According to the 2000 Census, approximately 588,000 Native Americans were residing on tribal lands. 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. 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. 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. 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….” 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. 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.” 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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 users 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. FCC’s Tribal Land Bidding Credit program is designed to provide incentives for wireless providers to deploy wireless services across tribal lands. 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. 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. 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. 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. 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. 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. 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. FCC provided the tribally-owned wireline providers with ETC status within a few months of their application. Two different non-tribally owned wireless service providers petitioned FCC for ETC designation on three separate tribal lands. 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. 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.” 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). This case sets out the guiding principle that Indian tribes lack jurisdiction to regulate nonmembers on the reservation, but it recognized two exceptions. 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. 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.” 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), 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.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. 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. 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. 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. 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. 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, 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. 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) 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. 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. 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. In 1999, the Department of Commerce estimated that very few tribes had telecommunications plans. 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. 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. 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. 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. 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, 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. 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. 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. 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. 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. 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. 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. 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. 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: Several tribes have deployed shared spectrum wireless networks to provide high-speed Internet access. 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. 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. 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. 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. 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 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. 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. 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. 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. 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. 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. 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. 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. 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. We provided a draft of this report for comment to BIA, the Census Bureau, NTIA, FCC, General Services Administration, Institute of Museum and Library Services, and RUS. BIA provided written comments, presented in appendix IV, stating that BIA recognized the need to update its rights-of-way regulations to include advanced telecommunications infrastructure, and is working to include this in its trust related regulations. BIA stated that it will issue a Rights-of-Way Handbook in March 2006, to ensure consistent application of existing regulations. RUS and the General Services Administration responded that they had no comments. The Institute of Museum and Library Services provided written comments, found in appendix V, stating that the report accurately reflected its understanding of the relevant issues and concerns. NTIA offered technical comments, as did the Census Bureau and FCC, which we have incorporated where appropriate. In the draft report, we recommended that the Chairman of the Federal Communications Commission direct FCC staff to determine what additional data is needed to help assess progress toward the goal of providing access to telecommunications services, including high-speed Internet, to Native Americans living on tribal lands; determine how this data should be regularly collected; and report to Congress on its findings. In oral comments responding to our recommendation, FCC agreed that additional data is needed to help assess progress toward the goal of providing access to telecommunications services, including high-speed Internet. However, FCC did not agree that it is the organization best positioned to determine the data needed in this context, noting that other federal agencies and departments possess expertise and more direct authorization to determine whether and what economic and demographic data are needed to support policy making. In view of FCC’s disagreement with our recommended action, we have made it a matter for Congressional consideration. We continue to believe that FCC, as the agency responsible under the Communications Act for the goal of making available, as far as possible, telecommunications at reasonable charges to all Americans, is the appropriate agency to determine what data is needed to advance the goal of universal service and support related policy decisions—especially for Native Americans on tribal lands who continue to be disadvantaged in this regard. As agreed with your offices, unless you publicly announce the contents of this report earlier, we plan no further distribution of it until 30 days after the date of this letter. At that time, we will send copies of this report to the appropriate congressional committees, tribal organizations and governments, Bureau of Indian Affairs, Census Bureau, Economic Development Administration, Federal Communications Commission, General Services Administration, Indian Health Service, Institute of Museum and Library Services, National Science Foundation, National Telecommunications and Information Administration, Rural Utilities Service, Universal Service Administrative Company, and the Director of the Office of Management and Budget. We will make copies available to others upon request. In addition, this report will be available at no cost on the GAO web site at http://www.gao.gov. If you have any questions about the report, please contact me at (202) 512-2834 or goldsteinm@gao.gov. Contact points for our Office of Congressional Relations and Public Affairs may be found on the last page of this report. GAO staff who contributed to this report are listed in appendix VI. 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. Northern Cheyenne Tribe of the Northern Cheyenne Indian Reservation Oglala Sioux Tribe of the Pine Ridge Reservation Paiute-Shoshone Indians of the Bishop Community of the Bishop Colony Rincon Band of Luiseno Mission Indians of the Rincon Reservation San Carlos Apache Tribe of the San Carlos Reservation Three Affiliated Tribes of the Fort Berthold Reservation White Mountain Apache Tribe of the Fort Apache Reservation B. Alaska Regional Native Non-Profit Organizations Alaska Communications Systems Group Inc. American Indian Higher Education Consortium Cheyenne River Sioux Tribe Telephone Authority Mescalero Apache Telecommunications, Inc. National Indian Telecommunications Institute Organization for the Promotion and Advancement of Small Telecommunications Companies San Carlos Apache Telecommunications Utility, Inc. 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, 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. 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. 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. 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, 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. 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. 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. 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. 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. 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. 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. 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. 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 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 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. 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. 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. 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. 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. 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. 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. 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. 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. 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 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. 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. 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. 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. 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. 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.

Summary: 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. 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.