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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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 [email protected] . 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 [email protected]

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
[email protected].

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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