AIDEA board approves $75 million fiber company, bars partners on restricted lists

Editor's note: This story compares the resolution the AIDEA board signed Wednesday with the version posted in its meeting packet before the vote. The changes described here are the only differences between the two.

The Alaska Industrial Development and Export Authority board on Wednesday authorized forming Northstar Fiber Development LLC, a wholly owned AIDEA subsidiary that can invest up to $75 million in undersea and land-based fiber lines.

The signed resolution adds limits that were not in the version in the meeting packet. It bars ventures with owners, investors or lenders who are restricted under Alaska law, appear on federal restricted lists or would cost a project a required U.S. license. A new paragraph says it does not limit entities from countries not subject to such restrictions. Outside counsel must confirm in writing before each commitment that no participant is restricted, with screening of participants and their beneficial owners updated before each funding. The final version also moves reporting to the board from at least quarterly to monthly.

The vote came on the plan Alaska News reported Oct. 16 was headed to the board. The resolution lets the company be formed under another name.

Executive Director Randy Ruaro can commit the full $75 million to Pacific fiber projects without another board vote, after a finance plan, outside legal and tax reviews and other conditions. Money moves from AIDEA's revolving fund in stages. His authority to sign new commitments expires Dec. 31, 2028. The cap covers AIDEA's total exposure. A higher ceiling or any guarantee of project debt would require another vote.

The resolution says four undersea systems connect Alaska to the Lower 48, along with one land route through Canada, MTA's AlCan ONE. Two of the undersea systems, Alaska United East and NorthStar, began service in 1999 and have reached the end of a typical 25-year design life, it says. None connects directly to Asia.

It says the company's initial focus is moving Alaska from a "data cul-de-sac" toward becoming a "data hub." It cites recent cable cuts in the Red Sea, the Baltic Sea and around Taiwan, and says routes through Alaska and the Arctic avoid "congested and contested chokepoints."

The resolution puts Pacific links first: West Coast routes under U.S. jurisdiction, replacement of aging undersea capacity and more route diversity and redundancy. The company is also to explore links to Asia and, across the Arctic, to Europe. Investments should complement, not duplicate, last-mile work under Alaska's more than $1 billion federal BEAD broadband allocation.

Ruaro described such a link at the Alaska Sustainable Energy Conference in Anchorage on May 19, saying AIDEA was looking at "a new subsea fiber connection, high-speed, high-capacity, between Northeast Asia and Alaska."

Any deal must land capacity in Alaska and rest on binding customer contracts, not expressions of interest, memoranda of understanding, pipeline or forecasts. The resolution states that "by itself, it does not approve any specific project, route, party, or transaction."