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                                                       Calendar No. 691
108th Congress                                                   Report
 2d Session                                                     108-335


                      CAPACITIES IN INDIAN COUNTRY


               September 7, 2004.--Ordered to be printed


   Mr. Campbell, from the Committee on Indian Affairs, submitted the 

                              R E P O R T

                         [To accompany S. 2382]

    The Committee on Indian Affairs, to which was referred the 
bill (S. 2382) to establish grant programs for the development 
of telecommunications capacities in Indian country, having 
considered the same, reports favorably thereon with an 
amendment in the nature of a substitute and recommends that the 
bill (as amended) do pass.


    The purpose of S. 2382 is to provide a Federal funding 
mechanism to assist Indian tribes and Alaska Natives in 
determining their telecommunications needs and in obtaining the 
requisite assistance and infrastructure to meet those needs. 
The primary objective of S. 2382 is to ensure that Indian and 
Alaska Native communities have access to telephone, Internet, 
and other information technology that is currently available to 
non-Indian communities.


    The purpose of the Communications Act of 1934 was ``to make 
available * * * to all the people of the United States * * * a 
rapid, efficient, Nationwide, and world-wide wire and radio 
communication service with adequate facilities at reasonable 
charges * * *.'' \1\ When Federal telecommunications law was 
updated in 1996, one of the principles of universal service 
provided that ``[c]onsumers in all regions of the Nation, 
including low-income consumers and those in rural, insular, and 
high[-]cost areas, should have access to telecommunications and 
information services * * *.'' \2\ Neither goal has been met in 
Indian country.
    \1\ 47 U.S.C. Sec. 151.
    \2\ 47 U.S.C.A. Sec. 254.
    Relying on 2000 Census data, the Federal Communications 
Commission (FCC) estimates that, on average, only 67.9 percent 
of Indian households on Indian reservations have telephone 
service \3\ compared to a national average of 95 percent.\4\ 
The 2000 Census data also indicate that the telephone 
penetration rate on Indian reservations varies by state--with 
only one-half of Indian households on Indian reservations in 
Arizona having telephone service compared with full coverage of 
Indian households on Indian reservations located in 
Connecticut, Massachusetts, and Rhode Island.\5\ What is even 
more alarming is that household rates for some tribes, such as 
the Kickapoo Reservation in Texas and the Navajo Nation, are as 
low as 33 percent and 38 percent, respectively.\6\ Even on 
Indian reservations and trust lands, non-Indian homes are more 
likely to have telephone service than are Indian homes.\7\
    \3\ Other than the Annette Island Reserve in Alaska, data from 
Alaska and Hawaii were excluded from this calculation.
    \4\ Telephone Subscribership on American Indian Reservations and 
Off-Reservation Trust Lands (Data from 2000 Decennial Census), Industry 
Analysis and Technology Division, Wireline Competition Bureau, Federal 
Communications Commission, (May, 2003).
    \5\ Id.
    \6\ Id., Table 3.
    \7\ U.S. Bureau of the Census, Telephone Service Available: 
Occupied Housing Units Data Set: Census 2000 Summary File 4 (2000).
    Available data shows that many Native Americans lack access 
not only to basic telephone service but also to advanced 
telecommunications services and information technology. In 
1999, the Economic Development Administration found that only 9 
percent of Indian households had computers (compared with 42 
percent nationally), 8 percent of Indian households had access 
to the Internet (compared with 26 percent nationally) and only 
17 percent of Indian tribes have developed technology 
infrastructure plans.\8\ In 2003, preliminary data from 551 
tribes shows that only 146 tribes reported owning a computer, 
121 reported having a computer lab, and only 91 reported 
Internet access.\9\
    \8\ Assessment of Technology Infrastructure in Native Communities, 
Prepared for Economic Development Administration, p. vi (1999).
    \9\ Serving the Nation: Opportunities and Challenges in the Use of 
Information Technology at Minority-Serving Colleges and Universities, 
Prepared for The Institute for Higher Education Policy, p. 18, (2004).
    Many Native Americans lack access to emergency 911 
services,\10\ are unable to secure employment because they do 
not have a telephone, and cannot otherwise participate in many 
daily activities that non-Native Americans take for granted. 
The lack of telecommunications infrastructure also impedes 
tribal economic development, educational opportunities, 
language retention and preservation, and access to adequate 
health care.
    \10\ Assessment of Technology Infrastructure in Native Communities, 
p. vi.
    In many areas of Indian country, the costs associated with 
the installation of land-lines are so prohibitive that wireless 
service may be the only viable means of addressing 
telecommunications needs and, even then, the costs associated 
with wireless service are high.\11\
    \11\ Assessment of Technology Infrastructure in Native Communities, 
p. 41.

Current funding programs

    The United States Department of Agriculture, through the 
Rural Utilities Services, administers: (1) an infrastructure 
loan program, consisting of the Rural Telephone Bank, 
guaranteed loans and financing of broadband and other advanced 
services; (2) the Distance Learning and Telemedicine program, 
which provides funding to wire schools and improve health care 
delivery in rural America; and (3) the Broadband Pilot Program, 
a loan program designed to increase telecommunication 
technology in small towns located in rural areas.
    The Department of Commerce, through the National 
Telecommunications and Information Administration, administers 
the Technology Opportunities Program (TOPS), a competitive 
grant program that provides resources to rural and under-served 
communities for advanced telecommunications technologies. 
Despite the statistics indicating the need for 
telecommunications infrastructure and service in Indian 
country, the Administration has failed to take Indian country 
statistics into account and has thus deemed funding for the 
TOPS program as unnecessary. As a result, every year the 
Department of Commerce seeks to terminate funding for the TOPS 
    These Federal attempts to address the needs of Native 
America have been inadequate and have failed to address one of 
the most significant barriers to telecommunications and 
information technology development--lack of local community 
knowledge and capacity.

Federal reports

    In 1995, at the request of the Senate Committee on Indian 
Affairs, the Office of Technology Assessment of the U.S. 
Congress released a report, Telecommunications Technology and 
Native Americans: Opportunities and Challenges, on the 
potential of telecommunications to improve the socioeconomic 
conditions of Native Americans.
    The Telecommunications Technology report determined that 
without a Federal Indian telecommunications policy, Indians 
will be ``unlikely to catch up with, and probably will fall 
further behind, the majority society with respect to 
telecommunications.''\12\ It also concluded that the lack of 
telecommunications may weaken, rather than strengthen, tribal 
culture, values, and sovereignty.
    \12\ Telecommunications Technology and Native Americans: 
Opportunities and Challenges, Office of Technology Assessment, Congress 
of the United States, p. 17 (1995).
    The report identified eight components of a comprehensive 
policy framework for telecommunications in Indian country: (1) 
Grassroots Tribal/Village/Community Empowerment; (2) National 
Native Leadership; (3) Integrated Infrastructure Development; 
(4) Native Entrepreneurial Activity; (5) Interagency Strategy 
and Funding; (6) Telecommunications Policy; (7) Information 
Policy; and (8) Further Research and Evaluation. Some of these 
recommendations are currently being implemented while S. 2382 
will begin implementing some of the other recommendations.
    For instance, the report recommends a ``Grassroots Tribal/
Village/Community Empowerment'' policy. This policy recognizes 
that empowerment is an important part of effective local 
planning and recommends that the local community should develop 
the telecommunications plan to best meet the needs of the local 
community, including health, education, culture, and economic 
and social development.
    Moreover, the recommendation for an ``Interagency Strategy 
and Funding'' policy suggests that the Federal agencies 
providing support for Native American telecommunications should 
coordinate with each other to ensure the best use of Federal 
telecommunications funds.
    In 1999, the Economic Development Administration (EDA) 
provided several policy suggestions including increasing the 
funds available for development of Native technology 
infrastructure with the most needed investment being for 
physical infrastructure, planning assistance, and workforce 
development.\13\ It also recommended an interagency working 
group to target specific types of infrastructure initiatives; 
identify program strengths, weaknesses, and gaps; and maximize 
synergy between different agency programs funding similar 
Native infrastructure areas.\14\
    \13\ Assessment of Technology Infrastructure in Native Communities, 
p. viii.
    \14\ Id.
    Like the Office of Technology Assessment report, the EDA 
report recommends that any solution requires strategic planning 
with tribal and community-based participation in order to truly 
reflect tribal needs and goals, and support sustainable tribal 
development.\15\ The report also recommended that the Federal 
government make sufficient resources available for 
telecommunications infrastructure.\16\ Moreover, the report 
identified the areas in which resources were needed the most: 
capital investment, planning assistance, workforce development 
and training, and information and data provision.\17\ Finally, 
the report noted that without technology training, Native 
communities will be unable to make informed technology 
decisions and maintain technology infrastructure.\18\
    \15\ Id. at 47.
    \16\ Id. at 48.
    \17\ Id. at 50.
    \18\ Id. at 53.

Benefits of telecommunications

    The gaps in technological infrastructure are widening 
further as a result of the rapid emergence of new technologies 
and related infrastructure requirements. In the absence of 
timely action to bridge these gaps, tribal economies will be at 
even more of a disadvantage than they are now.\19\
    \19\ Id. at 2.
            Economic development
    Nearly 26% of American Indians and Alaska natives live in 
poverty, with an average per capita income of $12,893. The 
national unemployment rate is approximately 5.5%, whereas the 
unemployment rate on some reservations is over 50%.
    A certain level of technology infrastructure is a necessary 
prerequisite for improving tribal economies.\20\ Native 
telecommunications companies may assist economic development by 
facilitating the education and training of a skilled, 
marketable workforce in Native communities; providing part of 
the technology infrastructure many businesses and investors now 
consider to be essential; creating jobs in computer, 
communication, and other high-technology companies that decide 
to locate on or near reservations or in Native villages; and 
indirectly creating jobs by expanding markets for Native 
products and services. \21\ Currently, Native Americans 
comprise less than one percent of all Information Technology 
    \20\ Id. at 2.
    \21\ Telecommunications Technology and Native Americans, p. 104.
    \22\ Serving the Nation, p. 15.
    Moreover, telecommunications services save lives. Without 
telephones, Indian citizens are unable to call for emergency 
assistance. And telecommunications is integral to the 
development of telemedicine.
    In Alaska, for instance, although many areas are without 
telephones, some of those same areas have access to 
telemedicine through the Alaska Federal Health Care 
Partnership. This Partnership has deployed telemedicine 
solutions to 248 sites throughout Alaska, with approximately 
200 of these sites at Native/Tribal clinics and hospitals.
    The Alaska telemedicine system has conducted more than 
17,000 clinical cases in the last 3\1/2\ years. Based on 
surveys conducted by the Partnership, telemedicine eliminated 
the need for travel by the patient and family 37% of the time 
while giving rise to travel 8% of the time.\23\ More recently, 
the Partnership conducted a study of telehealth cases that were 
reimbursed through Medicaid and discovered that an average of 
$7.95 was saved by Medicaid in travel costs for every $1 spent 
on claims.\24\
    \23\ A Unified Approach to Telehealth in Alaska, p. 14 (2004).
    \24\ A Unified Approach, p. 14.
    Despite the success of telemedicine in Alaska, the American 
Indian Information Network for Indian Health Services' report 
on Telemedicine concluded that access to affordable 
telecommunications is the major barrier to implementing 
telemedicine projects throughout Indian Country.\25\
    \25\ Telemedicine & Telehealth Projects Service Indian Health 
Service & Tribes, U.S. Department of Health and Human Services, Indian 
Health Service, Department of Environmental Health and Engineering, p. 
24 (2000).
    Telecommunications promotes education by allowing distance 
learning to encourage student access to educational 
opportunities and retention. It may be used in all areas of 
education including worker training, preschool, elementary, 
secondary, and post-secondary education by offering students 
access to courses and educational material from on and off-
reservation locations.
    The Salish Kootenai College, located in Montana, offers 
approximately 170 courses through distance education and is 
seeking accreditation for two degree programs: an Associate of 
Arts in general studies and a Bachelors of Arts in tribal human 
services.The College has developed the distance education 
program to ensure that all online courses incorporate a cultural 
element. More than 1,000 students from 70 tribes as well as citizens of 
Finland, Japan, and Canada have taken distance education classes from 
the College. In addition, at the request of smaller nearby tribes, the 
College has opened branch campuses made feasible in part through 
distance education classes.
            Native language and culture
    Many native communities believe that strengthening native 
language and culture will assist in addressing community and 
societal problems, such as alcoholism, gang activity, and 
suicide. Telecommunications can be an invaluable part of this 
effort by offering new methods of retaining and preserving 
native languages and culture by spreading the knowledge to a 
broader forum, such as conversing online.
    For example, the Gila River Indian Community provides 
information on tribal traditions and cultures to students 
attending tribal, Bureau of Indian Affairs, parochial, and 
public schools through a community-wide network. Because the 
curriculum content is tribally-controlled and approved, the 
curriculum protects and preserves Gila River's culture.
    In addition, the Salish-Kootenai College has incorporated 
native culture into curriculum and instruction through an 
online format. The College offers a culturally appropriate 
curriculum, dialogical learning that includes tribal 
storytelling, and visual learning using culturally appropriate 
graphics and demonstrations.

Native American Connectivity Act

    Bt establishing a flexible block grant program, the Native 
American Connectivity Act (NACA) seeks to begin addressing the 
recommendations found in two Federal reports and to further 
tribal self-determination by authorizing grants to tribal 
communities for the planning, research, and development to 
address the telecommunications needs of their respective 
communities. It will also help ensure that technology 
infrastructure will be culturally appropriate as the local 
tribal community will determine needs, implementation, and help 
define content.
    Funds available under NACA differ from funds available 
under the Department of Agriculture programs in that NACA 
establishes a grant rather than a loan program. NACA funds 
would also be available for other purposes, including 
preliminary planning and development studies and work needed 
before a tribal government may apply for an infrastructure 
loan. NACA differs from the TOPS program because the NACA 
program is broader, more flexible, and is available only for 
Indian tribes and other specified entities acting through 
agreements with an Indian tribe.

                          LEGISLATIVE HISTORY

    S. 2382 was introduced on May 4, 2004, by Senator Inouye 
and was referred to the Committee on Indian Affairs. Senators 
Campbell, Daschle, and Murray are cosponsors of S. 2382. A 
hearing on S. 2382 was held on May 20, 2004 and the Committee 
favorably reported an amendment in the nature of a substitute 
to S. 2382 to the full Senate on July 21, 2004.


    The Committee on Indian Affairs, in an open business 
session on July 21, 2004 adopted an amendment in the nature of 
a substitute to S. 2382 by voice vote and ordered the bill, as 
amended, reported favorably to the Senate.

                      SECTION-BY-SECTION ANALYSIS

Section 1. Short title

    This section sets forth the short title of the bill as the 
``Native American Connectivity Act.''

Section 2. Findings

    This section sets forth the findings, including the need 
for telecommunications infrastructure and training in Indian 
country, the effect that the lack of telecommunications has in 
Indian country, and statistics demonstrating the need for a 
telecommunications block grant program in Indian country.

Section 3. Purposes

    This section sets forth the purposes of the bill: (1) to 
promote affordable and universal access among Indian tribal 
governments, tribal entities, reservation-based schools, tribal 
colleges and universities, and Indian households to 
telecommunications and information technology in Indian 
country; (2) to encourage and promote tribal economic 
development, self-sufficiency, and strong tribal governments; 
(3) to enhance the health of Indian tribal members through the 
availability and use of telemedicine and telehealth; (4) to 
improve the quality of kindergarten, primary, secondary, post-
secondary,and job-related training, through enhanced and 
sustained information technology infrastructure; and (5) to assist in 
the retention and preservation of native languages and cultural 

Section 4. Definitions

    This section sets forth definitions for the following 
terms: block grant; eligible activity; eligible entity; Indian 
tribe; information technology; planning; Secretary; technical 
assistance; training and technical assistance grant; tribal 
college or university; and telehealth. The substitute amendment 
changed the definition of ``eligible entity'' to further tribal 
self-determination by clarifying that block grant funding may 
only be used consistent with the local needs of the community 
as identified by the tribal government thus requiring that any 
non-tribal government receiving funds to act pursuant to an 
agreement with the tribal government(s). For purposes of this 
Act, tribal colleges are not considered tribally chartered 

Section 5. Block grant program

    This section establishes an Indian telecommunications block 
grant program within the National Telecommunications and 
Information Administration of the Department of Commerce. The 
block grants will be provided on a competitive basis to 
eligible entities that submit an application that meets the 
Secretary's approval. The Secretary must promulgate regulations 
establishing criteria for the competition within 180 days of 
enactment of the Act.
    The block grant is intended to be a flexible program 
similar to the Indian Community Development Block Grant program 
administered by the Department of Housing and Urban 

Section 6. Training and technical assistance grants

    This section authorizes the Secretary to set aside ten 
percent of the total amount appropriated for training and 
technical assistance grants and requires the Secretary to 
provide notice of the availability of such grants and publish 
criteria for selecting recipients. The training and technical 
assistance grants may be used by eligible entities with a 
demonstrated capacity to develop a training program 
facilitating local use and maintenance of new 
telecommunications technologies; to develop and implement 
telecommunications and information technology work study 
programs and postsecondary telecommunications and information-
related education, development, planning and management 
programs; develop a training program for telecommunications 
employees; or to provide assistance to students who participate 
in telecommunications or information technology work study 
programs and are enrolled in a full-time graduate or 
undergraduate program in telecommunications-related education, 
development, planning or management. A training and technical 
assistance grant may be provided in addition to any block grant 
provided under this Act. In addition, the Secretary may provide 
technical assistance, either directly or through contracts, to 
eligible entities.

Section 7. Compliance

    This section authorizes the Comptroller General of the 
United States to audit any financial transaction involving 
grant funds by any grant recipient. In conducting an audit, the 
Comptroller General shall have access to all accounts, records, 
and reports that are necessary to facilitate the audit.
    In addition, the Secretary is authorized to promulgate 
regulations to ensure that the National Environmental Policy 
Act of 1969 (NEPA) is effectively implemented and to assure the 
public of undiminished protection of the environment. The 
Secretary may release the funds to grant recipients that assume 
all of the responsibilities for environmental review, 
decisionmaking, and related action under NEPA and other laws 
upon request by a grant recipient and a certification that 
meets specified criteria.

Section 8. Remedies for noncompliance

    This section sets for remedies for noncompliance that the 
Secretary may take after finding, through an agency hearing, 
that a grant recipient has failed to comply substantially with 
any provision of this Act. The remedies include terminating 
payments to the grant recipient; reducing payments to the grant 
recipient by an amount equal to the amount of payments that 
were not expended in accordance with the Act; limiting the 
availability of payments only to programs, projects, or 
activities not affected by the failure to comply, or referring 
the matter to the United States Attorney General with a 
recommendation that the Attorney General bring an appropriate 
civil action. The Attorney General is authorized to bring civil 
action seeking appropriate relief.

Section 9. Reporting requirements

    This section requires the Secretary to submit an annual 
report to Congress describing the progress made in 
accomplishing the objectives of the Act; summarizing the use of 
funds during the preceding year; and evaluating the status of 
telephone; Internet, and personal computer penetration rates in 
Indian country on a tribe-by-tribe basis. The Secretary may 
require grant recipients to submit reports and other 
information necessary for the Secretary to prepare the report.

Section 10. Consultation

    This section requires the Secretary to consult with other 
Federal agencies administering Federal grant programs related 
to the development of telecommunications capacities or 
infrastructure; and to consult with the General Accounting 
Office and Indian tribes to determine the priority and 
proportion of grant funds necessary to address training and 
technical assistance and eligible activity needs.

Section 11. Historic preservation requirements

    This section requires any projects funded under this Act to 
comply with the National Historic Preservation Act and the 
Native American Graves Protection and Repatriation Act.

Section 12. Authorization of appropriations

    This section authorizes $20,000,000 for Fiscal Year 2005 
and such sums as are necessary for each subsequent fiscal year. 
Funds are to remain available until expended.


    The cost estimate for S. 2382, as amended, as provided by 
the Congressional Budget Office, is set forth below:

S. 2382--Native American Connectivity Act

    Summary: S. 2382 would authorize appropriations for fiscal 
year 2005 and subsequent years for grants to Indian tribes or 
organizations to provide telecommunications services. Under the 
bill, the National Telecommunications and Information 
Administration (NTIA) would administer the grant program. 
Assuming appropriation of the authorized and estimated amounts, 
CBO estimates that implementing S. 2382 would cost $70 million 
over the 2005-2009 period. Enacting the bill would not affect 
direct spending or revenues.
    S. 2382 contains no intergovernmental or private-sector 
mandates as defined in the Unfunded Mandates Reform Act (UMRA) 
and would impose no costs on state, local, or tribal 
    Estimated cost to the Federal Government: The estimated 
budgetary impact of S. 2382 is shown in the following table. 
The costs of this legislation fall within budget function 500 
(education, training, employment, and social services).
    S. 2382 would authorize the appropriation of $20 million in 
2005 and amounts necessary in subsequent years for grants to 
Indian tribes and organizations. CBO estimated the amount 
authorized for grants after 2005 by adjusting $20 million for 
anticipated inflation. Estimates of outlays are based on 
historical spending patterns for similar programs.

                                                                       By fiscal year, in millions of dollars--
                                                                       2005     2006     2007     2008     2009
                                  CHANGES IN SPENDING SUBJECT TO APPROPRIATION

Estimated authorization level......................................       20       20       21       21       21
Estimated outlays..................................................        2       11       16       20       21

    Intergovernmental and private-sector impact: S. 2382 
contains no intergovernmental or private-sector mandates as 
defined in UMRA and would impose no costs on state, local, or 
tribal governments. Grants authorized by the bill would benefit 
tribal governments.
    Estimate prepared by: Federal Costs: Melissa E. Zimmerman; 
Impact on State, Local, and Tribal Governments: Marjorie 
Miller; Impact on the Private Sector: Selena Caldera.
    Estimate approved by: Robert A. Sunshine, Assistant 
Director for Budget Analysis.

                        EXECUTIVE COMMUNICATIONS

    The position of the Administration on S. 2382 is set forth 


    Paragraph 11(b) of rule XXVI of the Standing Rules of the 
Senate requires each report accompanying a bill to evaluate the 
regulatory and paperwork impact that would be incurred in 
carrying out the bill. The Committee finds that S. 2382, as 
amended, will require the promulgation of regulations, however, 
the regulatory and paperwork impact should be minimal.

                        CHANGES IN EXISTING LAW

    In compliance with subsection 12 of rule XXVI of the 
Standing Rules of the Senate, changes in existing law made by a 
bill are required to be set forth in the accompanying Committee 
report. There will be no changes in existing law.