General Communications Inc. will likely see an increase of 23 percent in the phone line rental rates it pays to its main competitor after a ruling by the Federal Communications Commission.
The ruling was in response to a petition filed in 2005 by Alaska Communications Systems asking the federal agency for relief in providing use of its phone lines. The full text of the ruling should be released this week.
GCI currently pays rival telecommunications provider ACS about $25 million a year to rent phone lines. GCI resells the use of those lines to offer Alaskans local telephone service.
The Telecommunications Act of 1996 required incumbent carriers to offer lines to other companies to promote competition. The act allowed GCI, and similar companies around the nation, to offer local phone service.
GCI has since gained about half the consumer local phone market share. In recent years the company has built a system to get its customers onto its own phone system, called Digital Local Phone Service, that runs through existing cable television or Internet coaxial instead of a telephone line.
ACS filed the petition saying that because GCI had built alternative technology, ACS should be relieved from providing the lines, said Bruce Broquet, GCI's vice president of finance.
David Eisenberg, senior vice president for corporate strategy and development with ACS, said in a message that he couldn't comment on the ruling until he had seen the full text of the decision.
The FCC said that in five of the 11 wire centers located in Anchorage, GCI does have acceptable alternate technology to ensure continued competition. In those five areas, the agency said ACS could increase the rates and terms based on rates recently negotiated for lines in the Fairbanks area.
GCI's Broquet said that would affect about 26,500 lines, raising the monthly rates from $18.64 per loop, or line, to $23. The increase will take effect in one year.
The increased fee is an incentive for GCI to complete its digital phone service conversion, Broquet said. Early in 2006, the company fell behind in it conversion plans as it worked out technical issues.
Later in the year, executives said they hoped to have 30,000 customers on the system by the end of 2006, a goal it exceeded, Broquet said recently.
In a separate release, GCI announced it closed an agreement to invest $29.5 million to own an 80 percent share of wireless provider Alaska DigiTel LLC.
The deal was approved by the FCC on Dec. 22, and finalized on Jan. 1.
GCI has a majority equity interest in DigiTel but does not have voting control of the company. One GCI executive will serve on the DigiTel board.
GCI also offered a $15 million revolving line of credit to DigiTel. The wireless company plans to use the money to expand its existing network.
DigiTel has more than 32,000 subscribers and has roaming partnerships with national carriers.
Melissa Campbell can be reached at
melissa.campbell@alaskajournal.com.
