Tribal lands vary dramatically in size, demographics, and location, ranging from the Navajo Nation, with 24,000 square miles and over 176,000 Native American residents, to tribal land areas in California comprising less than 1 square mile with fewer than 50 Native American residents. Most tribal lands are located in rural or remote locations, though some are near metropolitan areas. Also, some tribal lands have a significant percentage of nonNative Americans residing on them. Tribes are unique in being sovereign governments within the United States. Their sovereign status has been established by the U.S. Constitution, treaties, and other federal actions. 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. 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 had 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 systems. 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 of 1934, as amended, (Communications Act) which states that the FCC 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 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. 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 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. As of 2000, the telephone subscribership rate for Native American households on tribal lands had improved since 1990, but was still substantially below the national rate, while the rate for Internet subscribership on tribal lands was unknown due to a lack of data. According to data from the 2000 decennial census, about 69 percent of Native American households on tribal lands in the lower 48 states had telephone service, which was about 29 percentage points less than the national rate of about 98 percent. About 87 percent of Native American households in Alaska native villages had telephone service, also considerably below the national rate. Telephone subscribership rates for Native American households on individual tribal lands in 2000 varied widely. A few tribal lands had rates above the national level, but the majority of them had rates below the national level. 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, and had a range in telephone subscribership rates from 38 percent for the Navajo Nation Reservation and Off-Reservation Trust Land (located in Arizona, New Mexico, and Utah) to 94 percent for the Turtle Mountain Reservation and Off-Reservation Trust Land (located in Montana, North Dakota, and South Dakota). While Census data indicate that the average subscribership rate for Native Americans on tribal lands has increased from about 47 percent of households in 1990 to about 69 percent in 2000, changes in telephone subscribership rates since the 2000 decennial census are not known. In order to provide more current data, the U.S. Census Bureau (Census Bureau) has begun to gather telephone subscribership data through a new, more frequent survey that will provide demographic and socioeconomic data on communities of all sizes, including tribal lands. However, because it will take time to accumulate a large enough sample to produce data for small communities, annual reports will not be available for all small communities, including tribal lands, until 2010. The rate of Internet subscribership for Native American households on tribal lands is unknown because neither the Census Bureau nor FCC collects this data at the tribal level. One survey performed by the Census Bureau that collects data on Internet subscribership can provide estimates for the nation as a whole, but the survey’s sample cannot provide reliable estimates of Internet subscribership on tribal lands. The Census Bureau’s new survey will provide data on tribal lands but does not include a question on Internet subscribership. Without current subscribership data, it is difficult to assess progress or the impact of federal programs to improve telecommunications on tribal lands. FCC 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 obtain this data, FCC requires service providers to report 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 their residential subscribers in each zip code, because tribal lands do not necessarily correspond to zip codes, and because these data do not include information on “dial-up” users (i.e., those who access the Internet without a broadband connection), these data cannot be used to determine the number of residential Internet subscribers on tribal lands. The FCC has recognized that its section 706 data collection efforts in rural and underserved areas need improvement to better fulfill Congress’ mandate. The Department of Agriculture’s Rural Utilities Service and FCC are responsible for several general programs designed to improve the nation’s telecommunications infrastructure and make services affordable for all consumers, which can benefit tribes and tribal lands. The Rural Utilities Service has grant, loan, and loan guarantee programs for improving telecommunications in rural areas. FCC has several programs (known as “universal service” programs) to make telephone service more affordable for low-income consumers and consumers living in areas, such as rural areas, where the cost to provide service is high. In addition to these general programs, FCC has recognized the need to make special efforts to improve tribal telecommunications and established four programs specifically targeted to improving telecommunications for residents of tribal lands. The Tribal Land Bidding Credit program provides financial incentives to wireless service providers to serve tribal lands. The Indian Telecommunications Initiative disseminates information to tribes and tribal organizations on telecommunications services on tribal lands, including universal service programs and other areas of interest. Enhanced Link-Up, which provides a one-time discount on the cost of connecting a subscriber to the telephone network, and Enhanced Lifeline, which provides ongoing discounts on the cost of monthly service, provide more support per customer than the regular Link-up and Lifeline programs. 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. Regarding Enhanced Lifeline, we found that, at present, data provided to the program administrator from the service providers 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. 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? An additional universal service program, known as E-rate, provides discounts on telecommunications services for schools and libraries nationwide. One of our key findings is that some tribal libraries are not eligible to receive E-rate funds because of an issue involving federal eligibility criteria. The current statutory provision under the Communications Act 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 Library Services Technology Act (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. Tribal and government officials, Native American groups, service providers, and others with whom we spoke cited several barriers to improving telecommunications service on tribal lands. The rural location and rugged terrain of most tribal lands and tribes’ limited financial resources were the barriers to improved telecommunications most often cited by the officials of tribes and Alaska Native Villages we interviewed. 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. These two barriers, the rural location of tribal lands (which increases the cost of installing telecommunications infrastructure) and tribes’ limited financial resources (which can make is difficult for residents and tribal governments to pay for services) can combine to deter service providers from making investments in telecommunications on tribal lands, resulting in a lack of service, poor service quality, and little or no competition. For example, 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 and that there were cost issues in providing this 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. The third barrier most often cited by tribal officials is a shortage of technically trained tribal members to plan and implement improvements on tribal lands. 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. An official of the Coeur d’Alene tribe, who has technical training, 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. 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, which can impede service providers’ deployment of telecommunications infrastructure. In part, this is because BIA must approve the application for a right-of-way across Indian lands and to obtain BIA approval, service providers are required to take multiple steps and coordinate with several entities during the application process. 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. The tribes we visited 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. For example, the Coeur d’Alene Tribe in Idaho is using a Rural Utilities Service grant to overcome its limited financial resources and develop its own high-speed wireless Internet system. 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. For example, the Yakama Nation has proposed to connect a local university to its telecommunications system in exchange for technical training for its staff. The Mescalero Apache Tribe has improved its technical capacity by hiring technically trained staff and pairing them with less trained staff, creating a technical mentoring program. 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. Also, a BIA official acknowledged that portions of the federal regulations for rights-of-way over Indian lands, including the section on telecommunications infrastructure, are outdated. BIA is currently revising the regulations to better apply to modern utility technologies, including advanced telecommunications infrastructure, though the timeframes for completion of this work have not been established. Our report, Challenges to Assessing and Improving Telecommunications for Native Americans on Tribal Lands, contains more information on these and other tribal initiatives, as well as detailed case studies of six tribes’ efforts to improve their telecommunications infrastructure and services. For questions regarding this testimony, please contact me on (202) 512- 2834 or goldsteinm@gao.gov. Individuals making key contributions to this testimony include Carol Anderson-Guthrie, Edda Emmanuelli-Perez, John Finedore, Michelle Fejfar, Logan Kleier, Michael Mgebroff, John Mingus, Mindi Weisenbloom, Alwynne Wilbur, Carrie Wilks, and Nancy Zearfoss. This is a work of the U.S. government and is not subject to copyright protection in the United States. It may be reproduced and distributed in its entirety without further permission from GAO. However, because this work may contain copyrighted images or other material, permission from the copyright holder may be necessary if you wish to reproduce this material separately.

Summary: An important goal of the Communications Act of 1934, as amended, is to ensure access to telecommunications services for all Americans. This testimony is based on GAO's January 2006 report GAO-06-189 , which reviewed 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. This data indicates some progress since 1990, though changes since 2000 are not known. The U.S. Census Bureau is implementing a new survey that will provide annual telephone subscribership rates, but 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 Federal Communications Commission (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 tribes, including programs to provide discounts on the cost of telephone service to residents of tribal lands. However, one of FCC's universal service fund programs, which 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 telecommunications services. 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 partnerships with the private sector. 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 wireline carriers 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.