GCI, ACS reach agreement about disputed markets

Posted: Thursday, April 22, 2004

ANCHORAGE Alaska Communications Systems said Tuesday it has abandoned its claim that it should be exempt from competition in the Juneau and Fairbanks markets.

Dropping the claim was among several legal and regulatory issues settled this week between ACS and rival General Communication Inc.

''I think it's a landmark event,'' said Dana Tindall, GCI senior vice president of regulatory affairs. ''The issue of whether or not there should be competition in Fairbanks and Juneau has been resolved.''

The announcement came four months after the state Supreme Court ordered the Regulatory Commission of Alaska to re-examine its decision allowing GCI to compete with ACS in affected areas, which also include Fort Wainwright and Eielson Air Force Base.

Justices had said the commission wrongly put the burden on ACS to prove economic harm in eliminating the company's exemption from competition in Fairbanks and Juneau and granting GCI's request to enter those markets. ACS leases telephone lines to GCI, which then uses those lines to resell phone service to its customers.

The commission had 120 days to re-examine the exemption issue, placing the burden of proof on GCI.

The Anchorage-based utilities reached an agreement late Sunday night just before the RCA was to begin a hearing on the matter Monday morning.

''This is a real positive step for everyone,'' said ACS Vice President Mary Ann Pease. ''It's so nice to say this is a joint agreement.''

The exemption dispute had been brewing since the regulatory commission terminated a ''rural exemption'' for ACS in Fairbanks and Juneau in October 1999, opening the those areas to competition. ACS appealed to state Superior Court, then took its case to the Alaska Supreme Court, which issued its ruling in December.

Among other terms in this week's settlement, GCI agreed to pay higher lease rates to ACS.

Tindall said GCI currently pays $19.19 for each residential and commercial line leased in Fairbanks. That rate will increase to $23 in Jan. 1, 2005. At that time, the Juneau rate will increase from $16.71 to $18.

''This will not affect rates for consumers,'' Tindall said. ''What this means is that litigation between the companies is over with, and we're ready to go forth and compete.''

RCA Chair Mark Johnson said the commission would issue a formal response sometime this week to ACS relinquishing its claims of exemption. He said no further action was expected.

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