AP&T tells FCC subsidy phaseout would cost $185 per connection a year

Ending Connect America Fund Intercarrier Compensation support without a replacement would cut roughly $1.1 million a year from Alaska Power & Telephone, about $185 for each of its 5,953 voice and broadband connections, the company told the Federal Communications Commission in reply comments filed Thursday.

CAF ICC replaces revenue rural carriers once collected from other carriers for handling calls. The FCC adopted it in 2011 as a transitional recovery tool, setting a 2020 sunset for price-cap carriers but none for rate-of-return carriers like AP&T.

AP&T serves 40 remote communities in southeast and south-central Alaska, including 39 tribes and Alaska Native Corporation entities, nearly all reachable only by air or water. Much of its southeast territory lies within the Tongass National Forest or Glacier Bay National Park, where the Roadless Rule and other land-management restrictions limit construction.

AP&T argues one-time capital grants cannot substitute for ongoing operating support. Its USDA ReConnect construction required a 25% cash match; the company said it took on those projects only because ACAM support, which extended fiber-to-the-home service to more than 2,000 locations, would keep the network running. Vice President of Corporate Development Jason Custer signed the filing.

AP&T also framed Alaska's connectivity as a national security matter, citing the state's Arctic Ocean coastline, its proximity to the Bering Strait and the Russian Far East, and sensing technologies that turn networks into observational systems.

The company asked the commission to extend the Alaska Connect Fund Transition at least two more years, adjust support for inflation in equipment, transportation, fuel and labor, and set a support floor for carriers, lenders and tribal partners. It also asked the FCC to make fiber-based terrestrial networks the primary high-cost infrastructure, reserving satellite for places terrestrial service may never reach; base testing on verifiable terrestrial data and Broadband Consumer Label information rather than "lightweight" satellite tests; fund assets over their full life, including electronics replaced every five to seven years; and allow exceptions for uneconomical locations. Transition support runs through Dec. 31, 2028; Fixed ACF's six-year term begins in 2029.

FCC orders describe CAF ICC as transitional, not permanent.