A rural Alaska phone company says a subsidy cut costs $185 per connection

Alaska Power & Telephone has 5,953 voice and broadband connections. Phasing out one federal subsidy would cost the company about $1.1 million a year, which works out to roughly $185 for every one of them.

The company told the Federal Communications Commission as much in reply comments filed Thursday, in the agency's proceeding on how it supports high-cost rural telephone service.

The subsidy at issue replaces money rural carriers once collected from other carriers for handling long-distance calls. That system went away; the payments replacing it did not. The commission has not proposed simply ending them. In a separate proceeding it would let carriers set their own customer rates and recover the lost revenue from subscribers, then phase the subsidy out once that shift is complete.

AP&T serves 40 remote communities in Southeast and Southcentral Alaska, including 39 tribes and Alaska Native corporation entities. Nearly all are reachable only by air or water. Much of its Southeast territory sits inside the Tongass National Forest or Glacier Bay National Park, where land-management rules limit what can be built.

Its central argument is that one-time construction money cannot substitute for money that keeps a network running. The company put up a 25 percent cash match for USDA construction grants, and says it took those projects on only because ongoing federal support existed to operate what it built. That support extended fiber to more than 2,000 homes.

AP&T asked the commission to extend the current transition period at least two more years, to adjust support for inflation in equipment, transportation, fuel and labor, and to set a floor beneath which support cannot fall, for the sake of carriers, lenders and tribal partners.

The transition runs through the end of 2028, with a fixed six-year term beginning in 2029.