Great disparity exists for Indian Country when comparing telephone penetration rates to the rest of America. Current statistics on telephone penetration rates (number of homes with telephones) in Indian Country range from 25% to 75%. Tribes with higher rates correlate with those tribes that own, operate, and provide communication services to their respective communities. Telephone penetration rates for the rest of the nation are approximately 94%.

As the Information Age begins to play a greater role in tribal communities, the need for improved and affordable communication services is becoming more apparent. Participants of the National American Indian Telecommunication Workshop discussed the opportunities that improved telecommunication service could provide to their communities. Telecom ownership that enables long term infrastructure investment in their home communities, the creation of jobs for tribal members, and the opportunity to build a base for economic and business development through the use of a sound telecommunication infrastructure.

Workshop participants were able to share information and learn about public and private resources that exist to support tribal telephone utility ownership, and/or utility regulation through easement assessments or utility taxation. Some of the objectives of this workshop were to identify perceived barriers to improving service in Indian Country, as well as identify solutions and economic development opportunities for tribes as they begin to prioritize telephone infrastructure investment.

Workshop objectives included:

• Identifying the current status of telecommunication services in Indian Country, compared to national statistics for rural and urban communities.

• Creating a forum for telephone industry information to be disseminated to tribal officials and decision makers about the public and private resources that exist to support tribal ownership.

• Assessing opportunities for telephone utility ownership by tribal governments.

USDA/Rural Utilities Service (RUS)

With over $11 Billion in approved Telephone Loan Program financing for the improvement and expansion of telecommunication services across the United States and its territories, RUS has been building the foundation for the information super-highway for nearly 50 years. Since 1993, RUS’ Distance Learning and Medical Link Grant Program has provided over $52 Million in funding 192 projects in 41 states and one U.S. territory. RUS uses the National School Lunch Program as an indicator of financial distress and to categorize applicants into one of their three financing options. This is the same criterion used by the Federal Communications Commission for discounts to schools and libraries for telecommunications service.

RUS Loan Administrators know that the telephone penetration rates for Indian tribes are below national standards. According to Ed Cameron, Acting Assistant Administrator, Telephone Loan Program, the service rates in American Indian communities "are a disgrace to the national telecommunications system, and it is our job to do something about that". To date the USDA/Rural Utilities Service (RUS), Telephone Loan Program has five American Indian Tribe borrowers. The statistics provided to the RUS as a basis for lending to each of these tribes are as follows

As of December of 1994, RUS borrowers provided telephone service to 42,961 American Indian subscribers.
 

Federal Communications Commission (FCC)
"We're going to rural Appalachia, we're going to American Indian communities in the Southwest, and we're going to inner cities -- around the country. And we're going to get the facts. We're going to learn who is being helped and who's being left behind. We're going to pose some hard questions to the telecommunications industry. And, with the help of the National Urban League, we're going to learn what we can do to bridge the digital divide."
- FCC Chairman, William Kennard  

The 1990 Census found that only 47% of residents on American Indian reservations containing more than 500 households had telephones. Among the general population 94% has phones. According to FCC Commissioner Gloria Tristani, "It’s not acceptable for there to be 47% penetration rates on reservations held in trust by the Federal government if far more Native Americans on those reservations actually want service."

A short term objectives of the FCC is to identify where there are Local Access Transport Areas (LATA) boundaries that divide reservations and make a local call into a long distance call. The FCC can grant a waiver of these industry boundaries that will eliminate an artificial cost increase for American Indians use of basic local service. The FCC has created an Indian Affairs desk, and has asked Eric Jensen to fill that role on an acting basis.

As a result of the Telecommunication Act of 1996, Universal Service support programs were authorized by Congress, and designed by the Federal Communications Commission. New programs include the Schools and Libraries Corporation, and the Rural Healthcare Corporation which provide financial support for telecommunication service access to rural and high cost service areas. The Universal Service – High Cost Program provides support to companies that are serving high-cost areas, or low-income subscribers. Workshop presenters shared the following information:

Schools and Libraries Corporation – Program funding is $1.3 Billion obtained from contributions by telecommunications companies and is also known as the E-Rate. The E-Rate provides discounts of 20% to 90% on the cost of telecommunication services, which are paid directly to the companies that provide the services. As of today, tribes within Alaska have not been able to participate in this program because the Act disqualifies major long distance carriers such as AT&T, MCI, Sprint from receiving this federal subsidy. AT&T is a major local service provider in Alaska.

Rural Healthcare Corporation – Program funding is $100 Million to make telecommunication services affordable for rural health care providers. Qualified applicants include Indian health care facilities. Tribally managed facilities, however, have encountered a stumbling block on the application process. States and federal agencies which deal with tribes on a regular basis accept their application as if they were federally recognized non-profits. The FCC, however, is not aware of this standing practice and, until such time this barrier is removed most tribes may not apply.

Universal Service – High Cost Programs has an annual budget of approximately $1.5 Billion. This funding is used to support services to customers in high cost service areas. The program includes Universal Service Funds and Lifeline Assistance which is paid to the telecommunication company providing service(s).

Another important FCC activity that affects tribes is the proposed forward looking model used to distribute phone access charge revenues between carriers. The average Rural Utility Service (RUS) borrower earns about 26 percent of its revenue from local service rates, and another 9 percent from special services such as directory advertising. The remaining 65 percent of local phone company revenue is mainly derived from toll sources, the universal service fund, and access charges.

According to RUS, the FCC proposed model has a serious flaw because the database becomes progressively less reliable as the population density falls. RUS estimates that about 7 million households outside areas of 5,000 or more are not accounted. Furthermore, the model only recognizes households with existing phone service. The model is being revised by the FCC.

Other Tribal Opportunities

Other presentations included those tribes that have assessed easements, defined right of way requirements on Indian land, and have begun the process of taxing and regulating existing service providers. General Services Administration presenters provided information about their telecom purchasing programs to enable cost savings through economies of scale strategies.

Indian Country participation and leadership will be required for telecommunication service improvements and opportunities to become a reality for each respective Tribal Nation. The workshop organizers hope that this information will prove helpful in identifying telecom industry practices and participants that can lead to tribal strategies for service improvements or ownership.

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