ACS takes bids on television subsidiary

Posted: Tuesday, July 30, 2002

ANCHORAGE (AP) -- Alaska Communications Systems is negotiating to sell its television subsidiary, citing a reluctance to spend money to upgrade the money-losing unit to digital broadcast format.

Two or three bids were received by late July, and company officials hope to complete the sale soon, said Mary Ann Pease, vice president of investor relations. Company officials would not disclose the identity of the bidders.

After studying the costs associated with converting the television broadcasts from analog to digital, ACS instead chose to focus on its wireless and broadband business lines, and building systems for the state telecommunications contract, she said.

Another deciding factor was that ACS Television LLC had been losing money, she said.

The decision to sell the operation was made during the first quarter of this year, according to quarterly financial reports. The company recorded a one-time charge of $6.9 million associated with the television unit.

ACS Television, formerly Alaskan Choice Television, provides wireless cable television broadcasts via UHF frequencies in Fairbanks, Anchorage and the Matanuska-Susitna area.

The quarterly report also noted competition in the television broadcast market from satellite and cable television providers.

General Communication Inc. owns cable television operations in the state, while Microcom in Anchorage operates Alaska Digital Satellite, provider of Dish Network services.

Art Schumann, vice president of Microcom, has seen changes to the Alaska market.

''Wireless cable services have not, in my mind, been competition to cable,'' he told the Alaska Journal of Commerce.

Although ACS TV provides a good niche service, such smaller television services have had a hard time keeping up as technology has advanced, Schumann said.

Also, switching to digital can be costly, he said.

New satellites, such as the Echostar 7, launched in February and operational in May, have provided expanded television service in Alaska, Schumann said. That satellite gives Schumann's company the ability to offer broadcasts from local television stations, although the debut of the service depends on negotiations with area broadcasters, he said.

According to ACS' 2001 annual report, ACS TV had 1,900 customers. At that time, ACS considered building up the television division.

''ACS Group is evaluating opportunities to expand its offering of wireless cable television services,'' according to the annual report.

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