Mat-Su's rapid growth has telecoms' attention

MAT-SU -- Rapid population growth in Mat-Su has the attention of practically every consumer-oriented company in the state.

The telecommunications industry is no different. All of the big Alaska players -- ATT Alascom, Alaska Communications Systems (ACS), and General Communications Inc., (GCI) -- are here in one form or another, making inroads to a growing consumer market, and, in GCI's case, providing between 70 and 90 jobs at its call center in Wasilla, where operators assist callers statewide.

That number of GCI jobs in the Valley is in flux and sure to go up since GCI announced plans to purchase Rogers American Cablesystems from its Canadian parent company last June.

Each of the statewide telecom companies has to deal in one fashion or another with Matanuska Telephone Association, a member-owned cooperative that owns the copper wire and phone switching network.

The MTA network connects about 35,000 owner-members to each other and the outside world with about 70,000 phone lines.

GCI's purchase of Rogers represents an immediate threat to MTA on the high-speed Internet front. The deal still needs to be approved by regulators, but GCI officials appear confident it will go through. In fact, the company is currently installing a new fiber-optic line through a conduit along the Glenn Highway from Anchorage to the Valley.

GCI company spokesman David Morris said the cable basically extends the Internet backbone to the Valley. GCI owns the majority of a similar cable the length of the trans-Alaska oil pipeline, and one that extends from Prince William Sound to the Lower 48.

For the Valley, the fiber cable will mean more TV channels first, digital cable TV second, and then Internet speed that is beyond current consumer demands, through a new cable modem platform.

"The applications aren't really there yet," Morris said when talking about the backbone's high capacity.

One of the first challenges in the Valley for GCI is integrating the current Rogers cable TV and cable modem Internet subscribers.

"I'm not sure when we'd roll our cable modem service out on the Valley. Rogers uses a different type of cable modem technology than we do, and one thing you don't want to do is have two different platforms," Morris said.

While Rogers sits in a technical and administrative holding pattern, MTA is aggressively marketing its own high-speed Internet service to the Valley. It's likely that once GCI's backbone is complete, MTA's Internet service will be riding on it, but that will be transparent to the consumers.

MTA has an advantage on the market share front because its DSL (digital subscriber lines) service can reach into more homes than the cable TV system.

"One of the things that's exciting about MTA is that about 90 percent of our subscribers can get DSL," said Sandy Crawford, MTA's director of marketing. "We chose as a cooperative to invest in that infrastructure, and we're very happy we did that."

Crawford couldn't say how much of the Internet market MTA's DSL has captured -- and with many people using a regular phone line for Internet access, the market share is nearly impossible for anyone to get a handle on. MTA's 90-percent boast is about six times the 10,000 homes GCI said Rogers reached when GCI announced Rogers' purchase last summer.

The last big rush on MTA was a $187.5-million buyout attempt by ACS, which would have required approval from MTA members. The members who voted approved of the sale, but a majority never returned their ballots, so the sale was turned down, as per MTA bylaws.

"That was one case where we won the battle but lost the war," said ACS spokesman Tom Jensen. ACS now has a customer service presence in the Valley that sells its long-distance service, wireless phone service, and Internet service. Jensen said the operation is there to keep ACS' customer service profile up in the Valley. Jensen said many customers don't like doing business over the phone, even when that business is with a phone company.

In some ways, phone companies are each other's largest customers. The trade access to each other's long distance and local lines are like so many PokŽmon cards.

"For some of our products, GCI and ATT Alascom are very important customers to us," said Crawford.

Anyone who calls long distance into MTA pays an access fee, and MTA is out there buying wholesale long-distance time in order to resell it to MTA customers. There are also competing Internet companies that offer DSL in the Valley who are simply buying and reselling DSL service that was built by MTA.

If people outside the industry see a spooky shell game of an economy, some of the insiders can sympathize. The various companies often wind up arguing with each other in front of the Regulatory Commission of Alaska or appealing to state courts.

"We're all struggling with going from complete and total monopoly to being completely deregulated," Jensen said. "What we're all looking for (from regulators) is to make the playing field level or get out of the way entirely."

ACS seems to have backed away from the Valley for now. Jensen said the company is working internally to merge the various local companies it has already purchased with each other, and with long-distance companies and Internet service providers it has purchased. Most of ACS management's efforts are focused on that.

"We're just trying to get our arms around it," he said.

In Anchorage and Fairbanks there is competition for local phone service. But Alaska phone utilities are protected from competition by a rural exemption in the federal communication laws. Before competition comes to Valley on the local phone call front there will be filings with the RCA, the state agency that can approve of competition, and possibly appeals in state courts.

GCI's Morris said his company filed in 1997 for the right to sell local service on ACS' Juneau and Fairbanks lines. The company finally cleared all the regulatory hurdles for the Fairbanks market last year and started offering its local service there last spring. GCI plans to offer local service in Juneau in spring 2002.

"I guess we played the role of the agent of change or the agent of aggravation, depending on which side of the table you were on," Morris said.

The transition into competition gets smoother with each new market, Morris said, but he couldn't say where or when GCI would try to provide local phone service next.

"Where is the next area where we roll out local service? I can't tell you because it basically depends on how things play out in Juneau," he said.