Navajo Nation Likely to Lose Internet Service

AP, April 4, 2008

The thousands of Navajo Nation residents who rely on the Internet to work, study and communicate across their 27,000-square-mile reservation will be out of luck Monday, if their service provider shuts access as planned.

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A tribal audit last year revealed that Utah-based provider OnSat Network Communications Inc. may have double-billed the tribe, and it raised questions about how the tribe requested bids for the Internet contract.

Those discoveries led the Universal Service Administration Co., which administers the service under the Federal Communications Commission’s E-rate program, to tell the tribe March 28 that it would withhold $2.1 million from OnSat.

Jim Fitting, an attorney for OnSat, said the delay in payment means it can’t pay subcontractor SES Americom for satellite time.

“With USAC taking this particular position, it doesn’t look like we’re going to get paid in the foreseeable future,” Fitting said. “We’re already $4 million in the hole, so why should we continue doing it?”

Most evenings, when residents get off work, the reservation’s chapter houses are closed, but their wireless signals remain live. So it’s common to see residents with laptops sitting outside the chapter houses in cars, working away, a local official said.

Through the Washington, D.C.-based USAC, the FCC reimburses 85 percent to 90 percent of the costs for Internet service to 70 of the tribe’s 110 chapter houses, which operate like city governments. The Navajo Nation covers the other 10 percent to 15 percent of the cost and offers service inside the chapter house and nearby through Wi-Fi.

The USAC told Navajo President Joe Shirley Jr. in a March 28 letter that it is withholding money for OnSat for 2006-07 because of the possible overbilling and because the tribe didn’t comply with federal rules that require it to select the most cost-effective service or equipment through a fair, open and competitive bidding process.

The USAC asked the tribe to prove OnSat provided the service it is billing for and has not overbilled.

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