Senate takes dim view of House taxation plan

JUNEAU -- A House-approved package of $900 million in alcohol and income taxes and Alaska Permanent Fund earnings was dubbed "the good, the bad and the ugly" May 3 by Senate President Rick Halford.There might be floor votes in the Senate but there’s no chance that a $250 million income tax or the use of more than $600 million in permanent fund earnings will be approved this year, said Halford, a Chugiak Republican, and Senate Finance Co-Chairman Pete Kelly, a Fairbanks Republican."There’s no plan to engage in any kind of trickery on them," Kelly said. They just lack the necessary support, he said.Halford and Kelly said that a boost in oil prices proved revenue projections wrong in 1987, 1992 and 1999, demonstrating it’s too soon to pass major revenue measures to fill a $1 billion shortfall projected for 2004.In election campaigns this year, "The public will get to decide on the whole package," Halford said.But passage by the House on May 2 of four bills to close the state fiscal gap was a major event in the state’s political history."It’s revolutionary," said Rep. Bill Hudson, a Juneau Republican who founded the bipartisan Fiscal Policy Caucus. "It culminates the work we’ve been doing for four years.""I think it’s quite unprecedented," said Clive Thomas, political science professor at the University of Alaska Southeast. "There is actually some leadership going on here. I think a very strong message has been sent here."Democratic Gov. Tony Knowles issued no statement, and spokesman Bob King declined to characterize the House action as a whole.Knowles has supported an income tax and an alcohol tax increase, but has supported using only $250 million from permanent fund earnings, the approximate amount left over after dividends are paid and the principal is inflation-proofed. Halford said he would expect Knowles to veto a permanent fund bill taking more than that."I think it’s premature to talk about what action the governor would or wouldn’t take," King said.The House passed the income tax on a 24-15 vote and the alcohol tax 31-8, with all the no votes coming from members of the Republican majority. Two different bills using permanent fund earnings passed by 28-11 and 30-9, with three Democrats joining a group of conservative Republicans in voting against one or both.Many legislators emphasized the difficult position they’re in."I don’t like it," said Rep. Peggy Wilson, a Wrangell Republican. "But it’s medicine. It might taste bad, it might be hard to swallow, but it’s going to make us feel better."The income tax, brainstormed by Fairbanks Democrat John Davies, is apparently unique because it bases its rates and brackets on the estimated sales tax dollars that would be paid by Alaskans of various income levels. As a percentage of income, the highest rates would be on the middle class, and the lowest on the wealthiest Alaskans."It’s probably not the thing any one of us would have done, but it’s the thing we can do together," Davies said.But House Finance Co-Chairman Eldon Mulder warned that the regressive structure is temporary and will be changed in the future. That’s an easier way to raise new revenue than implementing a separate tax, said Mulder, an Anchorage Republican.House Finance Co-Chairman Bill Williams, a Saxman Republican, objected to what he said is the contradiction of giving out permanent fund dividends and also imposing taxes. "I think it’s wrong for us to go out and give money away and then ask for money back."Mulder and Williams argued for more use of permanent fund earnings, saying the original intention was to create a rainy day fund for a period of declining oil revenues.The two bills approved May 2 would be the first major incursion into fund earnings for general government purposes in 20 years.Projections are that the dividend, $1,850 last year, will drop to $1,363 this year, and then hover around $1,000 for several years. But the legislation has no dollar cap on the dividend, which can grow as the payout grows.The alcohol tax would raise the rate to 10 cents a drink, bringing in $20 million to $24 million a year. Halford said he’s still hopeful that the Senate will pass it, although a few members of the Republican majority there have been resisting it.The fiscal package rose from the ashes of a House vote March 27 defeating an income tax.The agreement was worked out in negotiations between House Democrats and Republicans and Knowles.

Land trade will help Kensington mine efficiency

Coeur Alaska Inc. has reached land-use agreements with two Southeast Alaska Native corporations that will consolidate ownership of land parcels in the Kensington and Jualin mine areas, simplifying management.The agreement will also make Alaska Natives owners of some of the subsurface mineral rights in the areas of the mines.Cape Fox Corp. of Ketchikan and Sealaska Corp. of Juneau will exchange parcels of privately owned land within the Tongass National Forest near Ketchikan and on Prince of Wales Island for lands of equivalent value near the Kensington Mine.Lands to be acquired by the two corporations are also within the Tongass, but underlie mining claims held by Cour and Hayk Mining Co. in Kensington and Jualin, which is east of Kensington.The area of mining is on the north side of Berner’s Bay, north of Juneau.Cape Fox will exchange 2,500 acres near Ketchikan and Sealaska will trade 5,000 acres on Prince of Wales Island. The trade will allow the U.S. Forest Service to consolidate lands under public ownership in the two areas.The plan has important advantages for Coeur. "Consolidating ownership interests will lead to simplified management of the mine, once it is in operation, making mining more efficient," said Rick Richins, manager of the Kensington project for Coeur.The Kensington project is 45 miles north of Juneau. The mine received permits for development in 1998, but falling gold prices made the development plan approved under the permits uneconomic.Coeur subsequently redesigned the project to cut costs, allowing the mine to be developed at lower costs. The new plan has environmental advantages because it would affect 25 percent less land. The company is working to get permits for the new plan.Cour Alaska is a subsidiary of Idaho-based Coeur d’Alene Mines, a major silver and gold producer.

Cellular providers work to upgrade 911 system

If there’s anything we can count on in this world, it’s the ability to dial 911 to summon help in an emergency. That’s true even if we can’t talk, because the system knows the physical location of every telephone in communities with so-called Enhanced 911 service.Now, the Federal Communications Commission wants to be able to do the same thing with cellular telephone calls, and cellular providers and municipalities throughout Alaska are working to comply.Since April 1, 1998, cellular 911 calls have provided the telephone number of the cellular handset and the location of the nearest radio tower handling the call. Figuring out where the caller is located is another matter, since a cellular call can come from anywhere.The FCC has ruled that by Dec. 31, 2005, at the very latest, 95 percent of all cellular 911 phone calls must transmit the latitude and longitude of the caller to within 100 meters or less, and all call centers must be able to process and display the location information.That’s a technical challenge that is pushing the technical envelope and which will cost both the providers and the municipalities that have 911 call centers millions of dollars.In fact, the process of deploying "automatic location information," as it is officially called, is so complicated and expensive that already the FCC has moved back its deadlines and hundreds of providers, including most of the cellular telephone companies in Alaska, have asked for waivers to give them more time to get ready.But the 2005 deadline appears to be firm. "Frankly, we are disappointed that the process of making wireless E911 a reality is not further along," said Thomas Sugrue, FCC’s chief of wireless telecommunications, in testimony Oct. 16 to the U.S. Senate Subcommittee on Communications.Sugrue told the committee that he is requiring every company granted a waiver to supply a quarterly report explaining the progress they’re making toward supplying location information."As deployment proceeds, I expect that technology and systemwide performance will improve," Sugrue told the committee. "I also expect that, as customers increasingly understand how location capability makes their lives safer, they will insist on having it available."The technology choicesSo, how does one figure out the location of a cellular telephone call? Three types of technology are available to cellular telephone companies, and they have the leeway to pick any one, or even a mix, to meet the FCC’s requirements.Two of the technologies involve so-called "network solutions." They rely on the fact that a cellular telephone is really nothing more than a radio with a keypad. Thus, placing a call means transmitting a radio signal. In an urban area, that signal is received by several cellular towers; the one with the best signal handles the call.Much like tracking down an illegal transmitter in an old World War II spy movie, if each tower knows the direction the signal is coming from, the radio can be pinpointed using "triangulation."That’s one approach being used by cellular telephone companies. To get the precise direction of a call will require installing special antennas on every tower, so it’s not the favorite solution.The other network solution also uses triangulation, but instead of direction each tower measures the exact time the radio signal arrives. The difference in arrival times allows the signal to be pinpointed. This approach is being considered by several companies in Alaska.Both of the network solutions have the advantage of working with every kind of cellular handset, including the old analog systems, which are still popular in Alaska because of their long range.The third option for carriers is the handset solution. This requires providing every customer with a new telephone with a built-in global positioning satellite receiver, which then transmits its coordinates along with every 911 call. This approach is being adopted by several Alaska companies because it will work in areas with few towers where triangulation is difficult or impossible.What Alaska carriers are planning ACS Wireless Inc. is taking the most dramatic step. It’s building an entirely new statewide cellular phone network and converting almost every customer to GPS-equipped handsets.ACS Wireless operates in Anchorage, Fairbanks, Juneau, the North Slope and the Kenai Peninsula. Its new digital network began operating April 28 in Anchorage, and soon, every new customer, will be provided a location-capable handset.According to a filing with the FCC, the company estimates it will have 40 percent of its customers equipped with the new handsets by the end of next year but has asked for a delay until 2007 to reach 95 percent. AT&T Wireless Services Inc. is also building a new network nationwide using Global System for Mobile Communications, or GSM technology. In a waiver filing with the FCC that includes AT&T Wireless Services of Alaska Inc., the company said it plans to use a hybrid approach for location which involves a combination of handsets and the time difference type of triangulation. The company said it is currently investigating using the same technology for its existing digital network in order to meet the FCC’s deadlines."We have committed to beating the deadline by a year on our GSM network," said AT&T spokeswoman Rochelle Cohen in Basking Ridge, N.J. "This is a priority for our company. We’ve put a lot of resources into this." Alaska Digitel, which operates a CDMA network in Anchorage and the Matanuska-Susitna Borough, hasn’t made a decision yet. "We’re leaning toward a handset-based solution, but a final decision hasn’t been made," said Glenn Parsons, the company’s director of network services. "We’re waiting to see which direction the Municipality (of Anchorage) takes with their 911 system." MTA Wireless, which serves the Mat-Su area, also has made no final decision. "We’re exploring different technologies right now," said Carolyn Hanson, director of sales. She added, however, that given the company’s large number of analog customers, "It makes more sense for us to make a network solution.""In order to go with handsets, I would have to replace every handset, and that wouldn’t go over very well," Hanson said. "We also have people out there who don’t want us to know where they’re at." Arctic Slope Telecommunications and Cellular Inc., which serves the North Slope Borough from Barrow to Kaktovik, is going with the handset solution, according to chief technology officer James Wickham. That’s because he figures it’s the only way to comply with the FCC rules in a service area encompassing 91,000 square miles and with few cellular towers.Wickham said the company is also investigating the commercial possibilities of the GPS-equipped handsets, since the location information can be sent to any customer, including the oil and construction companies on the North Slope. "It would provide them with an added safety advantage," he said. "In a whiteout, they would know exactly where an employee is." Dobson Cellular Systems Inc. is an Ohio-based company with licenses to serve Western Alaska and Haines. In a filing with the FCC, it said it is currently leaning toward a network solution but reserves the right to change to a handset solution if it makes better sense. General Communication Inc. doesn’t own its own cellular network; it resells AT&T Wireless service and is not affected by the FCC mandates, according to spokesman David Morris.

New ideas can help Alaska's future

Alaska has been blessed with extravagant riches in natural resources and one of the highest per capita levels of government spending in the nation. However, our historical economic dependence on natural resources and government has depressed our entrepreneurial diversity. We seem to spend more time squabbling over how to slice up these traditional pies than we do building a future based on product innovation and a healthy knowledge base. As testimony, our college-educated children are increasingly finding more exciting employment opportunities outside Alaska, even though many of them would like to return to their home state. Between 1990 and 2000, Alaska’s 25- to 34-year-old population, a key to the success of any start-up enterprise, has declined 21 percent, and only one in seven Alaska jobs is in the private sector as compared with the U.S. average of one in three. How do we plant the seeds of entrepreneurialism in our great state? According to the National Commission on Entrepreneurship, funded by the entrepreneurship-promoting Kauffman Foundation of Kansas City, Mo., entrepreneurs and investors agree that people and expertise are the keys to success for most companies. The cash that venture capital groups supply is often the least significant aspect of their contribution. Far more important is their help recruiting key executives and board members, introducing companies to potential customers and strategic partners, and providing advice when management runs into trouble. Those of us who have founded companies are intimately familiar with the isolation that goes hand in hand with the start-up process. The new business owner has a more limited range of connections coupled with less experience and therefore a greater need for networking and industry knowledge. Broad-based economic growth can only happen when the business community embraces networking, human-capital development and entrepreneurship at all levels. Formalized networks not only support new businesses but help brand a region as entrepreneurial and therefore exciting and innovative. Fortunately, Alaska can point to some pioneering examples of successful civic entrepreneurs who are giving back to the state in which they built their wealth. In so doing, they are creating innovative opportunities for our youth and a more entrepreneurial culture. Through its Rasmuson Foundation, the founding family of National Bank of Alaska, is setting the standard for civic investing in Alaska. The foundation notes that "helping others is an Alaskan tradition; both the earliest Alaskans and those who came here to settle had to rely on one another to build a good community and a good life." To further this goal, the Rasmusons helped create the Foraker Group in anticipation of increased grant capacity following the sale of NBA to Wells Fargo. Led by Dennis McMillian, Foraker provides technical assistance to the state’s nonprofit organizations through education and training programs to increase their leadership and management skills. Among the other civic entrepreneurs who have consistently worked on behalf of Alaska’s start-ups are attorney Julius Brecht, certified public accountant Michael Hanrahan, assistant professor Bruce Borup of Alaska Pacific University and Bob Bulmer with Alaska Executive Search. Another pioneer, Dave Rose, founded Alaska Permanent Capital, an independent investment firm. He leverages his talents and resources through the Alaska Community Foundation as well as through a family foundation with his wife, Fran Rose. Together with McKinley Capital, they awarded more than $60,000 in scholarship funds to Alaska’s high school seniors this year, and both of these firms provide intern programs for Alaska college graduates, clearly investing in our youth. An example of government-backed support for entrepreneurism is the Alaska Science and Technology Foundation. Under Jamie Kenworthy’s leadership, the foundation has begun to invest in partner organizations that play a key role in creating a more-entrepreneurial culture in the state. One of these partners is Alaska Growth Capital, where David Hoffman, chief executive, targets nontraditional, often-rural borrowers and makes equity investments available for the new or expanding company. Another partner, Alaska InvestNet is a nonprofit entity with an educational mission that provides, in the words of co-chairman John Wanamaker, "forums where investors and entrepreneurs can exchange business plans and investment, network and learn from one another." Visionary co-chairman Allan Johnston, who pioneered the APU business plan competition and the Alaska InvestNet intern program, reminds us that creating an entrepreneurial culture in Alaska is no small task. He continues year after year to link Alaska’s youth to employment opportunities through daily networking. In the words of Alaska InvestNet intern Katya Bezrodnaya, "My current employment is largely based on involvement in conference organization and experience I got through helping entrepreneurs put together their business plans and presentations to investors. I am using those skills in my current job and basically those skills were the reason I got this great job in the first place." Seeds are being planted. Let’s water them. Deborah Marshall is director of Alaska InvestNet in Juneau.

House approves $441 million in state bonding measures

The state House has approved a $441 million package of state general obligation bond proposals and bills which help municipalities pay off local bonds.Projects funded would include schools and university buildings, rural energy projects, port and harbor improvements and deferred maintenance projects.The general obligation bond bill, House Bill 524, would fund $152.9 million for schools in urban and rural communities and university buildings on nine regional campuses around the state.A separate measure, House Bill 525, proposes $199.5 million in general obligation bonds for major deferred maintenance projects in schools, university buildings and state-owned docks and harbors. Both bills, if they are approved by the Senate and Gov. Tony Knowles, will appear on the state general election ballot this November for voter approval.A third bill, House Bill 528, provides $92.9 million to reimburse municipalities who issue bonds for economic development projects, including energy projects and harbor improvements. Harbors in Unalaska, Chignik, Akutan and False Pass would be expanded. State debt reimbursement for an expansion of the Port of Anchorage is also included in HB528.The three bills now go to the state senate.Funding approved for rural intertie projectsThe state House approved funding for some $43 million in rural electrical intertie projects, including improvements to transmission lines along parts of the Parks Highway, power generation and transmission lines in Seldovia, a replacement for transmission lines between the Eklutna hydroelectric plant and Anchorage, and improvements for Golden Valley Electric Association in Fairbanks.The projects would be funded by the Alaska Energy Authority using funds from the Railbelt Energy Fund, which was established by the Legislature several years ago for improvements to the Southcentral Alaska electrical grid. Interties link utilities so they can exchange power.House Bill 175, sponsored by Rep. Ken Lancaster, R-Soldotna, made the allocations. The bill now goes to the state Senate."Many areas in Alaska have been waiting a long time for projects to expand the electrical grid and connect them with generation and transmission facilities," said Lancaster.Property tax deferral bill passes SenateThe state Senate approved a House-passed bill allowing cities to defer property taxes for renovation of derelict buildings. House Bill 389, sponsored by Rep. Vic Kohring, R-Wasilla, now goes to Gov. Tony Knowles.Current authority for derelict building tax exemptions expires this year. Kohring’s bill makes the authority permanent. The tax exemptions are designed to give renovators a financial break while they repair run-down buildings, in part because of the promise of rebuilding neighborhoods and eventually creating more valuable properties that would pay taxes.One project the legislation will help is an effort to renovate the downtown Anchorage MacKay Building, which was damaged in the 1964 earthquake. The building has been vacant for years.A developer is attempting to remodel it and turn it into residences, but financing problems partly caused by the pending sunset of the property-tax exemption have delayed the project."This legislation will be a tool for local governments to use in redeveloping properties that would normally fall into such a state of disrepair that they would have to be demolished," said Kohring.

Petro-Canada leads bidders in Foothills oil and gas sale

Led by Petro-Canada Ltd., investors bidding in a record-setting Alaska North Slope Foothills oil and gas lease sale held May 1 pursued tracts believed to be rich in natural gas, adding another link in a growing chain of interest in arctic gas development."Since the geology of the area indicates that the sale area is predominantly gas-prone, (the May 1) sale shows the industry is serious about North Slope gas development," Alaska Gov. Tony Knowles said in a statement.Preliminary results show 197 tracts covering 1,119,360 acres were sold for $10.266 million in bonus bids, or $9.17 per acre. It was the most acreage ever leased in a single Alaska lease sale, state officials say.Overall, the Foothills sale, the second that Alaska has held in the area, was a considerable success by the division’s standards, said Jim Hansen, leasing manager for Alaska’s Division of Oil and Gas. "It is the largest by acreage but on par with last year’s sale in bonuses," he said.Petro-Canada led the bidding, winning a staggering 179 tracts totaling just over 1 million acres, with more than $8.5 million. This brings to 1.34 million acres the total leases held in Alaska by the Calgary, Alberta-based company.Petro-Canada’s analysis of the Foothills area shows it to be underexplored and similar to Alberta’s foothills, Petro-Canada spokesman Chris Dawson said May 2. "We’ve been extremely successful at finding gas in the Alberta foothills. We currently produce about 750 million cubic feet per day from there."Dawson said Petro-Canada hopes to duplicate that success in Alaska. He also said the company is route-neutral on a proposed gas pipeline from the Arctic to the Lower 48 states, but believes a line will be built in the not-too-distant future.Anadarko and EnCana Oil & Gas, in partnership, offered the highest bid of the Foothills sale, $428,256 for tract 200. The partners sought and won a total of 13 tracts with high bids totaling nearly $1.6 million.Anadarko, bidding alone, picked up four more tracts for $128,332.80. Union Oil Co. of California won a single tract with a bid of $35,769.60 The first Foothills lease sale, held last year, attracted just under $10 million in bids on a total of 860,000 acres.

Agency, utility debate plant's future

The Alaska Industrial Development and Export Authority is hoping to persuade Golden Valley Electric Association of Fairbanks to move forward with a limited retrofit of the $297 million Healy Clean Coal Project rather than a total replacement of new clean coal-burning technology in the plant. GVEA isn’t receptive to AIDEA’s entreaties, at least so far.The 50-megawatt coal-power plant was completed in 1998 but has been idle since late 1999 in a dispute between the state development authority and the Fairbanks utility on whether the new technology works.AIDEA is anxious to get the issue resolved so the plant can get back into operation, according to Bob Poe, executive director of the authority."We’re paying $6.5 million yearly on debt service and another $2.3 million to Golden Valley to keep the plant maintained," said Poe. "That money comes out of the authority’s annual income and it’s money that could be used to finance other development or to help fund the state budget."The Healy Clean Coal Project was designed to demonstrate the effectiveness of new clean coal-burning and emissions-control technologies developed by TRW Inc., and Babcock and Wilcox, which is now a part of McDermott International.The U.S. Department of Energy contributed $117 million in grants to the plant as a part of its clean coal research program with the state financing the rest.A key part of the plan was that the plant would burn low-quality waste coal from the nearby Usibellicoal mine, using a resource that cannot now be sold commercially.Poe said the limited-retrofit approach would be less costly and might allow the plant to get back into operation in six to nine months compared with an estimated four years to replace the new technology with conventional coal-burning systems. For its part, Golden Valley officials feel the new technology would have problems and want to replace it with conventional systems that are more reliable.The limited retrofit would troubleshoot problems with the existing systems by modifying equipment rather than replacing it.Sen. Frank Murkowski, R-Alaska, added an amendment to the federal energy bill that would allow the U.S. Department of Energy to loan AIDEA up to $125 million in low-interest financing to pay for the retrofit. Poe applauded Murkowski’s efforts and said the money should be able to be used for either a limited or a total retrofit."Let’s not forget the federal loan has to be paid back, however," he said.Poe is concerned that if the full $125 million is used for a total replacement, adding that to the $297 million already spent on the plant, would amount to a total investment of almost $425 million.That’s extremely costly for a plant that will produce 50 megawatts of electricity, he said.It could increase the cost of power to as much as 8 or 10 cents per kilowatt-hour, about double the cost the plant expected with its current technology.Golden Valley now buys power from Chugach Electric Cooperative in Anchorage for about 4.7 cents per kwh.Engineering companies that worked with AIDEA and Golden Valley during a 90-day test in late 1999 said the new systems actually worked well, although modifications are needed to solve some problems."Every knowledgeable engineering person that has been involved with this project, except those that work with GVEA, say the equipment worked, and worked well. Given the enormous investment in this plant, it deserves more than one 90-day test," Poe said.GVEA contests the argument that the 90-day test was too short. "We ran that plant for a year and a half after its completion. The 90-day test was at the end of that period. We know how that plant works, and we know that it doesn’t work," said Steve Haagenson, president and chief executive of the utility."Based on its past performance, it failed miserably. It won’t last 35 years," he said.Haagenson also disputed Poe’s contention that the full retrofit would drive up the cost of power. The retrofit will cost only $80 million, and if the authority uses $45 million more in the $125 million DOE loan to refinance its bonds, the final cost of power will be within the range originally forecast, he said.The official report from the 90-day test by Duke Engineering reported results were ’inconclusive’ about whether the plant met its goals, Haagenson said. The main problem, however, was not so much in the clean-coal technology, which worked as expected, but that Usibelli Mines was unable to supply the plant with the quantity of low-quality waste coal for which it was designed.Usibelli had to supply coal normally produced at the mine for other customers, which is of higher quality. For the test, contaminants were added, like dirt and sand, to mimic waste coal.But because waste coal was not used the plant technically failed to reach one of its goals, which was to test the equipment using waste coal.Engineers later felt the sand that was added might have contributed to problems encountered with the equipment, Poe said. Sand would not ordinarily be in waste coal that Usibelli would deliver if the plant were in normal operation.AIDEA has discussed a limited-retrofit with Golden Valley and is exploring other options, Poe said. If the utility does not want to be the operator of the plant, as was envisioned originally, the authority could operate the plant itself and sell power into the railbelt power grid, contracting with an operating company to run the plant.Usibelli Mines Inc., which would supply coal to the power plant, also operates a coal-burning power plant in Fairbanks. AIDEA is also in contact with large out-of-state operating companies, Poe said.There are a number of options, but AIDEA has to do something to reduce the financial burden of the idle plant, he said.GVEA’s Haagenson said AIDEA has a short-term goal to convert a large, nonproducing asset into a producing asset, just as Usibelli Mines has a goal to sell coal to the plant.But GVEA’s goal is long-term power supply for the Interior. The utility can’t afford to operate the plant if there are frequent shutdowns due to equipment malfunctions that will have the effect of upsetting GVEA’s power load, Haagenson said.The Interior’s power requirements are growing, and there are potential large new power customers, like the Pogo Mine and missile defence facilities near Delta.GVEA hasn’t added any baseload generation capacity in 10 years because it was waiting for the new 50MW Healy plant to come on line, he said. But the supply of power from the plant must be reliable.

Municipalities retain consultants to help plan for 911 information

While cellular telephone companies work toward providing location information with 911 phone calls, processing and displaying that information is a whole other issue.The Municipality of Anchorage has hired a consultant to provide advice on how to make its 911 call center compatible with the kind of data about location arriving from cellular systems, according to the city’s communications manager, Doug Robinson.The consultant, William L. Doolittle & Associates of Santa Monica, Calif., met Feb. 12 in Anchorage with the cellular providers, said Glenn Parsons, Alaska Digitel’s director of network services. Robinson said the consultant’s report is due this month. At that point, the city will have a better idea of the scope of the project and its potential costs."We do have some money up front to start the process" from an already-approved bond to upgrade the 911 system, Robinson said.He said the Legislature last year put a funding mechanism in place to pay for 911 call centers to handle the location information. Subscribers in large cities will see a 50 cents per month charge on their bills, while those is smaller communities will see a 75 cents per month charge, Robinson said.That funding mechanism is giving some heartburn to Kevin Koechlein, the director of public safety for the Matanuska-Susitna Borough. "There are lot of people who live here and use their (cellular) phones here, but who buy them in Anchorage," he said. "Anchorage would get the surcharge."Koechlein said the 911 system serving the Mat-Su area is 7 years old and is nearing capacity. A major upgrade is needed to handle location information. "We will have to replace our Enhanced 911 system," he said.While he doesn’t know how much that will cost, Koechlein said the city of Wasilla has received a $1 million grant, "which will probably get us most of the way into the system." He said the city and the borough are seeking additional grants.The big question in Koechlein’s mind is how well the system will work. "The real issue is whether or not the cell providers can give us accurate location information," he said.Under FCC rules, cellular telephone companies must begin providing location information by Dec. 31, 2005, or within six months of a formal written request from a so-called "public service access point," usually a city running a 911 call center. In Alaska, that hasn’t happened, according to Robinson, Koechlein, FCC filings and the cellular providers contacted by the Journal.The reason is simple: Nobody is ready to accept the information yet. Koechlein said the Mat-Su area is still about a year away from making the formal request.

ACS reports $7.2 million net loss in first quarter

Alaska Communications Systems Group Inc. reported a net loss of $7.2 million for the first quarter of 2002, a figure that includes the company’s decision to discontinue and sell its television division. In first quarter 2001, ACS recorded a net loss of nearly $4.9 million.Earlier this year ACS officials decided put up for sale the analog television operations and recorded a one-time charge of $6.9 million. The change was made due to competition from satellite and cable television market players, ACS reported.For continuing operations, ACS listed a net loss $300,000 for the quarter.First-quarter revenue for continuing operations was $81.6 million, compared with $81 million for the same period in 2001. Local revenue was $55.3 million for the quarter, up from $54.7 for the same period in 2001. Cellular revenue dropped to almost $9 million from $9.2 million for first quarter last year. Internet revenue climbed to $3.8 million, up from $3.1 million for the same period in 2001.ACS totaled 330,658 local telephone access lines, compared with 332,275 at the end of first quarter 2001.Cellular subscribers at the end of the first quarter totaled 79,599, up from 76,803. Average revenue per subscriber was $37.47, compared with $40.51 for the same period last year.ACS listed 66,521 long-distance subscribers, up from 65,372 at the end of first quarter 2001.The company said it had 47,426 Internet subscribers, up from 44,065 recorded at the end of first quarter 2001.

House votes to limit air crash lawsuit awards

JUNEAU -- The House approved a measure April 30 that limits punitive damages paid by Alaska air carriers for crashes.The bill is aimed at reducing skyrocketing insurance premiums paid by rural air carriers."It’s quite apparent in this state we have a crisis within the air transportation industry," said Rep. Lisa Murkowski, R-Anchorage.The bill was sponsored by the House Labor and Commerce Committee, which is chaired by Murkowski.Aviation crashes are the leading cause of work-related deaths in Alaska. Alaska pilots have 100 times the occupational death rate of all U.S. workers and five times the death rate for all pilots operating in the United States.The bill is intended to control the cost of premiums, which the aviation industry said has risen by as much as 50 percent in some cases, so that small carriers can survive, lawmakers said.Alaska law requires carriers to have at least $150,000-per-seat coverage for bodily injury, but most air services have higher coverage.The measure would limit punitive damages to $300,000 if the aircraft has 20 or fewer seats. Damages would be capped at $500,000 for aircraft with 30 or more seats.It also caps damages against an aviation employer based on the number of employees the air service has.Lawmakers representing rural communities argued that the measure would preserve essential air service for many areas by capping damages.It passed the House on a 32-7 vote.Rep. Ethan Berkowitz, D-Anchorage, said the bill does not include assurances from the insurance industry that such legal limits will result in cheaper insurance for pilots."There’s no guarantee whatsoever that the benefits will be passed on to the air carriers," Berkowitz said.

GCI to boost Internet in 45 rural towns

This year Anchorage-based General Communication Inc. plans to build the infrastructure to supply high-speed Internet service to 45 rural Alaska communities.The project is part of the company’s plan to provide high-speed Internet service to 152 Alaska towns where GCI provides its telecommunications services by 2004 via cable modem, digital subscriber line and wireless technology. GCI announced the $15 million rural Internet project last year."This year we plan on building out 45 locations around Nome and Bristol Bay," said David Morris, GCI public affairs manager.The company plans to spend $2 million on the project this year, he said.GCI plans to add 45 to 50 communities each year until the project is finished, he said.As part of the project, GCI plans to offer cable modem service in Bethel, Cordova, Homer, Kenai, Ketchikan, Kodiak, Nome, Petersburg, Seward, Sitka, Soldotna and Wrangell. Other towns will receive high-speed Internet access via DSL or wireless technology.GCI announced its rural Internet plan last summer after another company proposed bringing its own high-speed service to Alaska communities.Alaska Network Systems, whose shareholders are 12 Alaska local telephone companies, announced in June it had applied for a $24 million federal grant to fund Internet service to 139 Alaska villages.The two proposals listed 98 villages in common.By late last year Alaska Network Systems had not receive the grant money, and company officials were considering other funding options.Regulators and other state officials have endeavored to bring Internet access to rural Alaska areas that lack inexpensive dial-up service. Bush residents typically face high costs for Internet service.In December, the Federal Communications Commission granted a waiver in a federal program that helps some schools and libraries reduce the cost of providing Internet services. The move allowed community members at home, in addition to school children and library patrons, to use the broadband connection for noneducational purposes during hours when the schools and libraries are closed.GCI also plans to add 15 telemedicine sites to 74 locations across the state, Morris said. The new sites will be in the Aleutian and Pribilof islands and villages around Fort Yukon, he said.Adding the telemedicine sites this summer should cost $3 million, Morris noted.GCI further intends to expand its local telephone service beyond Anchorage, Fairbanks and Juneau. Recent company reports show GCI holding an 18 percent share of the local service market."For the company, it’s terrific news," said Dana Tindall, GCI senior vice president of regulatory affairs. "It’s been a much better product than we expected."She said the company has packaged local phone service with other services.Tindall raised concerns about the pending fate of legislation to reauthorize the state regulatory commission. The issue loomed during the last days of the session, which was to end May 14.GCI contends its competitor, Alaska Communications Systems, has lobbied to sunset the Regulatory Commission of Alaska. The commission administers the Telecommunications Act, deciding issues like allowing GCI to provide local phone service in towns once served only by ACS.Before the commission would sunset, it would enter a wind-down year during which major decisions could not be tackled, including GCI’s bid to provide local phone service to the Kenai Peninsula, Tindall said.Mary Ann Pease, vice president of ACS investor relations, said the company would not comment until after legislators decided the issue. She cited company officials’ reactions to previous decisions by the commission about pricing for interconnection agreements between ACS and GCI."We feel the regulatory commission has not always treated ACS equitably," Pease said.

ACS sees state as 'anchor tenant' for network

Within a year, the state of Alaska will have one of the most modern telecommunications systems in the country. That’s according to officials from Alaska Communications Systems, which won the contract to install the new network.The $92 million, five-year State of Alaska Telecom Partnering Agreement, as it’s formally known, was signed Dec. 10 and officially went into effect April 1.ACS, however, had been designing the network even before it won the contract and spent $17 million on the project last year, according to Mary Ann Pease, ACS vice president of investor relations. That’s because it was something the company was planning to do anyway because there was a business case for it, she said.The state contract just speeded up the process, said Jeff Tyson, ACS vice president and the man in charge of building the network. "The state acted as our anchor tenant," he said."This is the benefit of a true partnering agreement," Tyson added. "Instead of the state investing in its own, smaller network, we’re taking fewer dollars and provided them a big network. It gives ACS a network deployment sooner than we would have otherwise."Tyson has a big job ahead of him. The state’s telecommunications infrastructure consists of thousands of phone lines and data circuits installed over the years by different departments.It also includes a videoconferencing system, a network of microwave towers, pagers and cellular phones, and the ARCS TV system for the Bush and its more than 230 satellite earth stations. Even satellite phones for state employees in remote areas are part of the contract.Contract includes everything from telephones to satellitesBy the Journal StaffAccording to Alaska Communications Systems officials, the services ACS must provide to the state are divided into 10 groups. They include:wired telephony, to include telephones, voice mail, long distance, calling cards and audio conferencing;data services, in the form of a single statewide digital network and including Internet access;videoconferencing, which will involve upgrading 14 sites currently operated by the University of Alaska;pagers;cellular telephones;broadcast of the ARCS TV system;providing a help desk and service center;maintaining the state microwave communications system;providing satellite telephones; and maintaining more than 230 earth stations in rural Alaska used to receive the ARCS broadcasts. Since the contract was signed late last year, ACS has been in what Tyson called the "ramp up" phase, getting its new network in place and beginning to identify exactly what services already exist.On April 1, a transition period began with ACS taking over all state services as they currently exist. Then, on July 1, a nine-month "transformation" phase will begin, as ACS begins changing out existing equipment and moving services to the new network."By April 1, 2003, we’ll be done," Tyson said. "The entire state will essentially be on one network."Larry Walsh, director of the state Department of Administration’s Information Technology Group, is the person in charge of making sure ACS complies with the contract. "It’s a big cultural change for both the state and ACS," he said. "As we change our roles, there will probably be some bumps and issues we’ll need to work through. By and large, we’re working well together."Walsh said the contract has penalties in case ACS fails to meet certain deadlines, but it also has incentives for early deployment, and for new ideas. "The contract encourages ACS to offer efficiencies," he said.Walsh said he was probably more "anxious and excited" about April 1, 2003, than he was about April 1, 2002. That’s because next year the new network is scheduled to be complete.Just what kind of network is this, anyway? For one thing, it’s not a telephone network. It’s more like a customized, souped-up private version of the Internet. The telephones, for instance, use a technology called "Voice over IP," with IP standing for Internet protocol.When a state worker places a phone call on the new network, the system figures out the entire route and makes sure there’s enough bandwidth to provide a good connection. "It allows us to guarantee a quality of service," Tyson said. That’s a far cry from the garbled, low-quality voice and video transmissions often found on the Internet.The system can also handle multiple kinds of traffic at once, including data and video. It’s what Tyson called the "Holy Grail" of telecommunications networks.The advantage of this kind of arrangement is lower operating costs. For one thing, it will allow every state employee to call every other state office without incurring long-distance charges. "Over the next five years, that’s a savings of millions of dollars," Walsh said.It also means there’s just one wire coming out of the wall. A state employee simply plugs his or her phone into the wall, and then plugs a desktop computer into the phone. As soon as employees log in, they instantly have telephone, data, Internet, e-mail, access to their office network and access to any other big state computer they’re authorized to use.As any company that has paid to have a network installed will tell you, having just one cable for all services will save money. "That’s a big cost savings in the long run," Tyson said.Walsh said the first state building to have its services on the network is the new Anchorage Jail, which was wired for it from the ground up and which is serving as a pilot site for the statewide deployment. "It’s working great," he said.Because it’s all one big network, more savings occur whenever employees move from one office to another for whatever reason. Any authorized user can simply log in at a new desk and have all telephone features, including voice mail messages, e-mail and network access move with them.Tyson said that the network features extensive security features to prevent unauthorized access, and that its design as a private network makes such access difficult to begin. "We’re very aware of the security concerns," he said.So ACS, which traces its roots back nearly a century as a traditional telephone company, has chosen to build a network based instead on Internet technology. As Pease pointed out, a big reason for the decision was to be able to offer services at reduced costs and thus be competitive.Pease said that already, ACS has gained another customer for its new network, connecting the U.S. Department of the Interior with the Lower 48. She said ACS is currently negotiating to expand that contract to include more in-state services for the department.The other big reason for the nontraditional approach has to do with the Telecommunications Act of 1996, which mandated local telephone competition. Under its terms, ACS was required to sell its services to competitor General Communication Inc. at discounted rates.GCI has since gained significant market share in the phone business, and ACS has protested, with little success, that it is being forced to provide its services to the competition at below cost. It’s a claim GCI has strongly disputed, but clearly ACS has been hurt. ACS reported a net loss of $11.2 million for 2001, following a loss of $25.2 million in 2000.None of these rules apply to the new network, however. "It’s Internet," Pease said. "It’s not regulated."

Fast growth prompts Animal Food Warehouse to seek larger home

After building and opening their first Anchorage store last year, the owners of the Wasilla-based Animal Food Warehouse plan to begin construction this month to relocate to a new, larger location.Builders are due to break ground in May, said co-owner Larry Tallman. The new store in Anchorage, which will measure twice the current size, is scheduled to open in mid-November or mid-December, he said.The company has operated a retail store in Wasilla, on the Parks Highway at Mile 37.7, for about 10 years. A wholesale division, Sunny Day Distributing LLC, has operated in Wasilla for 15 years. Tallman owns the company with Alaskan Tim Sonnentag.Animal Food Warehouse opened its first Anchorage store last June, on Brayton Drive between Dimond Boulevard and Dowling Road. That store measures 10,000 square feet and has 33 parking spaces, Tallman said.The lot size restricted options for expanding that store, he said. Adding parking spaces is one main reason for the move."We just didn’t anticipate the sheer volume of the business we would do at that store," Tallman said.Every day between 300 and 1,400 customers visit Animal Food Warehouse in Anchorage with Saturday ranking as the busiest day, he said.The new store will be built about a mile north on Brayton Drive on a three-acre lot. It will measure 22,000 square feet and have 100 parking spaces. Although Tallman did not list a specific construction price tag, the new building will cost "in the area of several million dollars" to build, he said.Company officials considered relocating to a nearby vacant building on East Dimond Boulevard between Brayton Drive and Hartzell Road. However, that building, originally built for Seattle-based retailer World Lighting, which never opened in Anchorage, was too large and too expensive, Tallman said.The existing building for Animal Food Warehouse has already been sold, Tallman said. That deal has not closed yet, and he declined to name the new owner.Features of the new store include a seminar area, a hay shed with covered, automated loading and an animal adoption center offering information from Anchorage-area agencies. The owners plan later to add a dog-walking area with fire hydrants.Another new addition at the to-be-built store will be a live pets section selling small animals, reptiles, fish and birds. "It’s what our customers have been asking for," Tallman said.The success of the Anchorage store, which prompted the expansion, is probably due to supplying a market demand in the area and the store’s mix of products and prices, Tallman said.Animal Food Warehouse has posted business increases in Anchorage and Wasilla.Overall, the company has recorded revenue growth of 25 percent to 30 percent annually in the last five years, he said.Business volumes and returns on investment led company owners to confirm the financial feasibility of building the new store, Tallman said.Expanding the company’s presence in Anchorage is important to the business, Tallman said. "The pet specialty industry is a business we’re looking to be a significant player in," he said.Tallman is steering the Alaska-based company to fill a market niche typically dominated by national retailers that often operate alongside retailers already in business in the state."This is probably the only market of its size where there isn’t a Pet Smart or Petco," he said. "Our idea is to fill that need with a local business."

Large Web sites need navigation planning

Try this. Visit a content-heavy Web site such as CNN.com or IRS.gov. Think of a piece of information you want to retrieve, then try to find it. Seems fairly straight forward? Perhaps it seemed to be, but was it? Think back for a moment to the steps you took to accomplish that task. Did you use a search engine? Did you follow a series of links through the site? Perhaps you used a site index or a keyword? However you found that information, chances are you used only one of several options available. Good enterprise site design provides users with multiple ways to reach the specific area of the site. Web sites are, by their very nature, hierarchical beasts. Almost every site has a start or home page from which you link to site subsections. These subsections may then link to sub-subsections and so on. In some cases this "drill down" navigation system is all that is needed. A small site with only five pages may require nothing but the "link to subpage" navigation method. However, if you need to provide access not to five subpages but to 5,000 subpages, site hierarchy becomes a hindrance to navigation. Imagine, for example, you wanted to retrieve a copy of the year 2000’s 1040 tax-return form from the Internal Revenue Service’s Web site and were forced to use the drill-down method alone. Even with careful site organization, this method required six clicks to complete, and each step along this path provided an opportunity to lose or confuse visitors. It is important to recognize the importance of well-designed and thoroughly tested primary and secondary navigation systems on enterprise Web sites. Primary navigation Perhaps the most basic method of providing navigational sanity to a large Web site is to carefully select the criteria on which to base primary navigation. This part of the design process is often short-circuited by assumptions regarding how information should be grouped. Jacob Nielsen, an authority on Internet site usability and navigation, warns that a company’s internal thinking regarding site structure may be the least useful in determining how content should be organized. A practical example of this can be found in the University of Alaska Anchorage’s recent redesign of its Web site. For years UAA’s Web presence had been structured around the internal organizational structure of the university itself. Instead, the new site was organized around the primary demographics of students, faculty and others, and the most popular activities, like registering for classes or contacting staff. Designing the primary navigation scheme for an enterprise site should be an exercise in thinking out of the box. Ask fundamental questions like: Why do people come to the site? What is the target demographic? What are primary goals for the site? Secondary navigation In our IRS example, retrieving the 1040 form took too many steps, even with excellent primary navigation and content organization. A user does not need to know the name of the IRS department that distributes forms in order to retrieve one, but the number of clicks required to get the form is too great. A quick look at usage statistics for several large sites indicate that the majority of user activity goes no deeper in the site structure than three levels. If information is "buried" beneath this level, a secondary method for retrieving the information is required. Search engines Returning to our IRS example, the site provides a site-specific engine that can be used to search the entire Web site by keyword. While this is good, the IRS site is so large, and there are so many references to the 1040 form, that even using this engine returns too many results to be useful. Therefore, the IRS was wise to place a secondary forms-only search engine on its site, specifically designed for retrieving tax forms. By typing "2000 form 1040" in the form-specific engine, we cut the number of steps to perform this process in half. Site indices Many large sites now employ a whole-site index or "site map" link. These sort of indices are especially useful in sites that represent organizations with multiple units such as universities or government sites. Alaska Pacific University’s site, for example, incorporates a site map, which is an alphabetical listing of all departments and university subsites. Keywords America Online championed this method of providing quick navigation to specific areas of a site. The idea behind keywords is to provide a word or short phrase that acts as a shortcut to a particular section of a site. This is often useful if specific sections of a site will be advertised. Pop-up navigation Many sites are beginning to utilize "pop-up" navigation as a means of flattening sites. This sort of navigational element features menus that appear when the mouse is passed over the primary links. The advantage of pop-up navigation is that a user can drill down through a site’s hierarchy without having to click through all the subpages, effectively rendering most areas of the site one click from the site’s home page. Dave Stephens is the chief information officer for Impact LLC.

Gas pipeline would provide Yukon jobs

WHITEHORSE, Yukon -- An Alaska Highway natural gas pipeline would greatly boost the Yukon both before and after construction, according to an economic analysis commissioned by the Yukon government.As many as 8,000 jobs would be created at the peak of construction and as many as 2,000 in the longterm, Scott Kent, the minister of energy, mines and resources, said May 2 when the $80,000 study was announced."Results of this study demonstrate that the Alaska Highway pipeline will have significant local, regional and national benefits," the minister said.The report is more than a one-time analysis of economic impacts related to the pipeline, said Michael McCracken, chief executive officer of Informetrica, the Ottawa-based company that produced the document. He said the report was developed to be used as a tool box by communities and organizations who want to plug in their own numbers to assess the impact on a more-local scale.McCracken used the analogy of throwing a rock in a pond to describe impacts of a gas line across the country.On a nationwide scale, the project would barely make a ripple but the Yukon would be right under the rock and there would be a dramatic surge of activity. For that reason, McCracken said, Informetrica focused on the resources required to absorb the impact of a construction boom that would see a huge influx of transient workers.McCracken said the analysis found that 20 percent of the construction jobs could be filled by Yukoners, but all of the spin-off jobs in the service and supply sectors could be filled by Yukoners."What that means is about half of the employment effort will end up with Yukon residents," he said. "But the bottom line after all this is done is to look at how this can be handled. It is going to require good government. It is going to require good training to maximize benefits."McCracken predicted an annual increase in expenditures by the pipeline companies, including annual operation and maintenance costs like property taxes, would generate more than 1,000 full-time jobs in the Yukon. That doesn’t include jobs created by access to a pipeline.Kent said if the project proceeds, it could create between 32,000 and 50,000 person-years of employment during the 24-year period examined in the study. During the same period, it would add an estimated influx of nearly $17 billion to Canada’s gross domestic product, including almost $12 billion it is expected to generate for the Yukon and British Columbia gross domestic products over 24 years.McCracken added, however, that Yukoners should realize that benefits from any pipeline construction "are not going to fall from heaven and hit them on the head, that they do have some control over how things are going to affect them."

Lawmakers continue gas pipeline incentive talks

Juneau - Proposed state incentives to help a North Slope natural gas pipeline face an uncertain future as the state Legislature races toward a required May 14 adjournment.A bill in the state House that grants an exemption from state and local property taxes for a pipeline both during construction and its first two years of operation was being held in the House Rules Committee May 9.House Bill 519 was being held for amendments, according to its sponsor, Rep. Pete Kott, R-Eagle River. Opponents of the bill said Kott held the bill because he was unable to muster 21 votes needed for it to pass the 40-member House.Another bill in the state Senate, SB360, is in the Senate Finance Committee. Unlike Kott’s proposal, the senate bill establishes a framework for a negotiated set of incentives for a pipeline, which could include reductions in state royalties and taxes as well as property tax.Its sponsor is Sen. John Torgerson, R-Kasilof, chairman of the Legislature’s Joint House-Senate Natural Gas Committee.In the House, Kott earlier rejected changes suggested by Gov. Tony Knowles that would make the property tax exemption more acceptable. Knowles proposed allowing the exemption only during the years of construction, and that the taxes be deferred and paid back at some future time.The governor also proposed moving up the period for which the exemption would apply to 2008, instead of 2012. To have the project under construction by 2008 to take advantage of the exemption, a commitment would have to be made to do a pipeline within six months, Knowles said.

Cruise ship tourists share their opinions

JUNEAU -- The arrival of the season’s first cruise ship April 30 and its 2,000 passengers began to provide answers to the questions many residents have had on their minds since last September: Will they come and will they spend?"We thought since we got such a deal on our tickets we could afford to be a little more extravagant in town," said Jon Hanson of Puyallup, Wash., who came to Alaska on the Norwegian Sky with his wife Glenys to celebrate their 33rd wedding anniversary.That may be music to the ears of downtown shop owners and excursion companies who feared bargain tickets would attract tight-fisted travelers.Bonnie Poindexter and Lilly Clark, both of Portland, Ore. , said their tickets may have been cheap but nothing on the ship was. Meals are included in the ticket price, Poindexter said, but alcohol, soft drinks and bottled water are extra. She said she paid $9 for a mixed drink called a White Russian."Yes, the prices have changed our spending habits," she said from the bar at the Alaskan Hotel on South Franklin Street. "We’re here (at the Alaskan) aren’t we? We would much rather come in here and enjoy the atmosphere and pay less than stay on the ship and pay those kind of prices."Others saw taking a vacation after Sept. 11 almost as an act of patriotic defiance."Nobody’s going to keep me from going where I want to go," said Euna Balizan of Castro Valley, Calif. "If we let them do that, they win."To be honest, one of the reasons I wanted to come to Alaska is because it is still America," Balizan said as she touched the American flag pin on her collar. "I wanted my money going to support people in the United States. ... My husband told me I could spend as much as I want."The Juneau Convention and Visitors Bureau predicts more than 700,000 cruise ship passengers will travel to the capital this season. Several tourists said April 30 the crew of the Norwegian Sky told passengers the ship was at its capacity.Though the reasons for coming to Alaska varied from lifelong dreams to see the Last Frontier to winning tickets in a company drawing, all of those interviewed said increased security eased their travel fears."We were originally supposed to go to Paris," said Jeri Migliore of New Orleans. "The company we won the tickets from didn’t think it was safe to send us overseas so they sent us here, which is great because we are far enough away from home that it’s exciting but we’re still in our country feeling safe."Charlie Howard, 23, who tends bar in Juneau during the winter and works as a rafting guide on the Nenana River during the summer, remained skeptical about tourist spending this year."The bargain cruises absolutely make a difference in the kind of tourists you get," Howard said as he sat on the downtown docks. "It’s similar to other summers in that you get the bargain cruises at the beginning and end of the summer with tourists taking the trip of a lifetime who got a cheap ticket and don’t want to spend a lot. I know this because ... (the tourists) won’t tip, don’t want to pay extra for pictures from their rafting trips, don’t want to take as many tours and things like that."You also get a lot of families in the beginning of the summer who maybe don’t have a lot of money to spend and they’ll take a hike or go sightseeing. To them a picture and memories are more important than a doll or a trinket."

Around the World

StateSuit challenges salmon cooperative at ChignikANCHORAGE -- Two commercial fishermen have sued the state Board of Fisheries to try to block a plan to divide the sockeye salmon catch at Chignik.The fishermen say slicing the harvest into roughly equal shares violates the Alaska Constitution and is an abuse of the board’s authority.The lawsuit shows the difficulty state officials face in trying new ideas to improve the poor economics of Alaska’s commercial salmon industry.The board in January approved a cooperative approach to managing the fishery at Chignik, on the Alaska Peninsula, where about 100 seine boats converge each summer to net prime red salmon. Under the plan, some or all of the boat owners may unite and designate a portion of the fleet to catch the fish.Longtime Chignik fishermen Dean Anderson and Michael Grunert filed their class-action suit in Superior Court in Juneau. The suit says making a special allocation to the co-op would violate the "common use" and "equal treatment" clauses of the Constitution’s natural resources article.Judge upholds decision to require mine studyFAIRBANKS -- A state Superior Court judge is sticking by his decision to require an economic impact study of the True North gold mine.The state Department of Natural Resources and Fairbanks Gold Mining had asked Judge Charles Pengilly to reconsider his decision, handed down in April. Pengilly denied the request later in the month.Residents living near the mine, 30 miles north of Fairbanks, have complained about lights and noise from trucks that carry ore from the mine 24 hours a day.They say the trucks disrupt sleep as well as tourism businesses that cater to visitors who want to view the northern lights.State officials say they’ve already begun gathering information for an economic impact study.Senate approves pool insurance for carriersJUNEAU -- The Senate approved a bill May 6 to allow Alaska small air carriers to create insurance pools to ease the rising cost of coverage.The bill comes in response to Alaska’s high aircraft accident rate, court judgments and fewer companies willing to insure air services.Rates have risen by as much as 300 percent and have threatened essential air service in some remote areas, said Sen. Robin Taylor, R-Wrangell, who sponsored the measure.The bill would allow small air carriers to establish a self-insurance pool, and allow outside insurance companies to participate.To do this, the air carriers would set up a $1.5 million capital and surplus account to entice insurance companies to participate, Taylor said.Alaska law now requires passenger air services to carry at least $150,000 per seat coverage for injury or death.House passes private prison bill for WhittierJUNEAU -- A bill clearing the way for a 1,000-bed private prison in Whittier passed the House April 29.The House voted 24-to-14 for the measure, which calls for the state to contract with the city of Whittier to house state inmates. Whittier, in turn, would contract with Cornell Companies Inc. to build and operate the prison.The bill also would expand a 92-bed state prison in Bethel by 96 beds.Proponents say a Whittier facility will be cheaper than building new state prisons, it will bring prisoners from an Arizona private prison back to Alaska, and it will boost the town’s economy."What we’re doing here is certainly bringing folks home," said Rep. Fred Dyson, R-Eagle River. "We are giving a struggling community that has turned the corner and wants to have a new future a chance to do it."Opponents said the money could be better spent on education, and that the prison contractor was not chosen through a truly competitive process.This is the fourth time a private prison proposal has come up and the third time a bill authorizing such a prison has passed the Legislature. Previous efforts were derailed by community opposition.Fairbanks International Airport official to retireFAIRBANKS -- Fairbanks International Airport manager Doyle Ruff will retire July 1.Ruff has been airport manager for 15 years, from 1983 to 1987 and from 1993 to the present. In between he was director of the Anchorage International Airport and executive director of the state’s International Airport System.Ruff flew 200 combat missions in Vietnam as a pilot in the Air Force. He later became a pilot for three seasons with the Air Force’s precision aerial team, the Thunderbirds.Ruff eventually served as commander for Eielson Air Force Base, where he finished his military career in 1980.He said he plans to remain in Fairbanks.NATIONFederal Reserve leaves interest rates unchangedWASHINGTON -- The Federal Reserve left a key interest rate unchanged May 7, allowing Americans to continue to take advantage of some of the lowest borrowing costs in four decades.That would give consumers an incentive to keep on spending, and businesses might be motivated to step up investment in new equipment and plants. Both are crucial ingredients to help along the budding economic recovery.Federal Reserve Chairman Alan Greenspan and his colleagues held the federal funds rate, the interest that banks charge each other on overnight loans, at 1.75 percent, the lowest level in 40 years.WorldNova Scotia bank may end Argentine ventureBUENOS AIRES, Argentina -- Bank of Nova Scotia may become the first major foreign bank to pull the plug on its Argentine operations, saying May 7 it was considering putting Scotiabank Quilmes up for sale.U.S. giant Citigroup Inc., Brazil’s Banco Itau and Argentina’s Hipotecario and Banco Macro were among the interested buyers, the business daily Buenos Aires Economico reported.On April 18, the Central Bank suspended Scotiabank Quilmes’s operations for 30 days or until it restored its operating capital and cash reserves to required levels. But the bank said it had no plans to recapitalize its Argentine operation until the recession-wracked country clarified its banking rules.-- Compiled from business wire services.

House OKs bill to better target rural development loans

The state House of Representatives passed House Bill 471, a bill that would change limits for rural development loans by the Alaska Industrial Development and Export Authority and rural bulk fuel loans by the Alaska Energy Authority, an agency affiliated with AIDEA.The bill, sponsored by Rep. Joe Green, R-Anchorage, also makes technical changes in the accounting procedures AIDEA uses to calculate its net income, to comply with new federal Accounting Standards Board directives.The rural development loan program is changed in the bill so that the low-interest loans can be better aimed at small Alaska communities, according to Lynn Kenney, AIDEA spokeswoman. Under the bill, loans would be available to communities on the road system of 2,000 or fewer residents and rural communities off the road system of 5,000 or fewer residents.Current law says the loans can be made in any community of 5,000 or fewer residents, although they have access to conventional financing.A higher loan limit for rural bulk fuel purchases recognizes that fuel prices have increased substantially since the $100,000 loan limit was set in 1993, Green said. Rural utilities mainly use the AIDEA bulk-fuel loan program to purchase a year’s supply of fuel to meet seasonal barge shipping schedules.House committee OKs requirement for uniform health insurance dataThe House Finance Committee approved a bill that would require uniform information on plastic health benefits cards issued to Alaskans enrolled in group health insurance programs. House Bill 318, sponsored by Rep. Lisa Murkowski, R-Anchorage, was in the House Rules Committee, its last committee before floor action in the House.By 2004, health insurers in Alaska would be required to have a subscriber’s name, routing and group number, name and address of benefits administrator and a help desk.Pharmacists favored the legislation, saying it would reduce time spent on the telephone confirming coverage for prescription medicines. Health insurers, however, spoke against HB318, citing costs.

Air Force launches rocket

The U.S. Air Force launched a rocket from the Kodiak Launch Complex on the Narrow Cape Peninsula of Kodiak Island on April 24 as part of the Alaskan Command Northern Edge 2002 military exercise.The mission’s primary objective was to simulate a ballistic-missile launch to allow Northern Edge participants to test responses and practice defenses that would occur during an actual ballistic-missile attack. The Northern Edge exercise is an annual joint-service arctic-weather training exercise involving more than 7,500 troops from all branches of the U.S. armed forces and Alaska-region Canadian Forces.The flight also provided an opportunity for the U.S. Navy Sea-based Midcourse Defense program to test its tracking of the rocket and computer-simulations to intercept it.

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