Northwest Indian Law & Business Advisor : Northwest Indian & Tribal Lawyer & Attorney : Williams Kastner Law Firm : Tacoma, Seattle, Portland

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Federal Communications Commission Chairman Julius Genachowski, recently conducted meetings with many industry and advocacy groups regarding the pending reclassification of the Internet for regulatory purposes under the Communications Act of 1934. It is likely that these meetings were in response to the recent decision in Comcast v. FCC, where the FCC was found to lack ancillary jurisdiction to regulate the network management actions of an internet service provider. The FCC asserted it possessed the ability to regulate the Internet based upon its ancillary jurisdiction. Therefore, the FCC could require Comcast to grant it the authority regarding the creation of Comcast network management policies so as not to impede access to the Internet by non-Comcast applications. The D.C. Court of Appeals determined the FCC lacked the ancillary jurisdiction to regulate the Internet because the FCC assertion was based solely upon policy statements contained within the Communications Act of 1934 and not specific statutory power contained within the Act. The ruling rejected the FCC’s claim to have authority to regulate the Internet through policy pronouncements and specific congressional approval contained within legislation. FCC network neutrality policy after the Comcast decision was found to be without support or authority.

It is likely that Chairman Genachowski’s meetings were intended to predict political climate which might result if the FCC pursues a reclassification of the Internet. Currently, the Internet is classified as an information service as opposed to a common carrier. Common carriers, are subject to more detailed regulation when it comes to topics such as rates charged for utilizing the communication system, universal service, accessibility, and other network management issues.

It is uncertain if Native American Tribes or Tribally owned telecommunications companies have been included in Chairman Genachowski meetings. Although the policy and legal discussion will still be sent back to Congress for consideration before the FCC can proceed with the reclassification of the Internet, the initial salvo has already begun in important Senate and House Committees. In mid-June, a letter sent from Senator Dorgan to Senator Inouye expressed concern that someone may seek to attach a rider to the 2010 appropriations measure which would severely restrict the FCC’s authority when it comes to network neutrality. In the letter, Dorgan specifically states that the FCC “must move forward to ensure solid legal footing” for policies which reform universal service to support broadband and connectivity to Native Americans on tribal lands among other issues. Tribal interests in the future of the Internet have already been sidelined in favor of large corporate interests because large businesses have established platforms which now control access to the internet, which has become an important part of daily life. Tribal governments and tribally owned telecommunications companies should be focused upon engaging with both the FCC and Congress on the future of the Internet and Network Neutrality.
 

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Washington Senate campaign launches a Dash for Cash. With the entrance of Dino Rossi as the Republican candidate into Washington state’s Senate race against incumbent Democratic Senator Patty Murray on May 26, the ground has been set for the ensuing battle which will be influenced on a national level. The Democrats and Republicans both view the Washington Senate campaign as a skirmish where the balance of power may shift away from the Democratic majority in Congress. Both parties have observed that the mood of this year’s electorate is shaped by mounting budget deficits, lackadaisical employment numbers and an administration which is struggling to cobble together a unified strategy to address the Gulf Coast oil debacle. Campaign contributions will also flavor the tone, pace and results of this fall’s elections because of the decision reached by the Supreme Court when its verdict was announced in the Citizens United v. FEC case. In the Citizens United decision, the Supreme Court overruled the ban which prevented corporations from using funds from their general treasury to make independent expenditures and electioneering communications in federal elections.

The Supreme Court determined that a ban based upon the identity of the speaker was impermissible because it sought to restrain political speech without a justifiably compelling interest, particularly when it involved a prohibition directly levied on corporate political speech. After the decision, the Federal Election Commission stated that it would not enforce statutory provisions or its regulations that had prohibited corporations or labor organizations from making independent expenditures and electioneering communications. The Court’s decision and the FEC’s position together mean that corporations and labor organizations are free to pay for political tools essential for candidates reaching and persuading the electorate via media communications. This freedom to pay for communications may prove to be the difference between the electorate choosing Dino Rossi or Patty Murray to represent Washington in the U.S. Senate for the next six years.

In a recent statement, it was declared that the Rossi campaign had raised $600,000 from individual donors in the wake of his entrance into the race on May 26. The figure quoted by the Rossi campaign is dwarfed by the $5.47 million on hand for the Murray campaign as of the last report filed with the FEC at the end of March 2010. Both the Rossi and the Murray campaigns will likely experience a surge in donations from individuals, corporations and labor organizations as the end of the race gets closer, the rhetoric gets deeper, and the price of political ads gets steeper. The price tag for the 2010 election cycle in Washington State just went up and it will likely be influenced by out-of-state donors as the share of in-state donors reaches contribution limits. The voice that interested parties will exercise in the electoral process is directly attributable to the impact that the funding of independent expenditures and electioneering communications have upon a candidate’s cause.
 

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Creating jobs was the overriding subject of Wednesday’s State of the Union Address. The President acknowledged that job creating and growth will be the primary focus of his administration in 2010, in order to restore prosperity to America’s middle class. While the President acknowledged that the national unemployment rate of ten perecent was unusually high, he did not mention that in some areas of Indian Country, the unemployment rate has consistenly hovered at 50 to 70 percent for many years. Senator Dorgan and fellow members of the Senate Committee on Indian Affairs conducted a hearing Thursday that launched a dialogue addressing the high unemployment in Indian Country. The panel of witnesses at this hearing included key leaders in the federal government, tribal government, and several corporations based in Alaska, but did not include business owners from privately-held tribal member-owned entities. As many economists have detailed in reports and the President stated Wednesday night, government programs designed to bolster the nation’s small businesses will help set the country on a speedier path to an economic recovery. Nationwide, small businesses compose about 50 percent of the country’s total number of business enterprises.

Small businesses deserve a place at the table both in the nation’s dialogue on economic recovery and in the dialogue addressing Indian Country’s battle with high unemployment. Williams Kastner represents one such company—Sister Sky—which took the initiative to draft and send its comments to Capitol Hill for inclusion in a discussion on how to build commerce within Indian Country. Sister Sky is a Native women-owned company with headquarters on the Spokane Indian Reservation. They provide high-quality natural bath products and employ a workforce largely composed of Native Americans in a community where jobs are scarce. The company owners believe that its business success can be useful to fostering job creation within tribal communities. Sister Sky executives crafted their comments to lawmakers in D.C.with the desire to participate in a dialogue that will be both good for businesses nationwide and good for their local tribal community. Following Sister Sky’s lead, tribal entrepreneurs and tribal-owned entities should direct their comments on building sustained tribal economies to members of Congress and the Senate Committee on Indian Affairs so that their insights may be included in this important economic policy discussion.

In addition to Sister Sky’s participation in plans for economic revitalization, the Pathways to Prosperity Program, operated by the United Indians of All Tribes Foundation, is sponsoring a career fair on February 4, 2010, in order to connect employers with job seekers. The career fair is scheduled to be held at the Daybreak Star Indian Center located in Discovery Park, Seattle. There will be state, county, and tribal governments present to recruit potential applicants. This event has, in the past, also attracted the likes of non-tribal businesses such as REI and Starbucks so it should prove useful for all types of applicants seeking work.
 

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Health care, in this session of Congress, is not likely to fare well. Speaker Pelosi has stated that there is virtually no way to gather enough votes for the House to pass the Senate version of the health care reform bill before the mid-term elections. This essentially means that the health care reform initiative as it currently stands is likely to be dead before arrival. However, it appears that after the election of Senator Brown in Massachusetts, the President is seeking to seize upon voter frustration with in the typical standoff between Democrats and Republicans which results in lack of progress in our nation’s capital. The President announced that he would seek further regulation of Wall Street financial institutions in the form of imposing new restrictions upon banks engaging in proprietary trading. Congress will likely have to review and amend legislative initiatives currently being deliberated in order to accomplish the President’s new focus upon strengthening regulatory mechanisms over Wall Street’s financial institutions.

On January 28, 2010, the Senate Committee on Indian Affairs will conduct a hearing on proposing solutions to the high unemployment rates on Indian reservations. Yesterday, the House approved three water rights bills: H.R. 1065, H.R. 3254, and H.R. 3342. The direction of Indian country priorities will likely face shifting political emphasis after the State of the Union address and submission of the President’s budget.

Washington Legislature

The Washington Legislature continues to face mounting challenges in order to balance the state’s $31 billion budget. The source of state revenue continues its decline as the economy suffers through job losses in 2009 that reached 106,000. The forecast for the state’s economy shows that there will continue to be slow recovery, stagnant job growth, high unemployment, and less revenue collected. The state will be reliant upon Federal sources of funding and will be forced to implement policies that expand job opportunities and investment in state business development. Some notable bills to monitor include the following:
HB 2411: A bill to address subarea plan proposals as part of comprehensive land use planning.
HB 2493: A bill to address the taxation of cigarettes and other tobacco products.
HB 2749: A bill to address local government taxation. HB 2650: A bill to address utility taxes.
HB 1191: Incentives to support renewable solar energy. HB 1610: Incentives for use of biomass in renewable energy production. HB 1658: Incentives for utilities to promote renewable energy.
HB 1699: Implementing a high-speed internet deployment and adoption strategy for the state. HB 1249: Concerning internet and mail order sales of tobacco products.
 

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The next ten months will be very interesting as Congress deliberates after the President’s State of the Union Address. The balance of power has been impacted in the Senate as the Democrats hang on to a 59-seat majority with a Republican margin of 41 seats. The mid-term elections for Congress are scheduled for November 2010 and in the meantime Congress will address the federal budget, debate any jobs related policiesand determine the future of the health care reform bill. The position and the discussion that will ensue during the next ten legislative months will likely set the tone and agenda for issues which will be used by voters in determining their elected officials. The following information is a brief synopsis of a few of the key gubernatorial and congressional races in the western United States.

Washington

There is no scheduled gubernatorial race for Washington state in 2010 as current Governor Christine Gregoire’s term does not expireuntil 2012. In the Senate race, Senator Patty Murray is seeking reelection in 2010 and has enjoyed broad support from Democratic voters in the state. Sean Salazar, a chiropractor, and Wayne Glover, a trucker, have announced that they will challenge Senator Murray in the upcoming election on the Republican ticket. Some Republicans areintending to mount a serious challenge to Senator Murray by mobilizing voter turn-out and by encouraging high profile candidates such as Attorney General Rob McKenna or 8th Congressional District Representative Dave Reichert to enter the race.

Idaho

The Republican incumbent Governor C.L. “Butch” Otter is set to mount a reelection campaign in 2010 on favorable polling numbers. The challenger, Keith Allred, is a political novice when it comes to electoral politics and will face an electorate that is known for supporting conservative, Republican candidates. In the Senate, Senator Mike Crapo is seeking reelection in 2010 and has yet to see a serious challenge from the Democrats in Idaho.

Oregon

Former Governor John Kitzhaber is a favored candidate on the Democratic side of the ticket and he faces a challenge in the primary by former Secretary of State Bill Bradbury. The Republicans have several candidates which include Allen Alley, Bill Sizemore, and former State Senator John Lim. In Oregon’s Senate race, Senator Ron Wyden is seeking reelection in a heavily leaning Democratic state. Some Republican pundits have suggested that former Senator Gordon Smith would be a strong candidate to challenge Senator Wyden.

California

Jerry Brown has re-surfaced, again, as the Democratic candidate for Governor in the nation’s most populous state. The Republicans have some serious challengers among their candidates which include former eBay CEO Meg Ryan and State Insurance Commissioner Steve Poizner. Senator Barbara Boxer is seeking reelection for the U.S. Senate and faces a challenge from several high profile Republicans. Carly Fiorina, former CEO of Hewlett Packard; State Assemblyman Chuck DeVore; and former U.S. Representative Tom Campbell have all surfaced seeking the U.S. Senate seat for the Republicans.
 

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On January 12, 2010, Governor Christine Gregoire delivered the State of the State address to the 61st Washington State legislative session. This year’s legislative session is slated to be a 60-day session that will likely be marked with frenzied activity and decision making that will provide deep cuts to an already deficit laden budget. The supplemental budget proposed by Governor Gregoire in December 2009 requested reductions in government services or programs to patch an expected $2.6 billion gap in funding. At the opening of her address, the Governor acknowledged all of Washington’s tribal leaders and recognized those in attendance including: Carol Hatch, Chairperson of the Quileute Tribe; Charlotte Williams, Chairperson of the Muckleshoot Tribe; and Mel Sheldon, Chairman of the Tulalip Tribes. Chairman Brian Cladoosby, Swinomish Tribe, gave the opening prayer to the address where he emphasized a humble and gentle approach to governing during this session of the legislature since many of Washington’s families are struggling to survive in the state’s depressed economy.

The Governor’s address focused upon the challenging economy and the difficult decisions ahead while asking for the legislature to have compassion when adopting legislative policy to implement cuts requested in the budget. The Governor sharpened her pledge to have a leaner and efficient government bureaucracy where she would reduce the size of the state government agencies by one-third and eliminate an additional 78 boards and commissions. In addition to bureaucratic reductions and eliminations, the Governor stated that it was the creation of jobs which would bring the state out of the current recession. Governor Gregoire suggestedthat adopting public policy in renewable energy, health care, technology, biotechnology, education, and public safety showed promise in developing jobs and securing the future economy of the state. Although the specifics of each public policy area were not detailed in her address, the Governor indicated that she would support a tax credit for small businesses that hire new employees, spur business development in renewable energy industries through infrastructure investment in the smart electrical gridand the streamlining of government permitting programs. Collectively, it is hoped that these measures will result in the creation of 40,000 new jobs with a commitment of $2 billion in capital investment from non-state government sources. Tribal businesses, tribal entrepreneurs, and other businesses wishing to do business in Washington should be formulating a position on these economic policies.

The Senate Ways and Means Committee began receiving testimony today on the proposed supplemental budget and will likely move the measure forward in an expeditious manner in the shortened time frame provided by this legislative session. The state budget along with the other measures introduced in this legislative session will set the tone and pace for Washington’s programs and policies for many years to come. The state’s economic and natural resources are facing a tough financial reality for the immediate future. Now is the time for state policy to incorporate tribal economies into the equation of developing and expanding opportunities to generate revenue and jobs in the state. The advantages of doing business with Washington’s tribes should be a factor when the state legislature is looking to offer incentives when attracting capital investment and business activity.