ACS pursues rate changes for Juneau and Fairbanks

Posted: Tuesday, September 23, 2003

ANCHORAGE - In an attempt to lure back business customers, Alaska Communications Systems is planning to overhaul local phone rates in Juneau and Fairbanks.

The rate changes are part of a plan to win back customers from rival General Communication Inc.

ACS plans to lower rates for most businesses in both areas. At the same time, it is proposing rate hikes for residential customers in Juneau and at Fort Wainwright and Eielson Air Force Base.

The proposed rate changes are part of an increasingly fierce battle between the two Anchorage-based telecom companies.

GCI, which has snared a sizable portion of the local phone market in Anchorage over the past six years, is proving as formidable a competitor in Fairbanks and Juneau, said ACS vice president Mary Ann Pease.

"We have lost 50 percent of the market in Anchorage, and that erosion is rapidly following in Fairbanks and Juneau," she said Friday.

The proposed rate changes would mean a $4 million loss in annual revenue in the near term, but the company is hoping that it will make ACS more competitive, especially on the business side, Pease said.

ACS is Alaska's dominant local phone company. It sprang to life in 1999 after buying out the state's major local phone companies, most of which had been monopolies in their service areas.

The company has faced intensifying competition from GCI after a change in federal law required ACS to lease telephone lines to GCI at rates regulated by a state commission. GCI then uses those lines to resell phone service to its customers.

ACS has long complained that those rates are inequitable and give GCI an unfair pricing advantage. The companies have been fighting the issue before regulators and legislators for years.

Under the new pricing plan, residential customers in Fairbanks and North Pole would get lower base rates but have to pay a new fee for some calls to areas now included in their basic monthly plan.

ACS is not proposing any changes in Anchorage, where it adjusted local phone rates in November 2001.

Pease said the rates in the Fairbanks area and Juneau haven't changed in about 13 years.

The proposed changes for Juneau and the Fairbanks area would provide more uniform rates in the state's three biggest communities, Pease said. ACS expects state regulators to approve the new rates early next year, she said.

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