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Oversight Hearing on Universal Service Fund Reform: Ensuring a Sustainable and Connected Future for Native Communities

Statement of Chairman Daniel K. Akaka

Thu, June 7, 2012

Oversight Hearing
Senate Committee on Indian Affairs

Aloha and welcome to the Committee's oversight hearing on Universal Service Fund reform and its impact on Native communities. 

Native communities suffer from the poorest access to telecommunications services in the country, which impacts their health, safety, education, and potential for economic development.  More than 90 percent of tribal residents lack access to broadband, and one-out-of-three tribal residents still lack even basic telephone service.

Universal service, which has been a core priority of federal telecommunications policy since the 1930's, is the primary reason that Native residents have even  limited access to basic services.  For years, these critical funds have provided a lifeline and allowed companies that want to serve Native communities to do so even though they operate in the highest cost markets in the country. 

The FCC has recently started issuing a number of major reforms to the modern Universal Service Fund, which will have disproportionate, and potentially dangerous, impacts on Native communities.  Tribally-owned and operated telecom companies may see as much as a 33 percent revenue reduction, which will mean an initial loss of over six hundred thousand dollars annually per company.  For companies that operate on slim margins in high-cost Native areas, this could mean the end to their business and a major step back for Native broadband connectivity.

Most of the companies that serve Native residents also borrow significantly from the Rural Utility Service whose Administrator we will hear from today.  USF funds are critical to secure these important capital loans and their clients' ability to repay these loans may now be in question.

We will also be hearing today from tribal leadership and the Native companies themselves about why these funds are critical to keeping their business open and growing in their communities.  It is absolutely necessary that the federal government honor its unique relationship with Native communities across the U.S. and ensure that these companies that provide broadband do not have to shut their doors.

In most of these communities, these companies are the only ones available to provide critical services that enable better healthcare, education, and economic development.

I can't stress enough how important this issue is to our Native communities across the country.  In this new era, access to Internet services is now a basic need.  The funds provided through universal service make a difference in how our elders receive critical healthcare services.  They pave the way for accessible and affordable education opportunities for our young people at home in their communities.  And, they give our business owners, large and small, real economic opportunities to participate in the global economy.

I hope that the federal agencies here today will take this to heart as they proceed with reforms to the Universal Service Fund.  Not only are Native communities severely underserved, they are owed a special duty as part of the federal government's trust relationship which must be honored and respected.  We must work together to insure that the proposed USF reforms address the special needs of Native communities.   Federal agencies must also work to insure equal access to high-quality, high-speed and reliable broadband services-not a second-class system.

Again, thank you to all of our witnesses today.


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