AIDEA board to vote on a $75 million company to invest in undersea internet cables

The board of the Alaska Industrial Development and Export Authority votes Wednesday on whether to create a company that could put up to $75 million into undersea and overland fiber-optic lines, part of an effort to change what AIDEA calls Alaska's status as a "data cul-de-sac."

Only four undersea cables connect Alaska to the Lower 48, according to the resolution, which cites the research firm TeleGeography. Two entered service in 1999 and have reached the end of a typical 25-year design life. None runs directly to Asia. The only overland fiber route out of the state, the resolution says, is a single line along the Alaska Highway through Canada that MTA and Canada's Northwestel completed in 2020.

With so few routes, damage to one system can degrade or cut off service for large parts of the state, "as Alaska communities have experienced during extended subsea cable outages," the resolution says.

The new subsidiary, Northstar Fiber Development LLC or a similarly named company, would invest in cables, landing stations and backbone networks, directly or through joint ventures with telecom carriers, internet providers, Alaska Native corporations and tribal entities, utilities, the University of Alaska and others.

Its first priority would be the Pacific: replacing aging cable capacity to the Lower 48 and adding backup routes. It would also explore connections to Asia and, across the Arctic, to Europe. Any cable it invests in would have to land in Alaska with capacity available for use here, not just pass by.

The money would move in stages from AIDEA's revolving fund. The resolution would let AIDEA's executive director commit the full $75 million without another board vote. Before signing a commitment, the director would need a finance plan and legal and tax reviews, and the money would flow only once conditions such as binding customer commitments are met. The director would report each commitment to the board afterward and give quarterly updates. That authority would expire at the end of 2028. AIDEA's exposure would be capped at $75 million, and any guarantee of a project's debt would need a separate board vote.

In August, the board voted to take back some control over its $4.5 million due diligence fund from the executive director.

The board will also vote on about $32 million in AIDEA matching money for six federal grant applications for the state-owned Ketchikan Shipyard, which JAG Marine took over operating last year. The largest seeks $20 million from the U.S. Economic Development Administration toward the $46.4 million first unit of a new floating drydock, three modular sections to be fabricated, launched and joined in Ketchikan. AIDEA would put up the other $26.4 million.

In a closed session the same day, the board plans to discuss nine matters, including the Interior Gas Utility and the Alyeschem methanol plant at Prudhoe Bay. Written comments are due Tuesday.