Judge won't disconnect local phone order

GCI wins battle in effort to offer local phone service

Posted: Sunday, February 11, 2001

In another reversal in a see-saw telecommunications battle that has lasted nearly four years, a Superior Court judge has refused to stay an interconnection order calling for local phone competition in Juneau and Fairbanks.

Agreeing with General Communication Inc. (GCI) that a recent U.S. Supreme Court decision doesn't overrule the order from the Regulatory Commission of Alaska, Anchorage Judge John Reese rejected a plea by Alaska Communications System to halt work immediately on the interconnection.

"Competition goes forward," GCI senior vice president Dana Tindall said after receiving the judge's two-sentence ruling Friday.

"This was just a request for an expedited proceeding," said ACS President Wes Carson, playing down the long-term significance of the ruling.

The court still must hear arguments about whether ACS' "rural exemption" under the pro-competition U.S. Telecommunications Act of 1996, terminated by the RCA last year, can be reinstated. That would force GCI to start the state regulatory process all over again.

ACS, which does business in Juneau as PTI Communications, moved for the stay after the U.S. Supreme Court decided on Jan. 22 not to review a federal appeals court ruling in an Iowa case. The Eighth Circuit Court of Appeals last July threw out federal regulations placing the burden of proof on the incumbent local service provider to show that competition would imperil universal, affordable access.

Because the Supreme Court declined to review the Eighth Circuit ruling, ACS contends that the issue is settled and the burden is now on GCI to show that it wouldn't cause rate hikes for some "high-cost" consumers who are being subsidized. But Reese, stepping in for District Court Judge Sigurd Murphy, who had been handling the case, said the Eighth Circuit decision did not compel the stay and was not "persuasive."

GCI had insisted that the Alaska Supreme Court has held that the Alaska courts are not bound by the interpretations of federal law by the federal circuit courts.

Tindall of GCI said the remaining legal issues could take six months to a year to sort out. In the meantime, GCI intends to be offering local telephone service in Juneau and Fairbanks, she said, first by buying and reselling ACS services and later by leasing "unbundled network elements" from the incumbent to offer new packages to consumers. That could happen within a couple of months, if ACS complies with the interconnection order that is still in force, she said.

"We have to meet with them and come up with a plan for going forward," Tindall said.

Carson said his concern is that the money ACS must spend on equipment and labor to make the interconnection can never be recouped, even if ACS ultimately prevails in court.

As for the roller coaster of regulatory and judicial rulings that have shifted momentum repeatedly since 1997, Carson said: "It's incredible, isn't it?"

Bill McAllister can be reached at billm@juneauempire.com.

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