Telecommunication Issues Telecommunication Issues in Indian Countryin Indian Country

ATIC Pre-SummitATIC Pre-SummitApril 19, 2007April 19, 2007

Navajo Nation Telecommunication Regulatory CommissionNavajo Nation Telecommunication Regulatory Commission

National Telecom IssuesNational Telecom Issues

• Telephone Penetration– 76.4% - Indian Reservations– 94.1% - National Average

• Access to Computers– 26.8% - Indian Reservations– 42.1% - National Average

• Access to Internet– 18.9% - Indian Reservations– 26.2% - National Average

National Telecommunications & Information Administration, US DOC

Arizona TelecommunicationArizona Telecommunication

• Ranked 36th in the nation in percentage of households with telephone service.

• “Telephone penetration within Arizona is significantly lower in the state’s more rural areas, including much of Arizona’s Indian reservation lands.”

Statewide Economic Study 2002, Arizona’s Telecommunications Infrastructure, Prepared for the

Arizona Department of Commerce by the Bureau of Business and Economic Research, NAU.

Telecommunication ChallengesTelecommunication Challenges

• Internet Subscribers – Data unknown

• Limited Financial Resources

• Rural and Rugged Terrain

• Lack of Trained Technicians

• Rights-of-way Issues

• Jurisdictional Issues

Challenges on Navajo NationChallenges on Navajo Nation

• There is $1 billion in salaries and wages earned on the Navajo Nation. Yet only $231,305,889 in retail sales are occurring on the Nation. Thus, 71% of the income earned of the Nation is benefiting non-Navajo communities.

• Navajo Unemployment rate is 42.16%.

• The poverty level on the Navajo Nation is 42.9%.

• Dual taxation continues to exist. Nation is asked to waive it’s tax first.

Office of the Navajo Tax Commission, 2005

HB 2689HB 2689

• Reservation Telecommunication Legislative Study Committee– Identify methods to track tribal contributions to the state transaction

privilege tax (TPT);

– Identify an appropriate distribution formula that is modeled after the current city and state shared revenue formulas;

– Identify an appropriate transaction privilege tax distribution process for tribal governments;

– Recommend tribal telecommunications legislation that incorporates the state transaction privilege tax; and

– Submit a report of its findings and recommendations to the Speaker of the House of Representatives and the President of the Senate on or before June 30, 2007.

Distribution of AZ TPTDistribution of AZ TPT

• Distribution Base– 25 % - cities

• Allocated among incorporated cities and towns

– 40.51% - counties• Allocated among

Arizona Counties

– 34.49% - gen. fund

A.R.S. 42-5029

• Non-shared– 100% - gen. fund

County-City TPT DistributionCounty-City TPT Distribution

0

100

200

300

400

500

600

700

800

FY 01-02 FY 02-03 FY 03-04 FY 04-05 FY 05-06

Co

City

Reservation TPT CollectionsReservation TPT CollectionsFY 2001 FY 2002 FY 2003 FY 2004 FY 2005 FY 2006 TOTAL

140,630.77 46,627.44 40,670.46 179,540.90 142,879.00 192,483.00 $742,831.57

919.34 42,808.76 37,547.71 22,720.36 8,131.00 14,432.00 $126,559.17

925,655.85 969,749.22 980,917.43 1,301,315.63 917,796.00 969,386.00 $6,064,820.13

96,217.77 1,776,390.23 1,681,186.89 1,668,171.71 498,838.00 296,093.00 $6,016,897.60

57,838.46 198,690.41 388,149.95 553,419.56 599,505.00 684,259.00 $2,481,862.38

3,058,119.54 1,893,515.01 645,525.28 500,427.41 1,057,972.00 1,307,665.00 $8,463,224.24

82,816.09 68,501.19 55,364.15 188,679.59 91,545.00 100,791.00 $587,697.02

11,561,553.40 14,338,118.97 15,648,234.62 17,036,869.53 16,192,010.00 17,926,281.00 $92,703,067.52

18,369.62 69,679.39 91,813.53 56,116.17 39,284.00 64,971.00 $340,233.71

1,195,481.19 1,518,226.24 1,188,850.24 3,340,998.40 5,018,203.00 7,790,178.00 $20,051,937.07

33,612.10 53,856.38 118,772.94 52,014.94 76,192.00 57,718.00 $392,166.36

1,239,426.96 1,016,224.97 1,271,860.11 1,254,358.92 1,735,893.00 1,948,484.00 $8,466,247.96

219,804.83 397,080.89 151,209.28 63,715.34 21,692.00 172,847.00 $1,026,349.34

39,946.12 69,026.55 55,369.67 98,537.27 81,430.00 114,222.00 $458,531.61

622,242.16 923,436.73 913,314.19 1,080,584.65 2,529,318.00 4,796,623.00 $10,865,518.73

65,640.25 10,489.13 87,653.31 87,998.19 71,027.00 22,518.00 $345,325.88

             

19,358,274.45 23,392,421.51 23,356,439.76 27,485,468.57 29,081,715.00 36,458,951.00 $159,133,270.29

Arizona Department of Revenue

Reservation TPT CollectionsReservation TPT Collections

0

5

10

15

20

25

30

35

40

2001 2002 2003 2004 2005 2006

All Rez

Navajo

Meetings HeldMeetings Held

• 2 Ad Hoc Meetings - Summary• Need for Telecommunication Infrastructure• Educate, Build Support & Consensus• Work with Tribes & Governor

• Arizona Department of Revenue• Alternative Model for TPT Revenue Sharing

• Inter-Tribal Council of Arizona• Informed Tribes and Request for Participation

Goals for RTLSC MeetingsGoals for RTLSC Meetings

• 2/16/07: Dialogue with Tribal Telecom & ITCA• Introduce the Concept, Navajo & Hopi Presentations

• 3/27/07: Dialogue with State & Local Govt’s• Counties, ADOR, ACC, etc.

• Meeting 3: Dialogue with Telecom Industry• 2007 AZ Telecom Summit

• Meeting 4: Follow up w/ Tribes & Stakeholders• Propose Alternative Models

• Meeting 5: Ratify Proposed Model• For RTLSC Report

““Postcard to Congress”Postcard to Congress”

• HCM 2007: Telecom; Native Americans– Recognize the rights of tribal governments and communities to

exercise regulatory jurisdiction over telecommunication activities within the boundaries of reservations

– Allocate sufficient Homeland Security funds to tribes for the development of telecommunication build-out necessary to mitigate various emergencies

– Support and advance public safety implementation among tribes and communities through the provision of grants for the development of telecommunications and information technology capacities among various public safety providers

– Encourage local governments to provide partnership opportunities the promote telecommunication services and that are mutually beneficial for the welfare of all state citizens

ContactsContacts• Navajo Nation Telecommunication Regulatory Commission

– Ernest Franklin, Executive Director• PO Box 900• Window Rock, AZ 86515• Phone: (928) 871-7854• Fax: (928) 871-7856• Web: www:nntrc.org• Email: efranklin@nntrc.org

• Navajo Nation Communications & Utilities Department– Pearl Lee, Program Manager

• PO Box 2928• Window Rock, AZ 86515• Phone: (928) 871-7740• Fax: (928) 871-7741• Email: p.lee@citlink.net

• Native Policy Group, LLC– Ron Lee, Government Relations & Legislative Affairs

• Phone: (602) 319-4419• Email: ron.lee@nativepolicygroup.com