ACS gets permission to boost Anchorage phone rates

ANCHORAGE (AP) -- Many local phone customers will pay 24 percent more for basic phone service and other optional features starting next Saturday under a rate increase tentatively approved by state regulators this week.

Local residential customers signed up with Alaska Communications Systems, the city's biggest local phone company, will pay the new rates, said Agnes Pitts, spokeswoman for the Regulatory Commission of Alaska. Basic residential rates will jump from $9.70 to $12.05 a month.

Rates on optional features such as call waiting will also increase 24 percent for both residential and business phones.

ACS asked for the increases last month, arguing that it is losing money. The company also sought a rate increase for business phone service, but regulators have not decided whether to approve it.

An ACS competitor in Anchorage, AT&T Alascom, also asked for a local rate increase. But General Communications Inc., which has about a third of the market, plans no rate hike.

The regulators granted a temporarily rate increase on residential service, agreeing that ACS has shown sufficient evidence that its current rates are too low to support the service, Pitts said. The increase could ultimately be lowered or rescinded after regulators complete their studies.

ACS contends it is losing money in part because of competition and rate agreements set up in the 1990s. Anchorage's local telephone market was deregulated in 1997, opening the door for competitors to lease ACS lines and sell services.

Since then, ACS has lost more than 40 percent of the local market to Anchorage-based GCI and AT&T Alascom.