Cowdery introduces insurance reform measures in Alaska Senate

Sen. John Cowdery, R-Anchorage, has introduced a bill to prevent insurance companies from using a customer’s credit rating to determine rates, and to halt use of "aftermarket," or used, replacement parts in settling accident claims without permission of the insured car owner.Under Cowdery’s SB320, insurers would be prohibited from using credit scoring, a practice which the Anchorage Republican says has no merit in determining risk exposure to an insurance company, and which could be used in a discriminatory way."I support the rights of any company to protect its assets by limiting exposure to risk, but I also believe in protecting rights of individuals to keep personal information private," Cowdery said."The use of personal credit information provides nothing to the insurance companies except a method to charge customers more. This is particularly true when other rating data, such as driving records, illustrate a driver to be low risk. Credit scoring, which may change due to events such as a divorce or decreased spending power, does not accurately reflect a driver’s risk on the road."Cowdery’s bill also requires insurance companies to obtain consent from consumers prior to using aftermarket replacement parts during repair work."An insurance company insures your vehicle and insures the parts in your car," Cowdery said. "These are usually originally manufactured parts. If that is what is insured that is what should be replaced."Use of aftermarket parts may nullify the manufacturer’s warranty or cause unnecessary safety risks due to an imperfect fit in an auto, Cowdery said.Committee approves measure for temporary state water-use permitsThe House Resources Committee approved House Bill 420, eliminating a "sunset" provision in state law regarding the issuing of temporary water permits. The bill is now in the House Resources Committee, awaiting placement on the calendar for action by the full House.The current law provides a way for the state Department of Natural Resources to issue temporary water permits for projects like building ice roads on the North Slope. Without the law, time-sensitive projects could be delayed.The law contains a sunset provision, or a section that voids it without new action by the Legislature. House Bill 420 would extend the law.Regulatory Commission of Alaska would continue if bill approvedLegislation that will extend the powers of the Regulatory Commission of Alaska moved from the Senate Labor and Commerce Committee to the Judiciary Committee. The bill would extend the "sunset" date in the current law, so that the RCA will continue its regulation of public utilities and pipelines in the state.

Military seeks permit for radar

Even Pentagon planners have to apply for permits.The U.S. Missile Defense Agency has applied for a wetlands permit with the U.S. Army Corps of Engineers to begin construction of a portion of the nation’s new missile defense system at Eareckson Air Station on Shemya Island.Proposed work at the U.S. Air Force installation includes upgrades to the existing Cold War-era early warning radar system, utility extensions, housing and infrastructure improvements, dredging and land-clearing.Most importantly will be the installation of test equipment related to X-Band radar, the most powerful tracking and detection device in the world and the heart of the national missile defense system.Lt. Col. Jim Balocki, deputy commander of the ballistic missile defense program for the Alaska district, said work will begin this summer, once a permit is in place and a federal environmental impact statement completed.Work related to the national missile defense system in Alaska also is slated for Fort Greely and Eielson Air Force Base. A test missile complex is set for construction this summer at Fort Greely, as is a transfer facility at Eielson for shipment of booster missile components.Missile launch facilities on Kodiak Island also are being considered.The test facilities at Fort Greely and Shemya are expected to be completed by mid-decade, according to Department of Defense officials.About $198 million will be spent at Fort Greely this year, and $48 million at Shemya, Balocki said.An estimated $12.5 billion is needed to fund the entire missile defense project, a top priority with the U.S. Defense Department.Only two miles wide and four miles long, Shemya Island is one of the most important pieces of real estate in the United States. It has long been used by the military to monitor missile tests in Russia and as a refueling stop for U.S. war planes.The island’s location on the tip of the Aleutian chain makes Shemya ideal for the new antiballistic missile radar, designed to get an early look at any missile fired at the United States from Russia, China, Iraq, Iran or North Korea, Department of Defense officials say.The antiballistic radar at Shemya would lock onto warheads as they cross the Pacific and guide intercepting missiles from mainland Alaska. In theory, the Alaska-launched missiles would destroy the incoming missiles on impact above the Earth’s atmosphere.Shemya, with the Bering Sea on one side and the Northern Pacific on the other, is closer to Russia and Japan than it is to Anchorage, 1,500 miles to the northeast.The tiny island’s location, while strategically significant, is one of the worst places on Earth to build anything, and it is a logistical nightmare, said John Killoran, a U.S. Army Corps of Engineers spokesman in Anchorage."It’s awful out there but the location couldn’t be better," Killoran said.Weather on Shemya is brutal, even by Alaska standards. Calm, sunny days are rare. Earthquakes have rocked the island repeatedly over the years.Air Force Capt. Heather Anderson said she loves the place."It takes a special kind of person to work here because it’s so remote," Anderson said.To the 100 or so people who work on "The Rock" or the "Black Pearl," the incredible weather conditions are known simply as the "Shemya Factor."For example, Anderson said, in the winter snow blows and swirls almost continuously, creating a sand-blasting effect. And the warmer weather doesn’t always bring better conditions. Last summer saw 122 consecutive days of fog."For 122 days it was as thick as pea soup. You couldn’t see in front of your face," Anderson said."We have hurricane-force winds without there actually being a hurricane, on a regular basis," Anderson said. "It’s pretty spectacular."There are a few temporary duty Navy and Air force personnel on the island like Anderson, and about 90 contractors from Chugach Eareckson Support Services, a joint venture between Del-Jen Inc. and Chugach Development Corp.The contractors are charged with keeping the island’s runway open to military and commercial traffic and other island operations.The island also is home to about 18 Arctic foxes known locally as scruffys. The foxes earn their keep by keeping goose populations at bay, lessening the risk of aircraft-bird collisions, Anderson said.Companies from California, Washington and Alaska have submitted proposals to the Missile Defense Agency to do the planned work this summer. A contract should be awarded by April, and work will begin immediately thereafter, Balocki said.Barge shipments would have to come either from Anchorage or Seattle, 3,000 miles away.Shemya has only one dock, and the island’s beaches are home to many shipwrecks.Balocki said the window of time for construction is narrow, so shipments must be precise."It’s not like there is a Home Depot on the next island," Balocki said.

Dick Pacific-Ghemm to build Bassett hospital

The U.S. Army Corps of Engineers Alaska District has chosen joint venture firms Dick Pacific Corp. and Ghemm Co. as general contractors to build new Bassett Army replacement hospital at Fort Wainwright.The project contract award, a major construction project in Alaska, comes one year after the original bid and construction start timeline.Work on the $178 million construction contract is set to begin in May and should be complete in June 2006.Dick Pacific operates an Anchorage office that will serve as joint venture headquarters. The company has been operating in Hawaii since 1939 and serves the Pacific Rim from a Guam office. Dick Pacific Construction, which expanded to the Pacific Northwest to pursue projects in Alaska, Northern California, Oregon and Washington, is owned by Dick Corp. of Pittsburgh. At the Anchorage office, alliances with area contractors are established to pursue military, private and public sector projects, according to company information.Fairbanks-based Ghemm Co. marks its 50th anniversary this year. The project award is significant to the company, said president Bert Bell."We’re going to be busy," he said.Ghemm formed a joint venture with Dick Pacific to handle financing on the major construction project, Bell said. Dick Pacific also was looking for a partner on the project and made the match because Ghemm could provide Alaska expertise, he said.The scope of the project is significant, Bell noted."It’s a big building and a complex building that has a lot of special needs," he said. Since it is a medical building, the project will require extra considerations, he said.The total programmed amount for the project is $215 million, including the government’s cost for administering the construction contracts, Corps officials said.Phase I of the project, including site development and project office construction, was completed last year. Construction of the new hospital is next. Subsequent stages of the project include installation of medical and communications equipment and later demolition of the 50-year-old hospital.The 32-bed replacement hospital will measure 269,000 square feet.The bid award concludes a process that had to be restarted last year. Construction was originally to begin in summer 2001. However, the Corps canceled the solicitation for bids in January 2001 without awarding a contract, citing high prices received in bid proposals.Last October the Corps again issued a request for proposals. The new proposal featured a budget increase of more than $80 million.

Philosopher-consultant teaches leadership key

Peter Koestenbaum is a philosopher. He is also a business consultant specializing in developing the leadership skills of managers at large companies around the world.What does philosophy have to do with business? Plenty, says Koestenbaum, who holds degrees from Stanford, Harvard and Boston universities and who taught philosophy for 34 years at San Jose State University in California."Philosophy is not only about the abstract," Koestenbaum said. "It’s about life, human beings and the world. All science began with philosophy."Business is building and creativity. It’s why I as a philosopher went into business."And, he adds, entrepreneurship is the highest form of business creativity. Koestenbaum said he especially admires entrepreneurs because they show vision and courage, two of the attributes he believes all great leaders must have.He will meet some of those entrepreneurs March 13, when he is scheduled to make two presentations at the Alaska InvestNet Capital Investment Conference in Anchorage.

Providence completes expansion project

Construction has been completed on phase two of a $45 million expansion project at Providence Alaska Medical Center in Anchorage. On Feb. 4 the hospital opened its new Ambulatory Procedures Department, formerly called Day Surgery.The 11,000-square-foot area features more private pre- and post-operative rooms, a new pain clinic and three new surgical suites. As a result, Providence now tallies 16 operating rooms. The new operating rooms were finished before the project’s completion and went into service two months ago, said Vince Huntington, assistant administrator.Work on this part of the project began last summer after completion of a new emergency room.Providence children’s program gains accreditation until 2004Providence Alaska Medical Center has received reaccreditation for its Center for Child Development and the BP Early Learning Center, also operated by the hospital.The National Association for the Education of Young Children granted the accreditation, which runs through 2004.The Center for Child Development at Providence serves 150 children age 8 weeks to 9 years. At the BP Exploration (Alaska) Inc. headquarters, the BP Early Learning Center serves 69 children in the same age group.To achieve the voluntary accreditation, a facility’s program must show its early childhood programs meet national standards of excellence. Programs seeking accreditation undergo a self-study and collect information from parents, teachers, administrators and classroom observations. Early childhood professionals trained by the national organization NAEYC visit facilities to confirm self-study results. A group of national experts then independently reviews the information to grant or defer accreditation.About 7 percent of early childhood programs nationwide, or 8,138 programs serving 722,009 children, have obtained this accreditation, Providence officials said.

Railroad straightens first three miles of track to Valley

The Alaska Railroad Corp. last month completed its realignment of about three miles of track on Elmendorf Air Force Base, the first in a series of line improvements between Anchorage and Wasilla that will cost a total of $78 million. The new alignment between miles 118 and 121 of the railroad moves the track 3,000 feet further east of the east-west runway at Elmendorf to alleviate safety concerns the U.S. Air Force had with the line’s location, according to Patrick Flynn, Alaska Railroad spokesman.A new passenger main track was added, as was a new line for freight in the three-mile stretch. The old track will be pulled up by April, according to Flynn.Construction went smoothly, with minimal traffic delays, Flynn said. The line is made of continuously welded rail designed to lessen "clickity-clack" noise, he said.The state-owned railroad began construction last spring on the project that will straighten some 70 curves on the Anchorage-to-Wasilla line. Some road crossings along the track also will be improved for increased safety, according to the railroad.Most of the funding for the $78 million project comes from the Federal Railroad Administration, with the railroad matching about 20 percent of the overall cost, Flynn said.Construction will be done in three phases: Anchorage to Eagle River Bridge; Eagle River to Knik River; and Knik River to Wasilla.The railroad, along with Anchorage-based Wilder Construction Co., began work last April on the first phase of the project, a 10.5-mile stretch from the north end of the Anchorage Rail Yard to the Eagle River Bridge. That phase is scheduled for completion next year, Flynn said.When all three phases are completed in 2004, railroad officials say the travel time between Anchorage and Wasilla will drop from 90 minutes to just under an hour. Trains should be able to maintain speeds of about 50 mph instead of 20-25 mph, Flynn saidMost of the curves along the line will be reduced from 10 degrees to 2 degrees.The shorter travel times and reduced track curvature will also reduce wear and tear on the trains, according to the railroad.The Anchorage-to-Wasilla track is the most meandering leg of the 471-mile railroad, and has had the highest number of derailments over the years.Other improvements along the line include building roads over or under the tracks, instead of at-grade, or level with the road.

People need to know real estate regulations

It makes one wonder how different things might be in the real estate industry if the general public knew more about our rules of ethics and requirements under Alaska law. And since most people don’t really know a lot about what motivates and restricts us, then it is our responsibility to educate them as we go.Every real estate agent is required to take continuing education credits every two years to maintain skills and abilities. This is one of those years. There is a mix of required and elective credits, and all are designed to protect the general public.The classes relentlessly drill into us that you, the general public, acting as a buyer or a seller, are our "bosses" and that we must perform our duties with a certain level of speed and accountability. If an agent has entered into an agreement with you, either written or implied, then he or she has a lot of responsibilities under the law to you. And this is true whether you pay our commissions directly or not.I think of how different things might be if the public only knew how strictly the laws are interpreted. I believe that agents would probably keep in closer contact with you, answer their phones quicker, negotiate a point of contract more promptly, present all offers to you immediately, keep their "bosses" more informed, and probably act more professionally overall. Our image may improve a bit, and the public might be happier with our industry.The following item serves as a good example of "if the public only knew." Twenty years ago all real estate agents worked for the seller of real estate regardless of our connection to the buyer according to the law. So if my own grandmother just received an insurance settlement and could pay cash for your home that I was helping her buy, the law said that my fiduciary responsibility is to disclose that information to you, the seller, my "boss."And yet, if I disclose that information then my own grandmother’s ability to negotiate a better price is severally compromised, if not undermined. I can tell you of many stories where someone felt betrayed by the agent who was simply obeying the law.Thank goodness the law was changed and that the laws in general are continuing to change for the better. Today, it’s more like what everyone intuitively understands where buyers can "hire" their own agents who are now required by law to represent only their interests. The agents listing a property still represent the seller only. Everyone knows where he or she stands and, in theory, everyone is well served.But, as you guessed, there is an exception. And this exception can create some discord between agents and their clients. Where an agent ends up representing both sides of the transaction, he or she is called a "dual agent." His or her ability to help either party negotiate or strategize is further limited by the law. Agents representing both sides of the transaction are legal and acceptable as long as their status is disclosed and agreeable to all parties.An example of that exception would be if I’m selling my best friend’s home and am having an open house. I’m definitely, at that point, representing the seller only. If a buyer has an agent and comes through the home and decides to make an offer, there is no problem because everyone has his or her own representation and everyone knows it.However, if you come through, and you don’t have an agent but want to make an offer through me, the listing agent, then everything changes. In that instance I become a dual agent because both parties now believe that I’m representing them. The law now restricts me from suggesting a price, other than the one listed, for either party or from disclosing any pertinent information about one side to the other side without express permission to do so, even though I would be doing this for my client if I represented only the seller or only the buyer.In fact, there is a five-page form for disclosing to all parties what a dual agent can and cannot do. Agents can get into big trouble if they mislead or fail to disclose, even if this part of the law is not always understood or totally clear by the agents or by the general public.There are several ways for you to educate yourself about how we are supposed to perform our services. One way is to read articles like this one. Another way is to interview different agents. Find one that will inform and educate you as you go. Either way, if you only knew more about what we do, then I can’t help but think that you would be better served.Ken Jelinek is an associate broker with RE/MAX Properties in Anchorage. He can be reached at 907-257-0196.

Frontier Flying Service studies adding Kenai-Anchorage flight

KENAI -- Commuters in search of choices in the air market from the Kenai Peninsula to Anchorage may soon have another alternative. Fairbanks-based Frontier Flying Service Inc. is considering joining the Kenai market, which is currently served by just one passenger carrier, Era Aviation.Marina Jarvis, Frontier’s marketing director, told the Kenai Rotary Club recently that the company is awaiting word on a federal loan that will help it acquire a sixth aircraft, which would allow expansion into the Kenai market. Frontier expects to hear the status of the loan by April, which would enable the company to begin flights to and from Kenai as soon as May.It would be the culmination of months of talks between Frontier and Kenai Municipal Airport Manager Becky Cronkhite. Cronkhite said the city of Kenai has been encouraged by the commuters in the population to get another carrier in to compete with Era, which is in its 18th year of serving Kenai. She said she knows Frontier well from her days in the Interior."We’re not talking to a start-up operation. Frontier has a good business background and an excellent safety background," she said. "They’re a good company."Established in 1950, Frontier was purchased by John Hadjukovich in 1974. The company employs 150 people, including 47 pilots, who fly Frontier’s current fleet of five Beech 1900 aircraft, which are capable of carrying 19 passengers each.In addition to five flights a day between Fairbanks and Anchorage, the company flies established routes to the Yukon-Kuskokwim region, the North Slope and such Interior villages as Galena, Nulato and Kaltag.Cronkhite noted the importance of getting an established carrier in the market after a series of failed attempts by others, TransNorthern and Yute Air most recently, to remain viable as the market’s second carrier. "The city has seen enough airlines come and go that we want to bring someone in that’s stable," she said. "Frontier is here to stay. It is my personal opinion that Frontier is the best company out there that I can market to."In her address to the Rotary club, Frontier’s Jarvis emphasized that the point of coming into the market is not to compete with Era but, rather, to complement and augment existing service. "We can’t compete with Era," Jarvis said. "If they dropped their prices, we couldn’t match them."To that end, Frontier also is seeking assistance from the city to get service up and running out of Kenai. Jarvis said in addition to getting landing fees waived and leasing costs reduced for the first 12 months of operation, the company also would need assurance from the business community that 50 percent loads could be maintained on the expected two daily flights Frontier would make between Kenai and Anchorage."Our start-up costs must be offset by corporate guarantees and local incentives while the market matures," Jarvis said. She said the operational costs of the aircraft will make it difficult for Frontier to offer fares cheaper than Era’s. "Sixty-seven dollars is not a bad fare," she said. "You could drive it cheaper, but we’d be here to cater to business travelers who just need to get from point A to point B. Here’s another option."

Juror convicts defendants despite sharing a marijuana moment

A man sitting on a jury in West Virginia was sentenced by the court after pleading guilty to smoking marijuana with the three defendants in the case. Despite sharing the marijuana moment, the juror voted to convict the defendants. The juror was found guilty of contempt of court.Lawyer attempts legal suicideAtlanta attorney John J. Lieb, saying he was "sick of the law," attempted to have himself disbarred. Lieb, admitted to the bar in 1983, complained about the practice of law by saying he thought he "was going to be a champion of the underdog. Instead, I became a handler of venomous snakes." He vows to never practice law again.Lieb had a third party file a charge against him with the State Bar and then failed to appear to answer, thinking this would lead to his disbarment. The facts alleged by the third party, however, were never investigated by the State Bar. The claim was dismissed for lack of probable cause, and Lieb is still a lawyer.But will $26 million be enough?The price of becoming a lawyer is increasing dramatically, maybe as dramatically as the salaries paid to associates at large law firms. According to the National Association for Public Interest Law, tuition at law schools accredited by the American Bar Association more than doubled during the 1990s. The average law student now graduates with debt exceeding $80,000.That translates into loan repayments of about $11,000 a year over 10 years. But not all graduates are headed for big firms where they can afford those kind of payments. The average salary of attorneys working in public interest law positions is $31,000 a year.The computer sentences youA new software program, CrimeTime, helps California judges decide on sentences by sorting through the more than 1,900 crimes in the Penal Code and calculating how much time a defendant faces for a specified crime.The judge can plug in prior convictions, extenuating circumstances, and so on and get back a range of time for sentencing purposes. The software is also used by criminal lawyers to forecast possible sentences for their clients if convicted.HistoricalIn the 1640s, Virginia, then a colony, established a fee schedule for attorneys. The rate was low in comparison to those set for other professions and was payable in tobacco.Hearsay"This truly was a network that was vegetables for vegetarians. Too narrow."-- Court TV’s chief executive on the channel’s programmingFootnoteFirst there was Starving Students, the moving company. Now, there’s Starving Lawyers. An advertisement in a Los Angeles legal newspaper is headlined "Starving Lawyers" and offers "reliable" and "cheap" legal services by California licensed attorneys. They are available starting at $20 an hour.Have something to share with Out of Court? E-mail it to Chet Olsen at ([email protected]).

Around the World March 3, 2002

STATECommissioner says plan would drain export fundJUNEAU -- A Senate plan to aid Alaska’s tourism industry would hurt the state’s efforts to promote exports overseas, Community and Economic Development Commissioner Deborah Sedwick said.The Senate Finance Committee has approved a plan to empty a $5.1 million endowment that supports state international trade efforts to help pay for a tourism marketing plan.The Alaska Tourism Industry Association is in line to receive $6 million to wage a media campaign to offset an expected drop in vacationers this year in the wake of the terrorist attacks on the East Coast.The endowment is used by the state Division of International Trade and Market Development, which helps promote and sell Alaska products overseas."I think it’s shocking that Senate Finance would chose one industry over another," Sedwick said. "It’s very shortsighted."Netricity hires firm for study of data centerANCHORAGE -- Netricity LLC has hired Parsons Engineering Inc. to study the economics and markets for a proposed $1 billion data center on the North Slope.The study, which just got under way, will take about two months, according to Mike Caskey, vice president of Fidelity Exploration and Production Co., one of two partners in the venture.Caskey said the facility, commonly known as a server farm, would house a half-million Web-hosting servers in a 1 million-square-foot building, connected to clients and users by the fiber optic system that runs the length of the trans-Alaska pipeline. It would also include construction of a 400 megawatt, gas-fueled electric plant to power the center and an additional fiber optic line for backup.Modular buildings to house the data center and power plant would be constructed in Anchorage or Nikiski, Netricity said.Netricity is in negotiations with producers to buy natural gas from North Slope producers to power the facility. The center would use a maximum of 120 million cubic feet of natural gas per day.Alyeska terminal closed to visitors this summerVALDEZ -- Alyeska Pipeline Service Co. says the public will not be allowed to tour its terminal this summer."We explored alternatives to continue public tours under heightened security screening, but couldn’t satisfy ourselves," Richard Ranger, with Alyeska’s Valdez business unit, told The Valdez Vanguard. "We acknowledge the significance of the fact and are in the process of looking at alternatives to meet curiosity and interest."Alyeska also will close the Alyeska Marine Terminal to family tours and has tightened restrictions on all visitors to the terminal, Ranger said.Security has increased in and around all aspects of the pipeline since the Sept. 11 terrorist attacks.The closure will likely hit Valdez Tours the hardest. The tour company, which shuttles cruise ship passengers from the dock to town, also contracts with the terminal and shuttles in visitors on a daily basis from May through September. Last season, 20,000 people visited the terminal through public tours.2-term Kasilof senator will not seek re-electionJUNEAU -- Sen. John Torgerson will not seek re-election this November, he said Feb. 19.Torgerson, a Republican from Kasilof, said after serving two terms in the state Senate he wants to allow "new blood" into the Legislature.Torgerson was first elected to the Senate in 1994. He is chairman of the Senate Community and Regional Affairs and the Resources committees. He also serves as chairman of the Joint Committee on Natural Gas Pipelines.Under a new redistricting map, Torgerson’s district lost Homer and Seward and added Kenai and Nikiski. Torgerson also faces a possible challenge from Sen. Jerry Ward, R-Anchorage, who announced he would move to Nikiski because of changes to his own district.NATIONConsumer confidence declines in FebruaryNEW YORK -- Consumer confidence declined in February, hurt in part by increased pessimism about the jobs outlook and the economy, reversing two straight monthly gains.The New York-based Conference Board said Feb. 26 that its Consumer Confidence Index fell to 94.1 from a revised 97.8 in January.The industry group’s index, based on a monthly survey of some 5,000 U.S. households, is closely watched because consumer confidence drives consumer spending, which accounts for about two-thirds of the nation’s economic activity.Lynn Franco, director of the Conference Board’s research center, said despite weaker confidence in February, she expects continued "healthy consumer spending" in the months ahead."The consumer will continue to provide solid spending support as the economy moves into recovery," Franco said.Economists agreed that the February decline appears to be a "temporary dip" in confidence.WORLDOPEC chief sees drop, then rise in oil demandWELLINGTON, New Zealand -- International oil demand is expected to be weak in the second quarter of this year, said Ali Rodriguez Araque, secretary-general of the Organization of Petroleum Exporting Countries.Lower demand levels will put further downward pressure on prices in the second quarter, Rodriguez told a petroleum conference Feb. 25 in Auckland.Rodriguez also expects to see "modest" growth in demand for oil in the second half of the year.Demand could grow by as much as 300,000 barrels a day between July and December, while OPEC’s second half output may rise by as much as 700,000 barrels of oil a day, he said.Rodriguez said OPEC’s reduced output target, announced late in December, could be met in the second quarter if Russia, which isn’t a member of OPEC, maintained its current output cuts.Rodriguez spoke after delivering a keynote address at the New Zealand Petroleum Industry Conference.OPEC, at a meeting Dec. 28 in Cairo, decided to implement a production cut of 3.5 million barrels of oil a day."OPEC’s action, supported by other producers, has been instrumental in halting the oil price slide," Rodriguez said.-- Compiled from business wire services.

In this brand-laden world, the first impression is crucial

The item in the Pottery Barn catalog was the answer to my months’ long search: an inexpensive furniture hutch, sturdy and reasonably attractive, in that laid back, Pottery Barn sort of way. I went online to buy the item only to find that I had to register first, a process devised by some acolyte of the Marquis de Sade.After seven minutes of frustration and constant hitting of the back button to re-enter data, the system still wouldn’t accept my newly established password. The only thing that worked correctly is the box that keeps defaulting to a "yes" answer to the question would I "like to receive e-mail communication periodically from Pottery Barn and select partners about products and special events."I decided to call the toll-free number. A first for me in ordering from a mail-order catalog, was the three-minute on-hold wait, before being connected to a pleasant and cooperative service representative. I quoted the numbers off the back of the catalog and she located my data. So far so good.I ordered the item, recited the credit card data, agreed to shipping terms and asked for a confirmation number and agreement on the final cost. Except there was no agreement. The catalog quoted a price of $119 plus $10 shipping. The service rep quoted a price of $157 and change.Why the 24 percent difference? An extra handling charge and state taxes, neither of which I can find mentioned prominently, if at all, in the catalog.We agree to disagree. I cancel the order, and 20 minutes later I’m no better off than when I started.Stated bluntly, I consider Pottery Barn’s practices to be confusing at best and deceptive at worst. Given the type of unforgiving customer I am, Pottery Barn cannot expect ever to hear from me again. Lost for life, a customer at the peak of his spending power and with a previously good impression of the Pottery Barn brand to boot.Contrast that behavior with the Amoco Oil Co., as it was then known, which in 1975 was the first company to offer this poor, graduating student a credit card with no strings or limits attached. I’ve stayed loyal ever since, spending the next 26 years faithfully pumping Amoco gas just as they intended.It’s a relatively simple rule: You rarely get more than one chance to capture and hold the first-time customer. In this day and age of brand oversupply and impression overload, that first impression counts. It creates an instinctive aura by which we judge the brand and how we evaluate its relevance to us as consumers. Consider it a pheromone radiating a hidden aura of attraction and goodwill.It also establishes an early warning system for the future. Is this a brand that I would want to revisit and buy again another time? Incidentally, the research firm Gartner advises that a 5 percent increase in customer retention results in a whopping 60 percent increase in profitability over five years.First impressions are not all touch in the pure physical sense. They’re more than a bad experience or transaction with the sales clerk at the checkout line. Impressions are formed in myriad ways from a telephone greeting to e-mail response time; from lobby decor to employee dress code; from the chief executive’s personality to media messages.For McDonalds, it’s a case of ever-worsening television advertising that reeks of cheapness, mediocrity, inconsistency and loss of interest. I single them out only because McDonalds was once the benchmark for the category. "You deserve a break today" spoke to the huddled masses and every social class in a language and with an empathy that permitted little room in the consumer’s mind for loyalty to competing brands. Today, they’ve become just another player on the fast-food strip, albeit a larger one with the good fortune of better real estate.Marketers are finally waking up to the fact that a good first impression is in many ways tied to exemplary customer service, which in turn, contributes mightily to brand loyalty and customer retention. Many companies are now looking to technology, customer relationship management software for example, to address the problem. That solution cannot be dismissed lightly.As a Modalis Research Technologies study shows, 73 percent of customers, whether ordering by phone or online, expect the company to possess some advance knowledge about them and resent having to repeat the tiresome process of reciting various addresses, phone numbers, codes and so forth.But as the experts will also advise, customer service will never achieve superior levels if it relies solely on technology. Roger Nunley, customer service expert of the Atlanta-based Customer Care Institute, said, "The biggest issue is still people how we hire, train and coach them and measure their performance."According to Nunley, coaching employees in the soft, people-to-people skills will be the primary determinant of how well a company performs in the ongoing customer service marathon. It will also guarantee that the first customer impression is always a positive one and never a lost opportunity to establish a life-long relationship between the consumer and the brand.Alf Nucifora is an Atlanta-based marketing consultant. He can be reached via e-mail at ([email protected]).

ACS announces reduced losses for year

Alaska Communications Systems Group Inc. recorded a net loss of $11.2 million for 2001 compared with a loss of $25.2 million in 2000. The company also tallied a net loss of $2.2 million for the fourth quarter, down from an $8.5 million loss in fourth quarter 2000.ACS listed revenue for the year at $331.7 million compared with $313 million during 2000. Fourth quarter revenue was $85.9 million, an increase from $79.2 million for fourth quarter 2000.Directory revenue grew 19 percent in fourth quarter 2001 to total $9 million, up from $7.6 million for the same period in 2000 because of demand for advertising in regional directories, ACS officials said. Annual directory revenue was $33.9 million in 2001, compared with $29.2 million in 2000.Local telephone revenue grew to $58.4 million in fourth quarter, up from $54.3 million in fourth quarter 2000. Annual local telephone revenue was $221.4 million in 2001 compared to $222.3 million in 2000. Cellular revenue was flat in the fourth quarter at $9.7 million compared with $9.8 million for the same period in 2000. For the year, cellular revenue was $40.4 million, up from $39.5 million in 2000.Internet revenue was $3.8 million in fourth quarter 2001, down from $3.9 million in fourth quarter 2000. Last year Internet revenue was $13.7 million, up from $9 million in 2000.ACS totaled 332,923 local access lines in 2001, an increase from 329,460 in 2000. As of Dec. 31, 2001, the company had 80,120 cellular subscribers compared with 75,933 in 2000. Annual average revenue per unit was $43.15 in 2001 compared to $44.17 the previous year.ACS tallied 46,476 Internet subscribers at year end 2001, an increase from 45,865 in 2000.

March-Issue-1 2002

Events celebrate ANCSA's 30th

Alaskans are celebrating the 30th anniversary of the Alaska Native Claims Settlement Act this spring. Passed by Congress in 1971, the claims act reshaped Alaska’s economy and the management of the state’s vast unpopulated areas.Among other things, the claims act made possible the construction of the trans-Alaska oil pipeline in 1974 and its completion in 1977.It was passed just in time to supply oil to U.S. markets when oil supplies from Iran were cut off in 1978. Because Alaska oil was available at that crucial time, many petroleum economists say the Iranian cutoff never led to an actual shortage of oil on world markets, unlike the shortages and worldwide panic that followed the Arab embargo of 1973.The actual Native claims act anniversary was Dec. 18, 2001, 30 years from the date the law was signed by President Nixon. But a number of educational activities related to the anniversary are continuing through the spring.Included is a series of four seminars at the University of Alaska Anchorage by people who participated in events leading up to passage of the historic legislation."So many people have forgotten what the claims act was and what it has done for Alaska, even our own young Native people," said Irene Sparks Rowan, a Native leader who helped organize the lecture series.The act was unusual in a number of respects. It has attracted worldwide attention for the way it resolved land claims by indigenous people and by the unique and innovative way in which the indigenous people, Alaska Natives, were economically empowered.It was of tremendous importance for Alaska, equal or approaching in significance, Alaska historian Jack Roderick believes, to the Alaska Statehood Act of 1958.The pipeline and North Slope oil production revenues made possible by the claims act also greatly boosted Alaska’s economic growth, and the private Native corporations created by the act have now become major employers and investors in the state’s continued development.Other important changes occurred as well. The 1971 act settled aboriginal land claims and cleared title to Alaska lands, allowing, among other things, for a land corridor for the trans-Alaska pipeline.The act also led directly to creation of the nation’s biggest national parks and wildlife refuges, and to vast parts of Alaska being given formal protection as wilderness.Section 17 d(2) of the claims act required the withdrawal of 80 million acres of federal lands for classification into a new system of national parks, wildlife refuges, national forests and wild and scenic rivers.These were created in the Alaska National Interest Lands Conservation Act in 1980, which also designed large areas for protection as wilderness.Despite these accomplishments, there are a number of loose ends remaining from the claims act and, in its wake, ANILCA.The most well-known is the unresolved subsistence wrangle. While the ambiguous rural preference for subsistence appears in ANILCA, the efforts to protect access to subsistence resources in rural Alaska, on both Native and public land, was a primary force behind the push for a land claims resolution by Native people."The land and subsistence was what was really important to us. Having control of the land was everything. Money was nothing," said Joe Upicksoun, a North Slope Inupiat leader, in the first of the University of Alaska seminars Jan. 26.Another loose end, many believe, is the status of tribal groups in rural Alaska, and the question of Native sovereignty in terms of government powers.A deliberate policy decision by Congress in 1971 was to form private corporations owned collectively by Native shareholders to receive lands and money transferred in the settlement.There was a decision to steer away from forming reservations governed by tribes. There was a feeling that system had failed Native Americans in the Lower 48.Some Alaskans felt the claims act, in settling land claims and establishing the Native corporations with land and cash, meant that tribes would not assume the quasi-governmental powers they have in the Lower 48 and that the federal government would end its special responsibility for welfare of Alaska Natives.The government, however, decided that the claims act did not do these things. The responsibility of the federal government for Alaska Native health and welfare has continued, although the health system has largely been privatized to Native-operated nonprofit corporations.Native tribes have also been recognized by the federal government, and recently by Alaska Gov. Tony Knowles. What is still unclear is the extent of tribal governmental powers in Alaska.

This Week in Alaska Business History February 24, 2002

Editor’s note: "This Week in Alaska Business History" revisits events that shaped our past."Those who cannotremember the past arecondemned to repeat it."-- George Santayana, 1863-195220 years ago this weekAnchorage TimesFebruary 24, 1982More salmon can defects foundby Maureen BlewettTimes WriterFederal officials have widened their search for contaminated Alaska canned salmon after finding holes in 21 cans packed in "various" Alaska canneries. But U.S. Food and Drug Administration officials this morning refused to name which of Alaska’s 58 canneries are involved.Officials said they are "not ready yet" to recall all salmon canned in Alaska. Owners of the canneries which produced defective cans have been informed, said FDA spokesman Christopher Smith.Botulism is an odorless, tasteless poison which grows in the absence of oxygen. It is introduced through the holes after the salmon is packed.A Belgian man died of botulism poisoning Feb. 6 after eating salmon packaged by the New England Fish Co.-Whitney Fidalgo Co. in Ketchikan. Health officials in Belgium found a hole in the can the size of a pencil eraser.Anchorage TimesFebruary 24, 19823 firms to sign pacts for state royalty oilby Dave CarpenterTimes WriterThe native corporation representing Alaska’s Interior region and two oil companies with Kenai-area refineries have reached tentative agreements with the state to buy its royalty oil for the next years, officials from the three firms have confirmed.Natural Resources Commission John Katz is expected to announce the tentative contracts here Friday.The three companies selected by the Department of Natural Resources: Doyon Ltd., whose officials planned to sign a preliminary state contact today or Thursday for the purchase of a maximum 50,000 barrels of royalty oil per day. Chevron U.S.A. Inc., which would get an undisclosed amount of oil to increase production in its Nikiski refinery and boost in-state production of heating, diesel and jet fuel. Tesoro Alaska Petroleum Co., which would receive an undisclosed amount to use in its North Kenai refinery.10 years ago this weekAlaska Journal of CommerceFebruary 24, 1992Another protest filed over port studyBy the Alaska Journal of CommerceJUNEAU - A Maryland firm ousted as the apparent bid winner for the southcentral Alaska port study has filed a protest with the state, alleging it lost on a technicality.The Division of Economic Development has until Feb. 24 to issue a decision on the protest filed by ECO Engineering Inc., of Annapolis, said Phil Bennett, finance officer for the state agency."When the department made its decision based on anonymous phone calls it violated the rules under which protests are to be made," said Walt Parker, ECO’s representative in Anchorage."We were given absolutely no notice before the change of contact notice was made. It’s a violation of state statutes."Parker also said ECO’s $127,000 was considerably less than the amount bid by Peratrovich, Nottingham & Drage Inc., the Anchorage firm the state agency has now identified as the successful bidder.Alaska Journal of CommerceFebruary 24, 1992Kodiak breakwater to be advertisedBy the Alaska Journal of CommerceKODIAK - Phase one of the $32 million Kodiak breakwater project will be advertised later this year, after revisions sought by the city of Kodiak are incorporated, says the U.S. Army Corps of Engineers."We are redoing the plan specs and some of the environmental documentation, to designate a quarry site for the rock for the first phase of the contact," said Steve Bordman, chief of civil works programs for the corps.The Kodiak City Council "felt it was in the best interests of the community to try to guarantee the quarry site would be in St. Herman Harbor because removal of the fill material from that location would provide approximately 10 acres of uplands space for gear storage," said Harbormaster Corky McCorkle.-- Compiled by Ed Bennett.

Bills would ease permit buybacks

JUNEAU -- Bills aimed at increasing the efficiency of Alaska’s beleaguered salmon industry are moving through the Legislature.The House Resources Committee Feb. 13 approved a measure making it less cumbersome for the state to implement a limited entry permit buyback program.The committee is also looking at a bill that would let fishermen set up associations that could put together their own private buyback programs. Rep. Drew Scalzi, R-Homer, is sponsoring both bills.Both are aimed at reducing the number of nets in the water, so the remaining fishermen stand a better chance of survival in a market flooded with farm-raised salmon."It gives human beings a little bit more control instead of just flowing with the immediate market circumstance," said David Bedford, executive director of the Southeast Alaska Seiners Association and a board member for the United Fishermen of Alaska.A flood of farm-raised salmon has pushed down prices and made it more difficult for Alaska’s commercial salmon fishermen to stay afloat financially.The buyback bill, House Bill 288, would change existing law so that if the state Commercial Fisheries Entry Commission decides to go forward with a buyback program, it need only purchase a fisherman’s permit.State law currently requires a buyback to also include boats and gear."It would be a very cumbersome and expensive process," Scalzi said.The bill also removes a requirement that the state automatically begin a buyback program as soon as an entry commission study determines there are too many permits in a fishery.That change allows the commission to determine the optimum number of permits, information that fishermen could then use to decide how many permits to remove if they pursued a private or federal buyback.The bill also removes language calling for buyback programs to be paid for through an assessment on the fishery, leaving funding to be determined when a particular program is proposed.The measure next goes to the House Finance Committee.The Resources Committee is expected to act soon on House Bill 286, which lets permit holders in a given fishery form an association to consolidate that fishery.A fishery consists of fishermen using a particular type of gear in a particular area, such as Cook Inlet drift gillnet fishermen.The measure would allow such a group to assess a fee with approval of two-thirds of the permit holders. The money would be used to reduce the number of people fishing.The association would decide for itself how best to accomplish consolidation. Mary McDowell, of the commercial fisheries entry commission, said associations might create their own private buyback program or simply pay some fishermen to sit out a season.The measure also allows fishermen to hold two permits in a single fishery, although it doesn’t let them use any more gear than allowed for a single permit. Currently, fishermen can hold only one permit per fishery.Both bills are supported by various fishing groups, including the United Fishermen of Alaska.

Five Star Medallion chief works to change safety culture

Jerry Dennis has his work cut out for him.As the new executive director of the Five Star Medallion Program, Dennis is in charge of cutting Alaska’s aircraft accident rate by half in the next decade.That’s a tall order in a state that has the highest aviation accident rate in the nation.Dennis was hired last month to head the federally funded volunteer program to provide safety training to air carriers and help them establish safety programs."We’re hoping to have some impact," Dennis said. "It won’t be easy and it won’t happen overnight."Dennis, 59, brings with him decades of experience in aviation.He was a commercial pilot before joining the Army to fly helicopters and airplanes in Vietnam. In the military, he also served as an aircraft crash investigator. He went on to work for the National Transportation Safety Board investigating aircraft accidents. He also worked as an aviation insurance agent, accident investigator and underwriter."I probably have credibility with a lot of different venues," Dennis said.He also has seen many aviation accidents, at least 600 by his count, most in Alaska and most involving fatalities."The sad thing is, that in most cases, if you change the date on the picture and the (tail) number of the airplane, it is virtually the same accident," Dennis said. "The types of mishaps haven’t changed."One of the most common is called "controlled flight into terrain," a crash that is often the result of a pilot taking too many chances in bad weather.Poor pilot judgment has destroyed many good airplanes at a cost of hundreds of lives in Alaska, Dennis said.Since 1990, 460 people have died in aviation-related crashes in Alaska, according to the National Institute for Occupational Safety and Health. That number includes about 120 commercial pilots who lost their lives in airplane crashes.Commercial pilots have surpassed loggers and fishermen as having the most dangerous job in the state. Over a 30-year commercial flying career in Alaska, 11 out of 100 pilots will die in an airplane crash, 100 times the risk of an average worker in the United States, according to NIOSH."What we’re looking at and looking for is a fundamental change in the safety culture," Dennis said.Too many risks are being taken by pilots for the sake of their companies’ bottom lines, Dennis said. Crashing airplanes is never good for an air carrier, and as a group, more accidents mean higher insurance premiums."It is more economical to be safer," Dennis said.Key to the program will be education, not only to airlines and pilots but to the traveling public as well, Dennis said."Often it’s passengers who apply the pressure,’’ said Dennis, who intends to pitch the program’s goals to school districts and large companies that do business in the Bush.The Five Star Medallion Program is volunteer accreditation by Alaska air carriers that includes, among other things, a company safety program, simulator training, risk assessment checklists, increased mechanic and ground service training and independent safety audits.Sen. Ted Stevens, R-Alaska, included $3 million in this year’s transportation appropriations bill to fund the program, in which participating airlines will be given a star by the Federal Aviation Administration for each step of the program it completes. After a carrier has accumulated five stars, it must wait a year to be certified as having Medallion status. The carrier will undergo annual independent audits to retain the status.The Alaska Air Carriers Association administers the program, which in time is intended to be self-supporting through air carrier funding.

2001 a $1 billion year for Arctic Slope

Despite a slowdown in its aggressive growth, Arctic Slope Regional Corp. remains a powerhouse in the state’s economy. The Barrow-based Native regional corporation enjoyed more than $1 billion in revenues during 2001 for the second year in a row. However, the corporation’s rapid rate of growth leveled off last year. Net income for 2001 was about the same as in 2000. "It was a relatively stable year for us," said Jacob Adams, ASRC’s president, in a talk to the Resource Development Council for Alaska Inc. earlier this year. In broad terms, ASRC is consolidating many of its gains of recent years. Its Alaska assets performed well in 2001, with the exception of post-Sept. 11 impacts on Petro Star, a fuels refining company, according to Conrad Bagne, ASRC’s chief operating officer. But some out-of-state ventures also did not do well, particularly a plastics company, he said. That had an impact on the corporation’s bottom line.

Princess puts Royal Caribbean merger vote on hold

LONDON -- With its planned marriage to a U.S. rival now on hold, P&O Princess Cruises PLC is expected to come under intense pressure to talk with Carnival Corp., the No. 1 cruise operator, whose $5.4 billion bid for Princess sparked a shareholder revolt.Carnival won a tactical victory Feb. 15 after Princess shareholders voted to postpone a meeting at which they were to decide whether to approve their company’s proposed merger with Royal Caribbean Cruises Ltd.All three companies operate in Alaska.A 62.5 percent majority of investors chose to adjourn the meeting to give competition regulators in the United States and Britain more time to review Carnival’s bid alongside the proposed merger."We are committed to giving P&O Princess shareholders the opportunity to accept our increased offer, and we will focus all our efforts on securing regulatory clearance," Carnival Chairman Micky Arison said after the votes were counted.Princess insists that Carnival’s bid is unlikely to survive regulatory scrutiny. It argues that regulators are more likely to approve its proposed merger with Royal Caribbean, which it says would deliver more value to shareholders over the long run.Analysts estimate the Royal Caribbean merger to be worth about $3.7 billion for Princess shareholders."What the shareholders were saying is that they wanted more time to consider the alternatives. I don’t think they were choosing between them," said Peter Ratcliffe, Princess chief executive.Royal Caribbean shareholders called off a parallel meeting in Miami after learning the outcome of the voting in London. Royal Caribbean Chairman Richard Fain said he was "obviously disappointed.""However, we have to acknowledge that a shareholders’ vote is a democratic process, and naturally we respect the decision that has been reached at the P&O Princess meeting," he said. "Now we will need to consult with our advisers to determine the implication of the votes and their impact on the merger."Although Fain suggested earlier that his company might walk away from the merger if Princess shareholders delayed their decision, Royal Caribbean would face a $62.5 million breakup penalty if it did so before Nov. 16."At this stage, it’s not in their interest to walk really because it’s not clear that shareholders have voted ’no’ to a merger," said David Liston, a transportation analyst at the London brokerage firm Gerrard.Royal Caribbean, based in Miami, is the world’s second-biggest cruise operator with 23 ships and an estimated 22 percent market share. Princess ranks third with a 13 percent share of the global market and 18 ships.Carnival’s 43 ships give it a 27 percent share of the estimated global market for 2002, according to U.S. brokerage firm AG Edwards. By buying Princess, it would scuttle the competitive threat of a merger and become the industry’s unassailable leader.Business for all three companies foundered after the Sept. 11 terrorist attacks, and each is determined to cut costs and boost profits.Princess has refused to talk with Miami-based Carnival about its hostile bid, which Carnival has sweetened three times. However, Liston said Princess would face growing pressure to do so, given the preference expressed by a majority of its shareholders."They’re still very reluctant, but I think (the) vote has to improve the prospect of them talking, at least," he said.


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