ATA, GCI Wrangle With Alaska Communications Over Wireless USF Plan, Conditions

FCC Chairman Tom Wheeler committed to addressing the Alaska Plan this quarter when the commission approved an order making broad rate-of-return USF changes (see 1603300065). The FCC had no comment Monday.

Alaska Communications had backed the plan's wireline proposal for the FCC to continue to provide $55 million per year to rate-of-return telcos in Alaska over 10 years, but objected to its proposal for wireless-oriented CETC support of $100 million per year, which it said would be a windfall for competitors and particularly GCI's "unregulated middle-mile monopoly" (see 1604190012). Fleshing out its arguments recently, Alaska Communications said ATA and GCI concede they will be unable to provide broadband service meeting the FCC's performance standards to all of the unserved locations in their areas without improved middle-mile capacity. ATA and GCI propose that CETCs receive nearly $1 billion "to support some combination of mobile wireless last-mile coverage and middle-mile capability," including the backhaul needed for wireless broadband in the Alaskan Bush, an April 29 Alaska Communications filing said. The price-cap telco said it would be ineligible for plan support and suggested the middle-mile funding go to an independent "carrier's carrier" providing wholesale service, not retail competition.

Alaska Communications proposed the FCC allocate at least $800 million of the CETC funding to deploy and operate "terrestrial middle mile" facilities, and that CETCs be required to spend at least 70 percent of their USF support on middle-mile systems where they don't exist with sufficient capacity to meet FCC benchmarks. It also proposed: (1) USF-backed middle-mile carriers with no terrestrial competition be regulated as dominant carriers; (2) CETCs receiving support offer rates that are reasonably affordable and comparable to rates for comparable urban services; (3) CETCs be subject to annual certification and reporting duties, with appropriate enforcement mechanisms; and (4) minimizing CETC support duplication. The FCC shouldn't delay the plan but should incorporate the proposed conditions, Alaska Communications said. USTelecom last week expressed concerns about USF support that's "potentially duplicative or based on the discredited identical support approach," and sought more clarity regarding USF recipient duties.

GCI said Alaska Communications (ACS) is seeking to "spoil the efforts of the entire Alaska telecom industry eager to invest, expand, and upgrade broadband services" for consumers in the state. "Rather than investing in facilities necessary to improve its own service offerings and position, ACS instead looks to siphon off universal service support targeted for mobile voice and broadband service in rural Alaska -- services ACS no longer offers -- to support the middle mile services that ACS seeks to purchase for its enterprise operations," a May 3 GCI filing said. GCI said Alaska Communications "has no interest in improving service" in remote Alaska. In contrast, GCI said it and other providers have built out middle-mile capacity and wireless coverage serving remote Alaska. Even without middle-mile upgrades, "which would be unreasonable," LTE costs exceed the $506 million "present value" of the proposed CETC support, it said.

GCI also addressed details of its proposal to bring LTE service to over 100,000 consumers in Alaska. GCI said Wednesday "for those areas where it commits to deploy LTE, it will provide, through to the edge, speeds of 2 Mbps/800 kbps in areas served by fiber or microwave backhaul, and 1 Mbps/256 kbps in areas served by satellite backhaul."

ATA stressed "the Alaska Plan is an integrated whole," with signatories proposing performance commitments on the assumption that USF support for both rate-of-return carrier and CETCs would be addressed. "By creating holistic build-out plans, the companies can take advantage of the network synergies from upgrading their wireline and mobile networks together," ATA said. Signatories factored middle-mile costs into their commitments that are "an expensive input, given the very challenging terrain, climate, and land use restrictions in remote Alaska," as even Alaska Communication concedes, ATA said. It listed investments made by various members that show that the carriers -- with USF support -- can invest in middle-mile facilities in challenging environments, and that GCI isn't the only Alaska provider doing so. "No onerous conditions on middle mile facilities will help bring better services to remote Alaska consumers," ATA said.

ATA and GCI are proposing to build "inadequate, bottleneck middle mile broadband facilities" in the most remote areas of the Alaskan Bush with public funds, responded Alaska Communications, which "has proposed reasonable safeguards in line with those the FCC has previously used" to promote competition. "GCI and the [ATA] oppose those safeguards, but they have not refuted our basic point, which is that the FCC should not permit public funding to be used to create and extend private unregulated broadband monopolies that continue to offer only inflated rates and substandard service to Alaskans,” Senior Vice President Leonard Steinberg said in a Monday email.