FCC denies S.D. tribe's telephone bid
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The Federal Communications Commission's sole Democratic member last week objected to a decision which limits tribal competition in the lucrative telecommunications market.

On August 21, the FCC refused to force the state of South Dakota to recognize the authority of the Cheyenne River Sioux Tribe. The decision said the state's denial was "competitively neutral."

But FCC Commissioner Michael J. Copps, a Democrat appointed by President Bush, said his colleagues failed to consider the tribe's inherent authority. "The matter," he wrote in a partial dissent, "requires careful balancing of the critical issues of consumer protection and tribal sovereignty."

"I do not believe that the majority's decision here strikes the correct balance between the two," he continued.

The FCC's decision comes in an eight-year-old dispute between the state and the tribe. The South Dakota Public Utility Commission (PUC) won't let the Cheyenne River Sioux Tribe Telephone Authority, a 40-year-old company with $10 million in assets, buy three telephone exchanges that cover parts of the reservation.

The state's objections applied only to the tribe. The PUC allowed 63 other sales to go through.

Supported by US West Communications, which merged with Qwest in 2000 to become a $5 billion company, and the Department of Justice, the tribe sought federal review. State courts wouldn't overturn PUC.

The FCC did the same last week and refused to pre-empt, or override, the state. The commission said concerns about tribal sovereign immunity, taxation and jurisdiction were valid.

"We note that the majority of the service territory that the Telephone Authority seeks to acquire is outside the boundary of the Cheyenne River Sioux Reservation," the decision stated. "Thus, we are particularly cognizant of the state's interest in protecting any such consumers that do not fall within the tribe's jurisdiction."

The ruling was based on a federal law whose purpose is to prevent tribes and Alaska Natives from being locked out of the telecom business. The FCC can step in and recognize tribal authority when a state limits competition and acts against the public interest.

Copps argued that is exactly what South Dakota is doing. "The denial . . . is directly related to the fact that the [Authority] is owned by an Indian tribe," he wrote.

Commissioner Kathleen Q. Abernathy, a Republican also appointed by Bush, issued a separate statement that concurred with the refusal to pre-empt. But she expressed concerns about the state's objections.

"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," she wrote.

The FCC five members are appointed by the president. By law, at most three can be of the same party.

Currently, three members, including Chairman Michael K. Powell, are Republicans. Copps is the sole Democrat because the fifth seat is vacant.

The FCC under GOP leadership has pre-empted South Dakota on tribal matters. In October 2001, the commission recognized the authority of a wireless telecom that entered into an agreement with the Oglala Lakota Tribe. Commissioner Kevin J. Martin, a Republican, dissented.

Get the Decision:
In the Matter of Cheyenne River Sioux Tribe Telephone Authority and US WEST Communications, Inc. (CC Docket No. 98-6 August 21, 2002)

Relevant Links:
Cheyenne River Sioux Tribe Telephone Authority -
Federal Communications Commission, Commissioners -