Ruling: GCI can't piggyback on MTA wires

January 3, 2006

DAWN DE BUSK\Frontiersman reporter

MAT-SU - Imagine anticipating for four weeks the medical results of a test that might tell you how much longer you might live. Will the test come back negative, so you'll breathe a sigh of relief? Or will it come back positive, meaning you'll have to make lifestyle changes in an attempt to survive longer?

For a month, Matanuska Telephone Association waited for the Regulatory Commission of Alaska to make a decision whether General Communi-cation Inc. could piggyback on MTA infrastructure at a government-set reduced price, said Don Reed, MTA's director of regulatory affairs.

On Dec. 21, the RCA ruled that GCI would have to invest in its own network in the Valley to supply local phone service to residents. That suspension will be upheld for three years, but GCI may appeal the ruling.

&#8220There was a great deal of apprehension - not that we'd lose, but the potential for the commission to split the baby, as it were. There were legitimate concerns for both MTA and GCI,” Reed said.

GCI could also negotiate with MTA to purchase use of existing infrastructure or unbundled network elements, the wiring that travels into a person's home to provide phone-line services, according to the commission's ruling.

&#8220If customers want to go with GCI instead of us, MTA could sell use of its network for 20 percent off retail and GCI can resell that service to the customer,” Reed said.

Currently, GCI offers long-distance, wireless, Internet and cable TV to the Valley, according to GCI senior vice president Dana Tindall.

A telecommunications law protects local phone companies from local-phone-service competition by other companies until that local company steps into the arena of selling cable television. MTA began providing cable TV service in 2003.

In November, an RCA hearing was held, at which time MTA attorneys argued that if GCI were allowed to use the Valley co-op's unbundled network elements, it would suffer financially - to the point of closing its doors, Reed said.

Tindall said MTA's team of lawyers presented the case very dramatically.

&#8220MTA put whatever numbers forward to show they would go out of business, but if you looked, the numbers didn't make sense. The commission didn't look very closely,” Tindall said. &#8220I think this commission had decided the case going into it. There's a clear anti-competition bias. The ruling is protecting MTA rather than the consumer.”

If MTA had lost, GCI would have paid the company $38 per line per month to use the co-op's UNEs, Tindall said.

The decision means GCI can add local phone service to its other offerings, but will have to put up the capital to build its own infrastructure or wrangle with MTA over prices for using its UNEs.

Tindall said the company hasn't yet decided on its strategy, including whether GCI will appeal the ruling.

GCI could offer voice-over Internet, which is less costly than constructing UNEs for local service, but that voice-over Internet wouldn't contribute anything to the telephone network, Tindall said.

While GCI formulates its plan for continuing to do telecommunications business in the Valley, staff members at MTA breathed a sigh of relief that 2006 wouldn't bring pink slips, as predicted if the commission had ruled differently.

&#8220We truly hope GCI will see this ruling as an opportunity to build its own infrastructure in the Valley, to divert money from lawyers and lobbyists and spend money on engineers and telecommunication,” Reed said.

Tindall claimed MTA's method of contracting attorneys rather than keeping them on staff is considerably more pricey.

&#8220They've paid their attorney millions, put all her kids through college, paid for their braces and paid for their cars, too. We've done it all in-house. We've spent one-tenth as much as MTA,” Tindall said.

&#8220MTA went into the cable business and spent two years paying lobbyists to fight the consequences. They could have accepted the consequences of their actions, and not spent millions of ratepayers' money to fight it,” she said. &#8220The consumer is the big loser here.”

Contact Dawn De Busk at 352-2252 or at dawn.debusk@frontiersman.com.