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FCC denies phone exchange acquisition

EAGLE BUTTE, S.D. ? The Federal Communications Commission has denied the Cheyenne River Sioux Tribe Telephone Authority the right to purchase three other authorities on reservations because of the inability of the state to regulate and tax the operations.

The FCC was asked to reverse a decision by the South Dakota Public Utilities Commission, which denied the sale of the three Qwest phone exchanges located predominantly on the Standing Rock and Cheyenne River Sioux Reservations. The phone exchanges for the towns of McIntosh, Timer Lake and Morristown and the surrounding areas and 64 other exchanges were put up for sale in 1994 by U.S. West, Qwest's name at the time, because of its unwillingness to upgrade the systems in rural areas.

The Authority attempted to purchase the three exchanges with the blessing of U.S. West. The acquisition would have given the CRSTTA a chance to grow and expand technologically.

The issue has gone through the South Dakota Circuit court to the state Supreme Court with all rulings favoring the PUC.

The state Supreme Court ruled that the denial of the sale was not based on a refusal of the tribe to waive sovereign immunity, something claimed by the tribal authority.

J.D. Williams, manager of the CRSTTA said the company is evaluating its next step, which could be an appeal to the U.S. Supreme Court.

"It seems South Dakota isn't ready for an Indian company to get larger. They are not ready for us to become the vendor; they want us to stay the customer. They want us to be by the fort and camp out and trade fur and products.

"Whites can be the dominant players, we can not," Williams said, adding that the greatest opposition to the acquisition came from the Timber Lake area. "They hurt their own infrastructure."

The CRSTTA, the first tribally owned telephone authority in Indian country, provides digital service and is working on broadband for its customers. It had planned to implement a digital wireless service some of the new exchanges.

Williams said some customers from those other areas asked for help with communications and Qwest said it would not improve the technology because of cost concerns. He added that calling areas would have been increased, providing more service for the customer's dollar.

On the Cheyenne River Reservation, two communities located 150 miles apart are connected with fiber optic lines and customers can call each community at the basic rate, instead of long distance, which would have occurred with the new exchanges, Williams said.

It wasn't because the CRSTTA couldn't provide the technology and improve services, Williams said. The one dissenting vote on the FCC also said the exchange could be beneficial.

"I have no reason to believe that the Telephone Authority would not provide excellent service," said Kathleen Abernathy, FCC commissioner.

She also wrote that the PUC denied the right to purchase the sale because of the tribe's unwillingness to give up sovereign immunity. "I want to emphasize, however, that tribal authorities should not be forced to forfeit their sovereign immunity as a condition of purchasing a local exchange."

The FCC ruled that the state's denial for purchase was based on the unbiased attention to parameters that include the necessity of collecting taxes and regulation of laws and jurisdiction of those laws.

The FCC agreed that one of the reasons for denying the sale was the loss of tax revenues and the uncertainty "over the recourse a customer would have to complain about service problems and unregulated rates of a monopoly provider not subject to jurisdiction."

Williams said the decision was an example of how "we are to be watched over. We have to fight twice as hard to become similar as an industry."

He said the growth of CRSTTA was not easy. The telephone authority supplies phone service to 3,400 customers, mostly within the boundaries of the Cheyenne River Reservation. It owns and operates Lakota Technologies, which provides date processing, and computer services to customers such as IBM, National Library of Medicine, Uniband and other companies.

The phone service to insure that Lakota Technologies operates at a high level is provided by CRSTTA.

Some businesses that can afford it are using satellite hook-ups to gain access to high-speed Internet service. Smaller businesses can't afford that type of service.

OctaFlex Environment Systems, a research and development company, uses satellite to access the Internet. Qwest did not offer fast enough access to the Internet to satisfy the company.

CRSTTA claims it has been improving line service to its customers through fiber optics and wireless technology and that progress would have extended to the new exchanges. Qwest claims it would not upgrade its service to that extent.

Williams said that a plan to engineer wireless service for the Timber Lake area has been in the works for more than two years and will continue even without a purchase agreement.

Other criteria for approving the purchase of a phone system includes the ability of the company's technology to provide modern state-of-the-art communications services that will promote development, tele-medicine and distance learning in rural South Dakota. CRSTTA has the technology that allows for those services.