updated 7/22/2008 7:25:40 PM ET 2008-07-22T23:25:40

The Navajo Nation has temporarily averted having its Internet services shut down, a tribal official said Monday.

SES Americom, which provides bandwidth for the services, had threatened to halt service by noon Tuesday if the company was not paid for services rendered. However, the company informed Navajo officials Monday night that it had decided not to shut down services until Aug. 1.

"It is good news," said Deswood Tome, a spokesman for the Navajo Nation's Washington office. "It gives us some more room to work with USAC (the Universal Service Administration Company) to get their ruling on this and to get some time so that public safety services aren't shut down."

SES did not immediately respond to a request for comment.

An Internet shutdown would affect the tribe's public safety network, which police and other emergency responders must be able to access from remote places across the reservation.

The problem is that Utah-based OnSat Network Communications Inc., which buys the bandwidth from SES, has been unable to pay SES because the federal government has been withholding about $2.1 million in reimbursement funds.

A majority of the tribe's 110 chapter houses lost Internet service in April after the decision by the USAC to withhold the funds over concerns about a tribal audit of OnSat. USAC administers the funds through the E-rate program under the FCC.

USAC had asked the Navajo Nation to respond to the audit, which found that OnSat had overbilled for service and that the tribe didn't comply with procurement rules or a competitive bidding process in selecting OnSat. A USAC spokeswoman had said the agency would review the response.

Tome said the tribe has complied with USAC's requests and is awaiting a response.

The public safety network is not part of the E-rate program and is paid for separately. However, should SES terminate the satellite transmission, it would affect communications for the entire network.

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