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15                      PUBLIC HEARING
                         January 29, 1999
16                           8:30 a.m.
                   Indian Pueblo Cultural Center
17                       2401 12th St., NW
                      Albuquerque, NM  87102
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   REPORTED BY:  Christopher R. Sanchez, NM CCR #217
24               Hughes Southwest Court Reporters
                 300 Central Ave., SW, Suite 1500-East
25               Albuquerque, NM  87102

                                                 Page 1
 1                           I N D E X
 2                                                       PAGE
 3 Opening statement by Chairman Kennard                    4
 4 Opening statement by Commissioner Tristani               9
 5 Opening statement by Congresswoman Heather Wilson       12
 6 Opening statement by Congressman Tom Udall              15
 7 
 8 Statement by Senator Tsosie                             20
 9                            PANEL 1
   
10 Statement by Stanley Pino, Chairman, All Indian         26
   Pueblo Council
11 
   Statement by Governor Raymond Gachupin of Jemez         29
12 Pueblo
   
13 Statement by George Arthur, Council Delegate,           38
   Navajo Nation
14 
   Statement by Arnold Cassador, President,                45
15 Jicarilla Apache Tribe
   
16 Statement by Godfrey Enjady, General Manager,           51
   Mescalero Apache Telephone & Utilities
17 
   Statement by Eagle Rael, Governor, Picuris Pueblo       57
18 
   Statement by Anthony Lucio, Councilman, Zuni            62
19 Pueblo, Western Pueblos
   
20                            PANEL 2
   
21 Statement by Edward Lopez, Vice President,              79
   Regulatory Affairs, US West
22 
   Statement by Francis Mike, Navajo Communications Co.    84
23 
   Statement by Arthur Martinez, Western NM Telephone Co.  88
24 
   Statement by Gene DeJordy, Executive Director,          93
25 Western Wireless
   

                                                 Page 2
 1                       INDEX (CONTINUED)
                                                         PAGE
 2 
   Statement by Peter Carson, Vice President, Business     96
 3 Development, ArrayComm
   
 4                            PANEL 3
   
 5 Statement by Linda Lovejoy, Chair, New Mexico Public   114
   Regulations Commission
 6 
   Statement by Steve Beffort, Cabinet Secretary,         117
 7 New Mexico General Services Department
   
 8 Statement by Richard Weiner, Assistant Attorney        122
   General, New Mexico
 9 
   Statement by Karen Buller, CEO, National Indian        128
10 Telecommunications Institution
   
11 REPORTER'S CERTIFICATE                                 154
   
12 
   

                                                 Page 3
 1                     P R O C E E D I N G S
 2                CHAIRMAN KENNARD:  Let's get started this
 3 morning.  Good morning and welcome to the first of several
 4 Federal Communications Commission field hearings to examine
 5 the lack of telephone service in Indian reservations across
 6 our nation.
 7           My name is Bill Kennard.  I'm the Chairman of the
 8 Federal Communications Commission, and it is my pleasure to
 9 be here to work with you on these important issues.  I also
10 wanted to thank the Indian Pueblo Cultural Center for
11 hosting us today, and the people of New Mexico for having us
12 here and for their gracious hospitality.
13           In Washington, we feel particularly fortunate
14 because we get to work with very committed and able public
15 servants from around the country.  But having had the chance
16 now to visit your beautiful state for the first time, I'm
17 thinking that maybe we're not getting the best part of this
18 deal.  For those of us who are native Washingtonians,
19 perhaps it would be better if we came to New Mexico instead,
20 especially in the wintertime, especially with all this
21 craziness going on in Washington these days in the political
22 scene.
23           But either way, I feel especially fortunate to
24 have one of your own, Gloria Tristani, as my colleague at
25 the FCC.  I find that Gloria has been truly a breath of

                                                 Page 4
 1 fresh air on the FCC.  She's a person who truly cares about
 2 doing the right thing for average Americans -- and that
 3 hasn't always been the case at the FCC -- someone who is
 4 completely committed to making sure that all Americans have
 5 access to telecommunications technologies.  And her
 6 commitment, drive and quick mind have made my job much, much
 7 easier as Chairman, especially because we share so many of
 8 the same goals for the country.  She's been a terrific ally
 9 and, more important, a good friend.  And, Gloria, it's
10 wonderful to be here in your home state with you.
11           And on Capitol Hill I have been able to work with
12 Senators Bingaman and Domenici.  And I've been looking
13 forward to working with who I think are two of the most
14 exciting members of Congress, who are here today, Heather
15 Wilson and Tom Udall.  And I know you'll be hearing a lot
16 about their careers not only in this session but in many
17 years to come.
18      Today we are making history in New Mexico because this
19 is the first time in the history of the Federal
20 Communications Commission that we have held a field hearing
21 to address this pressing issue of access to telephone
22 service on Indian reservations.  Never before in the history
23 of the Commission have we focused attention on this issue.
24      I believe that it's shameful that as we enter the 21st
25 Century, and as we all marvel at the wonders of the Internet

                                                 Page 5
 1 and all of the wonderful things that electronic commerce
 2 will bring to our country and our economy, that there are
 3 still people in America who do not have access to basic
 4 telephone service.  And since New Mexico lays claim to the
 5 very oldest road in the United States, a road serving
 6 Albuquerque for over 400 years, it's more than ironic that
 7 our newest road, the information highway, is available to so
 8 few of the first Americans, our original settlers.
 9      It's estimated that telephone penetration in this
10 country reaches 94 percent of Americans on average.  That's
11 a very high percentage relative to the rest of the world,
12 and we should be very proud of that.  In fact, our telephone
13 networks in this country are the envy of the rest of the
14 world.  But on Indian reservations in this country,
15 telephone penetration only averages 40 to 55 percent, half
16 of what most average Americans get elsewhere.  And on the
17 largest reservation in the country, we are told that only 25
18 percent of people have access to a telephone.  That's on the
19 Navajo reservation.
20      Many Indian nations have informed us that it sometimes
21 takes them over 10 years to get a telephone installed.  Or
22 sometimes the phone company is willing to install a phone
23 but the cost is prohibitive.  $40,000 to extend a line.
24 $150,000 to extend a line.  These are some of the stories
25 that we've heard in the last few days.

                                                 Page 6
 1      And for those who are fortunate enough to have
 2 telephones, oftentimes we generate another problem.  Their
 3 phone bills are too high.  They discover that to call
 4 friends or family or to get access to their hospital or
 5 their school, it's a toll call, a long distance call.  And
 6 to add insult to injury, we're hearing that the quality of
 7 service is spotty, at best, and equipment serving some of
 8 these areas is antiquated.
 9      It's no surprise, then, that many of these areas suffer
10 so in other basic services like education and health care,
11 public safety.  If you don't have a basic communications
12 infrastructure, how can you attract high-paying jobs?  How
13 can you solve an unemployment rate?  If you can't call
14 quickly for emergency help, how can you even begin to have
15 high rates of quality health care?
16      We've heard a lot of very compelling stories as we've
17 prepared for this hearing.  We heard one about a gentleman
18 named Darrell Gerlaugh of the Gila River Reservation in
19 Arizona.  He found out the hard way about this lack of
20 access to telephone service when years ago his grandfather
21 got sick.  His family had to hitchhike to get to the nearest
22 pay phone just in order to call the ambulance to get help
23 for his grandfather.  Many hours later after help came it
24 was too late.  He had lost his grandfather.
25      And I'm afraid that these stories are not unusual.

                                                 Page 7
 1 Well, we've got to do something about that.  That's why
 2 we're here to focus on this problem.  And let's remember
 3 that we're not focusing only on the problem as it affects
 4 Indian populations.  Many other areas of rural America, in
 5 fact, some areas in the inner cities of America, also have
 6 similar underservice problems, similar lack of basic
 7 telephone service.
 8      When I became Chairman of the Federal Communications
 9 Commission last year, I pledged that I would do everything I
10 could to make sure that all Americans are able to
11 participate in this revolution in technology and
12 communications that is so changing our nation and our world.
13 Because I believe that this communications revolution will
14 only be a success if it's an inclusive revolution and helps
15 all peoples.  That's why we're here today, to see and learn
16 firsthand about the problem so that we can address it.
17      And I believe that the problem is not one of
18 technology.  If we in this country can develop a phone the
19 size of a wallet that can fit in your pocket, and develop
20 the wonders of the Internet to connect people all around the
21 world with the highest capacity fiber packet switch
22 networks, we can figure out a way to get basic telephone
23 service on Indian reservations.  The technology is here.
24 What we lack in this country is the will.
25      Will we have the will to change the rules and

                                                 Page 8
 1 incentives so that companies will bring these services?
 2 Will we figure out a way for the states, tribes and the
 3 federal government to work together to solve this problem?
 4 Do we have fundamentally the will to work together and make
 5 this happen?  Well, I'm very optimistic being here today,
 6 seeing all of you, seeing the outpouring of concern that I
 7 have seen.  Being here in New Mexico makes me believe that
 8 we can address this problem, we will address this problem,
 9 and we will get it solved, working together.
10      I'd now like to turn to my esteemed colleague,
11 Commissioner Gloria Tristani, our host.  Without her, this
12 event would not have taken place, and someone who I know
13 will lead us in our quest for solutions.  Gloria.
14                COMMISSIONER TRISTANI:  Thank you, Mr.
15 Chairman.  Can you hear me?  Good morning.  Buenos dias.
16 It's a real pleasure for me to be back in New Mexico on
17 official duty with the Federal Communications Commission.
18 And I guess the only thing that would be better would be to
19 be here on vacation, but since I have to be working, I could
20 not be more pleased than to be here on an issue that is so
21 important to me and to so many New Mexicans -- the issue of
22 telephone subscribership among Native Americans on
23 reservations and pueblos.  This is a critical issue for the
24 Native American communities in New Mexico and throughout the
25 United States.

                                                 Page 9
 1           Today and in the future, basic telephone service
 2 will, at a minimum, provide instant access to emergency
 3 services.  With large numbers of people lacking such access,
 4 that's a cause for concern.  But in the near future, the
 5 lack of telephone service will increasingly affect a
 6 person's quality of life.  This is because the telephone
 7 lines are what connect us to the Internet.  And the Internet
 8 is quickly becoming the national town square.  Everything
 9 from family communications, to consumer purchases, to
10 politics, to personal finance, will one day be totally on
11 the Internet.
12           If you think there's a troublesome divide between
13 the information have's and have-not's in our society today,
14 just wait until the Internet takes over.  If you're not on
15 the Internet in five years, your access to important
16 information and the way you communicate with friends and
17 relatives will be light years behind the rest of America.
18 We cannot allow that to happen to Native Americans or to any
19 other group of Americans, and that's why I'm here today.
20 The sooner that all stakeholders come together and address
21 the problem of no telephone penetration on Indian lands, the
22 more likely it will be that all Americans, including
23 Indians, will be part of the telecommunications revolution.
24           Looking over the list of participants in today's
25 hearing, I am very pleased to see so many quality people

                                                 Page 10
 1 that will help guide the FCC's thinking.  But the credit for
 2 making today's hearing a reality goes to Chairman Kennard.
 3 I have to tell you, without his commitment to this issue, we
 4 will not see things happen.  He has made Native American
 5 issues a priority, and he has made sure that our talented
 6 staff at the FCC have been devoted to that priority.
 7           I would also note my appreciation that
 8 Congresswoman Wilson and Congressman Udall have taken the
 9 time to be here today.  Their support will be extremely
10 helpful as we resolve these issues.  I'd also like to note
11 that our two Senators, Senator Domenici and Senator
12 Bingaman, I know would be here today if they could.
13           Finally, I'd like to thank those of you in the
14 audience who have taken the time to come here today to help
15 us with this important issue.  And my sincere appreciation
16 and thanks to all the panelists.  I can't name you all now,
17 but I am really thankful and grateful that you are here.
18           I'd like to take this opportunity to recognize
19 some of my friends in the audience.  I'd like to start with
20 some of the members of the new Public Regulatory Commission.
21 And I probably got that wrong, but -- I still wanted to say
22 State Corporation Commission.  Some of you might understand.
23 I believe Linda Lovejoy, the chair, is here.  Welcome.  My
24 former colleague on the SCC, Jerome Block.  Commissioner
25 Bill Pope who took my seat on the SCC.  I'd also like to

                                                 Page 11
 1 recognize an old friend and a wonderful New Mexican,
 2 Governor Anaya.  Thank you for being here.  Steve Gallegos,
 3 thank you for being here.  Councilman Michael Brasher I know
 4 was here earlier from Albuquerque.  Is Senator Tsosie here?
 5 Yes.  I thought I saw you come in.  Senator Tsosie, could
 6 you please stand up?  I'd also like to recognize a friend
 7 from Washington, although he's from New Mexico, too, in many
 8 ways, Ambassador Charlie Blackwell.  Ambassador Blackwell
 9 has already helped guide our thinking at the FCC.  I know
10 there are many more I'd like to recognize, but we have to
11 get this hearing going.  Thank you for being here.  And with
12 that, Congresswoman Wilson, if you will start this hearing.
13                CONGRESSWOMAN WILSON:  Thank you very much.
14 It's a real pleasure to be here.  And I wanted to thank
15 Chairman Kennard and Commissioner Tristani for coming to New
16 Mexico to hold this hearing.  It's a real pleasure, believe
17 me, to be out of Washington and to be having this hearing
18 here.  I serve on the Commerce Committee, on the
19 Telecommunications Subcommittee of the Commerce Committee,
20 which has oversight of all telecommunications issues, as
21 well as of the FCC.  I have to admit that when I was in my
22 first subcommittee meeting, one of my colleagues said,
23 "Isn't there a lady from New Mexico who is a commissioner on
24 the FCC?"
25           And I said, "Well, yes, sir, there is."

                                                 Page 12
 1           And he said, "Is there a conspiracy of New Mexico
 2 woman dealing with telecommunications in New Mexico in this
 3 country?"
 4           And I said, "No, but I'm sure we can start one."
 5           Access to telecommunications is growing more
 6 important every year; all of us know that and understand it.
 7 Anyone who's stood by children as they play on the Internet
 8 know that the future is in telecommunications and in access
 9 to those telecommunications.
10           Two days ago I was out in Moriarty, at the public
11 library in Moriarty, and they are now not only on the
12 Internet but able to access immediately over 2,000
13 periodicals immediately via the Internet.  That gives great
14 power to small, rural communities, and it's a power that we
15 need to make sure is in all of our communities.
16           Unfortunately, Indian country and rural areas are
17 being left behind.  And often, this issue in Washington is
18 not so much a party issue.  It is an issue between east and
19 west, between rural America and urban America, where people
20 have to think about all of America and making sure that all
21 Americans have access to the technology of the 21st Century.
22           This year the Commerce Committee will be taking up
23 the reauthorization of the FCC, as well as a number of other
24 issues related to the Telecommunications Act of 1996, and
25 examining how best to expand the availability of

                                                 Page 13
 1 telecommunications.  The Congress and the Commerce Committee
 2 want to expand the availability of those services.  Of
 3 course, the devil is in the details.  The question is, how
 4 can we expand service?  That's the tough question, and
 5 that's, for me, why this hearing today is as important for
 6 me as it may be for the FCC.
 7           One of the pie-in-the-sky things that I would like
 8 to see is what if we just leapfrogged that whole 20th
 9 Century generation of technology into the 21st Century of
10 technology for our rural areas and for Indian country.  This
11 hearing is important to me, too.  I look forward to hearing
12 what people have to say and what the panelists have to say
13 about their needs, their ideas and their innovations.  I
14 very much welcome the input into the opportunity.  Thank
15 you.
16                CHAIRMAN KENNARD:  Thank you very much.  Now
17 I'm pleased to introduce Congressman Tom Udall, who was also
18 able to join us today.  As I said before, Tom is one of the
19 shining stars of the freshman class in Congress.  He's
20 already distinguished himself by his election to serve as
21 one of only three freshman Democrats to be elected as a
22 Freshman Democrat Whip with Congress.  I think we all
23 acknowledge that Mr. Udall is following in a very proud
24 tradition of public service in his family, and I'm delighted
25 that I have the opportunity to meet with him and look

                                                 Page 14
 1 forward to working with him in the next Congress and in
 2 years to come.  Mr. Udall.
 3                CONGRESSMAN UDALL:  Thank you very much,
 4 Chairman Kennard.  Thank you for the kind words about my
 5 family.  Some of us in the family think that there are --
 6 some of my brothers and cousins, they say, "Tom got the
 7 defective gene.  It was a political gene."  But it is a
 8 pleasure to be with all of you.  As with the rest of us that
 9 have to work back in Washington, to be here in New Mexico is
10 always a pleasure.  I thought I was going to come out to
11 blue skies.  We don't have those today, but of course we
12 probably will in the next couple of days.
13      Let me thank Commissioner Tristani and Chairman Kennard
14 for bringing this historic moment not only to New Mexico,
15 but here to the Indian Pueblo Cultural Center.  I think that
16 this is a very appropriate place to have this meeting, and
17 we appreciate you being here.
18      I also want to just say a word about Commissioner
19 Tristani; we worked a long time together when she was on the
20 State Corporation Commission, as well with Jerome.  And she
21 was known for being a real leader on that commission.  She
22 was known for tackling tough issues.  And I know that with
23 both her and Chairman Kennard focusing on this issue, that
24 something is going to be accomplished.  I know that the
25 needs that are out there in Indian country, if we all work

                                                 Page 15
 1 together, can be met.
 2      It's also a real honor to be on this panel with all
 3 these distinguished governors and Native American leaders.
 4 I think I'm very much looking forward to hearing their
 5 comments as we move along today.
 6      Chairman Kennard, I think your title of this hearing is
 7 a very apt one:  Overcoming obstacles to telephone service
 8 to Indians on reservations.  Clearly, we have very many
 9 obstacles that we need to clear away, to reach the goal of
10 universal service for everyone, including Indian
11 communities.  There isn't any doubt in my mind that we have
12 a very severe problem in terms of access.  Let's just look
13 at the big picture for a second.  I know you're going to
14 hear the specifics here from the tribes that are present
15 today, but 93 percent of American homes have telephones,
16 whereas for most New Mexico Indian communities it's in the
17 range of 30 to 50 percent.
18      So it's clear that universal service is not a reality
19 in the Indian country.  And it's not just that.  It's even
20 the issue of pay phones and access to pay phones.  In these
21 remote areas you sometimes have to travel miles and miles
22 just to get to a pay phone.  It's not just having a home
23 phone.
24      So why is it so important and why are we here today to
25 address this issue?  I think there are two very good

                                                 Page 16
 1 reasons.  One is, infrastructure is the key to economic
 2 development.  We all know that.  We talk over and over again
 3 about infrastructure, you put it in place and it helps
 4 everything else grow.  Well, telephones are a key component
 5 of infrastructure.  Without telephones, individuals living
 6 in our communities, especially our Indian communities, are
 7 going to be left behind.
 8      The second reason, that I think has been alluded to by
 9 the other speakers, is we're living in a brand new world.
10 Technology is remaking our world.  Our world is at one time
11 becoming larger, but it's also becoming smaller with the
12 Internet.  With this new technology and with telephones and
13 with computers, we are able to do things that a couple of
14 generations ago we would have thought impossible.
15      Three good examples.  In the education area -- you
16 know, Congresswoman Wilson and I know, we always brag about
17 how great access we have to information.  We have this
18 wonderful Library of Congress which serves us.  Today, with
19 the Internet, we are able to plug in an individual from
20 their phone with a telephone line and with a computer to
21 even better opportunities than are available through the
22 Library of Congress.
23      We have also seen a dramatic change in the way
24 businesses operate.  People are telecommuting from their
25 homes.  They're plugging in with a computer and with a fax

                                                 Page 17
 1 and running businesses out of their homes and connecting all
 2 over the world, not just in the United States.
 3      I don't think we should ever forget that there are
 4 emergency situations where 911 and telephone lines are very
 5 important, where friends and neighbors can reach out to
 6 others and help them maybe save a life.  So, in sum, there
 7 are very important resources our Indian communities cannot
 8 afford to be without.
 9      On the issue of obstacles and how we deal with these
10 obstacles, I think we also need to think outside the box.
11 We can't just use the traditional ways and the traditional
12 solutions that we've seen.  We know, because of the large,
13 vast areas in Indian country, that it's going to be
14 prohibitively expensive to put in telephones in the
15 traditional ways.  But we have technology.  We have
16 satellites.  We have cellular phones.  There's got to be a
17 way we can bridge between the two and move forward.
18      So I look forward to working with the tribes here in
19 New Mexico, with the industry people, and with our
20 Congressional delegation to see that we reach the reality of
21 universal service in Indian country.  If it means amending
22 the Telecommunications Act of 1996, if it means amending
23 other Congressional laws, I stand ready and willing to help.
24      One of the ways that I think we could open up the door
25 here is having a committee in the House of Representatives,

                                                 Page 18
 1 at least a subcommittee, that would focus on Native American
 2 issues.  I have written to Chairman Young, who is chairman
 3 of the House Resources, the old interior committee that my
 4 uncle chaired, and asked him to set up a subcommittee within
 5 that resources committee for Native American issues where we
 6 can take these kinds of issues and focus their attention.
 7      I've also been appointed to the Small Business
 8 Committee.  This is a committee that I look forward to
 9 bringing the resources here to New Mexico, hearing from
10 small businesses.  I also look forward to working with these
11 tribal leaders to see that our small businesses expand and
12 that we get the infrastructure in place on our reservations
13 that is going to make everyone a part of the community.  So
14 I look forward to working with all of you and I look forward
15 to hearing from the other panelists.  Thank you very much,
16 again, Chairman Kennard and Commissioner Gloria Tristani.
17                CHAIRMAN KENNARD:  Thank you very much,
18 Congressman.  That notion of setting up a subcommittee in
19 the Congress to examine these issues is a very exciting
20 idea.  I hope that will come to fruition.
21           I would like to acknowledge one other person who
22 is up here sort of hidden behind the panelists, as is his
23 inclination.  But we have today with us truly one of the
24 world class engineers in the country today.  Dale Hatfield
25 is chief of the FCC's Office of Engineering and Technology.

                                                 Page 19
 1 And I hope that as we talk about these issues today, we talk
 2 about lots of technological alternatives.  Heather Wilson
 3 and Tom Udall touched on this.  And this is a really
 4 important issue.
 5           We need not replicate the old 20th Century
 6 technology of copper wires and lines when we have a
 7 state-of-the-art wireless technology and satellites that can
 8 solve some of these problems.  So as we proceed today, Dale
 9 Hatfield, our chief engineer at the FCC, will be here to
10 answer questions and really get into some of the technical
11 feasibility issues that I hope will arise.
12           I also understand from Commissioner Tristani that
13 we have another distinguished guest who wanted to give some
14 brief opening remarks.  Commissioner.
15                COMMISSIONER TRISTANI:  If Senator Tsosie
16 will come up here to the table.  I know, Senator, you have
17 to get back to the legislature, and we're very glad you're
18 here.
19                SENATOR TSOSIE:  I appreciate the opportunity
20 to make a comment.  We have somewhat been involved in this
21 effort.  I have to get back up to Santa Fe for a caucus and
22 a session, but I really wanted to be here.  I really
23 appreciate Commissioner Tristani taking the lead in this
24 issue.  Also, I thank you, Chairman Kennard, tribal leaders,
25 Congresswoman Wilson and Congressman Udall.  I might advise

                                                 Page 20
 1 Congressman Udall that in New Mexico in some Navajo chapters
 2 the number of telephones in Navajo communities is less than
 3 one percent.  I know that for a fact because at Whitehorse
 4 Lake chapter where my hometown is, it's a party line and
 5 only four can get on there and it's all full.  So people ask
 6 me and say, well, we can't even call you because there's no
 7 way I can get on that party line.
 8                CONGRESSMAN UDALL:  Is that always why I have
 9 a hard time getting in touch with you?
10                SENATOR TSOSIE:  You have my mobile phone
11 number.  I could never get ahold of him.  We're just
12 kidding.  Thank you.  I appreciate this.
13           I just want to say that efforts in Indian
14 countries have been going on.  I'm aware of the efforts in
15 South Dakota to try to do connections.  NAU, Northern
16 Arizona University, has been working with the junior
17 college, Lawrence Livermore in Shiprock, trying to help out
18 the Shiprock community, and then we have been working with
19 Karen Bullard here in New Mexico on what started as the
20 Crownpoint Pilot Project.
21           But what we're finding is that, you know, there's
22 really no federal or state effort to try to get this, and so
23 the tribes themselves know they have to get on these digital
24 lines.  They know it is important.  But, you know, it is
25 costly.  So they've been doing these little pilot projects

                                                 Page 21
 1 to try to do this.  And that's why I'm real appreciative of
 2 the conference today because now we're able to convey to the
 3 federal government and the FCC the strong need for this.
 4           The other thing that is happening, too, is, there
 5 are lines there.  A real good example is along the Rio
 6 Grande corridor of New Mexico.  There are many pueblos that
 7 reside and that have reservations in pueblo lands, right
 8 along these high speed fiber optic lines between Los Alamos
 9 Lab, Albuquerque and the defense.  But nobody took the
10 initiative to do an outlet for the pueblos so they can get
11 on these digital lines.  It's right along the way.
12           That's why I think it's very important that
13 private companies also develop the digital heart, so that
14 they can say, hey, you know, there's a community here.
15 Let's connect them.  Let's provide the outlet, essentially
16 at no cost because it's along the way.  I think it's very
17 important to do that.  I have talked with US West, and
18 they've been receptive to try to discuss that issue.
19           The other thing that we worked on that we started
20 is what's called the Crownpoint Pilot Project.  I know
21 Theresa is here from the Navajo Nation.  I saw her way back
22 there.  We've been trying to do this because we tried to get
23 the state schools, the BIA schools, IHS, and other tribal
24 and state government to get on this high speed line.  I
25 think that's why it's very important where -- you know,

                                                 Page 22
 1 that's where the state, the federal and the tribes need to
 2 work together.
 3           The tribes need to assist us also, because when
 4 you extend these lines, you need right-of-ways.  That's
 5 where we need assistance from the tribes to try to work this
 6 out, because if that doesn't happen, then none of these
 7 lines are extended.  Those are some of the obstacles.
 8           I heard of a thing out at Jemez where the fiber
 9 optic line is three-quarters of a mile away from the Jemez
10 pueblo headquarters.  Imagine, you know, just putting
11 another three-quarter mile effort and you would connect that
12 whole community.  This is why I think it's so important.
13           I'd like to, in sum, say let's not give lip
14 service to this effort.  I would argue that extending the
15 Internet services and fiber optics is a federal trust
16 responsibility.  Because what you do is, as many of the
17 distinguished guests have already described, you are going
18 to do health care service through this.  You are going to do
19 social service through this.  You are going to get legal
20 information through this.  And many other things.  This is a
21 federal trust responsibility.
22           If we don't take this federal trust responsibility
23 seriously, nothing will get done.  We will contribute to the
24 digital darkness in Native American communities in the next
25 millenium, and along with that, we would contribute to

                                                 Page 23
 1 depriving Indian people of their precious rights.  One
 2 example of that is what's going on in New Mexico with health
 3 care.  With health care, you can get on the Internet and
 4 change your MCO almost at an instant.  But in Native
 5 American communities, that cannot be done.
 6           In New Mexico, you can get information on the
 7 Internet about -- the information about the MCO's and make
 8 the right choice to get quality health care.  That is not
 9 open to the Native Americans because there's no digital
10 lines to them and no Internet.
11           Allison Friese is here today, and I hope she will
12 be given the opportunity later on to describe the Crownpoint
13 Pilot Project.  I don't know if anybody from Los Alamos Lab
14 is here, but they've been helping us and they can describe
15 the problems we ran into in trying to do that.  We're
16 continuing, with very little revenue, trying to continue to
17 provide lines to these tribal libraries, also.  We decided
18 the best way to do it is to try to get to the tribal
19 libraries, because that's a public facility.  It's open
20 pretty much all the time and the resources are there.
21           So we're trying to do that.  We need help from the
22 private effort.  We need help from the federal government.
23 We need help from the state.  We need help from the state
24 PRC.  To me, it doesn't take a budget to begin planning.  It
25 doesn't take a budget to develop a heart for Native

                                                 Page 24
 1 Americans and an understanding of the need to do this.  And
 2 I hope that the PRC will continue -- the new group would
 3 help us in trying to find this.  Thank you very much,
 4 Chairman.
 5                CHAIRMAN KENNARD:  Thank you.  We're falling
 6 a little bit behind schedule, so we're going to proceed
 7 quickly into our next panel.  By the way, we have three
 8 panels today.  We will have a panel of Indian leaders who
 9 will give us their unique perspective on what is happening
10 in Indian country in this area.  Next, we'll have a panel of
11 telecommunications companies.  We have representatives of a
12 wide variety of companies.  I think it's going to be very
13 interesting to hear about the various technologies that are
14 available to solve these problems we're talking about.  Our
15 third panel will include state government and consumer
16 representatives.
17           Our first panel is assembled here, and I'm going
18 to dispense with the introductions in the interest of time.
19 So I'm going to ask each of the panelists to introduce
20 themselves and their affiliation, and tell us a little bit
21 about your experience and how you see the problem that we
22 are addressing today.  And I want to talk about specific
23 solutions, how we can get to important points on the board
24 in actually solving this problem.  Our first panelist is
25 Stanley Pino, Chairman of the All Indian Pueblo Council.

                                                 Page 25
 1 Mr. Pino.  I'd appreciate it if you'd limit your comments to
 2 about five or six minutes.
 3                MR. PINO:  My name is Stanley Pino.  I'm the
 4 Chairman of the All Indian Pueblo Council.  The All Indian
 5 Pueblo Council represents 19 pueblo governments here in the
 6 State of New Mexico.  I would like to welcome everybody in
 7 the audience to our flagship, the Indian Pueblo Cultural
 8 Center.  Like Congressman Udall said, I wish we had blue
 9 skies today, but we will take this weather any time because
10 of the dryness.
11           Chairman Kennard, we welcome you to the Land of
12 Enchantment.  Commissioner Tristani, we welcome you home.
13 Congresswoman Wilson, Congressman Udall, we are pleased with
14 your presence here today, but we are most especially pleased
15 with your presence in Washington D.C.  Thank you, Mr.
16 Chairman, for having this hearing and inviting me to testify
17 on behalf of the All Indian Pueblo Council and the 19
18 governments and the pueblo people that we serve.  We support
19 you in your work to overcome obstacles to telephone service
20 for Indian people on the reservations.
21           There are 70,000 pueblo Indian citizens living on
22 19 pueblos.  The majority of them are 18 years of age and
23 younger.  It is important for our youth that we correct the
24 lack of affordable telephone service which impedes their
25 access to knowledge and education, and for our elderly to

                                                 Page 26
 1 ensure access to emergency services.  As the chairman, I
 2 share the commitment of every pueblo tribal governor to
 3 better health care, higher quality of education and stronger
 4 tribal economies.
 5           While we share common concerns, each pueblo has
 6 its own individual economy, geographic location and
 7 population profile.  I am pleased to see the governors from
 8 Picuris, Jemez and Zuni are testifying.  It is also my
 9 understanding that you and/or your eyes will be visiting our
10 great need for expanded and affordable telephone services
11 for the Pueblos.
12           For some time now, we here in the West have been
13 witnessing an unusual migration.  People come here to enjoy
14 our air and sunsets, but, with the benefit of high quality
15 communications technology, they maintain their "office", a
16 business presence in Chicago or San Francisco or New York
17 City.  They must have access to several telephone lines for
18 business success and personal needs.  They have adequate
19 telephone service to do this.  We want the same opportunity
20 in our tribal offices and homes -- to access and interact
21 with the outside world and take advantage of the
22 opportunities located far from our remote communities.
23           We view the right to meet our personal,
24 governmental and professional needs as a basic right as
25 American citizens and recipients of the federal trust

                                                 Page 27
 1 relationship.  When we learn that the national average
 2 telephone penetration rate for most American communities is
 3 98 percent while we are struggling to get even 40 percent in
 4 many of the pueblos, then we know there is something wrong.
 5 We look to you, the President and the Congress, to help
 6 correct this imbalance.
 7           Our financial resources to overcome these
 8 telephone penetration deficiencies are generally quite
 9 limited both tribally and personally.  As tribes work to
10 establish independent, self-sustaining, diverse economies,
11 we do indeed focus on our needs 10 years, 20 years, 100
12 years from now.  We need your assistance in forging sound,
13 mutually beneficial business relationships with telephone
14 companies and others here today who are necessary in this
15 process.  Carefully structured relationships with the state
16 which reflect respect for our sovereignty may be appropriate
17 to consider.
18           Our communities are dealing with health problems
19 which are peculiar to us in some ways but not so much in
20 others.  Diabetes, substance abuse, tuberculosis, and
21 HIV/AIDS could each be better diagnosed, treated and
22 reported with stronger communications technology.  We see on
23 television that remote geographical locations are made less
24 so by the miracles of telemedical service.  We deserve the
25 same opportunity.

                                                 Page 28
 1           It is important to us, as traditional Pueblo
 2 citizens, to zealously protect our cultural heritage,
 3 identity and practices.  Having strong, up-to-date
 4 telecommunications technology puts us in a stronger control
 5 of protecting ourselves.  It is for these same reasons we
 6 became fluent in the Spanish and Indian languages.  Please
 7 help us become fluent with the Internet language of today.
 8           We want to have our sunsets and make a good
 9 living, too.  We want to be safe in our homes and be able to
10 give our children every possible advantage.  To do so, we
11 need affordable telephone service, adequate lines and
12 serious respect for our cultural identities.  Thank you for
13 your attention.  I reserve the right, on behalf of the
14 pueblos, to submit written testimony and respectfully
15 request the record to be kept open 45 days.  Thank you,
16 Chairman Kennard.
17                CHAIRMAN KENNARD:  Thank you, Mr. Pino.  I'm
18 going to jump slightly out of order here because I've just
19 been told that Governor Gachupin of the Jemez Pueblo must
20 leave by 9:15.  Is that right?  So, with everyone's
21 indulgence, I'm going to turn to him now so that we can
22 accommodate the schedule, and we'll get back in the order
23 outlined on your agenda.  Governor.
24                GOVERNOR GACHUPIN:  Good morning.  Greetings
25 to all of you.  Welcome to the State of New Mexico, the

                                                 Page 29
 1 heart of Indian country.  You have certainly honored us by
 2 your presence here this morning, as well as along with our
 3 distinguished guests here, and we certainly want to ask you
 4 to take the opportunity to meet some of our tribal members
 5 and some of our tribal leaders throughout your visit here.
 6 I'm very certain that as you leave, as you walk away from
 7 our state here, that you have been very impressed and that
 8 you know that you've been at a very special place.
 9           My name is Raymond Gachupin, and I'm the appointed
10 governor for the Pueblo of Jemez.  It is somewhat with a
11 great deal of anxiety that I address you this morning
12 because I feel that I probably bring mostly a lot of honesty
13 of having more questions than answers for some educative
14 responses to what I realize to be very technical, complex
15 and broad range issues.  I intend to be as brief as possible
16 here.
17           It is with a great deal of sense of responsibility
18 to my children and to my children's children and in their
19 generation that I submit my comments in hopes to improve and
20 secure, with caution, their opportunities for living in and
21 entering the next millenium with the necessary tools and the
22 resources to compete and coexist with the world beyond our
23 boundaries.
24           I have many general basic questions for you to
25 ponder over, and then to finally perhaps propose to develop

                                                 Page 30
 1 a partnership.  I know, Mr. Chairman, you talked about
 2 getting a little bit more specific and actually getting down
 3 to the specifics of technology.  However, we cannot dismiss
 4 the fact that we live in a world that is guided by politics.
 5 We cannot ignore that.
 6           So some of the basic questions that I offer to you
 7 here is, what is a level of trust responsibility that the
 8 FCC has to the federally-recognized tribes?  How broad
 9 reaching is the President's executive order of April 29,
10 1994, that mandates all federal agencies and departments to
11 establish meaningful government-to-government relationships
12 with American Indian tribes?  What is the FCC's long-term
13 strategy to meet the needs of a growing community?  How will
14 tribes be affected by one of the most pressing issues to
15 affect our nation in many years?  I'm talking here about the
16 Y2K problem.  This is a very cautious problem for me because
17 I really don't understand.  But from all the media reports
18 I've realized that it seems to be a very serious problem.
19           While the rest of the nation contemplates the
20 complexity of the Y2K problem, we in some of our communities
21 wrestle with some of the simpler but equally serious issues.
22 We do not enjoy all the services that most of you have taken
23 for granted.  We, as tribes in general, have contributed
24 handsomely to the greater national utility and energy
25 picture as the resource provider at grossly underpaid

                                                 Page 31
 1 royalty positions.  Meanwhile, we have paid very expensive
 2 retail rates, sometimes disproportionately so, for all the
 3 utilities ranging from electric to gas to telephone to water
 4 systems.
 5           I guess sometimes a picture does say a thousand
 6 words.  When you think of the metaphor of the old western
 7 painting of the Indian sitting up on his horse, leaning to
 8 listen to the singing wires.  First the railroads, then the
 9 singing wires or telephones, and now cables and fiber optics
10 are being transmitted to our lands to the benefit of our
11 neighbors.  It is time to work to allow access for our
12 tribal communities to the technologies that are crossing our
13 lands.
14           I learned recently that the BIA school that is in
15 the center of our community has had a T-1 line for some
16 time.  The T-1 was installed through Vice President Gore's
17 initiative through the Internet efforts that he has put
18 forth, and he was scheduled to visit our community, but he
19 did not go through.  We were not aware -- I was not aware --
20 until we started looking into this process that we could
21 actually tap into this line.  So I've got my staff working
22 on those arrangements now.
23           Let me share a couple of very personal stories, if
24 I may.  In 1989 I was a tribal sheriff for my pueblo, and a
25 shooting occurred.  My first day on the job I was

                                                 Page 32
 1 encountered with an incident where a young man was shot.  It
 2 was about two o'clock in the morning.  I could not get ahold
 3 of any law enforcement.  Even though I was in law
 4 enforcement, I did not have the training, because we have a
 5 whole different way of appointing tribal officials in our
 6 communities.  I was totally helpless.  My radio could not
 7 transmit.  I could not get ahold of any of the emergency
 8 people.  Unfortunately, the young man did not make it.
 9           I also witnessed another tragedy in 1997, just
10 less than two years ago here.  I was a 1st Lieutenant
11 Governor.  We got a call.  We were called to a home, and a
12 female had a seizure.  Her boyfriend frantically ran from
13 house to house trying to look for a telephone.  When he did
14 find a telephone, the lines were down, so he ran to the
15 tribal sheriff's office because he knew that the tribal
16 sheriff had a radio in his vehicle, or sheriff's vehicle.
17 But our sheriff had to go about a half a mile up to one of
18 our high points just so he could transmit to the BIA law
19 enforcement in Albuquerque.  Unfortunately, the lady also
20 did not make it.
21           Many of our 3,800 tribal members, about half still
22 do not have basic telephone services in our community,
23 primarily due to the great expense and the lack of proof of
24 credit experiences.  Most of our tribal members are
25 self-employed.  Seasonal workers tied to tourism generally

                                                 Page 33
 1 do not generate the kind of income necessary to maintain
 2 telephone services.  A tribal member, who wishes to purchase
 3 or pursue telephone service, contacts our GTE service
 4 provider.  They submit to a credit check and then wait 30
 5 days for the hookup.  The connection fee alone is about $48
 6 plus $84 per hour for inside wiring service and hookup.
 7 Once the service is installed, the tribal customer pays a
 8 monthly fee plus a long distance rate to the nearby business
 9 and commercial centers in Albuquerque.  My biggest problem
10 is, I'm only 45 miles from Albuquerque and I cannot even
11 make a local call.  Zia, which is 10 miles down the road
12 from me, can make a local call to Albuquerque but we can't.
13           Our department -- in our tribal office we have
14 approximately 20 programs, and about 120 staff members --
15 I've looked at our telephone calls.  It cost us over $72,000
16 to run our telecommunications last year alone.  That's a lot
17 of money for a small tribe that doesn't have a lot of money,
18 either.  The tribal members that do have service often
19 complain that the services are unreliable and too expensive,
20 and that at times it takes quite a while to get connected.
21           I have an incident where a gentleman who has a
22 terminal illness put in a request July of last year, and to
23 this date he still does not have any service.
24           As governor of the pueblo, I feel that my hands
25 are tied to help my tribal members because I'm not

                                                 Page 34
 1 personally aware of any federal programs that offer
 2 assistance for my tribal members struggling with large
 3 telephone rates.
 4           The Pueblo of Jemez has on more than one occasion
 5 approached the State of New Mexico, GTE and US West about
 6 working with pueblos to resolve our economic dilemma without
 7 tangible benefits.  There is a state petition process.  This
 8 is the experience that we had in 1997 when we attempted to
 9 do this here, and this is a protocol that we became aware of
10 at the time.  It may still be the same, it may be different.
11 The process requires the the pueblos conduct a local
12 petition from a tribal membership, then approach the state
13 public utility corporation, then the state contacts the
14 local provider.  The local provider conducts his own survey
15 through polls and balloting, and, if it's economically
16 feasible for the company, not the tribe, then the customer
17 base accepted rate increased to have local service to
18 Albuquerque.  I do not see a government-to-government
19 relationship in this case.
20           We have not imposed -- the tribe of Jemez has not
21 imposed -- any tribal tax on our service provider, and this
22 is all within our sovereign boundaries.  We realize that we
23 fall under a different set of regulations than the rest of
24 the New Mexicans, yet the State Corporation Commission
25 asserts and dictates whom we receive our utilities from.

                                                 Page 35
 1 Again, because of our rural location, we pay the highest and
 2 most costly long distance telephone rates.  Most of our
 3 federally subsidized programs have large line items for
 4 telephone service, as I mentioned to you earlier, and most
 5 of our calls are into Albuquerque -- the Bureau of Indian
 6 Affairs, IHS, Indian Health Services.  That's the reason why
 7 our phone bill is astronomical.
 8           We are not adverse to protecting, preserving and
 9 exercising our sovereignty at all costs.  We are not
10 inclined to enter into long and expensive court venues that
11 only benefit lawyers.
12           We want to solicit the Federal Communications
13 Commission, as a trust responsibility, to educate the State
14 Corporation Commission about tribal sovereignty and
15 jurisdiction in regards to utility development.  Removing
16 the legal obstacles that have prevented us from exercising
17 our inherent sovereign rights and responsibilities is a
18 major priority for our community's advancement.
19           In order to achieve real social and economic
20 self-sufficiency, we need access to competitive rates,
21 reliable services and cutting-edge technology, such as
22 wireless and cellular at low rates without expensive roaming
23 fees attached.
24           The introduction of telephone retail competition
25 has brought unimagined advances and increases in technology

                                                 Page 36
 1 that has changed our personal and professional lives
 2 forever.  We are also aware of that.  As the technology has
 3 changed and improved, so must our tribal and federal
 4 government relationship.  I challenge you to imagine with me
 5 a new relationship that is one of equal and mutual respect,
 6 one that is more of a partnership than anything else, one
 7 that seeks cultural appropriate development that will
 8 benefit all Americans, rural and urban alike.
 9           I would like to suggest to the FCC that if in fact
10 you are serious about your inquiries, that you take the
11 initiative to assemble an integrated federal team approach
12 that includes the Bureau of Indian Affairs, Indian Health
13 Services, Department of Energy, EPA and FCC.  The creation
14 of an interagency approach that conducts a comprehensive
15 assessment of the tribal opportunities and challenges in
16 regards to tribal utility development.  Starting, of course,
17 at the Pueblo of Jemez which is as good as any place to
18 start.  We are poised and ready to participate as a partner.
19           On a positive, encouraging and closing note, we at
20 the Pueblo of Jemez have done remarkably well at balancing
21 the most modern technologies, GPS, GIS, and other satellite
22 technologies to protect and preserve our most sacred
23 cultural resources, the ancestral and communal resources.
24 We certainly invite you to visit our Pueblo of Jemez.
25           Again, prior to my knowledge of this hearing, I

                                                 Page 37
 1 have made prior arrangements, and I thank you for giving me
 2 the time and thank you for allowing me the opportunity to go
 3 ahead of you, and certainly thank you folks again for the
 4 opportunity.  I remain hopeful and optimistic that our
 5 concerns will truly be heard.  Again, thank you very much,
 6 Mr. Chairman, for this opportunity.
 7                CHAIRMAN KENNARD:  Thank you, Governor.  And
 8 we will be visiting your pueblo.  I look forward very much
 9 to it.  George Arthur of the Navajo Nation.  Mr. Arthur.
10                MR. ARTHUR:  Chairman Kennard, Commissioner
11 Tristani, Congresswoman Wilson and Congressman Tom Udall,
12 honorable members of the panel, guests in the audience, I'm
13 pleased to say that I'm here on behalf of President Kelsey
14 Begaye of the Navajo Nation and the newly elected speaker,
15 Edward T. Begay of the Navajo Nation council, as well as
16 Chief Justice Yazzi.  As you will note, and for your
17 information, the Navajo Nation government is structured in a
18 three-branch system.  I believe that the Chair and the
19 commissioner had invited heads of the Nation to be here, but
20 we just recently got into a new governmental administration
21 and we're in the process of transition.  The Navajo Nation
22 council are in their first winter session, so all of the
23 heads are busy so here I am.
24                CHAIRMAN KENNARD:  Glad to have you.
25                MR. ARTHUR:  The Navajo Nation expands three

                                                 Page 38
 1 states, Arizona, New Mexico and Utah, and approximately
 2 covers 25,000 square miles.  Estimated population as of 1992
 3 census is 172,000 Navajo citizens on the Nation, the
 4 reservation, with approximately 53,000 more living off the
 5 reservation.  By the year 2020 the population is expected to
 6 increase to 585,000.
 7           The Navajo Nation government is comprised of three
 8 branches, as I stated earlier, in that it consists of an
 9 88-member council delegate representing 110 chapters.  The
10 chapters' communities lie within a geographical boundary of
11 five agencies.
12           The Navajo Nation first language is spoken in most
13 homes with a figure of 82 percent.  Navajo culture and
14 religion beliefs are still dominant.  There still is a lack
15 of resources to provide infrastructure.  Examples are, 51
16 percent of all residents do not have indoor plumbing.  48
17 percent lack complete kitchen facilities.  54 percent still
18 use wood as their major heating source, with natural gas as
19 a second.  77 percent of the residents at the Navajo Nation
20 do not have telephone service.
21           There are over 250 primary and secondary schools
22 throughout the Nation.  There is an estimate of 53,000 plus
23 enrolled Navajos from primary to college.  82 percent of
24 this number are elementary and high school.
25           Issues that we have in the development of

                                                 Page 39
 1 information technology:  Based on the July '98 report from
 2 the Navajo Communications Company, who is the sole provider
 3 of telecommunications systems within the Nation, 10,757
 4 residential lines, 10,269 business lines.  There are a total
 5 of 56,000 plus housing units on the Navajo Nation.  The
 6 residential penetration rate of the telephone service is
 7 less than 25 percent.  The Navajo Nation government expends
 8 $2.6 million per year for business lines.  Residents expend
 9 about $2.5 million per year for residential lines.  Please
10 note that the figures do not include long distance charges.
11           It is estimated that it costs $57.15 per month for
12 a one party business line, $15.90 per month for a one party
13 residential line.  These figures are not accurate because
14 they reflect the average cost of other rural telephone
15 companies and other tribal entities that service reservation
16 areas in Arizona.
17           If the Navajo Nation wanted to purchase the local
18 telco, it has been estimated to be about $66,871,000.  In
19 addition, over a 10-year period the Navajo Nation would have
20 to invest anywhere from $21,651,000 to $86.5 million for
21 expansion and upgrades.  Even with the investments at the
22 high end, the number of customers served would only increase
23 by 50 percent.
24      Training:  Technology is changing at such a rapid rate
25 that training will have to be ongoing.  Funds need to be

                                                 Page 40
 1 made available to fund educational institutions on or near
 2 the Navajo Nation similar to what the University of New
 3 Mexico had proposed:  "Train the Trainers."  This project
 4 would focus on ensuring that human resources are in place in
 5 the region to support training of people in how to use new
 6 technologies.
 7      Federal funds:  Funds are allocated to support specific
 8 areas such as education health, et cetera.  Legislation
 9 perspective, it would be helpful if federal and state
10 programs had the flexibility to use these funds to support
11 tribal information infrastructure.
12      Broadcast:  Improve or create broadcast areas of local
13 broadcasting using both television and radio.  The emphasis
14 of programming can be geared to community activities,
15 education, preventive measures on diabetes, AIDS, et cetera.
16 Currently these two exist on the Navajo Nation, but the
17 radio station is commercialized and for the profit-making
18 side.  Utilizing these two areas would be beneficial in
19 reaching a larger population.  Radio can bridge the existing
20 geographical boundaries and contribute to a more unified
21 system that covers all service aspects.
22      911 services:  There are no true 911 services on the
23 Navajo Nation.  When 911 is dialed, it is transferred to a
24 four-digit tribal extension at the police department.  The
25 dispatcher then receives the call.  The 911 call is then

                                                 Page 41
 1 relayed out to the police officer by radio, thus response
 2 time is lengthy, as noted in earlier testimony.  Customers
 3 are being unfairly charged for 911 services.  When brought
 4 to their attention, local telco, we were informed that this
 5 is a mandatory charge by the state PUC, therefore it has to
 6 be paid for whether 911 is available or not.
 7      Service delivery:  It is evident the local telco needs
 8 to upgrade the service delivery.  Almost 50 percent of the
 9 time when attempting to dial out long distance, a recording
10 is received that indicates "Due to network congestion a call
11 cannot be made" as indicated by Senator Tsosie.  This was
12 brought to the attention of the local telco.  We were
13 informed that it was because the Navajo Nation was not
14 purchasing enough trunk lines going out.
15      Although Centrex frame relay are available, the Navajo
16 is not afforded the opportunity to utilize these services.
17 For example, when Centrex was first introduced, a call
18 originating from Window Rock to Tuba City, Arizona, a
19 distance of 167 miles one way, was made through dialing four
20 digits.  As of today, this no longer is afforded.  When the
21 local telco was approached, we were informed that it was
22 probably because not enough revenue was being charged,
23 therefore the lines were switched back to toll.
24      The Nation continues to receive reports back on costs
25 of phone services being affordable.  A handicapped

                                                 Page 42
 1 individual in Pueblo Pintado in the middle of the Navajo
 2 Nation requesting phone service was told that it would cost
 3 $15,000 to extend the phone line.  It is estimated that it
 4 cost a minimum of $5,000 to connect one new subscriber.
 5      Satellite:  As mentioned earlier, satellite services
 6 are not the technological solution for Navajo.  It is too
 7 expensive.
 8      Two-way radio is also not a solution.  There are a
 9 number of areas on Navajo where there are dead zones.  Not
10 every mobile unit has satellite capability.
11      Right-of-ways:  There needs to be a more effective way
12 of regulated right-of-ways on the reservation.  For example,
13 you will hear later on in this discussion the
14 representatives from the Navajo Communications.  Navajo
15 Communications recently obtained or structured a fiber optic
16 from Shiprock, New Mexico to Window Rock and utilized the
17 New Mexico transportation highway right-of-ways.  In that
18 process, they avoided having to deal with the Navajo Nation
19 in acquiring their right-of-way.  They have this fiber
20 optic, but as far as I am aware of, between Shiprock and
21 Window Rock there are several communities, several
22 educational institutions, where there are no fiber optics
23 going to any one of these communities or schools, but the
24 fiber optic runs right along that.
25      You mentioned in this discussion you have the

                                                 Page 43
 1 metropolitan, the urban, and the rural areas.  You also have
 2 the Navajo Nation, which is a world in its own as far as
 3 technology is concerned and as far as telecommunications is
 4 concerned.  It is true that NAU has been involved with
 5 delivering certain telecommunications opportunities to
 6 classrooms in Kayenta and the Window Rock area, and that is
 7 only done through a joint effort.  It is still a far, far
 8 reaching effort to obtain these type of services that are
 9 enjoyed on a daily basis by the non-Indian communities.  And
10 to us, we still are very, very much behind.  We look forward
11 to working with you.
12      And I do want to make one comment in closing.  I have
13 appeared before many panels and panel discussions before
14 many federal agencies throughout my representation of the
15 Navajo Nation in the past eight years.  These hearings occur
16 sparsely.  They are more than years apart before you get
17 return responses.  We sit at these type of discussions with
18 no feedback and, most often, no awareness of what the
19 decisions have been made on such hearings.
20      I would request of the chairman and the commissioner
21 and Congressional delegates that if there is any solutions
22 that can be broadly initiated, that the tribes and their
23 representatives be continuously apprised of these so-called
24 solutions.  And I would look forward to participating on
25 behalf of the Nation or relaying any such information back

                                                 Page 44
 1 to the president or the speaker of the Navajo Nation
 2 council.  Thank you.
 3                CHAIRMAN KENNARD:  Thank you.  Arnold
 4 Cassador.
 5                MR. CASSADOR:  Good morning, everybody.  Like
 6 the other tribal leaders, Chairman Kennard and Honorable
 7 Commissioner Tristani and Honorable Congresswoman Wilson and
 8 Congressman Udall, I welcome you to the state of New Mexico
 9 and I thank you for holding this hearing here this morning
10 to hear the views of the Indian leaders.
11           Before I start, I want to just say to my great
12 Congressman, Mr. Tom Udall, that while I do not come from a
13 very prominent family like he does, I come from a somewhat
14 prominent family, the Cassador family, known among the
15 Apache tribes, and I think we have something in common as
16 far as defective genes, so if you would denote that, I'd
17 appreciate it.
18           I've also gotten into an agreement with my fellow
19 Apache member from Mescalero that he agreed to donate a
20 minute of his time, Mr. Chairman, so I can tell some
21 reservation communication jokes between the BIA and the
22 tribes.  I think that's a real highlight that we have to
23 note here.
24           But I want to welcome everybody, the Indian
25 leaders, my fellow brother leaders.  I think this is our

                                                 Page 45
 1 chance to kind of be here and I guess wave our flag and tell
 2 the truth, the whole truth, to this panel here and hope that
 3 this will be going back and relaying it to the proper
 4 authorities and leaders in Washington so they can address
 5 the serious problems that exist on our reservation.
 6           So, with that introduction, I would just like to
 7 go into my formal comments here on behalf the tribe.
 8 Incidentally, I've just been installed as the Jicarilla
 9 Apache president about two weeks ago amidst some controversy
10 that maybe some of you have heard.  I know not too many have
11 heard it in Albuquerque, but a tremendous amount of people
12 heard it in Australia and Japan because of the Internet.
13 So, with that, I hope that the Commission can hear this less
14 controversial statement from myself.
15      Hello and welcome.  My name is Arnold Cassador.  On
16 January 8 I was installed as president of the Jicarilla
17 Apache tribe.  I would like to thank you for inviting me
18 today to give you a broad, general picture about the
19 availability, affordability and quality of phone service on
20 the Jicarilla Apache Tribe Reservation.  The Jicarilla
21 Apache's population is 3,200 on a 870,000-acre reservation
22 in north central New Mexico.  And we sometimes refer to it
23 as God's country -- at least that's what the tourists told
24 us.
25      The abundant natural resources that lie within the

                                                 Page 46
 1 reservation have proven to be both our economic staple, and
 2 the source of our greatest challenges.  Hunting and fishing,
 3 livestock production, and, most importantly, oil and gas
 4 reserves provide economic revenue to our tribe.  In 1977 the
 5 Jicarilla Apache was the first tribe in the country to
 6 simultaneously own and operate oil and gas wells.  Receiving
 7 and maintaining phone services is essential to continue our
 8 tribal economic growth and maintain a good quality of life
 9 to our people.  Due to the remote location of the Jicarilla
10 Reservation, accessibility to communications networks is
11 vital to our tribe.
12      The Jicarilla Apache have two development projects, the
13 Integrated Resource Management Plan and Committee and the
14 Jicarilla Apache Industrial Commission.  These groups aid
15 with economic advice, sustaining our natural resources,
16 identifying startup businesses, and relocating businesses to
17 the reservation.  Pushing forward with phone services
18 throughout the reservation will guarantee economic vitality
19 and assure our ability to compete in a rapidly growing
20 technological world.
21      The Jicarilla Apache Tribe is entrepreneurial in nature
22 and places heavy emphasis on family and education.  In my
23 administration as president, I plan to take the Jicarilla
24 Apache people into the next millenium with full access to
25 technology and communication services.  These services are

                                                 Page 47
 1 nonnegotiable.  We must have the ability to compete in the
 2 business market, provide high quality health care for
 3 ourselves, and link our children academically to the rest of
 4 world.  With the onset of the global economy, Jicarilla
 5 Apache children must have access to the Internet and its
 6 unbelievable wealth of resources.
 7      As president, I am well aware of the challenges that
 8 young Jicarilla Apache students face when competing with
 9 other students across America.  I am also aware of the
10 difficulties that Jicarilla Apache people face when
11 competing for jobs which require computer skills and
12 Internet knowledge.
13      Another point that must be stressed is health care and
14 availability of home services to patients suffering from HIV
15 and AIDS, tuberculosis, hypertension, substance abuse,
16 physical disabilities, diabetes, and those that are elderly.
17 Proper communication networks are necessary for the
18 well-being of these tribal members and to assure their
19 ability to receive proper diagnosis, treatment, and care.
20      I would like to share a few statistics here with the
21 group and perhaps the panel and other people that might have
22 something to do with these regulatory responsibilities.
23 There are 648 residential lines on Dulce, the major
24 community or the headquarters of the community of the
25 Jicarilla Apache tribe.  1,100 households have telephones, I

                                                 Page 48
 1 think, and 393 commercial lines.  And so we'll probably put
 2 this all in better line because it was just handed to me by
 3 my, I guess, helper here.  And maybe we might present this
 4 in writing.
 5      A T-1 line was installed also to the school which
 6 costs, with subsidy, up to $20,000 per year, which is
 7 something that we will probably be discussing with you,
 8 also.  And then I just wanted to note that we come from a
 9 very remote reservation and the phone service is not readily
10 available.  It goes on to share what the other people have
11 expressed their concern about.  The emergency cases and
12 stuff like that might happen throughout the greater part of
13 the Jicarilla Reservation, which is, in miles term, about 60
14 miles long in length, and you can take about maybe 20 miles
15 minimum across the reservation.  And in it, we have, I
16 think, a good number of people that live in the reservation
17 that have no access to telephone or any kind of
18 communication.
19      And I just wanted to tell you that the Jicarilla Apache
20 Tribe comes from an area of geographic location and the
21 elevation, our reservation.  The Continental Divide runs
22 right through the reservation and the average elevation over
23 there is around 7,000 feet and very inclement weather.
24 Before El Nino, or whatever it's called, we used to have an
25 average snowfall of about 12 to 18 inches per year.  It's

                                                 Page 49
 1 very hard to get around.  So some of these people that live
 2 in the outlying communities have a hard time getting to
 3 communications systems to take care of emergency needs and
 4 others that that kind of situation can promote.
 5      As president of the Jicarilla Apache Tribe, I just
 6 experienced my phone disconnected the other day.  It has
 7 nothing do do with my ability to pay.  It has something to
 8 do with the political.  But I was unable to overcome it, but
 9 I did pay by maybe Friday, but they told me "Next day.  Next
10 day."  It wasn't turned on.  So I don't know where the
11 communication is there, so I kind of disagree with
12 technological advances.  However, you know, I finally got it
13 done.  It took about five days to reconnect me.  And maybe
14 I'll have to go file a lawsuit against them to reclaim maybe
15 two or three days that I was without telephone.  But I think
16 that has to be also denoted.
17      I have to agree with the great Senator Tsosie bringing
18 all the concerns very eloquently to you this morning about
19 the needs and things that go on within Indian country.  I'm
20 very thankful that you guys are out here.  I'm sure that
21 there's a ton of problems that are out there.  And given
22 maybe by a year in my administration, I probably could
23 forward you a longer list of the needs that we have in
24 telecommunication.  And I believe you guys have afforded me
25 that consideration here this morning and I'm very thankful

                                                 Page 50
 1 for that.
 2      Let me just say that I think just -- in my experiences,
 3 I think a lot of these things can happen if we want it to
 4 happen, if we are honest about living up to our commitments.
 5 And let's not go to that BIA syndrome, you know, about
 6 saying you're going to do it and then not do it.  I want to
 7 see that all the people in the regulatory agencies and
 8 people that say they're going to help us today will carry
 9 out whatever position they took this morning and do it.
10 Because we in Indian country have been lied to for centuries
11 and we don't want any more fork tongue kind of a thing here.
12 We want to appreciate every help you can get.  And like I
13 said, I can probably speak the whole day, but I'm afraid I
14 will put people to sleep like I always do.  Thank you very
15 much.
16                COMMISSIONER TRISTANI:  President Cassador,
17 so that you don't feel bad, about 10 days ago I had five
18 days without electricity in the great state of Washington
19 D.C., and I also thought it was political.
20                MR. CASSADOR:  That's assuring.
21                CHAIRMAN KENNARD:  Our next speaker will be
22 Godfrey Enjady, who is general manager of the Mescalero
23 Apache Telephone and Utilities Company.
24                MR. ENJADY:  Thank you, Chairman Kennard and
25 Commissioner Tristani.  I guess our other distinguished

                                                 Page 51
 1 guests have left.  My name is Godfrey Enjady.  I'm with the
 2 Mescalero Apache Tribe.  I'm here on behalf of Paul Ortega,
 3 who is the chairman down in Mescalero.  And I was appointed
 4 by Wendell Chino when he was still in office.  We just lost
 5 Mr. Chino last year, and I really miss him.  He was a mentor
 6 of mine, I guess you'd say, and really taught us how to
 7 become businessmen and how to act towards our fellow
 8 businessmen outside of the reservation.
 9           With that in mind, I was hired back in 1995.  I'm
10 a former GTE employee.  I worked for GTE for 15 years.
11 Also, ex-con, I guess you'd say.  Con-Tel.  There's some
12 Con-Tel people in the audience there.  We were talking old
13 times and how that company was such a good company to work
14 for.  And it's hard to find companies like that anymore.
15 But with that in mind, I'd like to speak a little bit about
16 the reservation and service we've had from GTE.  My
17 background is more technical.  I'm not a public speaker of
18 any sorts, but I'll try to do the best I can.
19           The Mescalero Apache Reservation is about 468,000
20 acres down in south central New Mexico.  We have 3,800
21 tribal members.  And we have pretty much lousy service.  Our
22 service is from GTE.  I used to run and work for the tribe
23 through GTE.  I was able to provide very good service for
24 GTE.  But since the tribe has hired me away from GTE, that
25 service has gone to nothing.  I took care of my people and I

                                                 Page 52
 1 really worked very hard for GTE to make sure that the people
 2 on the reservation had very good service.  Since I'm gone,
 3 nobody is able to replace me in that area.  You can call now --
 4 you can call to GTE or any other telephone company and you
 5 talk to a machine.  It's not very personal anymore.
 6           With that in mind, GTE has facilities on our
 7 reservations that are 100 percent full.  Our cable is up to --
 8 about 85 percent up to capacity, so not too much room for
 9 improvement there.  A lot of the things that are happening
10 now, GTE is trying to merge with another company, buyouts.
11 With that in mind, GTE is not thinking about improving
12 services on the Mescalero Apache Reservation or any other
13 reservation.  I think Dulce is also served by GTE, and as
14 with the pueblo with Raymond Gachupin.  I think his pueblo
15 is served by GTE, also.  So we have a few people here that
16 are served by GTE and we're having some problems with that.
17      There are approximately 500 residents that are served
18 by basic telephone service on the reservation.  For new
19 subscribers, the average waiting time for services can be
20 two to four weeks.  In homes with previous service, that is
21 for that.  One to three months if you want to have brand new
22 service installed.  That can be escalated up to a year
23 depending on if they have to bury a wire to get to your
24 place or whatever.
25      Pricing is controlled by tariffing from the state of

                                                 Page 53
 1 New Mexico right now, so we are under that plan.  GTE
 2 customers everywhere pay $12.27 per month.  Initial
 3 connection fees are around $65.  And, you know, with that in
 4 mind, that's not too bad of a price.  And all of our
 5 emergency services are within the reservations; it is a
 6 local call.  We do have one enterprise on the reservation,
 7 our ski area, that we have to call up there and it's a long
 8 distance call.  And that's an EAS issue.  Some of you might
 9 know what ESA is, extended area service, and some of you
10 people don't.  But I'm sure there's an agreement that can be
11 made that we can have that as a part.
12      But the way our tribe is going, Mr. Chino pretty much
13 got me to get utilities started for the reservation.  And
14 with that in mind, we started a gas company -- which I'm a
15 telecommunications guy and I'm starting a gas company.  He
16 told me, "This is what you're going to do."  In his stern
17 voice, if you knew Mr. Chino, he said, "This is what you're
18 going to start."  And I said okay.
19      With that in mind, we got a gas company started for the
20 reservation.  We have around 900 customers.  Mescalero Gas
21 is the name of it.  It's a propane company, and we service
22 the whole reservation.  Going into that, we're trying to get
23 our own telecommunications company started.  So that's our
24 solution to try to get better service for the Mescalero
25 Apache Reservation.

                                                 Page 54
 1      T-1 services and other services are lacking.  We have
 2 about 60 percent penetration into the community.  And that's
 3 only based in high population density areas like the
 4 community of Mescalero itself.  We have other areas outside
 5 of the reservation, I mean outside of the community of
 6 Mescalero, that have no service.  We have a new HUD home
 7 building area that we have built 30 new homes, and there is
 8 no telephone service out there at all.  In fact, we just
 9 barely got electrical service out to those new homes that we
10 just built.  And those are clustered in an area, so it
11 wouldn't be too hard to service that area.  As far as
12 service getting there, we do not know when service will get
13 there.
14      Like I said, in my time that I've worked for the tribe,
15 I built a fiber network for the Inn of the Mountain Gods.
16 We've built a computer network there.  The tribe's first
17 fiber optic own network went on-line in about 1997, and we
18 built that ourselves.  GTE has no fiber optic network on our
19 reservation.  They have no infrastructure to build one or
20 anything, so the tribe has gone ahead and built that
21 ourselves.
22      GTE is trying to talk with us and asking us to lease
23 some of our fiber so they can carry some of their traffic
24 line.  I guess we'll have to take care of them in order for
25 them to take care of us.

                                                 Page 55
 1      So those are some of the things that have hampered us
 2 in our goal to obtain our own telephone company.  The tribe
 3 right now is about three-quarters of the way in obtaining
 4 its own telephone company.  We've been negotiating with GTE
 5 for the last two years.  It's been a hard road.  My
 6 assistant and I, Jaime Flores, have been working very hard
 7 on this.  GTE is not a good company to negotiate with.
 8 We've had to make quite a few trips to Dallas; that's their
 9 company headquarters.  And it's been a learning experience
10 for us.  It's been tough.  Coming from the field and then
11 going into negotiating for a telephone company is -- you
12 know, it's very tough, let me tell you.
13      But the Mescalero Apache Tribe is currently in the
14 process of applying for a rural utility service loan for the
15 purpose of starting our own telephone communications
16 company.  Our U.S. representatives have been very helpful
17 and have provided guidance through this process.  We plan to
18 utilize the FCC's universal service program to obtain
19 support for schools and libraries on the reservation.
20      The two biggest concerns for the Mescalero Apache Tribe
21 are the potential sale of the incumbent local exchange
22 company and the State of New Mexico.  Provisions should be
23 made to facilitate the acquisition of a local phone company
24 by a tribe from a hostile ILEC.  The Universal Service Fund,
25 NECA, and other financial support mechanisms for rural

                                                 Page 56
 1 tribal phone companies should stay in place.  Finally, find
 2 a way to direct these funds directly to the tribes instead
 3 of through the state.  That's some of the things that I'm
 4 looking at.  If we can have that coming directly to us, that
 5 can ensure us to have our own facilities if we are taking
 6 initiative there.  It gives us our sovereign status.
 7      If the FCC can recognize each tribe as a sovereign
 8 nation, I believe that we can have a better understanding of
 9 each other.  By you coming here today, I think that's really
10 starting something.  I believe Commissioner Tristani has
11 really started -- I had a real wonderful conversation
12 earlier with her.  Hopefully you'll listen to us and
13 hopefully you can do something about this.  Hopefully, by us
14 taking initiative and doing this ourselves, we can improve
15 the service and get service to maybe 90 to 100 percent on
16 the reservation.
17      With that in mind, in closing, you know, I really
18 appreciate you letting me come here.  And like I said, on
19 behalf of Mr. Paul Ortega and Oliver Enjadi, the vice
20 president of the tribe, I thank you for letting me talk to
21 you.  Thank you.
22                CHAIRMAN KENNARD:  Thank you very much.  Next
23 we will hear from Governor Eagle Rael.
24                GOVERNOR RAEL:  Good morning.  Before I get
25 started, I have copies of my testimony on this table there

                                                 Page 57
 1 if you want to follow along with me here.  I'd like to thank
 2 Chairman Kennard, Commissioner Tristani for being present.
 3 Mr. Udall and Ms. Wilson, I'd like to thank them.  And Mr.
 4 Block, he's our ambassador; a very good friend of mine.
 5           Good morning, everybody.  It's a pleasure to be
 6 here and to address my concerns.  What I'm hearing,
 7 basically, is that pretty much everybody has basically the
 8 same problems that we have up in northern New Mexico.
 9 That's where I'm from, Picuris Pueblo.  It's up in northern
10 New Mexico, around 7,000 elevation.  Anyway, I'm glad to be
11 here and present testimony.
12           Our tribal administration office has four
13 telephone lines, and we house 24 employees, so you can tell
14 that we're having problems there.  Anyway, 400 years ago,
15 the Conquistadores came up toward northern New Mexico and
16 we're the last pueblo to be found, and it seems like we are
17 the last to get communications services, also.
18           Anyway, most of the lines to the village have been
19 taken.  I live in a historical area next to an underground
20 kiva.  If any of you know what it is, it's a ceremonial
21 chamber.  Even if we had lines to run into that area, I
22 would be very reluctant to run them because we have
23 ceremonial areas in there.  We have right-of-way problems.
24 We have problems like this that we have to deal with.
25           I don't have a cell phone because they don't work

                                                 Page 58
 1 in the area.  I'd like to have one, though.  There is no
 2 coverage in that area.  But we have a prime location for
 3 towers that we could kind of fuse the technology that we
 4 need to tie these areas in.
 5           Over half the tribal council are without telephone
 6 service.  This is typical of our situation there.  About
 7 one-third of the homes do not have telephones.  Tribal
 8 programs experience the same things, similar shortages, and
 9 business development is held back because of this.  No line
10 is available for a pay phone.  The closest pay phone is
11 about three miles away.
12           The previous governor, his mother has health
13 problems.  She's applied for telephone service and she's
14 been waiting up to six months, and that's pretty common in
15 the area.  A new family with a young infant can't get a
16 line.  Volunteer firefighters, just about half of them have
17 phones.  Someone talked about the problem about running from
18 house to house.  That's still pretty common up in my area.
19 We have to run around and get somebody, you know, to come
20 and help fight fire.  We had a fire recently up there, and
21 that's one of the problems we are experiencing.
22           Anyway, the shortest of administrative lines is
23 kind of aggravated by the arrival of the Internet.  Two of
24 the four lines have Net access, so when we're using the Net,
25 two of the lines are tied up.  Anyway, some of the federal

                                                 Page 59
 1 agencies require the Net nowadays.  Anyway, a new line
 2 became available in 1997, and the previous governors spent
 3 an entire morning deciding who was going to get it, the
 4 library or the police station.  The police station prevailed
 5 in the interest of public safety.  So these are very
 6 personal decisions in our area.  The educational needs of
 7 the children have to be put on hold because the police took
 8 the line.
 9           Also, the police need a dedicated line to the
10 National Crime Information Center.  With this they could
11 check traffic stops or outstanding warrants.
12           Residential phone bills are high and poverty is
13 common.  Our area per capita income is only half of that of
14 New Mexico as a whole.  Already New Mexico is 48th in the
15 nation.  Our local calling area is small.  97 percent of
16 tribal government calls are long distance.  Emergency 911
17 rings to Taos, outside the local calling area, and cannot be
18 reached by those with cost-saving long distance blocks.  We
19 would like to expand the local calling area.  As a matter of
20 fact, we have circulated a petition.  The whole town, all
21 the surrounding communities have the same problem, Penasco,
22 Taos County, and we are looking for a local calling area.
23           Picuris Pueblo is served by a clinic in Taos which
24 is a long distance call away.  The community health
25 representative allows calls from her offices and their bill

                                                 Page 60
 1 is over $400 a month.  The total cost for tribal business
 2 runs over $25,000 a year, and we are a small community.  We
 3 have the same problem that Jemez has.  US West has been
 4 working the area, but we're still having to be put on the
 5 waiting list.  And sometimes some of our community members
 6 get depressed by this and just say, well, I don't know.
 7 I'll just wait again.  So those problems are continuing to
 8 happen.
 9           We have other problems in the region which I
10 expressed, in the Penasco area.  Taos County is the same
11 problem.  We have no communications with Taos, with the
12 government there.  And we would probably like to have
13 Internet and the fiber optics.  Nothing of that sort in the
14 area.  Picuris cannot protect public safety and maintain a
15 satisfactory quality of life without adequate
16 telecommunications.  We will work with US West and anyone
17 else interested in finding the appropriate and profitable
18 solution to these telephone service problems.  We welcome
19 the advice and the support of the FCC and the U.S.
20 government in reaching our goals.  Please accept my
21 invitation to visit Picuris in person.  Thank you, Chairman
22 Kennard, Commissioner Tristani, and I hope to come and visit
23 with you.  And I want to make this short and I just hope
24 that we can work together.  Thank you very much.
25                CHAIRMAN KENNARD:  Thank you.  The final

                                                 Page 61
 1 speaker on our first panel is Anthony Lucio, who is a
 2 councilman for the Pueblo of Zuni in the western pueblos.
 3                MR. LUCIO:  Good morning, Chairman Kennard,
 4 Commissioner Tristani, my fellow tribal colleagues.  On
 5 behalf of the Governor and Lieutenant Governor, the Zuni
 6 tribal council and my people, I thank you for inviting us.
 7 I'm here today to present some testimony on behalf of the
 8 Zuni Pueblo and our residents.
 9           Zuni Pueblo seeks to advance services for
10 telecommunications into the 21st Century.  Zuni Pueblo is
11 the farthest of the 19 pueblos, located near the Arizona
12 state line with a population of approximately 10,000 people
13 and a land base of 410,000 acres.  There is an increased
14 need to keep in contact with the outside world.  Our
15 lifeline is the telecommunications systems and lines that
16 exist.  However, the present lines and systems offered by a
17 local telephone company are not capable of handling advanced
18 forms of telecommunications.  Therefore, Zuni Pueblo, Zuni
19 Service Unit Hospital, Zuni Public School District and the
20 Zuni tribal headquarters and the residents request the
21 Federal Communications Commission to assist us in receiving
22 advanced telecommunications services.
23           Our agencies and residents request for advanced
24 services in the following areas.  Install high speed lines
25 that have 256 kbps or greater carrying capacity to

                                                 Page 62
 1 accommodate LAN, WAN networks for Internet connections.  To
 2 accommodate telemedicine and video teleconferencing in the
 3 future, and to accommodate direct Internet connections.
 4 Advance phone systems that include voice mail and paging.
 5 Caller ID services.  Enhanced 911 service that identifies
 6 caller information and location of residents, which would be
 7 very helpful for our elderly citizens.
 8           These are some specific areas; however, I would
 9 agree with my fellow tribal leaders that my pueblo and my
10 people do experience the lack of basic services.  For
11 example, only 25 percent of our residents have telephones.
12 Internet connections reach less than one percent to the
13 pueblo.  Our residents are charged long distance rates to
14 make local calls to neighboring communities 15, 20 miles
15 away.  This needs to change.  Our residents are not aware of
16 the discount rates for low income families.  These are some
17 examples that my people and citizens have expressed.  I
18 believe our concerns need to be resolved to improve basic
19 telecommunications services and linkages with the outside
20 world.
21      I would agree with Senator Tsosie's statement that the
22 FCC has a trust responsibility to all Indian nations.
23 Therefore, the FCC needs to take our testimony seriously and
24 get down to business with a large telecommunication company
25 and start working out reasonable and affordable solutions.

                                                 Page 63
 1 Only then will all Indian nations and their communities,
 2 which include Zuni Pueblo, increase technology linkages.
 3 One final note, on behalf of my people and my pueblo and the
 4 governor and the council, we extend an open invitation to
 5 you and your staff to come and visit the Zuni Pueblo.  Thank
 6 you.
 7                CHAIRMAN KENNARD:  Thank you very much for
 8 that testimony, Councilman.  And thank you all for the
 9 testimony that we've heard this morning.  I think that we
10 have certainly learned a lot, and we've got a lot more to
11 learn as the day progresses.
12           I wanted to focus on a couple of things that I've
13 heard today, since we do have a few minutes for questioning
14 before the second panel.  As I've listened to you this
15 morning, there seems to be a lot of tension that I'm hearing
16 between the tribes and the telephone companies.  And I've
17 heard in some of your testimony a desire to have sovereignty
18 for the tribes, the pueblos, to take over operation of the
19 telephone companies.  As you had testified, you're in the
20 process of trying to do that.
21           And I'm wondering if the problem, particularly the
22 problem that you mentioned, Godfrey, about your problems
23 with GTE, is this a corporate culture problem that you're
24 experiencing or is it something more going on here?  And
25 secondly, one of the things I've learned about the

                                                 Page 64
 1 telecommunications business is that there are very powerful
 2 economies of scope and scale in the delivery of these
 3 telecommunication services, meaning that the more people you
 4 serve and the more services you provide, you can usually
 5 provide it at lower cost.  It seems to me that if the goal
 6 is for the tribes to take over control of the telephone
 7 exchanges themselves, then they may be losing some of those
 8 economies of scale and scope.  But what's the trade off?  If
 9 you feel you can have a smaller company and serve your
10 people better, is that preferable to having the telephone
11 company be more focused and perhaps change their corporate
12 culture so that they're responsive to the needs of Indian
13 people?
14                MR. ENJADY:  The bottom line is dollars.  As
15 I said before, the bottom line was dollars.  But, you know,
16 I've gone through the corporate cultures.  I've worked in
17 that scenario, and it's hard for a company like that to come
18 down and talk to a tribe.  We've had hard negotiations, like
19 I said.  And going from one culture to another as a
20 corporation, it would be very hard for them to try to work
21 with them.  As you can see, we've had a hard time working
22 with US West and all these other companies, and maybe it's
23 just because they don't understand how our culture works,
24 how tribes work, how it is to be personable with these
25 people or us, as I can see it.

                                                 Page 65
 1           By starting our own phone companies, we take our
 2 future in our hands.  That's been kind of the consensus all
 3 along by the government, for us to take our matters in our
 4 own hands.  With some help in the right direction, I think
 5 you can help us, Chairman Kennard, attain these goals that
 6 we're looking for.  Some of the things that -- do we really
 7 need some of this high speed networks for our little
 8 enterprise companies?  Maybe, maybe not.
 9           I think another company that could join with our
10 small telephone companies, that could help out in that area,
11 might be -- there might be some answers there.  But like I
12 said, the Mescalero Apache Tribe is going ahead to try to
13 take care of our own problems and try to take care of our
14 people, and that's what we're trying to do.  That's, I
15 guess, the best answer that I can give you.
16                CHAIRMAN KENNARD:  Thank you.
17                COMMISSIONER TRISTANI:  Thank you, Mr.
18 Chairman.  Something that I've heard from all of you, which
19 doesn't surprise me, is that even for those that are
20 fortunate enough to have telephone service, it becomes very
21 expensive because most of the calls that are necessary to
22 make are outside your local calling areas.  The EAS problem,
23 is one that's not only a problem for Native American people
24 of New Mexico but for some other communities.
25           The other thing I heard was that we need to make

                                                 Page 66
 1 sure that we work together with other federal agencies, with
 2 state governments, and the state PUC's, and with all the
 3 parties involved to make sure that we can get real
 4 solutions.  I'd like to hear more of your thoughts on that.
 5                MR. ARTHUR:  Thank you, again.  Earlier I
 6 stated that we are cautionary since although our problems
 7 may seem identical, but the solutions to those problems
 8 aren't exactly the same.  Most of the testimonies you've
 9 heard here are from communities that are basically
10 collective.  The tribes that are with me here on the panel
11 live more in the community unit, whereas the Navajo Nation
12 covers the three states I mentioned.  And our communities,
13 their largest may exceed ten to 12,000 membership.  The
14 majority of it still is beyond rural.  So the solutions are
15 not the same.  So I really do need to caution the fact that
16 you as federal agencies do come back and want to follow up
17 on solutions which we all look forward to, that we look at
18 these as individual needs.
19                MR. CASSADOR:  Let me just say that I think
20 the cooperative cultures should also be made aware that -- I
21 think the diverse economy and culture that we have here, I
22 think our problems are unique and I feel that these are
23 people that experience them.  Part of the problem is they
24 don't want to try to make an effort to understand that.  So
25 I'm thinking in some fashion, in some way, maybe mutual

                                                 Page 67
 1 meetings or some other way to maybe better communicate with
 2 them and perhaps educate one another, that might be one of
 3 the answers.  But I think a big, vast amount of the efforts
 4 here will probably surround the providers since we'll be
 5 dealing with them.  So that might be taken into
 6 consideration.  We might note that in our answer, perhaps.
 7                MR. ARTHUR:  I would agree with you,
 8 Commissioner Tristani, that we do need to work together, the
 9 tribal governments, state and federal agencies.  But I
10 believe the best way that we can start a dialogue is if the
11 FCC and its staff comes out and visits each of these
12 reservations and communities separately so they get a better
13 idea firsthand of the kind of services that we have and the
14 kind that we lack, so that it gives you a better idea.  Then
15 you can sit down and start working from some kind of central
16 point and move forward from there.
17                CHAIRMAN KENNARD:  I've heard some stories
18 this morning that really disturbed me, like the stories of
19 telephone companies that just refuse to extend lines to
20 serve consumers who want that service.  We heard a story
21 today that somebody called the telephone company to get a
22 line and the telephone company said, no, that will cost you
23 $10,000.  Another story, somebody said it will cost you
24 $30,000 to get service.  The reason that's disturbing to me
25 is because in this country we have a universal service

                                                 Page 68
 1 system that's been in effect now for decades.  It's
 2 administered both by the federal government and state
 3 governments around the country.  And we're in the process
 4 now of trying to figure out exactly how much is paid for
 5 universal service in this country.  And depending on whose
 6 model you believe, it's anywhere from about $10 billion to
 7 about $14 or $15 billion.  So that's money that's being
 8 spent every day in this country to bring affordable
 9 telephone service to people in rural areas.
10           So, I don't understand why this subsidy system
11 that's in place and has been operating is not working in
12 Indian country.  I guess my question is, when a telephone
13 company just tells you outright that you can't have that
14 line unless you pay us $10,000 or $15,000, what happens
15 after that?  Do you take that to your State Regulatory
16 Commission?  In fact, I understand we have a majority of the
17 Commission here today, which I'm delighted to see, and
18 perhaps we can hear from some of these folks later on.  But
19 this is an issue that has been dealt with in the law.  In
20 fact, in the 1996 Telecommunications Act, the law imposes an
21 obligation on the federal government and state government to
22 ensure that there is affordable telephone service for
23 everyone in America.  That was designed specifically to help
24 people in rural areas.
25           So I guess my question is, is there activity among

                                                 Page 69
 1 the tribal leaderships to bring these issues to the
 2 attention of state regulators and telephone companies to
 3 ensure that this law is being complied with?
 4                MR. ARTHUR:  Thank you, Chairman Kennard.
 5 The problem in that case is basically the state seems to
 6 choose at their will when they will apply state regulatory
 7 activities and when they will impose sovereign status.  In
 8 our case, in the Navajo Nation, it seems that there are
 9 times when the state is given those choices.  The Navajo
10 Nation's council is in session as of this week.  Yesterday
11 we debated such issues as consumer protection.  The state of
12 New Mexico has such regulatories in place, but when it comes
13 to the Navajo Nation consumers, those are not applied, by
14 choice of the state regulatory agencies saying that the
15 Navajo Nation is sovereign.
16           My residence is serviced by US West.  I have a
17 phone that is serviced by US West.  A quarter of a mile
18 away, my neighbor cannot get that service because they are
19 told there is a jurisdictional issue.  US West services me a
20 quarter of a mile away.  NCC, Navajo Communications, is
21 supposedly the agent that services that particular area.  So
22 my neighbors that live west of me do not have telephone
23 service because of jurisdiction as imposed by whomever.  I
24 don't know if this is a company, a company agreement, or
25 whether this is regulated by people such as yourselves.  So

                                                 Page 70
 1 as far as state regulations is concerned, we as a Navajo
 2 Nation find the problem as customers going to those
 3 entities.  So that is probably an answer as far as we are
 4 concerned.
 5                MR. CASSADOR:  I also want to interject here.
 6 I don't know what the conversation of the previous
 7 regulatory commission was.  The name was different, I think.
 8 The former state representative now serves here on the
 9 Commission, Linda Lovejoy, and she is very familiar with the
10 Native American problems and everything, being a former
11 legislator.  Perhaps from here on we can better focus on the
12 problems of the tribes just looking for -- in my
13 administration to try to work with the regulatory people in
14 the state to try to -- you know, if it requires national
15 attention, you know, we can work on that.  I don't know what
16 the protocol is right now, but we're probably looking at
17 that and certainly we will be looking at it and find
18 whatever problems there are and try to relate in that
19 fashion.  And I guess we just need to define where it's at
20 and where it's working.  I really have confidence in Linda.
21 I've worked with her before.  I think we can probably
22 correct some of those questions later.  Thank you.
23                MR. LUCIO:  My governor and council and
24 pueblo will start exploring those options.  We were recently
25 elected to our first term here, so we will explore those

                                                 Page 71
 1 options to work with you all.
 2                CHAIRMAN KENNARD:  Thank you.  I wanted to
 3 acknowledge someone in the audience who knows an awful lot
 4 about these issues, and someone I mentioned in my opening
 5 statement.  Darrell Gerlaugh, who is the president of the
 6 Gila River Board of Telephone Directors.  I understand he is
 7 here.  Thank you for being here.  I would be delighted to
 8 hear more about the Gila River a little later on.  As we
 9 study this issue of the FCC, the name of your company
10 repeatedly comes up as one of the most successful companies
11 that has essentially taken charge of this problem, an Indian
12 company that's been able to purchase local exchanges and
13 provide good service to Indian people.  So I think you're
14 emerging as one of the shining examples.
15           One question that occurred to me when I was
16 listening to testimony earlier, someone mentioned that
17 economics is a problem, consumers who can't afford to pay
18 the cost of having phone service installed initially, and
19 the ongoing costs of paying for maintenance of that service.
20 And I've been surprised that there's so little knowledge
21 about two very important federal programs that we
22 administer.  One is called Link-Up, which provides funding
23 for low income people who want to get phone service, and the
24 other is called Lifeline, which is a program to help such
25 people pay their phone bills.  And these are both

                                                 Page 72
 1 administered jointly between the federal and state
 2 government to provide I believe it's up to $10.50 a month in
 3 subsidy for low income consumers in paying for telephone
 4 service.
 5           As an initial matter, if we do nothing else -- and
 6 I'm sure we're going to do a lot more than this.  But we if
 7 we do nothing else, we have an obligation, everybody here,
 8 everyone in this room, to make sure that consumers know
 9 about these programs because these are programs that are in
10 effect.  The money is available and it's flowing.  There is
11 no reason why anyone who is a low income telephone
12 subscriber having trouble paying their bill should not be
13 told about Lifeline and Link-Up through the auspices of the
14 tribes and their ability to communicate with their members
15 by the telephone companies providing these services and by
16 the state commissions, who have a role in administering
17 these programs as well.  Any comments on that?
18                MR. CASSADOR:  As I stated, I'm kind of new
19 to this.  I was just going to ask you.  Many times in the
20 past when tribes try to take advantage like what you just
21 mentioned, the funding under the low income and all that, a
22 lot of times they refer us back to the BIA.  I just wanted
23 to know if this had anything to do -- if this only applied
24 to like the direct citizens and not to the tribe's regular
25 citizens.  I know that those things are thrown at us all the

                                                 Page 73
 1 time.  Maybe the greater reservation people who are not
 2 familiar with this kind of subsidies and other, I guess,
 3 things that are available to them, maybe there's kind of
 4 thoughts on the reservation.  So if there is, I guess my
 5 obligation to tell them that these things are available.
 6 And I intend to, but I just want to know if that's a
 7 consideration in this.
 8                CHAIRMAN KENNARD:  It could be but it
 9 shouldn't.  Because the way those programs are administered
10 is based on income and it shouldn't have to do with tribal
11 registry.  Or as far as I know, the BIA doesn't have any
12 role in administering it.  I could be wrong about that.
13 Gloria, you probably know more about it than I do.
14                COMMISSIONER TRISTANI:  That's one program I
15 don't think the BIA has and the telephone companies have an
16 obligation.
17                MR. ENJADY:  Like I said, the telephone
18 companies are consolidating more so.  Their service centers
19 are located in an area that's more to their likings and
20 physically economical, which could be Missouri or wherever.
21 Who knows where it is.  Do they know where Picuris Pueblo is
22 or do they know where Mescalero, New Mexico is?  Do they
23 know what the benefits and programs are in that area?  No.
24 Probably not.
25           So when we're talking about a service rep, that's

                                                 Page 74
 1 probably -- maybe you seem to get the worst ones that don't
 2 know anything.  Well, I just know I've been told on this
 3 paper that this is what our service costs and this is what
 4 we're going to give you.  And when he asked about Lifeline,
 5 I'm not sure what it is in your state because they are
 6 having to deal with so many states.  Like I said, it comes
 7 back to impersonal and not really knowing the geographical
 8 area, and, again, that points back to your corporate culture
 9 and is that corporate culture trying to -- I guess it's more
10 economic saying that, well, we'll take care of six states
11 from this one center and do they know the demographics of
12 all those areas.  Probably not.  So --
13                CHAIRMAN KENNARD:  Speaking of corporate
14 culture -- and I know it may be hard to generalize this, but
15 companies are different on this.  Are telephone companies,
16 particularly those who have responsibility to serve Indian
17 country, reaching out and hiring Indian people and making
18 job opportunities available to them and promoting them into
19 management so that these issues can be dealt with in that
20 way?
21                MR. LUCIO:  For Zuni, Century Tel operates
22 down there.  They do hire entry level technician type
23 individuals.  But in terms of hiring at a management level,
24 they do not promote them.  So when that happens, then
25 there's really no honest line of communication between the

                                                 Page 75
 1 company and the consumers.  So I would say, no, it really
 2 doesn't occur.
 3                MR. ARTHUR:  I think that's maybe one plus
 4 that I could say for NCC.  I'm aware that most of the
 5 technical people are of our tribe, but as far as management
 6 is concerned, I don't know.  But in addition to that, I
 7 think Indian country, as far as telecommunications services
 8 is concerned, what other disadvantages that we have that may
 9 exist in other parts of the country is that oftentimes,
10 probably 99 percent of the time, there is only one service.
11 So, in our case, basically, NCC holds a monopoly and it
12 covers practically all the Navajo Nation.  So competition
13 doesn't exist as in other parts of the country where you
14 have several service providers.
15                CHAIRMAN KENNARD:  What sort of regulatory
16 oversight is exercised with respect to NCC?  Are they
17 subject to state regulatory oversight or is it the tribe
18 that exercises oversight since it is a sovereign entity?
19                MR. ARTHUR:  NCC, I believe, is basically
20 overseen by state.  The Navajo Nation itself, we really
21 don't have any direct oversight.  We do have some
22 communications groups that work with NCC.  Like as far as
23 regulatory, we as a tribe don't have it.
24                CHAIRMAN KENNARD:  One last comment.
25                MR. LUCIO:  In Zuni there's only one company

                                                 Page 76
 1 there and they do monopolize the surrounding areas well.  I
 2 believe that they should be regulated by the state, but I'm
 3 not too sure on that.  I know that the tribe doesn't have
 4 any kind of regulatory authority over them.
 5                CHAIRMAN KENNARD:  Well, we're going to have
 6 to wrap up and turn to our second panel.  I wish we had more
 7 time, but I hope that you will be able to stay for the rest
 8 of the panel so that we can keep this dialogue going.  We'll
 9 take a 10-minute recess, then.  After some closing remarks
10 from Commissioner Tristani, we'll take a 10-minute recess
11 and return for the next panel.
12                COMMISSIONER TRISTANI:  Thank you, Mr.
13 Chairman.  I do hope you all can stay, but in case you can't
14 I just wanted to, first of all, thank you.  A heartfelt
15 thanks to the tribal leaders and tribal representatives who
16 have taken the time to come and help guide us at the FCC as
17 to what to do to address these problems.  Governor Gachupin,
18 who left us, President Cassadore, Governor Rael, Mr. Lucio,
19 Mr. Arthur, Mr. Enjady, thank you for being here.  I know
20 that your different issues may require different solutions,
21 you said, but I also heard the common theme that we need to
22 keep in mind:  Tribal sovereignty.  Respect that.  The
23 federal trust responsibility.  The need to work together.
24           I'll plead that, again, with our state agencies,
25 with our federal agencies, and with the telephone companies.

                                                 Page 77
 1 And I'm glad that so many telephone companies are
 2 represented here today.  I'm not sure that all the telephone
 3 companies that should be here are here, and if they're not,
 4 Mr. Chairman, I want to make sure that we get a transcript
 5 of this hearing to them because they need to hear the
 6 concerns.
 7                CHAIRMAN KENNARD:  Definitely.  We're here to
 8 work together.  This is a good start.  And, again, it's just
 9 to say thank you for being here.
10                [A recess was taken from 10:45 to 10:55]
11                COMMISSIONER TRISTANI:  I'd like to take this
12 opportunity to welcome another member of our state PRC, Herb
13 Hughes.  Welcome.
14                CHAIRMAN KENNARD:  That makes four down, one
15 to go.  Our next panel is composed of representatives of the
16 telecommunications companies.  And we are delighted to
17 welcome a wide array of companies represented here.  We have
18 a wireless company representative, Western Wireless.  We
19 have a high-tech company that has some very interesting
20 developments to share with us from the Silicon Valley.
21           I'm going to do what we did this morning with the
22 second panel.  I'm going to ask each of the panelists to
23 introduce themselves, tell us a little bit about your
24 affiliation and why you're here.  And I'm going to have to
25 start being a little bit more aggressive in enforcing our

                                                 Page 78
 1 time limits because we are running over, and I want to make
 2 sure that we have an opportunity to hear from everyone and
 3 ideally to be able to have some Q and A between the
 4 panelists and the audience.  Because I know a lot of people
 5 in the audience have a lot of expertise to share with us up
 6 here today, as well.  So we'll move into our next panel,
 7 beginning with Ed Lopez here on behalf of US West.
 8                MR. LOPEZ:  Thank you, Chairman Kennard,
 9 Commissioner Tristani.  I, too, want to add my thanks for
10 this opportunity to meet with the delegation from the FCC.
11 We at US West are struggling with these issues and are
12 excited about talking about them today.  And I would like to
13 welcome Commissioner Tristani home, as well.
14           Thank you for your interest in New Mexico and for
15 giving me the opportunity to speak with you today.  US West
16 is the largest telephone company in New Mexico with over
17 800,000 access lines throughout the state.  We're also the
18 largest rural telephone company in New Mexico, serving 71
19 percent of all the nonmetropolitan lines in New Mexico.
20 Because of this, we have a strong interest in
21 telecommunications issues that extend far beyond the
22 boundaries of Albuquerque.  I've listened carefully to the
23 first panel and have taken considerable notes.  We're
24 listening.  I think we need to work on these issues and we
25 need to focus on them, particularly the issue of quality and

                                                 Page 79
 1 service for Native American communities throughout New
 2 Mexico, a subject that US West has long been concerned
 3 about.
 4           Recently, we started work on a fiber link to the
 5 Laguna and Acoma pueblos that will change the way people in
 6 these communities do business, receive health care and
 7 educate their children.  The project literally took years to
 8 get off the ground, but we're very proud of it, and we'd be
 9 happy to discuss that with you.  But please understand,
10 having said all that, that for every Laguna and Acoma
11 success story that we can tell you, there are many other
12 Native American communities that are relegated to the dirt
13 road of the Information Superhighway.
14           Now, I want to stress that this problem is not
15 confined to the pueblos and reservations of New Mexico.
16 Over the last several months, I have led a team of US West
17 subject matter experts, and we have met with dozens of
18 communities throughout the state.  We've been to Portales,
19 located about 40 miles from the Texas border, to talk about
20 ATM switch upgrades and other critical advanced technologies
21 that will help them attract call centers to their
22 communities.  We've talked to communities like Raton and
23 Silver City and Grants about frame relay upgrades and
24 building telemedicine and distance learning networks -- all
25 things that we can provide as a company if the barriers to

                                                 Page 80
 1 investment are removed.
 2           What we've learned from working with these
 3 communities is that access to the Information Superhighway
 4 is just as critical today as it was 50 years ago when we
 5 built the interstate highway system.  That was a national
 6 effort, and we were still receiving the dividends as a
 7 nation.  We need to continue the same commitment at the
 8 federal and state level in the area of telecommunications.
 9           There are two prevailing views on how we can close
10 the gap between the telecommunication services available in
11 Albuquerque and those available to Native American
12 communities.  I expect you'll hear both expressed today.
13           The first holds that as long as we protect basic
14 rates and service quality, all companies should compete
15 under the same terms.  Under this scenario, barriers to
16 investment and efficiency are eliminated, and customers
17 throughout the state benefit.  I can say today that by
18 removing these regulatory barriers, companies like US West
19 can provide solutions to needy communities on a far greater
20 scale.
21      The second approach suggests that we can regulate a
22 solution that provides advanced services regardless of where
23 people live.  This approach requires companies to provide a
24 certain level of service in communities throughout the
25 state.  It ignores laws of the marketplace.  It encourages

                                                 Page 81
 1 companies to target lucrative business customers in
 2 Albuquerque and ignore the information have-not's.
 3      The problem with the second approach is that we've been
 4 there and we've done that in New Mexico.  Your very presence
 5 here today suggests to me that the regulatory approach has
 6 not produced the proliferation of advanced service that
 7 communities such as those we're hearing about today need in
 8 today's economy.  And those who think we can tinker around
 9 margins by removing one layer of regulation while adding
10 another are misleading ourselves, in our opinion.
11      It should not go unnoticed that this panel does not
12 include a single competitive telephone company.  We are
13 wondering where AT&T, MCI-Worldcom, e.spire, GST or any of
14 the other companies who provide competitive local service in
15 New Mexico are.  It's a fact that 95 percent of the
16 competition for local phone service is concentrated in a
17 single metropolitan area:  Albuquerque.  It's also a fact
18 that practically 100 percent of the customers in this state
19 who have switched local service providers are high volume
20 businesses.  We'd like to have the AT&T's and MCI's bring
21 their enormous resources to bear to help solve this problem,
22 but so far they've been unwilling to do so.
23      So what should the public policy makers at the state
24 and federal level do to correct this problem?  First, throw
25 out the Joint Board's recommendation on universal service.

                                                 Page 82
 1 The Joint Board's recommendation worsens the digital divide,
 2 creating a two-tiered society of have's and have-not's.
 3 I'll go into greater detail about that in my written
 4 testimony, but let me provide an example of how New Mexico
 5 loses if the Joint Board's recommendations are adopted.
 6 Using HAI 5.0 data at the low-end 115 percent benchmark, New
 7 Mexico's high-cost customers, including Native American
 8 reservations, would receive no federal universal service
 9 funding.  At the high-end 150 percent benchmark, only
10 Wyoming would receive federal funding.  That's devastating
11 to New Mexico.  In New Jersey there are 30,000 low-cost
12 customers for each high-cost ($100 a month or more to serve)
13 customer.  In New Mexico there are 58 low-cost customers to
14 support each $100 customer.  New Mexico simply cannot afford
15 to go it alone.
16      The second thing public policy makers must do is tear
17 down the barriers to investment.  We are in the process of
18 doing that here.  Community leaders from all over New Mexico
19 are working with US West to develop a plan that would level
20 the competitive playing field and guarantee tens of millions
21 of dollars of investment to communities throughout the
22 state.
23      In closing, I would like to commend you once again for
24 coming to New Mexico and seeing firsthand the challenges
25 that exist in serving Native American communities.  No one

                                                 Page 83
 1 understands better than US West that telecommunications is
 2 the great equalizer in today's society.  We're determined to
 3 move New Mexico forward from the bottom to the top of the
 4 list in state-of-the-art technologies and advanced services,
 5 but we do need your help.  Thank you.
 6                CHAIRMAN KENNARD:  Thank you, Mr. Lopez.  Mr.
 7 Mike.
 8                MR. MIKE:  Good morning.  I'd like to also
 9 thank Commissioner Block, Commissioner Hughes and
10 Commissioner Lovejoy for being here on such a historical
11 occasion that I think will help us progress in an area
12 that's neglected and I think it will help everybody
13 involved.
14           I am the external affairs manager for Navajo
15 Communications Company.  Navajo Communications Company, or
16 NCC, is a wholly-owned subsidiary of Citizens Communications
17 Company.  Citizens is a publicly-held company traded on the
18 New York Stock Exchange.  NCC provides telephone service on
19 the Navajo Nation in Arizona, New Mexico and Utah.  Citizens
20 also provides telephone service on the White Mountain Apache
21 Reservation and the Hualapai Indian Reservation in Arizona.
22 Citizens' NCCSI subsidiary provides CATV and two-way radio
23 service within the NCC service area and CATV to the Pueblo
24 of Zuni.
25           The following information that I discuss here will

                                                 Page 84
 1 pertain to that of the operations of Navajo Communications
 2 Company in the three states that I've mentioned, spread
 3 across the 26,000 square miles.
 4           Prior to 1969, the Bureau of Indian Affairs
 5 operated the telephone system on the Navajo Nation; this was
 6 primarily for their facilities and its employees.  At that
 7 time, the BIA had 13 exchanges and no toll facilities
 8 located on the Nation.
 9           In 1969, the Bureau of Indian Affairs sold the
10 telephone system on behalf of the Navajo Nation to GSTC.
11 The Navajo Nation retained 20 percent ownership in this
12 company.  In 1981, the Navajo Nation sold its 20 percent
13 ownership to CP National who had acquired NCC.
14           In 1986, ALLTELL acquired all the properties in
15 the southwest of CP National to include the cable and phone
16 operations.  Citizens then acquired the southwest properties
17 of ALLTELL with a trade with some properties in the east,
18 and is now the current owner of NCC and NCCSI.
19           NCC provides communications services to 21,948
20 customers.  The penetration rate is approximately 22.5
21 percent.  This is based on the Navajo Nation's Profile dated
22 Spring 1995.  NCC has one toll center and 39 exchanges, 12
23 in New Mexico, 24 in Arizona, and 3 in Utah.  Seven
24 communities comprise 70 percent of these access lines, and
25 51 percent of these access lines are residential and 49

                                                 Page 85
 1 percent business.  Currently, NCC only has 438 Lifeline
 2 customers.  Our average residential rate is $15.43.  And the
 3 average loop cost per access line to provide service on the
 4 Navajo nation is $555.  NCC received 4.25 million in Federal
 5 USF support in 1998, which represents 14.3 percent of our
 6 revenue stream.  We at Navajo have 139 employees of which 94
 7 percent are Native American.  As the token Navajo, I should
 8 add that 70 percent of the management group is Navajo.
 9           NCC's central office switching and inter-exchange
10 network is 100 percent digital.  This is comprised of 630
11 miles of aerial cable, 870 miles of buried cable, of which
12 121 miles is fiber optics.  The network is made up of 21
13 Microwave Repeaters, 10 OPAC and 51 digital sub-carriers and
14 29 subcarriers with three BETRS radio systems.
15           NCC offers customers call-forwarding, call
16 waiting, message center and conference calling services.
17 IntraLATA equal access was made available in 1998.  The
18 company has installed a frame relay switch in the St.
19 Michaels office and is currently finalizing the processes to
20 provide for a new link.  When this project is complete,
21 frame relay service will be available to schools and other
22 customers on the Navajo Nation.  Frame relay service is
23 currently being provided, through a resale arrangement, to
24 the Indian Health Services and a limited number of schools.
25 Over the next few months these customers will be

                                                 Page 86
 1 transitioned to our new switch.
 2           Our administrative headquarters is located in St.
 3 Michaels, Arizona, and this houses our toll center, our
 4 operator services call center, engineering department and
 5 NCCSI CATV and two-way radio operations.  NCC has four
 6 district offices located in Tuba City, Chinle and Fort
 7 Defiance, Arizona, and one in Shiprock, New Mexico.
 8           Major obstacles to providing service on the Navajo
 9 Nation include a very large land base coupled with three
10 state jurisdictions, dual taxation, and a very long,
11 difficult and expensive Bureau of Indian Affairs and Navajo
12 Nation right-of-way processes.
13           In particular, during the last two years, the
14 Navajo Nation has quoted exhorbitant fees for right-of-way
15 acquisition.
16           As a result, NCC has used radio systems to
17 mitigate the high costs of right-of-way acquisitions and to
18 serve more of the rural areas of the reservation.
19           The recent FCC decision awarding 450 megahertz to
20 the paging industry took away NCC's ability to serve more
21 remote customers using that band width.  This has created
22 some difficulties.  We are currently experimenting with an
23 alternative BETRS radio, 150 megahertz, which does not
24 provide the same quality or coverage as well as the 450
25 megahertz band did.  The FCC needs to look at allocating

                                                 Page 87
 1 frequencies suitable for telecommunication companies to
 2 provide service to the most remote customers on a wireless
 3 base.
 4           In conclusion, I would like to take the time to
 5 thank the FCC for coming here today.  We at Navajo have been
 6 fortunate of the fact that in the past, the former
 7 corporation commission of New Mexico has come to our
 8 reservation to listen to the problems, Mr. Block and
 9 Commissioner Tristani, and we appreciate that.  I believe
10 through these hearings and the collaboration between the
11 FCC, the various state regulatory entities, and Native
12 American tribes specifically, I believe progress can be made
13 not only in streamlining certain processes but to increase
14 the penetration of telephone service to Native American
15 lands throughout the United States.
16                CHAIRMAN KENNARD:  Thank you very much.  Next
17 we will hear from Mr. Arthur Martinez here on behalf of
18 Western New Mexico Telephone Company.
19                MR. MARTINEZ:  Mr. Chairman, Commissioner
20 Tristani, audience members, my name is Arthur Martinez.  I
21 am the special projects manager for Western New Mexico
22 Telephone Company.  I also serve as the vice president for
23 the New Mexico Exchange Carriers Group.
24           On behalf of my company, I take great pride in
25 reporting that the citizens of the Alamo Chapter of the

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 1 Navajo Reservation have access to one of the most modern
 2 telecommunications infrastructure in the nation, as do all
 3 of Western's customers.  Western provides service to
 4 approximately 145 residential and 50 business customers of
 5 an estimated 325 Alamo households.  This equates to an
 6 estimated 45 percent penetration of occupied housing units.
 7 Our engineering department estimates, however, that
 8 Western's facilities are in the vicinity of 90 percent of
 9 those households.
10           There are factors that exist today that may
11 present a barrier between Western's modern infrastructure
12 and the citizens of the Alamo Reservation.  There are also
13 factors that will present themselves in the coming years
14 which may affect telephone penetration on the Alamo
15 reservation.  Many of these factors are laws or rules or
16 processes that result by law or rule, over which Western has
17 little control.  Western, however, will continue to try to
18 influence those who have the ability to change these
19 factors.
20           Western will celebrate its 25th year of providing
21 quality, reliable, high capacity communication services
22 throughout southwestern New Mexico in the coming year.  The
23 company was established as a commercial company in 1974
24 through the purchase of Mogollon Mountain Telephone Company.
25 At that time there were 576 customers in the four exchanges

                                                 Page 89
 1 of Cliff, Glenwood, Reserve and Luna.  In 1980, the
 2 Magdalena, Datil and Quemado exchanges were purchased.  The
 3 Magdalena exchange is the exchange that includes the Alamo
 4 Reservation.  Today Western services approximately 6,000
 5 customers over 15,000 square miles throughout four counties
 6 in southwestern New Mexico.
 7           The company deploys state-of-the-art digital
 8 switches in each of its exchanges that are connected by
 9 approximately 3,670 route miles of buried cable, 330 miles
10 of microwave facilities, and 420 miles of fiber cable.
11           Western's infrastructure is a necessity to those
12 who are residing in our serving territory.  Western has
13 diligently spent the last 25 years ugrading its
14 infrastructure for the benefit of all its customers.
15 Federal programs like the Universal Service Fund, the Rural
16 Utility Service, and the Lifeline and Link-up America
17 programs have played a vital role in this endeavor.
18           Today, an Alamo citizen can purchase services like
19 caller ID, voice-mail, and through Western's affiliate
20 company, Internet access at rates that have been deemed
21 just, reasonable and affordable by the state Public
22 Regulation Commission.  Western's tariff rate for basic
23 local exchange service is $18.25 per month.  When combined
24 with a subscriber line charge and optional features, the
25 average local exchange rate on the Alamo Reservation is

                                                 Page 90
 1 approximately $23 per month.
 2           At the state level, Western is also actively
 3 participating in the state's expanded role as a result of
 4 the enactment of the federal Telecommunications Act of 1996.
 5 To the best of my knowledge, New Mexico does not
 6 differentiate between carriers serving reservations and
 7 those not serving reservations when it comes to explicit or
 8 implicit support.  Further, there is no differentiation
 9 between customers located on reservations versus
10 non-reservation areas to qualify for explicit low income
11 support.
12           In Western's territory, the explicit Lifeline and
13 Link-up support mechanisms are both available for all
14 qualifying customers at the maximum support levels.
15 Therefore, Western provides all qualifying Lifeline
16 customers a Lifeline credit of $10.50 per month for an
17 access line and the maximum discount of qualifying
18 installations through the Link-Up program.  Western
19 currently serves 29 LITAP or Link-up customers on the Alamo
20 Reservation.
21           New Mexico does not have any carrier currently
22 drawing explicit state universal service funds due to the
23 regulatory requirements and restrictions associated with the
24 state fund.  To our knowledge, New Mexico's implicit support
25 mechanisms are not targeted to carriers serving

                                                 Page 91
 1 reservations.  Implicit subsidies are, by definition,
 2 impossible to associate with a specific product for a
 3 geographic area, such as a reservation.  Western, through
 4 its involvement with the NMECG, is proposing legislation
 5 that we believe will provide incentives for carriers to
 6 participate in the state high cost fund.
 7           In addition to the federal and state
 8 telecommunications regulatory issues, there are barriers
 9 which exist that make it burdensome and time-consuming for
10 the Native American end-user that do not necessarily exist
11 in non-Native American areas of the state.  When Western
12 receives a request for service from an Alamo citizen that
13 requires facilities to be built, the resulting permit
14 process is tedious and in many cases can take up to a year
15 to complete.  It is a process that begins with the Navajo
16 Tribal Council and ends with the Bureau of Indian Affairs.
17 Western's engineers have in certain situations, to the
18 extent allowed by tribal law, provided assistance to a
19 particular end-user that desires to dig their own trench in
20 order to circumvent the permit process.  Western is
21 sensitive to Native American culture and government and we
22 would welcome any changes to the existing permit process if
23 it is the desire of the Native American community to do so.
24 Changes that will expedite the permit process will help
25 Western to extend facilities to the greater percentage of

                                                 Page 92
 1 the Navajo community.
 2           Western is willing to do its part, and we look
 3 forward to working with the state, the FCC, and the Navajo
 4 Nation in making Commissioner Tristani's vision a reality.
 5 Thank you.
 6                CHAIRMAN KENNARD:  Thank you, Mr. Martinez.
 7 Next we'll from Gene DeJordy, Executive Director at Western
 8 Wireless.
 9                MR. DEJORDY:  I feel honored to be here to
10 address this issue before Chairman Kennard, Commissioner
11 Tristani, distinguished Indian officials and guests and
12 everyone else here, that has come to recognize the
13 importance of this issue.
14           Western Wireless not only has an interest in
15 serving high-cost areas, but is also demonstrating its
16 commitment by actually providing affordable telephone
17 service in many high-cost areas, which I'll touch on here
18 today.
19           Some of the concerns and problems raised earlier
20 today in the panel before us were basically related to
21 access to phone service.  This is an issue that Western
22 Wireless has addressed in the past by providing a fixed
23 wireless local loop solution to consumers that were not
24 served by telephone systems through an innovative
25 stipulation that was reached between the Nevada Commission,

                                                 Page 93
 1 Nevada Bell and Western Wireless.
 2           Another issue raised by the panel before us was
 3 the problems with respect to quality of service and the
 4 disconnection of service, which is an issue that I can
 5 sympathize with -- we recently had a disconnect for
 6 ourselves.  The problems addressed earlier included small
 7 local calling areas and the difficulties dealing with the
 8 telephone companies.
 9           The potential solutions to these problems
10 addressed by some of the folks before us was that we need to
11 think outside of the box.  We cannot think the way we have
12 historically thought about in addressing some of these
13 universal service needs, and one of the suggestions was to
14 look at different technologies such as wireless to serve the
15 basic communications needs of consumers, to foster
16 competition.  The other approach mentioned earlier was to
17 create a federal trust.
18           Briefly, Western Wireless is a facility-based
19 provider.  It provides cellular and PCS service throughout
20 60 percent of the geography of the continental United
21 States.  Within that area, the company serves 23 Indian
22 reservations in 10 different states.
23           Some of the problems with respect to addressing
24 these service-related issues fall into two categories:  The
25 cost of service and the operating and construction of a

                                                 Page 94
 1 telecommunications system.  With respect to the cost of
 2 service, the issue there is that the cost of providing
 3 telephone service in many areas exceeds the rate that can be
 4 charged for such service.
 5           One potential solution to this problem is to use
 6 federal universal service funds to support the cost of
 7 providing service to high-cost areas on Indian reservations
 8 until a state establishes a competitively neutral Universal
 9 Service Fund, at which time the cost of service would be
10 shared by federal and state authorities.  The public
11 interest of such approach would be that the delivery of
12 competitive services would be encouraged.  The provider that
13 can meet the demands of a consumer would be able to recover
14 their cost of providing service.
15           The big problem that we have today is that the
16 cost of service exceeds the rates that can be charged.  When
17 you introduce additional approaches to these problems you
18 have the benefits of certain competitive offers, like a
19 large local calling area, which was an issue that was
20 addressed earlier today.
21           We introduced a service very recently in North
22 Dakota in which we extended the local calling area 50 miles
23 to a major business community.  This was an issue, again,
24 that was addressed earlier today that many of the
25 individuals that reside on Indian reservations don't have

                                                 Page 95
 1 access to the areas that they would like to call.
 2           An additional problem faced by competitive
 3 carriers, especially wireless carriers, is the placement and
 4 operation of antenna towers.  And to resolve those issues --
 5 and it's just not an issue with the Indian reservations;
 6 it's a much larger issue -- we would need to address the
 7 following points.  First, there needs to be a single point
 8 of contact or a decision-maker for negotiating the placement
 9 and operation of antenna sites.  Second, a formal process
10 needs to be established for gaining approval for the
11 placement and operation of antenna towers.  Third, it's
12 unclear right now what the role of certain individuals and
13 institutions like the Bureau of Indian Affairs is, and that
14 needs to be clarified.  And then, lastly, there's a lack of
15 understanding of the laws, regulations and policies
16 governing the placement of antenna towers.
17           I think by taking approaches to some of these
18 problems, looking at the problems, addressing those needs,
19 we can address some of the problems raised earlier today
20 with respect to providing service to the Indian
21 reservations.  Thank you.
22                CHAIRMAN KENNARD:  Thank you very much.  Our
23 next speaker is Peter Carson, who is Vice President of
24 Business Development for ArrayComm.
25                MR. CARSON:  I would like to thank Chairman

                                                 Page 96
 1 Kennard and Commissioner Tristani, as well as all of the
 2 tribal Indian leaders here today, and the federal and state
 3 regulatory officials who have also taken time out of their
 4 valuable schedules to hear our testimony.
 5           My name is Peter Carson.  I'm responsible for
 6 business development at ArrayComm.  ArrayComm is a
 7 leading-edge wireless technology company that was founded in
 8 1992.  ArrayComm's core technology is something called smart
 9 antenna technology.  On the surface, this may sound like
10 Star Wars, but we found very practical applications for our
11 technology.  In fact, one of the most useful places for that
12 technology is in the wireless local loop arena, providing
13 fixed wireless access.  Interestingly, ArrayComm, to find an
14 open-minded market, dynamic competition, and very hungry
15 buyers, went overseas mostly to developing countries with
16 per capita incomes lower than most communities that we were
17 talking about earlier today.
18           To date, we have deployed this technology in Asia,
19 Latin America, the Middle East and Europe.  At the center of
20 its cost benefit is an ability of the technology to increase
21 the range of a radio signal by simply adding multiple
22 antennas to the radio site, thereby reducing even the power
23 that's transmitted per antenna.  So instead of transmitting
24 a high signal over a wide area, like conventional wireless
25 systems do, polluting the airways with interference, this

                                                 Page 97
 1 system will simultaneously transmit each user signal from
 2 one of many antennas, focusing the energy and steering it
 3 and avoiding interference and focusing the beam so you get
 4 not only extended range, but also a significant increase in
 5 capacity.  In turn, this minimizes the number of radio sites
 6 you need in your network and consequently reduces the cost
 7 of wireless networks.
 8           What I'm hoping to do today is to help answer the
 9 questions raised earlier today about inclusion versus
10 autonomy in the regulatory policy, and about open
11 competition versus regulatory intervention.  I think on both
12 counts what we actually need in terms of being realistic is
13 both.
14           The U.S. telephone network and the Internet, two
15 of the most valuable information assets in the U.S., were
16 not started without significant government support.  Many
17 people questioned those policies very early on, and
18 especially the Internet caught everybody by surprise.
19           First, we should try to understand how we got
20 where we are today.  And when we look at where the telephone
21 monopolies are and where the wireless industry is, the two
22 are linked very closely.  The telephone monopolies were
23 granted the first very broad cellular licenses,
24 strengthening the positions of the incumbent telephone
25 carriers.  Subsequent auctions for spectrum were

                                                 Page 98
 1 geographically fragmented and moved up into a higher
 2 frequency which actually produces a system with a shorter
 3 range and a higher deployment cost.  These handicaps impeded
 4 the rapid emergence of broad-based wireless competition,
 5 beyond the existing cellular duopoly.
 6           So what I'm trying to explain is why the cellular
 7 revolution hasn't come out to the rural market.  The power
 8 of incumbency is about to be broadened again.  More
 9 frequencies in the area of two gigahertz are about to be
10 auctioned.  And it's expected that the cellular carriers,
11 and especially the large incumbents, will acquire a
12 significant share of those frequencies, in the name of
13 cellular evolution.
14           In addition, if you apply this principle to
15 government support, whether intentional or inadvertent, the
16 incumbent cellular carriers have inherent advantages.  They
17 were able to use their monopoly position to help build and
18 fund the infrastructure in the cellular industry.  There's a
19 tight relationship between the suppliers of those systems
20 and the operators of those networks, as well.  While this
21 may have helped create a viable industry, there's now a
22 question on the table whether or not incumbents should be
23 excluded from any future spectrum auctions or be subject to
24 a cap on spectrum ownership.  In addition, should we
25 consider drastic changes in the way spectrum is being

                                                 Page 99
 1 allocated?
 2           Another question is if wireless local loop
 3 technology is so competitive overseas, why hasn't it taken
 4 off in the U.S.?  The WLL history has been marked by some
 5 very costly mistakes early on.  The first entrants were
 6 incumbent cellular suppliers relabeling their systems.
 7 These systems didn't perform well and gave the wireless
 8 local loop industry a fairly bad image.  Highly competitive
 9 technologies have recently entered the market, but there's
10 still some technical barriers because the large incumbent
11 suppliers control the interconnections to the public
12 network, and for small companies it's a fairly difficult
13 challenge to enter that space.
14      In addition, the small companies entering with very
15 competitive technology were expecting the
16 populous-developing countries of the world to really start
17 to drive the economies at scale.  The recent global economic
18 downturn, absence of well-defined regulatory regimes and
19 limited radio spectrum availability overseas, has caused
20 that to not be realized.
21      So what I would like to propose, in closing, is to
22 leverage one of the most valuable resources we have in the
23 country, and it is a natural resource -- it is in very
24 scarce supply and very high demand -- and perhaps take a
25 different approach.  In the next spectrum auctions look at

                                                 Page 100
 1 frequencies that are more friendly in terms of fixed
 2 wireless access, especially for rural coverage, down in the
 3 one gigahertz range.  Look at a nationwide auction that
 4 allows suppliers in the Indian reservations preferential
 5 access to that spectrum outside of the Indian regions, as
 6 well.  That would create inherent value in the entry of this
 7 business outside of the economics of providing
 8 telecommunications services on Indian reservations.
 9      So the challenge is really to the regulators as well as
10 the industry.  And we have found this kind of cooperation in
11 the past has yielded some very surprising results, and I'm
12 very confident that this more unorthodox approach might be
13 worthwhile considering, especially if it involves and
14 includes the Indian communities, both in participation in
15 the operation of the network, as well as the decisions about
16 who gets licenses that affect their territories and, of
17 course, the suppliers' decisions as well.  Thank you.
18                CHAIRMAN KENNARD:  Thank you very much, Mr.
19 Carson.  I thought I'd lead off with a couple of questions
20 of this panel of witnesses.  I wanted to start with you, Mr.
21 Lopez, because you seem to suggest in your testimony that
22 the answer here is deregulation.  One of the things that
23 I've learned in my job in the FCC is that oftentimes when
24 you ask regulated entities how do we solve problems, the
25 answer is deregulation.  But I'm not sure quite what that

                                                 Page 101
 1 means, particularly in this context.  Because on the one
 2 hand you said that the solution is deregulation, but we also
 3 know from experience in other industries that wholesale
 4 deregulation, irresponsible deregulation, has not always
 5 been good for rural communities, let alone Native American
 6 communities.
 7           In the airline industry, for example, when we
 8 deregulated in the '80s, and the trucking industry, for
 9 example, people in rural America suffered greatly from those
10 decisions.  And then you testified that we should throw out
11 the Joint Board in favor of, if I'm understanding you right,
12 another formulation on universal service which would result
13 in a larger fund, more universal service funding, which in
14 my mind means even more regulation.  So I think there was a
15 little self-contradiction in your testimony, and maybe you
16 can help me figure out exactly what you're getting at when
17 you say deregulation is the answer.
18                MR. LOPEZ:  Thank you, Mr. Chairman.  Let me
19 try to clarify.  It's a good question.  I think the root of
20 the problem is on this loose definition of deregulation that
21 people have.  We have tried the regulatory approach, and yet
22 here we are today.  So if you flip the coin over and examine
23 that the -- and I think deregulation is perhaps too strong a
24 word and I think it's confusing to those outside the
25 industry.

                                                 Page 102
 1           The way US West views deregulation, for lack of a
 2 better word, is not to remove from state or federal
 3 regulatory oversight very important consumer issues.  We
 4 think you can relax regulation, throw a consumer safety net
 5 over it so that you can maintain affordable prices, bring in
 6 a sensible universal service formula that has the larger
 7 states with more money and fewer high-cost customers
 8 contributing to the more rural states like New Mexico, and
 9 stir it up and come out with a state perhaps like Nebraska,
10 where I think, as many people in this room know, there's
11 been a "deregulation claim" in effect since, I believe,
12 1985.  Over those 12 years, the sky has not fallen in
13 Nebraska.  On the contrary.  It happens to have the most
14 facilities-based competition of any state in the 14-state US
15 West region.
16           We see the cable television providing a local dial
17 tone in Omaha, another city in Nebraska, in competition with
18 our own.  It's no coincidence.  When US West experimented
19 with the role of fiber optics combined with coaxle cable, we
20 called it the fiber hybrid coax, copper hybrid coax
21 solution.  For the Broadband trial, the COPS geared up and
22 put the kind of switching equipment in their network that
23 you see AT&T scrambling to plan for as they acquire TCI.  12
24 years later -- well, the Broadband trial was approximately
25 eight, nine years ago, but the end result is, today, a cable

                                                 Page 103
 1 television provider is competing in the local telephone
 2 market with us.  Yet there's been a regulatory regime in
 3 Nebraska that basically maintained complete commission
 4 oversight over residential rates but gave us flexibility to
 5 hit the market with new products and services on a level
 6 playing field with our competitors.
 7           Another interesting thing about the Nebraska story
 8 is that -- you were saying independent companies pulled
 9 their resources together and are beginning to announce plans
10 to compete with us in the out-of-state areas of Nebraska.  I
11 think it's a very compelling indication of what relaxed
12 regulation with the appropriate consumer safeguards can
13 yield.
14           I'd also note that -- you know, folks can draw
15 their own conclusions, but if you look at the data in
16 Nebraska, Nebraska has one-half the unemployment rate of the
17 national average.  I think the national average right now is
18 about 4.3 percent.  Nebraska is half of that.  They're not
19 worrying about keeping people in their state because they
20 are trained in technology.  A lot of the folks call it the
21 telecommunications capital of the country.  Telemarketing
22 and call center industries thrive.  We think it's a shining
23 example in US West territory of what can happen.
24           And I can tell you, Mr. Chairman, that as a
25 product and services lawyer for the company, new products

                                                 Page 104
 1 and services lawyer for the company, it is a heck of a lot
 2 easier for US West to trial new technology such as the
 3 Broadband network, caller ID, voice-mail.  All were trialed
 4 first in Nebraska.
 5           So I'm hopeful that that explanation suggests and
 6 clarifies that there's no self-contradiction in our
 7 argument, but, rather, the purpose of the '96 act passed was
 8 to invite facilities-based competition eventually to all of
 9 the areas of the state, not just the Albuquerque large
10 business market.  Yet three years later it's not here.  What
11 is this state to do?  We're hearing community after
12 community tell us how dire the need is for infrastructure,
13 yet left to their own devices the market forces just aren't
14 taking them there.
15           So our proposal there is loosely based on
16 Nebraska, but we're also listening to our customers, and
17 they're helping us craft an investment plan, that if our
18 effort to remove these barriers is successful, will be an
19 extraordinary investment in those areas of the state.  We
20 can't cover everyone, but in those areas of the state or
21 those communities that we've identified so that they would
22 have the infrastructure to kind of leapfrog them into the
23 digital age, we think that's a very compelling and socially
24 useful approach.
25                CHAIRMAN KENNARD:  That's interesting that

                                                 Page 105
 1 you raised the example of Cox Communications out in the
 2 southwest.  I agree with you.  I couldn't agree more that
 3 the goal of policy makers should be to have facilities-based
 4 competition by as many different players out there as
 5 possible.  I guess the point I would invite you to be aware
 6 of, though, is that as we transition from this monopoly
 7 environment to a more competitive environment, there is a --
 8 actually, there is a role of -- and the Cox example
 9 exemplifies that because one of the -- in the southwest,
10 from the data that I have looked at, one of the reasons why
11 US West is investing in DSL facilities is to compete with
12 Cox.  But the Cox people come to the FCC and they tell us
13 that we can't compete unless you ensure that we get
14 interconnection to the US West network.  That's a regulatory
15 solution to promote competition.
16           So I just think that we all ought to be careful
17 when we use terms loosely, like deregulation is the answer,
18 when it's much more complicated than that and it's more of a
19 mixed bag.
20           Let me ask some panelists a couple other questions
21 here.  We heard testimony this morning about an apparent
22 lack of information in the marketplace about the Lifeline
23 and Link-Up services.  I'd like to hear from the telephone
24 companies represented here what you're doing to make the
25 Lifeline and Link-Up services available to Indian people who

                                                 Page 106
 1 may be in low income areas and need access to this service.
 2                MR. MIKE:  Mr. Chairman, on uses, a variety
 3 of the Navajo Nation has its tribally-owned radio station,
 4 KTN Radio.  Also, by way of folders, this information is --
 5 we build stoppers.  The regular media is used in the folders
 6 at our business office where bills are paid.  Again, I don't
 7 know what the solution is, because as I stated in my
 8 program, there's approximately 10,000 residential access
 9 lines.  We only have 400.
10                CHAIRMAN KENNARD:  Anyone else?
11                MR. MARTINEZ:  Western informs its customers
12 that these services are available when they apply for that.
13 It's also my understanding that in New Mexico, through the
14 Health and Human Services Department, that you actually will
15 automatically qualify for Lifeline and Link-Up once you go
16 in that program.
17                MR. LOPEZ:  Mr. Chairman, my understanding is
18 consistent with Art's.  I had made a note, though, when I
19 heard that comment, to verify exactly how proactive we're
20 getting.  I think it's a safe assumption that we probably
21 have information that is on our web site.  So I've made a
22 note to look at exactly how affirmative and how regular
23 we're being with your dissemination.  I've also made a note
24 to look at the training that our customer service intake
25 personnel are given on these issues, and I will report to

                                                 Page 107
 1 you as soon as I get those answers.
 2                CHAIRMAN KENNARD:  I would be very interested
 3 in hearing more about that.
 4                COMMISSIONER TRISTANI:  One of the things we
 5 heard from our earlier panel was that many Native Americans
 6 that have requested service may be able to pay but obviously
 7 are waiting a long time to get service.  I heard about
 8 someone in Picuris waiting six months and they were ill.
 9 And I heard some other anecdotal pieces of evidence.
10           And I'd like to hear from -- I guess starting with
11 US West, if you have a sense or if you know how many Native
12 Americans have held orders over 30 days and what you're
13 doing to address those problems.
14                MR. LOPEZ:  Thank you, Commissioner Tristani.
15 I have figures.  Unfortunately, they are not broken down
16 according to ethnicity.  But I can give you a current sense
17 of where we are with the held order situation as it now
18 stands.  As many of you know, our commission has a zero
19 tolerance for held orders policy, so it's something that's
20 been demanding our attention and resources for some time.
21 We have approximately -- looks like 200.  In the first
22 quarter of 1998 US West had approximately 254 held orders
23 for primary service that were delayed beyond 30 days for
24 various reasons in New Mexico.  After 30 days it's deemed
25 absolutely unreasonable.  The held orders and the reasons

                                                 Page 108
 1 for the delays are categorized as follows.  I think this is
 2 the message.  10 were held because additional time was
 3 required to build a facility; for construction.  28 were
 4 held because high-cost is required to construct facilities.
 5 And we all talked about high-cost this morning.  Three were
 6 miscellaneous reasons.  One was weather conditions delaying
 7 construction.  But here's the kicker.  212 of those 254 were
 8 held pending right-of-way acquisition.
 9                COMMISSIONER TRISTANI:  Would it be possible
10 to get information about the reservations?
11                MR. LOPEZ:  Yes.  We'll try to provide it for
12 you.
13                COMMISSIONER TRISTANI:  I'm just curious
14 because the tribal leaders have raised that as an issue.
15                MR. MARTINEZ:  In Western's case, we have one
16 held order to date.  We are going to initiate service for
17 two customers either -- it may have occurred today.  If not,
18 it will be next week for those two customers.  However, it
19 took us a year, approximately, to get through the permit
20 process on the reservation.  So, again, the permit process
21 is an extreme barrier to extending our facilities to the
22 customer.
23                CHAIRMAN KENNARD:  We heard this morning from
24 some of the tribal leaders that extended area service is a
25 real problem.  And this seems to me like a problem that can

                                                 Page 109
 1 be -- is a manageable problem and one that can be solved.
 2 For example, if people in Indian country are finding it
 3 difficult to manage their telephone bills because calls to a
 4 hospital or a BIA institution or a public safety or
 5 government building is a toll call, why can't the telephone
 6 companies provide dedicated or FX lines at least to those
 7 essential institutions that are Lifeline institutions, if
 8 you will, for many consumers to reduce the cost of calling
 9 for the average consumers in Indian country?  Is this
10 anything that's been thought about?
11           You might look at inbound 800 numbers as another
12 way to deal with this particular problem.  But it seems to
13 me outrageous that people living in low income areas have to
14 pay toll calls to reach essential facilities, and it seems
15 to me that telephone companies have a responsibility to try
16 to address that problem.  Any comments?
17                MR. MARTINEZ:  Having lived in a very remote
18 part of New Mexico, and Western's territory, I sure share
19 your concerns.  For me, I would incur a toll call to call
20 Cliff, New Mexico, which has no facilities whatsoever.  So
21 even calling the next community for me was not an answer.
22 There are certainly some tariffs.  We have the
23 infrastructure.  The issue is, do we have the services.  The
24 services are part of the regulatory process.  And that will
25 depend on what we can do in conjunction with the commissions

                                                 Page 110
 1 in developing these services and getting them tariffed in a
 2 timely manner.
 3                MR. MIKE:  Mr. Chairman, on Navajo, the land
 4 being extremely large is that is a particular significant
 5 problem on Navajo.  We have five communities that currently
 6 have extended area services.  And we have in the past looked
 7 at, particularly with competition coming in, a reduction in
 8 terms of central offices and looking at them in community
 9 interests, and so we are continuing with those scenarios.
10                MR. DEJORDY:  I would just add that we
11 recently introduced a service offering that was aimed at
12 being a competitive offering to what the local telephone
13 company was offering.  The local telephone company was
14 offering a service that was about $16 a month, and included
15 a very small local calling area.  Today, local telephone
16 service in this rural part of the state includes a local
17 calling area with combined exchanges that add up to no more
18 than a thousand or so lines.  We entered the market and we
19 provided a local calling area that extended into a community
20 that was 50 miles away.  It wasn't a technical barrier.
21 There wasn't a regulatory barrier for doing that.  It was
22 really an implementation issue.  And to the extent that you
23 entered a market and consumers demand that type of service,
24 I think in a competitive environment the competitive carrier
25 would provide that service and then the incumbent may

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 1 respond.  In a noncompetitive environment, sometimes you're
 2 left with these extremely small local calling areas.
 3                MR. LOPEZ:  I think it's a function of cost.
 4 I think you're suggesting to create exchange lines that have
 5 a presence out of their normal local calling area and do so
 6 on an unlimited toll-free call basis.  As Art indicated, per
 7 the tariff, folks have to pay those higher prices for FX
 8 lines.  I know we offer FX lines.  We do have some facility
 9 shortages in various areas because of the taxation and
10 demands.  I mean, by taxation, our cost here for data
11 services using the voice networks.  I know that FX lines are
12 tariff lines in the state and are available, but they do
13 cost more than the local service.  But inbound 800 numbers
14 reverse long distance, so at some point somebody is still
15 paying the cost.  And so you're transferring the cost of the
16 service.
17           With respect to the extent of the EAS in New
18 Mexico, we have four rate groups.  So that your residential
19 rates in a very rural, high-cost area like Questa, New
20 Mexico is a little over $11.  It's $21.22 with all the
21 surcharges.  It's a little reversed.  One of the problems
22 with EAS in expanding the local calling areas in a state
23 like ours with four different rate groups, you might
24 inadvertently raise residential rates to the next group by
25 expanding the calling area.  So I think a lot of these

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 1 options are worth exploring but they come with some social
 2 and economic consequences.
 3                CHAIRMAN KENNARD:  I'm sure they do.  Arthur,
 4 you'll have the last word.
 5                MR. MARTINEZ:  To respond to the wireless
 6 solution, in our territory the wireless solution would
 7 create have's and have-not's if they were to deploy in our
 8 area in order to create a new wider calling scope.  So they
 9 would in our area face the same problems that we do.
10 Certainly in some communities a wireless solution may help
11 in that, as well.  But, again, the issue is cost.  And for
12 many companies, especially some of the newly formed
13 companies, Part 54 of the Commission's rules which deal with
14 the sale and transfer of exchanges is a limiting factor as
15 well as the cap on USF.
16                CHAIRMAN KENNARD:  I really think we're going
17 to have to move on to the next panel.  We have some very
18 high level government officials on the next panel.  We've
19 now cut into some of their time, and I don't like to keep
20 some of these people waiting.  If we can adjourn this panel
21 with my thanks.  I thought it was very interesting, and I
22 certainly learned a lot from it.  And if we could invite our
23 next panel to come up.  This is our state panel and consumer
24 representatives.  Thank you very much.
25           We're ready to begin our third and final panel for

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 1 the morning.  I am very honored to be sharing the panel
 2 with, really, some of the leading policy-makers in the state
 3 on telecommunications.  And I want to express my thanks for
 4 not only for you being here, but the fact that you came for
 5 the morning panels and you've been here for the entire time,
 6 and I think that really speaks alot about your commitment to
 7 these issues as public servants.
 8           I want to begin with Linda Lovejoy, who is the new
 9 chair of the New Mexico Public Regulations Commission.  Long
10 before I made this trip to New Mexico, I've been hearing
11 wonderful things about you, Linda, and about your commitment
12 to the public interest that I know that you and I share.  So
13 I'm delighted to have this opportunity to meet with you in
14 person and to hear some of your insights on these issues.
15                MS. LOVEJOY:  I want to thank the Federal
16 Communications Commission, Chairman Kennard, and, of course,
17 our own native, Commissioner Tristani.  I'm really thankful
18 that you set aside this day to discuss a topic that is very
19 important to me, as well.
20           Under the newly created Public Regulatory
21 Commission, I am one of five commissioners and I represent a
22 district that has a high rate of Native American population.
23 This is certainly a learning curve for me and what I will
24 speak to you about will just basically be in general.  I
25 will describe what I believe to be the enormity of the

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 1 problem, the obstacles, and possible solutions in trying to
 2 provide telephone services to Indian communities.  Of
 3 course, this is a persistent problem that has existed for
 4 many years, as you have heard this morning.
 5           For most Americans, the telephone services provide
 6 access for critical life, health, safety, economic and
 7 educational necessity.  The problem of providing services is
 8 not only complicated, but it also requires involvement of
 9 government and nongovernment agencies.  Issues of
10 sovereignty, federal and state regulations, tribal
11 traditions and beliefs, and the overall cost must be
12 addressed, and it will take time to assess and evaluate the
13 problems.
14           In my opinion, there are many obstacles that can
15 make it very difficult and sometimes impossible to provide
16 telephone services to Indian communities.  One of these is
17 governmental barriers regarding easement and right-of-way
18 from the tribal authorities and federal agencies.  The
19 requirement of environmental impact studies and other
20 mandates also adds to the difficulty.  Geographic barriers
21 such as the remoteness of the area and the terrain and the
22 distance from one area to another; basically, small
23 populations residing in a large geographic area.  High cost
24 of infrastructure required to provide services to a limited
25 number of customers.  Issues of affordability to the

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 1 recipients of these services are those barriers.  And the
 2 obstacles are the high cost of alternative technologies, as
 3 was stated this morning.  The lack of incentives to
 4 companies interested in providing services to Indian
 5 reservations.
 6           It is also my opinion that the following actions
 7 could provide possible solutions to the problem of providing
 8 services to Indian populations:  Perhaps conduct studies and
 9 assessments that will provide accurate -- and this is very
10 important -- provide accurate and current information with
11 statistics on the low penetration and some people like to
12 call it deploring levels on Indian reservations.  Review
13 present regulations and determine their effectiveness.
14 Review present subsidies, such as the universal fund that's
15 been discussed this morning, and determine their usages and
16 fair distribution.  Consideration of tax or other incentives
17 to companies who are willing to provide services.
18 Alternative technologies which can be made affordable to
19 customers.  Containment of costs.  And interagency
20 cooperation and agreements among everyone concerned.  The
21 issues of access and costs can be and should be resolved
22 while paying attention and giving consideration to the
23 values of the Indian communities.
24           In conclusion, it is my belief that there must be
25 a concerted and concentrated effort to address the low

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 1 penetration rates on Indian lands.  It's important to
 2 involve local exchange carriers, industry officials, state
 3 and federal regulators, tribal governments and county
 4 governments and any other entities with specific interests.
 5 A partnership between agencies can lead to shared agreements
 6 and shared responsibilities.  Now is the time for a
 7 concerted effort to bring the telecommunication services to
 8 Indian communities.  This hearing should be followed up with
 9 a plan of action to address the serious needs.
10           Mr. Chairman and Commissioner Tristani, thank you
11 very much for giving me this opportunity to speak to you
12 this morning.
13                CHAIRMAN KENNARD:  Thank you very much.  Next
14 we will hear from Steve Beffort, who is a member of the
15 cabinet for the State of New Mexico.  He oversees the New
16 Mexico General Services Department.
17                MR. BEFFORT:  Mr. Chairman, Commissioner,
18 thank you.  Based on the information my office has received
19 from various telcos and other government entities, topping
20 the list of issues regarding telephone service to Indian
21 reservations and in the rural community as a whole is the
22 lack of telecommunications infrastructure, obviously
23 repeated several times this morning.
24           The local telcos are providing the best possible
25 service under the existing circumstances.  Unfortunately,

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 1 there's not sufficient enough business base for the local
 2 exchange carriers to run cable or fiber to these isolated
 3 areas.  In addition, they must contend with the diverse
 4 geographical nature of New Mexico, predominantly in the
 5 northern part of state where the numerous mountain ranges
 6 add to the cost, time and feasibility of laying in land
 7 lines.  The northern third of the state is also on the
 8 Jicarilla Apache Homeland, a large portion of the Navajo
 9 Nation and the eight northern pueblos, which make up the
10 majority of New Mexico's Native American and rural
11 population.
12           The State of New Mexico operates a microwave radio
13 network consisting of 68 towers, which blankets 90 percent
14 of the state.  Currently this network provides analog
15 transmission.  However, the state is in the process of
16 converting to a digital platform that will provide the
17 bandwidth necessary to accommodate the latest technology, in
18 addition to providing basic telephone service to even the
19 most remote and underserved areas.  Line-of-sight digital
20 transmission is capable of delivering voice, video and data
21 simultaneously to telco-provided equipment or directly to
22 the reservations and rural communities.
23           In addition to providing voice and data
24 communications to the Executive Branch agencies of state
25 government, the General Services Department is obligated to

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 1 provide radio communications to the various state law
 2 enforcement agencies, including the Department of Public
 3 Safety, the Transportation Department, the Department of
 4 Game and Fish, and the numerous local government agencies
 5 requiring two-way radios.
 6           The federal mandate requiring digital compliance
 7 by the year 2005 and a lack of business case for the local
 8 telcos to invest in wire-line infrastructure has prompted
 9 the state to be a driving force in this initiative.
10           A proof-of-concept pilot dubbed the Questa Project
11 was initiated in December 1997.  Questa, a rural community
12 located 30 miles south of the Colorado border in central New
13 Mexico, is one of the many areas where significant lack of
14 telecomm infrastructure inhibits any type of economic
15 development.  For lack of any business case, the local telco
16 for this area does not plan to expand its wire-line
17 infrastructure in the near future.
18           The twofold goal of this project was to, number
19 one, provide this community with the necessary bandwidth for
20 Internet access using all wireless technology; and two, to
21 invite and prove that collaboration between the public and
22 private sector is not only feasible but necessary.
23           Through collaboration between the General Services
24 Department, Los Alamos National Lab, Plains Electric Co-op,
25 La Plaza Telecommunity Internet Service Provider, and the

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 1 Village of Questa, this goal was reached in December of
 2 1998.  The Questa Project has spawned interest from other
 3 communities requesting assistance for basic voice, data and
 4 Internet services.
 5           By nature of the technology, the digitization of
 6 the microwave network will produce a significant amount of
 7 excess bandwidth, which, through approved legislation, can
 8 be made available to the private sector or communities such
 9 as Questa.  Normally, this is not the charter of GSD,
10 however we feel we can be the catalyst in this initiative to
11 generate collaboration between the telcos, state, tribal and
12 local governments and the private sector, which can only
13 prove to be a win-win situation for all participants.  GSD
14 has been attending many of the community meetings regarding
15 telecommunications issues, and as a result we have been able
16 to propose possible opportunities with many of the local
17 telcos which have received very favorable feedback.
18           Partnering where feasible with organizations
19 including US West, KNME, the electric co-ops and the local
20 telcos will not only reduce the burden to taxpayers and
21 expedite the entire project, but will also eliminate
22 redundant networks.
23           With proper funding and agreements in place, the
24 Digital Microwave Project can be accomplished within three
25 years through a phased approach.  Beginning with the

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 1 northeast section (Phase I) working counterclockwise, to
 2 north central, northwest, southwest, and finally southeast
 3 at a total of cost of approximately $35 million.
 4           GSD received $2.2 million through General
 5 Obligation Bonds from the 1998 legislative session, a
 6 significant amount, however, far less than the funding
 7 required to complete Phase I.  In the 1999 legislative
 8 session the GSD is requesting an additional $12 million for
 9 the completion of Phases I and II.  Provided the necessary
10 funds have been secured, Phase III, northwest, is slated to
11 begin in the spring of 2000.  This area of the state is
12 unique in that it is home to a large Native American
13 population, several rural communities and one of the largest
14 cities in northern New Mexico, all lacking sufficient
15 telecomm infrastructure.  In addition, this area offers the
16 best opportunities for collaborating with the local telcos.
17           Through a Memorandum of Understanding, the Army
18 National Guard and the General Services Department have
19 joined forces in developing an infrastructure capable of
20 integrating the Guard's ATM ring with their remote armories.
21 Currently their ATM ring serves seven of their 29 armories
22 and will more than likely remain at only seven armories
23 because there is either no business case to install ATM
24 switches, or the remaining armories are outside the US West
25 territory.  Here again, the only viable solution is digital

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 1 microwave.  This will provide the necessary bandwidth and
 2 relay points to tie the remote armories into the ATM ring.
 3           The key to the overall success of this initiative
 4 is cooperation.  Possible funding, regulatory and
 5 legislative assistance from the FCC will ensure the
 6 continued success of the project.  On the part of the
 7 telcos, a willingness to collaborate with state and federal
 8 agencies toward this common goal will provide a solid
 9 foundation for a lasting partnership.  The tribal
10 governments will have to provide the necessary right-of-ways
11 and possible site agreements in order to expand these basic
12 and advanced services to all the members of their
13 communities.  Again, the system is in place and we think GSD
14 can, in fact, provide an answer to this particular problem
15 in cooperation with your department.
16                CHAIRMAN KENNARD:  Thank you very much,
17 Steve.  That's an exciting project.  Next we will hear from
18 Mr. Richard Weiner, who is an Assistant Attorney General for
19 the State of New Mexico.
20                MR. WEINER:  Thank you, Mr. Chairman.  My
21 name is Rich Weiner, and I am in the ratepayer advocacy unit
22 of the Attorney General's Office.  We represent residential
23 and small business ratepayers in utility matters primarily
24 before the State Regulatory Commission.  Starting now we'll
25 be representing ratepayers before the new Public Regulation

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 1 Commission.
 2           I would like to thank the FCC for its initiative
 3 in arranging for a hearing on such an important topic, and
 4 allowing our office the opportunity to submit comments and
 5 participate in this panel.  And like others, I want to
 6 welcome back -- it's real good to see Commissioner Tristani
 7 here again.  I remember one of the first tasks I had when I
 8 started working for the office three years ago was to be
 9 part of a universal service panel.  I actually knew very
10 little about universal service at that time, but I began to
11 learn fast.  Gloria Tristani was the chair of the commission
12 at the time.  It was the first time I met her.  And today
13 now is the first time I've met the new chair of the Public
14 Regulation Commission.
15      I'd like to focus primarily on questions of basic local
16 phone service, because without that no one can get advanced
17 services or anything else that so many people so eloquently
18 spoke about before me.  I also want to say that I was very
19 deeply moved by Governor Gachupin's stories on the Jemez
20 Pueblo, and certainly that points up the need for phone
21 service, if nothing else for emergency purposes and other
22 essential things.
23      Our office hasn't studied the specific causes of low
24 penetration on Indian reservations.  But through the work
25 we've done, we've learned a number of things, and I want to

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 1 share them with you.  One is that because of the expense of
 2 providing phone service in sparsely populated areas, the
 3 state commission does not require the local phone companies
 4 to serve everyone.  For example, US West is only obligated
 5 to incur the expenses of extending facilities up to 1,000
 6 feet plus an additional $5,000 to serve new homes or homes
 7 that never had phone service.  The customer is required to
 8 pay the rest of the expense of extending the facilities, and
 9 most people in this situation just can't afford that kind of
10 expense.  We don't know how many people on the reservations
11 fall into this category.
12      In a number of instances, people within a thousand feet
13 of existing facilities, and even people who are already
14 connected, sometimes are not getting service because the
15 existing infrastructure, that is, cables between those
16 people and the central office, has become exhausted, that
17 is, the wire pairs are already in use.
18      We know of dozens of cases on Indian reservations in
19 which US West is refusing to reinforce the existing
20 infrastructure because the company claims that it should not
21 have to make an investment to reinforce infrastructure if
22 that investment is not profitable.  We have argued before
23 the state commission that reinforcement is part of the
24 monopoly phone company's obligation to serve, and the
25 commission has agreed with us.  However, US West has

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 1 appealed the ruling to the State Supreme Court, and many
 2 more months will pass before this issue is resolved.
 3      Even more common on reservations are service delays due
 4 to the company's need to obtain a right-of-way.  This has
 5 been spoken about at length by various participants today.
 6 I'd like to say that we believe, and the commission has
 7 agreed in general, that the company -- US West I'm speaking
 8 of because we've been involved in litigation over held
 9 orders -- the company is not often adequately anticipating
10 growth in housing and is not generally reinforcing
11 infrastructure in a timely manner.  And it is our view that
12 the company should be able in most cases to apply for
13 rights-of-way well before infrastructure becomes exhausted
14 so that held orders can be prevented.  US West has claimed
15 that tribes will not even consider right-of-way applications
16 before the held orders occur, but we have not yet been able
17 to verify the truth of that claim.
18      There are a number of other possible reasons for the
19 lack of phone service.  One would be the inability to afford
20 the monthly charge or installation charge.  And it looks
21 from what people have said today that a lot of people really
22 don't know about the existing subsidy programs like Lifeline
23 and Link-Up.  Another reason would be having local service
24 disconnected for inability to pay for long distance charges.
25 Perhaps people don't know about the ability to get toll

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 1 blocking in exchange for having their service restored.
 2 This is something that people need to be informed of, as
 3 well.  And it simply may be that there are people who are
 4 uninterested in getting phone service.  One of the tribal
 5 members mentioned today about the important need for phone
 6 service.  So lack of interest is probably not the case with
 7 many people.
 8      We have received very few unsolicited complaints from
 9 residents of Indian reservations, but I want to emphasize
10 that we welcome complaints so that we can understand the
11 extent of the problems and so that we can look into them.
12      What we did do a year ago is a random survey of US West
13 held order customers, and we found that half the respondents
14 of that survey live on reservations and the vast majority of
15 those live on the Navajo reservation.  The complaints
16 included delays of more than three years; I think in some
17 cases even more than that.  Some have blamed US West for the
18 delays.  One person said that the tribe is not processing
19 right-of-way applications fast enough.  Maybe it was the
20 BIA, I don't know.  A number of others have said that US
21 West had failed to return calls or answer letters, or US
22 West would not give straight answers or gave people the
23 runaround.  One even said that the Gallup office is
24 generally closed.
25      I suspect that these complaints are the tip of the

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 1 iceberg.  Even when US West offers vouchers for cell phones
 2 for customers waiting for regular service as you've heard
 3 today, cell phones often don't work in rural areas.
 4 Furthermore, vouchers wouldn't normally cover the expenses
 5 of a normal amount of local phone-calling.
 6      The FCC is now in the process of revamping its
 7 universal service rules, I believe, reconsidering its rules,
 8 and the rules that it enforces, to increase subscribership
 9 in rural areas, including Indian reservations.  We expect
10 that the Public Regulation Commission will also initiate a
11 universal service rule-making proceeding sometime this year.
12      It is critical that the new rule should result in more
13 affordable basic local phone service and not less affordable
14 service.  We have recommended already that the FCC scrap the
15 universal service rule that places 75 percent of the burden
16 for subsidizing rural telephone service on the states.
17 Because under that rule, small, rural and relatively poor
18 states such as New Mexico will not be able to establish the
19 state funds sufficient to preserve, much less advance
20 service in rural areas, including the reservations.
21      We would certainly support a study by the FCC and the
22 PRC and the tribes to pinpoint the major causes of low
23 subscribership rates on the reservations, providing those
24 studies are sensitive to the cultural needs of the tribes,
25 and the tribes are comfortable with the manner of conducting

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 1 the study.
 2      Mostly we are here today to listen to Indian leaders
 3 and others to learn about the possible obstacles to
 4 telephone service on the reservations.  And we welcome the
 5 opportunity to work with the tribal leaders and others in
 6 removing those obstacles.  Thank you.
 7                CHAIRMAN KENNARD:  Thank you very much.  That
 8 was very interesting and informative.  Our next witness is
 9 Karen Buller, who is Chief Executive Officer of the National
10 Indian Telecommunications Institute.
11                MS. BULLER:  My name is Karen Buller, and I'm
12 the president of the National Indian Telecommunications
13 Institute.  The name of this panel is state government
14 consumer representatives, and I'm the consumer.  I want to
15 thank all the Native people who responded to our call for
16 input to this hearing.  We asked for comments on barriers
17 through several Native American listservs in order to
18 include some folks who couldn't make it here today.
19 Comments are still coming into my office from all over the
20 country through e-mail, and our staff will continue to
21 compile these comments and provide your office with that.
22           The last time I testified at the FCC it was on
23 universal service, and a dear friend of mine, who is today
24 vice president of Turtle Mountain Tribal College, told me a
25 story about her grandmother.  The story she told me was to

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 1 inspire me and to make me strong and to stand up for Indian
 2 people as her grandmother had.
 3           When North Dakota was first getting telephone
 4 service, Whites were given service before the Indians.  In
 5 fact, the telephone company ran telephone wires across
 6 Carol's grandmother's front yard to White people to give
 7 them telephone service.  Her grandmother requested service
 8 also, but she was never given service.  Each day she saw
 9 more and more of her White neighbors getting telephone
10 service.  Carol's grandmother had a plan.  Each day she woke
11 up, made coffee and took a pair of scissors to her front
12 yard and she cut the telephone line.  She continued this
13 every day for months, and finally her wordless message was
14 heard.  She got telephone service.
15           We've been asked to comment on barriers.  The most
16 formidable barrier is money, in particular construction
17 costs.  It can cost from $10,000 to $60,000 for the initial
18 POTS line into a reservation home.  No American would pay
19 this charge.
20           What's the solution?  The FCC should prohibit
21 local telephone companies from charging initial construction
22 costs.  In communities like Gila River, Arizona, Native
23 American telephone penetration went from below 40 percent to
24 over 80 percent when the tribe bought the local telephone
25 company.  The tribally-owned company got a loan from the

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 1 Rural Utilities Service which prohibits capital construction
 2 costs.  If the FCC prohibited these charges on Indian lands,
 3 I believe telephone service would skyrocket.
 4           Who will pay for these construction costs?  How
 5 did Gila River pay for these costs?  They applied to the
 6 Universal Service Fund for repayment.  Currently the
 7 Universal Service Fund pays out 25 percent of the cost from
 8 the federal fund and 75 percent from the state fund.  When
 9 tribal lands are involved, which are federal hands held in
10 trust, 100 percent of the cost should come from the federal
11 universal service plan.
12           How are Native Americans hurt under the universal
13 service plan?  Under the universal service plan, study areas
14 are often determined as entire states.  Tribal lands should
15 be their own separate study area.  Telephone costs and
16 penetration numbers are currently determined by averaging
17 within a study area.  For example, in New Mexico,
18 Albuquerque, which is a large community and which has very
19 high telephone penetration and low provider cost, is
20 averaged with communities like Grants, Crownpoint, San
21 Ildefonso Pueblo and Picuris Pueblo.  By averaging the
22 underserved communities with the large urban areas, a false
23 story is told.  Universal service fees should be based on
24 the exact area of the tribal land.
25           What are some consumer solutions?  Another barrier

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 1 is the increased cost and social pressures that long
 2 distance service brings.  If an individual tribal member has
 3 telephone service in her home, it would be considered "rude"
 4 to deny the use of this phone to friends and family.
 5 Therefore, when charges of one's friends and family become
 6 too much for the individual to pay, the service is
 7 terminated.
 8           What's the solution?  Cheyenne River Sioux
 9 Telephone Cooperative in South Dakota has instituted a
10 clever system whereby the phone subscriber is issued a
11 personal identification number for access to long distance
12 service in his home.  It would be considered "rude" for a
13 visitor to ask for the PIN number, and therefore the
14 subscriber is relieved of the duty of policing the
15 telephone.  This system seems to work very well.
16           I'd like to speak to some state issues.  Telephone
17 costs vary widely across the West.  Local home service in
18 Olympia, Washington is approximately $16 a month.  US West
19 is the carrier.  In Santa Fe the same service is
20 approximately $25 a month and US West is also the carrier.
21 Incidentally, in Philadelphia it's only $9 per month.  So
22 why the difference?  The PUC of the state of Washington
23 restricts the amount US West can charge for basic service,
24 while the PUC of New Mexico has not restricted US West.
25 Therefore, New Mexicans pay more for basic service.

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 1           US West has had an overcharge of $66 million in
 2 the past several years.  We recommend that the state PRC
 3 require US West to reinvest that $66 million in overearnings
 4 back into the state infrastructure.  And especially we want
 5 it to support rural New Mexicans, in particular the circuits
 6 to Indian communities, those from Albuquerque to Gallup,
 7 from Albuquerque to Taos, and from Albuquerque to
 8 Farmington.
 9           I'd now like to talk about wireless issues.  The
10 first one is power limitations.  While a few tribes are
11 getting into the wireless business, many more would like to
12 if the cost of repeater towers were not so high.  Power
13 limitations on Personal Communication Services restrict
14 Native Americans from entering this field.  Currently
15 repeater towers tend to be close together, perhaps only a
16 few miles apart.  This situation is because the power of
17 each tower must be so low so as to not cause interference
18 with other carriers, a situation of urban communities.  In
19 rural areas, this is rarely a problem.  Indians cannot
20 afford to put up that many towers.  If the FCC would grant
21 waivers to this rule for Indian lands, Indian tribes could
22 put up fewer towers with higher power, thereby boosting
23 their signal at an affordable cost to provider and consumer.
24 Each tribe could ask for their own waiver.
25           Build Out Requirements:  The FCC requires carriers

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 1 to serve a certain number of people in order to keep a
 2 license.  Most communities can easily reach the required
 3 number of consumers by locating in dense urban areas, while
 4 neglecting or ignoring rural populations.  While this is a
 5 many-faceted situation, we recommend that the FCC look at
 6 build out rules and require that wireless companies serve
 7 rural populations as well as the easy-to-reach urban areas.
 8           Notification of FCC action to tribes.  Currently
 9 tribes are often unaware of their carrier selling or
10 changing services in their user area.  We recommend that the
11 FCC place a Native American notification on all of their
12 application forms.  Direct notification and consultation
13 should be given to tribes who live in the service area under
14 consideration of new applications.  Both the FCC and the
15 company making application should notify the affected
16 tribes.  This would not only inform tribal governments of
17 changes taking place in their area, but it would also open a
18 line of communication between the tribes and the telcos.
19           As I mentioned before, we put out a call to Native
20 Americans to ask for their input, and a lot of this has to
21 do with Internet services.
22           Internet service is scarce, spotty and a story of
23 extremes.  The following is a list of examples that have
24 been e-mailed to us from all over the country.  And I have a
25 few that I mailed to you already, but there is a larger list

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 1 that keeps oncoming in that I can share with you.
 2           Also, we developed a chart that shows home service
 3 costs in the areas of communities that we serve all over the
 4 United States and also T-1 line costs.  And you can see the
 5 variance.  Let me just say a few examples.  Fort Defiance
 6 has a lab of 30 G-3 Internet connected computers for third
 7 graders.  It's a fabulous lab but has no cell service.  Many
 8 of the parents of the students do not have telephone
 9 service.
10           Western Alaska has Internet connections in schools
11 but no other telephone service or electricity outside the
12 schools.
13           Kayenta, Arizona has a T-1 connected lab but the
14 students are only in it for 20 minutes per week and teachers
15 have virtually no time on the lab, and it is locked up after
16 school hours.
17           In a BIA school in New Mexico, only the coaches
18 have Internet access.
19           Schools who have been sold T-1 lines often find
20 their lines running only at one-fifth or less of a T-1 line.
21           Schools in western Alaska and other places find
22 that the last mile is not covered by local telcos and when
23 consumers develop a plan to connect the last mile, the local
24 telco uses political pressure to prevent the hookup because
25 they will not profit from it.

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 1           We recommend that an Indian desk be made to cover
 2 the special issues of Native Americans at the FCC.  I know
 3 this is something that Commissioner Tristani suggested this
 4 past summer, also.  In closing, let me just say that
 5 universal service is not universal.  Affluent Americans
 6 continue to benefit from information in telecommunications,
 7 Native Americans must have the same services as other
 8 Americans.  Thank you.
 9                CHAIRMAN KENNARD:  Thank you very much.
10 Those were some very concrete policy suggestions which I
11 really appreciate.  We are close to the end of our hearing,
12 and I wanted to give members of the audience who are here an
13 opportunity to ask questions if they have any.  There are a
14 number of people whom I recognize in the audience, who I
15 know are very familiar with this issue, having worked on it
16 for many years, and I think we would be shortchanging
17 ourselves if we didn't give members of this audience an
18 opportunity to ask questions.  So if you do have a question
19 or a comment, Eric Jensen is here with a mike and he will be
20 happy to accommodate you.  While you're putting your
21 thoughts together, let me ask one question of Linda Lovejoy.
22           We heard a lot of about Lifeline and Link-Up this
23 morning, and I'm wondering, first, what is the State of New
24 Mexico doing to publicize Lifeline and Link-Up, and are
25 there any things that we could do at the federal level to

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 1 make it easier for you to make the availability of this
 2 subsidy program more known?
 3                COMMISSIONER LOVEJOY:  Thank you for the
 4 question, Mr. Chairman.  And let me ask Commissioner Block
 5 to -- you have a very good question and it deserves an
 6 objective response.  Let me ask Commissioner Block to
 7 respond.  Okay.
 8                COMMISSONER BLOCK:  Thank you, Mr. Chairman.
 9 LITAP, low income telephone assistance plan, there are
10 specific criteria that the people have to fall under.  We
11 had worked with the Human Services Department years ago when
12 we set this up, and at first, because of privacy issues,
13 they would not release a list of names of people who are
14 eligible.  When we first started, they would contact people
15 and give them the opportunity to sign up, yet a lot of
16 people did not take advantage of it.  So we were able to
17 talk the Human Services Department into making it an
18 automatic sign-up once they met the criteria.  So we really
19 do not publicize it because if they fall under the criteria,
20 they are automatically signed up for the service.
21                CHAIRMAN KENNARD:  I see.  Are there any
22 questions from the floor yet?
23                MS. WHITEHORSE:  I just wanted to ask a
24 question.  I've been sitting here listening.  My name is
25 Jean Whitehorse.  I'm from Crownpoint.  It's in the eastern

                                                 Page 136
 1 agency of the Navajo reservation.  And I work with a program
 2 called the Native American Library Project.  This project
 3 was discussed -- or, you know, we had some meetings back in
 4 1994 and this was initiated by Senator Tsosie and it was
 5 presented to the legislature a couple of times but, you
 6 know, it wasn't passed.  But then it was reintroduced again,
 7 and it finally passed.
 8           So our program is funded by the state legislation
 9 to get some internets and -- you know, Internet computers
10 out to our Indian community, not just on the Navajo.  This
11 is like, you know, from Taos to Mescalero to Zuni to
12 Shiprock.  So far we have some computers out there.  When
13 the community, you know, got aware of this project, they
14 applied to receive these Internet computers out into the
15 community or to the rural communities, the chapter houses,
16 the communities that don't have libraries.  And this is like
17 for community access.  That means that children can come in
18 and get on the Internet, and, you know, adults, too.  So
19 that's what the program is about.
20           Our problem is that some of our chapters out in
21 the eastern agency have these state-of-the-art equipment but
22 there is no phone lines.  And I was just talking to the
23 gentleman that was talking up here about, you know, how
24 Navajo communication is progressing with all these projects.
25 But I just asked him, "Where is this progress?  I don't see

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 1 it in our area."  We're on party lines, and you can't hook
 2 up internets on party lines.  So, you know, that's what I
 3 wanted to find out.
 4           Back in August I read in the paper -- it's called
 5 Indian Country Today, and in there it says Clinton
 6 speaks Indian, and he addressed some points about if the
 7 tribe wanted to progress, that, you know, a lot of these new
 8 technologies, especially economic.  You need phone lines out
 9 there.  You need fax machines out there.  You need internets
10 out there.  That's the only way we can make it.  But if we
11 don't have phone lines out there, we're not going to do it.
12 It's not going to happen.
13           And I hope that -- you know, when you hear all
14 these problems from the leaders and then from the phone
15 company, they sound so good, but that's not true.  And I
16 hope that you're not speaking -- even being here, I hope you
17 make a change.  And most of the leaders that were sitting up
18 here, they're new into these offices.  We elected some of
19 these new faces because we want change.  Thank you.
20                CHAIRMAN KENNARD:  Thank you.
21                MR. LUCIO:  I have a comment for the State
22 Regulatory Commission.  You said that with the Lifeline and
23 Link-Up you don't advertise to the general public.  Well, I
24 think you need to change that and start advertising.
25 Because we have several families that are in Zuni.  We have

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 1 a lot of self-employed families down there.  And some of
 2 them aren't on the Human Services rule.  But they're not
 3 aware of this Lifeline and Link-Up subsidy program.  So it
 4 doesn't benefit them.  So I think you guys need to start
 5 advertising that.
 6                COMMISSIONER LOVEJOY:  I'd just like to
 7 repeat that the criteria is very specific.  And if people
 8 meet the criteria, they're automatically enrolled into the
 9 LITAP program.  If they don't meet the criteria, then
10 advertising won't help because they have to meet the Human
11 Services criteria and they're automatically enrolled in
12 there.
13                MR. BEFFORT:  Mr. Chairman, just for
14 clarification, I just wanted to make sure that it was
15 understood that with the system that we're talking about,
16 that we're not wanting to enter into this in competition
17 with the private sector, rather in collaboration with the
18 private sector to provide dial tones to these underserved
19 areas in this network.
20                CHAIRMAN KENNARD:  Understood.
21                MR. SCHOLTEN:  I have one question.  We
22 talked the whole morning about universal service, about dial
23 tone, but I wanted to actually talk about the connection to
24 that.  Many pueblos, particularly when it comes not to just
25 to dial tones but for the schools and libraries, need access

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 1 to 56K or higher site lines.  And we heard about all the
 2 problems about getting dial tones.  I hope that we have to
 3 see, thinking about solving the issue about providing dial
 4 tone does not forget about digital services.  Because if we
 5 don't provide digital services, we again create a
 6 second-class citizen.  Although we have a hearing program,
 7 and we can talk about it and applaud how good it is, it
 8 doesn't solve the issue about getting cable into the stores
 9 here if there's no cable in the stores here.  And I believe
10 that the FCC should think about regulatory issues with
11 regard to that.  It's not an issue just for the pueblos, I
12 believe, but also for our rural America.  I would be glad to
13 give you a long list of examples about that.
14                CHAIRMAN KENNARD:  Thank you very much.
15 Could you identify yourself just for the record?
16                MR. DODGE:  My name is Henry Dodge.  I'm the
17 development officer with the Ramah Navajo Chapter, and we're
18 located right next to the Zuni Reservation.  And I am kind
19 of put in charge of developing the community and doing
20 different projects.  I also don't know anything about the
21 two -- Lifeline and Link-up, but if anybody should know in
22 our community, that should be me, and I don't know about
23 that, the specifications about that or where to get that.
24 We also have --
25                COMMISSIONER TRISTANI:  Through a telephone

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 1 company in your area.  Which telephone company services your
 2 area?
 3                MR. DODGE:  Century Telephone.
 4                COMMISSIONER TRISTANI:  They should be
 5 letting you know, too.  So you should talk to them about it.
 6                MR. DODGE:  One way we could get phone
 7 services in the community, we recently finished a
 8 15-mile-long power line extension project, and the chapter
 9 is the one that pushed through the right-of-ways to grant
10 some easements.  So we're able to do our part as long as the
11 companies are willing to come in and to work with us.  Thank
12 you.
13                MR. WEINER:  In terms of getting people to
14 understand and have knowledge about LITAP, Lifeline and
15 Link-Up, perhaps -- based on what Commissioner Block just
16 said, perhaps the overall criteria for participation in
17 Lifeline and Link-up needs to be expanded beyond just the
18 HSD criteria.  Maybe that's something that the new
19 commission should look at in considering its universal
20 service rules.  Maybe the federal commission can work on
21 that, as well.  Thank you.
22                CHAIRMAN KENNARD:  Seeing no hands flying up
23 in the audience --
24                MS. TSOSIE:  My name is Mary Alice Tsosie.  I
25 am the chair of the Native American Librarian and Special

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 1 Interest Group.  I'm a member of the New Mexico Library
 2 Association.  And I really, really would like to emphasize
 3 that in order for us to get services out to the libraries
 4 and to the chapters, we really need telephone services out
 5 there.  We are really working with very limited, especially
 6 in the chapters where there's only like -- it's the only
 7 party line and some of them have very, very minimum.  And I
 8 know it's very, very difficult.
 9           But also, I was reading the history, and one of
10 the things that I read about the history of telephone lines
11 was that the pueblos were very, very instrumental in getting
12 one of the first lines out to -- I think it was Tesuque.  I
13 think if you ask for cooperation and collaboration, that you
14 will find it there, because I think we all can agree that we
15 really do need the services out there.
16                CHAIRMAN KENNARD:  Thank you.  Governor.
17                GOVERNOR ANAYA:  Mr. Chairman, Commissioner
18 Tristani, I almost would feel remiss if I didn't take this
19 opportunity to thank you also for having come here, and also
20 to underscore very quickly that we've heard a lot of
21 conversation, a lot of comments, comparing the challenges we
22 have ahead of us with some that we've had in the past; the
23 interstate highway system, for example.  We all thought that
24 with the interstate highway system, with the creation of
25 that, many of our rural states like New Mexico benefitted

                                                 Page 142
 1 tremendously because of the implementation of that system
 2 here.
 3           But we also know that many of our communities that
 4 were not on the interstate highway system suffered, and many
 5 of them, frankly, dried up and died.  My concern as a former
 6 policy maker and one who has been following the need to
 7 digitize our state very carefully, my concern for New Mexico
 8 and states like New Mexico is that if we don't get onto the
 9 information highway, particularly in our rural communities,
10 our Indian communities, our smaller towns, that the negative
11 impact upon us is going to be even more devastating than
12 having being left off of the interstate highway system.  I
13 understand, speaking to the two of you, I'm saying the
14 obvious.
15           What I am equally concerned about, for the past
16 few months through the utilizing of the vehicle of US West
17 as a resource, and with Ed Lopez whom you heard from earlier
18 and a team he's put together, at my recommendation they have
19 undertaken a project going around the state to try to
20 identify, community by community, what the infrastructure
21 needs are.  A lot of what you've heard here today has been
22 repeated in every one of these community forums.  We have
23 now probably reached some 25 or 30 towns.  This is not a
24 commercial for US West.  It's a plea for what I have been
25 hearing.  I'm stepping out not as an adviser to them but as

                                                 Page 143
 1 a citizen of the State of New Mexico who is concerned about
 2 this state.  That is, you look at the policies, whatever
 3 they may be, that you ultimately develop, that you please
 4 keep in mind these concerns you've heard here today and keep
 5 in mind the impact of what you will be recommending.
 6           Because as I see, particularly with the impact of
 7 the Telecommunications Act of 1996, and as we see the
 8 supposed onrush of competition, competition isn't reaching
 9 these communities that you've heard from today and it's not
10 going to.  We need to find a way to make sure we generate
11 the infrastructure investments.  You've heard some
12 recommendations today.  Certainly one of the approaches that
13 I'm helping develop is to pump in, as Karen Buller
14 recommended, these tens of millions of dollars of
15 "overearnings" that US West has been tagged with, of
16 reinvesting that.  But that's only part of the overall
17 solution, that hopefully we can have a level playing field
18 so that when these interstate carriers do come into New
19 Mexico, that they shoulder some of the responsibility that --
20 some of the questions and comments that have been referenced
21 to speakers today, that they shoulder part of that
22 responsibility, too.  Otherwise we are going to have the
23 have's and the have-not's, and the have-not's are then going
24 to be left to oblivion in this state.
25           So I commend you for coming here.  I know

                                                 Page 144
 1 Commissioner Tristani shares the same vision that many of us
 2 do in terms of making sure that our small communities -- in
 3 addition to Albuquerque, that our small communities, that
 4 the rural communities have access to the biggest pipelines
 5 and the fastest technology in the telecommunications era so
 6 that we can develop the communities economically, so that we
 7 can have access to distance learning, so that we can
 8 disperse medical care to the rural areas.  And with that
 9 kind of a vision coming from the FCC -- keeping in mind the
10 needs of the these rural communities -- I know you'll come
11 up with the right solution because I know you're motivated
12 by the right motives.
13           And so, again, I thank you and I apologize for
14 basically restating the obvious to you, but it's an issue
15 that many of us here in New Mexico have been dealing with
16 not just recently for many years, but very specifically very
17 recently.  And, again, we thank you, and many of us want to
18 work with you in making sure this gets accomplished.
19                CHAIRMAN KENNARD:  Thank you very much.
20                MR. VAN MILLER:  My name is Phillip Miller,
21 and I represent a company by the name of United Calling
22 Network, Inc.  And we work with Lucen Technologies.  I've
23 heard a lot of people today talk about what the problems
24 are.  And I think that between my company and Lucen, that we
25 do have a solution.  A, it's wireless.  And you can

                                                 Page 145
 1 integrate into any community by using a wireless based
 2 network.  And by coming with all of the couriers here that
 3 we can get together with them, with my company and Lucen and
 4 create a solution.  It's just not the regulatory issue.
 5 It's integrating all of these old and bifurcated networks to
 6 make the solution work.  And I will give you my card.  And
 7 I'm telling you now, we've done it in 28 countries and we
 8 can make the network work and bring you Internet access,
 9 library, whatever you want, with a solar-powered antenna and
10 you don't need a phone line.  So it can work.  Thank you.
11                CHAIRMAN KENNARD:  Thank you.  I noticed that
12 Congresswoman Heather Wilson has rejoined.  We're nearing
13 the end of our panel.  I wanted to wrap things up, first of
14 all, by thanking everyone for their participation.  I've
15 participated in a number of hearings in my job as Chairman
16 of the FCC, and I must say that this has been one of the
17 most successful, clearly, just in terms of having wide
18 participation by a number of people who had a lot of
19 insightful things to say, people who are out in the field
20 dealing with these problems every day.
21           And this is our first field hearing as a
22 Commission, since Gloria and I have been there, and I must
23 say, I think it's a very useful tool for us to get outside
24 the beltway of Washington and learn what's on your mind.  So
25 this is the first of many as far as I'm concerned.

                                                 Page 146
 1           I wanted to just sum up by outlining a few points
 2 to try to pull together what I've learned here today and
 3 come up with some insights as to the direction that I think
 4 we should be taking.  And as I've listened to the folks
 5 today, combining the ideas with what I've heard today, I
 6 would suggest four areas of action.
 7           First of all, it's very clear that we at the FCC
 8 need to be looking creatively at our existing rules to find
 9 ways that we can accelerate the deployment of technologies,
10 all technologies, particularly wireless technologies, to
11 rural areas and to Indian country.  For example, we can and
12 we should consider changing the transmitter power levels for
13 some of the mobile telephone uses so that we can make
14 certain that we're maximizing the use of the spectrum.
15           Second, we must consider the issues of access by
16 Indian communities to telecommunications systems as part of
17 our broader look at universal service.  As Rich mentioned
18 earlier, we are embarked on a huge undertaking this year at
19 the FCC, probably the most important thing that we will do
20 during our tenure as commissioners, to revamp universal
21 service and update it for the 21st Century.  And I believe
22 that it is very, very important that the issues of access
23 for Indian peoples be considered in the context of that
24 broader review.
25           Gloria Tristani was on the Joint Board, which was

                                                 Page 147
 1 a board of federal and state commissioners which have made
 2 some initial recommendations to us.  She has worked hard to
 3 make sure that these issues of Indian access are considered
 4 in universal service.  And I will say that I share her
 5 concern.  As those issues are brought before us, I'm
 6 committed to looking at those issues in that broader
 7 context.
 8           Rich mentioned his concern about the so-called
 9 25/75 jurisdictional split.  Rest assured, that we are not
10 wedded to that concept.  The current commission has voted
11 unanimously already two times now that we will not adhere
12 slavishly to a 75/25 jurisdictional split if the
13 consequences of that would be to shortchange rural states
14 like New Mexico.  I know there's been a lot of concern about
15 that, but please understand that we are grappling for a
16 better solution, and it will not involve 75/25 for rural
17 states.
18           In the context of our universal service review,
19 though, I think it's really important that we look at
20 competitively neutral solutions.  We've had a hundred years
21 of monopoly regulation in this country and it hasn't solved
22 this problem.  In fact, from what we've heard today, it has
23 probably made the problem worse.  So we've got to be open to
24 ensuring that new competitive entry helps us to solve this
25 problem by the wireless industry, for example.  I'm going to

                                                 Page 148
 1 do all I can to work with the CLEC community, those
 2 competitive local exchange competitors that are coming into
 3 the market for the first time, to make sure that they are
 4 shouldering their universal service obligations.
 5           Third, we must remain committed to working
 6 cooperatively with tribal governments and with state
 7 governments and state agencies to look at holistic solutions
 8 to this problem.  We heard about right-of-ways today.  This
 9 is a problem that I know there's a solution to it.  I mean,
10 there's no reason why someone who wants phone service on a
11 reservation has to wait a year because the tribe is not
12 granting right-of-way access to the telephone company.
13           We have faced this same problem with wireless
14 services, and what we did is we pulled together federal,
15 state and local government officials and we came up with
16 model practices.  What issues should be considered when
17 right-of-way access is requested?  What is an appropriate
18 timetable for the tribe to consider this?  What's the
19 appropriate turnaround time?  What issues are appropriate to
20 be considered in the context of those decisions and which
21 aren't, and try to come up with some model best practices so
22 that tribes who may not have dealt with right-of-way issues
23 before are not caught in the paralysis just because they
24 don't know how to deal with it and the consumers at the end
25 of the day suffer.

                                                 Page 149
 1           And fourth, I think we've got to continue to make
 2 sure that all universal service subsidy support is
 3 efficiently used and targeted.  It is very clear to me that
 4 one of the big problems that we face today is money.  There
 5 is not money available and not investment flowing into these
 6 communities to make technology available, basic
 7 technological services.  Some of that money has got to come
 8 from state and federal government, but we've got to find
 9 ways to ensure that it is used in the most efficient way
10 possible.
11           One of the things we've talked about is maybe
12 having competitive bidding for universal service subsidies
13 so that if companies are interested in providing universal
14 service to a reservation or a rural community, they can bid
15 for the right to do it.  That will ensure that the subsidy
16 is used in the most efficient manner, and it also will
17 ensure competitive neutrality because it will mean that
18 those companies that have the most efficient technology will
19 have an edge in the competitive bidding process.  So that's
20 an issue that I'd like to put on the table for discussion,
21 but as we do so we'll continue to look for guidance from the
22 tribes, from the private sector, from state agencies in
23 forging solutions to these problems.
24           I want this to be an ongoing dialogue.  The record
25 in this hearing will remain open until March 31, so for

                                                 Page 150
 1 those of you who have additional comments or policy
 2 suggestions, please send them to us.  And send any other
 3 additional information that you deem important.
 4           So, again, thank you so much for hosting us today.
 5 I want to thank the hard-working FCC staff, who have made
 6 this day possible, Mark Nadel, Paul Gallant, Eric Jensen,
 7 Michele Ellison, Sharon Franklin, Linda Paris and, of
 8 course, Dale Hatfield.
 9           And finally, I just want to give a special thanks
10 to you, the citizens of New Mexico, for loaning us your
11 native daughter, Gloria Tristani.  And just let me say, I
12 know how badly you want her back, but please, if we could
13 just keep her on loan for just a little bit longer, I would
14 appreciate it.  So thank you very much for coming.  And I
15 believe Gloria had some closing remarks, as well.
16                COMMISSIONER TRISTANI:  Thank you, Mr.
17 Chairman.  I want to thank this last panel for your very
18 insightful remarks.  And I particularly want to thank the
19 State Public Regulation Commission members that have been
20 with us throughout the day, Linda Lovejoy, Commissioner
21 Block, Commissioner Pope and Commissioner Hughes.  Thank you
22 for being here.
23           One of the things that I tell my fellow FCC
24 commissioners is that it's really easy to sit in Washington
25 and hear about the problems by pleadings and through the

                                                 Page 151
 1 lobbyists.  It's easy, compared to being in Santa Fe and
 2 having any citizen walk in your door any time of the day to
 3 tell you, "I can't get a phone line.  What are you going to
 4 do about it?"  State commissioners really get that direct
 5 thrashing from the public, which actually I miss, but it's
 6 very hard.  So thank you for your work.
 7           I want to, again -- and thank you, Secretary
 8 Beffort, because I know you hear those kinds of issues, too.
 9 I want to, again, thank the tribal representatives who have
10 been with us throughout the day and who were here earlier.
11 I want to thank Congresswoman Wilson.  We're very lucky to
12 have you on the telecommunications subcommittee.  I know you
13 will use your insight and your knowledge to help us there
14 and to help New Mexicans there.
15           And last but not least, I wanted to thank the
16 chairman because he's been saying all these nice things
17 about me, but I know his commitment is real to doing
18 something about this.  Because the hearing is important, but
19 what's more important is action.  We heard from one tribal
20 representative who said, "You know, we have these hearings,
21 and years go by and nothing happens."  I know Chairman
22 Kennard will ensure things will happen.  It's going to take
23 time and it's going to be hard.  Thank you for the
24 opportunity to be here.
25                CHAIRMAN KENNARD:  Thank you.  This hearing

                                                 Page 152
 1 is adjourned.
 2                [The hearing concluded at 1:05 PM]

                                                 Page 153
 1               FEDERAL COMMUNICATIONS COMMISSION
 2 
 3                      PUBLIC HEARING
                         January 29, 1999
 4                           8:30 a.m.
                   Indian Pueblo Cultural Center
 5                       2401 12th St., NW
                      Albuquerque, NM  87102
 6 
 7 
 8 
 9 
10                     C E R T I F I C A T E
11 
12           I, CHRISTOPHER R. SANCHEZ, a Certified Court
13 Reporter, do hereby certify that the proceedings of the
14 above-entitled cause were transcribed by me stenographically
15 on January 29, 1999, and that the within transcript is a
16 true and accurate transcription of my shorthand notes to the
17 best of my ability.
18 
19 
20                         ________________________________
21                         CHRISTOPHER R. SANCHEZ, CCR #217
22 
23 
24 
25 

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 4 
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