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Native American Telecom receives state certificate for Fort Thompson

PIERRE -- Crow Creek Telecom received state approval Tuesday to operate a telephone company in South Dakota.

The company, Native American Telecom, can offer services only within the Fort Thompson telephone exchange on the Crow Creek Indian Reservation.

The state Public Utilities Commission voted 3-0 Tuesday to allow the merged company to operate only within the Fort Thompson exchange.

Midstate Communications Inc. previously was the sole provider in the exchange.

Midstate and the South Dakota Telecommunications Association sought that Native American Telecom be limited to offering local and long-distance service only within the boundaries of the Fort Thompson exchange.

Native American Telecom agreed to that restriction.

PUC chairman Gary Hanson said Tuesday he believes the commission doesn't have primary regulatory authority over service provided by NAT to tribal members within the reservation.

There was no further discussion on Hanson's motion.

The PUC held a two-day hearing in February. There were no presentations or statements Tuesday by any of the companies involved.

Native American Telecom began in 2008 as part of a system organized and marketed by Free Conferencing. The Long Beach, Calif., company routed toll-free calls and conference calls through Fort Thompson. That arrangement allowed Native American Telecom to make money on toll-free calls.

Native American Telecom charged higher access fees to long-distance companies, such as Sprint and others, that had to carry those calls. The higher fees could be charged because calls were made through Native American Telecom's equipment that was part of a rural telephone exchange. This practice of making money from high access fees while offering limited or zero local service was commonly known as traffic pumping or access stimulation.

The Federal Communications Commission has since approved national restrictions to curtail the practice.

The Crow Creek Sioux Tribe agreed in 2013 to become a 51 percent owner of a new company called Crow Creek Telecom.

Crow Creek Telecom has two other owners: Native American Telecom, with 25 percent, and Wide Voice Communications, with 24 percent.

Prior to the 2013 merger, Native American Telecom disputed in federal court whether the company needed a state certificate of authority. Native American Telecom argued it was operating under authority of the Crow Creek tribal utility board.

The company lost that argument. The merger now allows Native American Telecom to operate directly under the umbrella of the Crow Creek Sioux Tribe.