GCI closes Quintillion purchase before Utqiagvik land fiber is finished

GCI Holdings completed its purchase of Quintillion, which owns the subsea and land fiber line serving Alaska's Arctic coast, on Nov. 9. It paid about $18 million in cash at closing. GCI's parent, Liberty Capital, said Nov. 5 it expected to close soon. To close, GCI waived a requirement that Quintillion first finish a land fiber route to Utqiagvik. The town's only other fiber connection is the subsea cable.

Under an amendment signed Nov. 9, GCI and seller Q Gateway Ultimate Holdings will split the cost of finishing that route. GCI says the deal adds more than 1,800 miles of existing fiber and about 1,500 miles of planned expansion.

The April agreement had set the price at $310 million in cash at closing, before adjustments. GCI's $160 million April loan to the seller was deemed paid at closing and credited toward the price, according to Liberty Capital's Form 8-K. GCI paid the closing cash with money borrowed from a $155 million loan facility it added in June for the purchase.

The amendment puts the cost of finishing the route at $27.5 million. The seller will contribute $16.75 million, which GCI will withhold from later earn-out payments. Those are possible payments to the seller in 2028, 2029 and 2031 based on Quintillion's revenue. If the work costs more or less than $27.5 million, the two sides split the difference equally, within a total cost of $21.5 million to $33.5 million.

The seller's contribution drops to $7.5 million if a memorandum between the North Slope Borough and Quintillion's subsea operating company takes effect by June 30, 2027. The memorandum concerns a Defense Community Infrastructure Program grant the borough won Sept. 23, 2025.

GCI must use "commercially reasonable efforts" to finish the route, report on it every quarter and get the seller's consent for major changes.

"Bringing these networks together will increase routing diversity and support greater reliability across Alaska," Billy Wailand, GCI senior vice president of corporate development, said in a Nov. 9 release.

The FCC approved the license transfer with conditions on Oct. 20 and denied a challenge from Alaska Communications. That company had argued the deal would increase GCI's market power over the long-haul lines other providers rent to reach rural towns. The FCC found GCI likely has some degree of that power, which may grow, but concluded the conditions and other factors would likely substantially limit the harm. GCI must honor and extend Quintillion's existing contracts for the life of the system and offer wholesale access at just and reasonable rates. Alaska Communications later questioned whether those conditions are enough.