FCC approves Alaska Wireless Network


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The Alaska Wireless Network is one step closer after a recent decision from the Federal Communications Commission.

The commission, or FCC, approved a request from Alaska Communications and General Communication, Inc., or GCI, to transfer their licenses to the Alaska Wireless Network, or AWN, July 12.

The decision means that Alaska’s major telecoms can combine their infrastructure, but must continue to sell separate retail products.

The memorandum opinion, order and declaratory ruling was released July 16.

In approving the transaction, the FCC wrote that any potential competitive harms were outweighed by the public benefit of having wireless carriers better able to provide coverage throughout the state.

According to the approval: “Such benefits include network efficiencies from infrastructure consolidation, expanded coverage and improved service throughout Alaska, and increased competitiveness from a timely transition to LTE. We therefore conclude that, on balance, the assignment applications, as conditioned, would serve the public interest, and, accordingly, grant those applications.”

Under the terms of the approved transaction, Alaska Communications, or ACS, and GCI would each contribute wireless assets to the new network. ACS would receive certain preferential cash flow initially, as long as it maintains certain subscriber levels, with GCI receiving the remainder. GCI would receive a consulting fee from the new network for its management work.

GCI’s current executive vice president, Wilson Hughes, would be the CEO of AWN.

The approval document also dictates that AWN will build out its LTE and 3G networks in rural Alaska by the end of 2014, and also maintain its 2G network. The telecoms had voluntarily committed to that work in a letter to the commission earlier this year.

The companies will continue to market and sell their plans separately, and the order requires that they maintain confidentiality about some information to preserve competition.

The two telecoms have said that the merger would allow them operational efficiencies to better compete with the national players in Alaska.

The commission’s approval analyzes some of those, noting that the AWN should be able to operate on fewer cell towers than when the companies have overlapping, but separately-run, networks, which will save money while maintaining current coverage. This could also enable a further build out than each company would otherwise be able to afford on its own.

According to information provided about the infrastructure merger earlier in the process, the telecoms have 120 days to secure approval from other entities. Either entity can still accept a topping offer, but must pay the other if it does so.

In its approval, the commission also denied the late-filed petition from a competitor questioning the infrastructure merger. Jeremy Lansman, part of another broadcast operation, had filed his objection after GCI announced that it expand its broadcast presence, arguing that such a move raised concerns over the company’s expanding footprint overall.

The commission rejected those arguments and denied Lansman and Fireweed Communication’s petition.

Alaska Communications and GCI had originally discussed closing on the AWN by the second quarter of 2013, but FCC approval has slowed that down.

 

Molly Dischner can be reached at molly.dischner@alaskajournal.com.

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