Inquiry questions whether GCI can buy second cable

Posted: Sunday, December 09, 2001

ANCHORAGE (AP) -- The Justice Department is investigating whether GCI's bid for a 2,000-mile fiber-optic cable would give it a monopoly on phone and data traffic between Alaska and the Lower 48.

Anchorage-based General Communication Inc. is among a few telecom companies that were expected to bid Friday for all or some of the capacity on the $165 million undersea fiber cable owned by WCI Cable, an Oregon company that has filed for bankruptcy reorganization.

The WCI cables are being auctioned in U.S. Bankruptcy Court in Portland, Ore., and include a segment between Fairbanks and Whittier and the 2,000-mile line between Whittier and Oregon.

GCI already owns the other major undersea fiber line to the Lower 48, as well as a cable along the 800-mile trans-Alaska oil pipeline.

AT&T Alascom owns an older, much smaller fiber-optic cable between Alaska and the Lower 48.

Regulators are concerned that GCI could have an unfair competitive advantage by owning the two cables, perhaps giving it power to mark up prices or influence consumer rates.

''There is an antitrust concern,'' said Alaska assistant attorney general Ed Sniffen. ''I'm not sure what the impact would be, but it raises enough of an issue because there is a potential for consumer harm.''

Ron Duncan, GCI's president, said his company is not trying to ''bottleneck the market.'' GCI is mainly interested in owning a second cable so it can back up its existing line, he said.

The Justice Department has contacted GCI's main rival to hear its thoughts on the matter. Wes Carson, president of Alaska Communications Systems, said he spoke with justice officials last week.

''It's like OPEC if you put both cables in the hands of one provider,'' said Carson, whose company is the state's largest local phone company.

Anchorage-based ACS plans to bid for all or a portion of the cable.

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