeking to serve the Navajo Nation told us that
    access to universal service program funds combined with their use of less
    costly wireless technologies provides a viable business case for their
    entry onto Navajo lands.

    Tribal officials told us that the NNTRC drafted a rights-of-way policy
    that includes new procedures to make the tribe's process for approving
    rights-of-way more efficient and timely for service providers. According
    to a Navajo official, this policy is currently being reviewed for approval
    by several of their tribal government departments. Following this approval
    process, NNTRC intends to implement this policy.

    Comments from the Department of the Interior, Bureau of Indian
    Affairs Appendix IV

    Comments from the Institute of Museum and Library Services Appendix V

    GAO Contact and Staff Acknowledgments Appendix VI

    Mark L. Goldstein (202) 512-2834 or goldsteinm@gao.gov

    In addition to the contact named above, Carol Anderson-Guthrie and John
    Finedore, Assistant Directors; Edda Emmanuelli-Perez, Michele Fejfar,
    Logan Kleier, Michael Mgebroff, John Mingus, Mindi Weisenbloom, Alwynne
    Wilbur, Carrie Wilks, and Nancy Zearfoss made key contributions to this
    report.

    (543112)

    www.gao.gov/cgi-bin/getrpt? GAO-06-189 .

    To view the full product, including the scope

    and methodology, click on the link above.

    For more information, contact Mark L. Goldstein at (202) 512-2834 or
    goldsteinm@gao.gov.

    Highlights of GAO-06-189 , a report to congressional requesters

    January 2006

    TELECOMMUNICATIONS

    Challenges to Assessing and Improving Telecommunications for Native
    Americans on Tribal Lands

    An important goal of the Communications Act of 1934, as amended, is to
    ensure access to telecommunications services for all Americans. The
    Federal Communications Commission has made efforts to improve the
    historically low subscribership rates of Native Americans on tribal lands.
    In addition, Congress is considering legislation to establish a grant
    program to help tribes improve telecommunications services on their lands.
    This report discusses 1) the status of telecommunications subscribership
    for Native Americans living on tribal lands; 2) federal programs available
    for improving telecommunications on these lands; 3) barriers to
    improvements; and 4) how some tribes are addressing these barriers.

    What GAO Recommends

    In a draft of this report provided for agency comment, GAO recommended
    that FCC determine what data is needed to assess progress toward the goal
    of providing access to telecommunications services to Native Americans
    living on tribal lands and how this data should be collected, and report
    to Congress on its findings. FCC agreed more data is needed but maintained
    that it is not the organization best positioned to determine what that
    data should be. Given FCC's response, Congress should consider directing
    FCC to carry out our recommended action. In addition, Congress should
    consider amending the Communications Act to facilitate and clarify tribal
    libraries' eligibility for universal service funds.

    Based on the 2000 decennial census, the telephone subscribership rate for
    Native American households on tribal lands was substantially below the
    national level of about 98 percent. Specifically, about 69 percent of
    Native American households on tribal lands in the lower 48 states and
    about 87 percent in Alaska Native villages had telephone service. While
    this data indicates some progress since 1990, changes since 2000 are not
    known. The U.S. Census Bureau is implementing a new survey that will
    provide annual telephone subscribership rates, though the results for all
    tribal lands will not be available until 2010. The status of Internet
    subscribership on tribal lands is unknown because no one collects this
    data at the tribal level. Without current subscribership data, it is
    difficult to assess progress or the impact of federal programs to improve
    telecommunications on tribal lands.

    The Rural Utilities Service and the FCC have several general programs to
    improve telecommunications in rural areas and make service affordable for
    low-income groups, which would include tribal lands. In addition, FCC
    created some programs targeted to tribal lands, including programs to
    provide discounts on the cost of telephone service to residents of tribal
    lands and financial incentives to encourage wireless providers to serve
    tribal lands. However, one of FCC's universal service fund programs that
    supports telecommunications services at libraries has legislatively based
    eligibility rules that preclude tribal libraries in at least two states
    from being eligible for this funding. FCC officials told GAO that it is
    unable to modify these eligibility rules because they are contained in
    statute and thus modifications would require legislative action by
    Congress.

    The barriers to improving telecommunications on tribal lands most often
    cited by tribal officials, service providers, and others GAO spoke with
    were the rural, rugged terrain of tribal lands and tribes' limited
    financial resources. These barriers increase the costs of deploying
    infrastructure and limit the ability of service providers to recover their
    costs, which can reduce providers' interest in investing in providing or
    improving service. Other barriers include the shortage of technically
    trained tribal members and providers' difficulty in obtaining rights of
    way to deploy their infrastructure on tribal lands.

    GAO found that to address the barriers of rural, rugged terrain and
    limited financial resources that can reduce providers' interest in
    investing on tribal lands, several tribes are moving toward owning or
    developing their own telecommunications systems, using federal grants,
    loans, or other assistance, and private-sector partnerships. Some are also
    focusing on wireless technologies, which can be less expensive to deploy
    over rural, rugged terrain. Two tribes are bringing in wireless carriers
    to compete with the wireline carrier on price and service. In addition,
    some tribes have developed ways to address the need for technical
    training, and one has worked to expedite the tribal decision-making
    process regarding rights-of-way approvals.

    GAO's Mission

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