Calls waiting: Phone competition to begin

Businesses first to be able to switch phone companies

Posted: Tuesday, December 04, 2001

Competition in local phone service will start in Juneau next month, says Ronald Duncan, president of Anchorage-based General Communication Inc.

Duncan and other GCI officials were in town Monday courting businesses who have service through Alaska Communications Systems, which does business here as PTI Communications. By mid-January, some users can be switched over, he said.

The long-delayed entry of competition into the market closely follows yet another court ruling in a seemingly interminable series of stops and starts over several years.

Last week, an Anchorage Superior Court judge upheld a regulatory panel's order allowing GCI to offer local phone service in Juneau and Fairbanks.

"The court decision is significant because it's the first court decision on the full merits of the case," Duncan said.

ACS officials haven't decided whether to take the case to the Alaska Supreme Court, spokesman Tom Jensen said last week.

GCI has been offering local service in Fairbanks since this past summer, when the Regulatory Commission of Alaska ordered ACS to let GCI lease equipment and enter the two markets, said GCI spokesman David Morris.

Once, ACS had been able to fend off GCI through a rural exemption in the federal Telecommunications Act of 1996. The idea was that small communities could not financially support more than one telephone company.

In 1997, GCI applied to lease ACS infrastructure in Fairbanks and Juneau, arguing that the communities were not rural. The Alaska Public Utilities Commission, forerunner of the current commission, ruled in 1998 that Fairbanks and Juneau were rural, saying GCI failed to meet the burden of proof.

GCI appealed that decision to Superior Court, which then ordered the commission to re-examine its ruling, this time placing the burden of proof on ACS.

The commission ruled in 1999 that Fairbanks and Juneau were not rural. Shortly after that, the Legislature replaced the commission with the RCA, which made the same ruling later that year.

ACS appealed to Superior Court, resulting in Judge John Reese's recent decision.

In the wake of that ruling, GCI said this week it's now planning to go after the local phone market in the smaller Interior communities of North Pole, Nenana, Delta Junction and Fort Greely. The company also is seeking to provide local service in Kenai, Soldotna, Ninilchik, Homer, Seldovia and Kodiak. ACS now serves those communities.

Meanwhile, ACS is likely to appeal an interconnection order for Juneau and Fairbanks all the way to the U.S. Supreme Court, Duncan predicted. ACS objects that the terms of that agreement don't fully compensate it for leasing equipment to GCI. But that complaint isn't based on any of the economic models allowed under pro-competition federal regulations, Morris said.

"Basically, they don't like any form of competition that reduces their market share," Duncan said.

Jensen of ACS couldn't be reached for comment.

While there always will be connections between the two telecommunications networks, GCI will be rolling out its own infrastructure during the next two to three years, Duncan said.

There are 30,000-some local phone lines in Juneau, Morris said. Within four years, GCI wants penetration in local phone service that mirrors its roughly 50 percent share of the market in Internet and long-distance, Duncan said. But there should be room in Juneau for two providers, he said.

GCI is focusing on businesses now because ACS is trying to lock down long-term contracts to keep customers from switching, Duncan said. In the spring, GCI will target more marketing at residential consumers, he said.

"The head-on (price) comparison initially won't be huge," with GCI underselling ACS by 5 percent to 10 percent, Duncan said. But services will be packaged so that additional features will be more attractive, he said.

Duncan said there could be some switch-over snafus. If there's a problem with a line once a customer has changed providers, it's still up to ACS to perform maintenance, he said. "We can't force them to get the truck out there." But state regulators would notice that, he said.

Bill McAllister can be reached at billm@juneauempire.com. This article contains material from the Associated Press.



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