October 9, 2014 Ex Parte Ms. Marlene H. Dortch Secretary Federal Communications Commission 445 12th Street, SW Washington, DC 20554

Re: Connect America Fund, WC Docket No. 10-90; High-Cost Universal Service Support, WC Docket No. 05-337; Universal Service Reform—Mobility Fund, WT Docket No. 10-208; Federal-State Joint Board on Universal Service, CC Docket No. 96-45

Dear Ms. Dortch: On October 7, 2014, Christopher Nierman and Tim Stelzig of General Communication, Inc. (“GCI”) and I, on behalf of GCI, met with Jim Schlichting, Margaret Wiener, Audra Hale-Maddox, Heidi Lankau, Eliot Maenner, Gary Michaels and Sayuri Rajapakse, all of the Wireless Telecommunications Bureau. The points addressed by GCI are summarized in the attached presentation and proposal, copies of which were provided to each of the FCC attendees. Please contact me if you have any questions. Sincerely,

John T. Nakahata Counsel to General Communication, Inc.

cc: Jim Schlichting Margaret Wiener Audra Hale-Maddox Heidi Lankau Eliot Maenner Gary Michaels Sayuri Rajapakse Attachments

High-Cost USF in Remote AlaskaFreeze, Mature, Retarget

Freeze current support allow the market to MatureRetarget support where needed

Freeze the $105 Million in current annual Alaska CETC Support

For 5 years, freeze the $78 M in annual Remote Alaska CETC support, on a per carrier basis at 2014 support levels with accountability to support mobile service in areas not served by AT&T/Verizon LTE

With the remaining $27 M in annual CETC support, conduct a reverse auction for only Alaska communities with no wireless service

At the end of 5 years, retarget the $105 M in annual support to maintain and expand service in areas of Alaska where AT&T/Verizon have not deployed LTE

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Alaska CETCs collectively receive $105 million per year, reduced from $123 million in 2011.

The Brattle Group has estimated that the incremental net cost to achieve 768 kbps downstream/256 kbps upstream service for all Alaska communities would be $260 million per year.

A nationwide reverse auction for TMF 2 could further drop Alaska CETC support to anywhere from $5 million to $87 million --not nearly enough to reach the FCC’s performance objectives.

A Nationwide Auction Would Not and Could Not Achieve the FCC’s Performance Objectives

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National carriers have not met Alaska’s statewide wireless needs; AT&T and VZW provide LTE service only to areas connected to the State’s limited fiber backbone.

GCI built the only rural and urban wireless network, leveraging USF support to access required private financial capital, but rural service continues to lag behind urban Alaska and the contiguous U.S.

Stable universal service support for Remote Alaska is necessary to meet the FCC’s mobile broadband performance targets, to preserve and expand service locations, and to prevent a widening service gap for rural Alaskans.

High-Cost Support Remains Necessary to Erase the Wireless Service Deficit in Rural Alaska

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The National Carriers Were Slow to Reach Alaska…

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2007

…And We Cannot Count on Themto Serve Rural Alaska in the Future

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2012

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Prior to 2008, Modern Wireless Service Prior to 2008, Modern WWas Extremely Limited

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The predictable e ssupport rt ft from the FCC’s 2008 The predictablee s pporupu rtt f om the FCC s 2008 oroTribal Lands CETC Policy spurred deployment.

Through the Alaska Wireless Network (AWN) combination, we deployed 4G LTE to the most populated, fiber-served road areas.

We had varying success in the MF1/TMF1 auctions, winning bids to upgrade 60 rural communities to 3G or 4G service in areas where we could support the backhaul.

But, recurring support was insufficient to expand service to all but a few unserved locations and will be inadequate to handle increased backhaul demands to many of our served locations.

What have we done (with less) since 2011?

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AWN is the only Alaska provider with the scale to AWN is the only Alaska provider with the scaleserve many rural locations that the national serve many rural providers won’t.

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Estimated 2016 After MF1/TMF1 Deployments

Leveraging highgh-h-cost support, AWN is Leveraging higghh ost support, AWcoccontinuing to upgrade service.

Provides the five year predictability necessary to facilitate mobile broadband deployment to underserved areas; directly supports mobile voice/broadband service to unserved areas; targets CETC support away from ATT/Verizon LTE areas

Allows the Alaska wireless markets to mature (MF1/TMF1 deployments and AT&T/VZW LTE buildout) and Alaska’s middle-mile networks to evolve before deciding how to further retarget support

Simpler to administer; obviates the need for line count updates

During the five years, mobile ETCs held to objective measurable standards to move nearer to the FCC’s mobile broadband goals

Freeze, Mature, Retarget to Move Closer to the FCC’s Performance Goals

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Built subsea fiber optic cables to the Lower 48 to increase capacity, reliability, and redundancy

Built Alaska’s first statewide wireless network, providing modern mobile service to many communities for the first time

Built a hybrid fiber/microwave middle-mile network in western Alaska (TERRA), providing the first terrestrial, i.e., non-satellite, broadband alternative to over 38,000 people in 69 locations

In the last 10 years, GCI has invested almost $1.4 Billion in Capital

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GCI Revised Proposal For Interim Alaska Wireless CETC Support

For communities with wireless service. Patterned after the FCC’s freeze for non-contiguous state price-cap ILECs in CAF Phase II, an Alaska alternative for Mobility Fund/Tribal Mobility Fund Phase II would begin by freezing the $78 million in Alaska Remote Support at the current level for five years.1 This support would be used to support current and upgraded mobile voice and broadband service.

Existing Remote Alaska support would be frozen on a company basis at the 2014 annual levels and distributed in a block amount.2

All Remote Alaska CETCs that elected this support would be required to use that support for mobile voice and wireless services, irrespective of the legacy origin of that support.3 Accordingly, no Remote Alaska CETC support would support wireline voice or broadband.

A CETC electing frozen support would have to demonstrate that it was using that support to provide mobile voice and broadband services in areas that are not receiving LTE service from AT&T or Verizon.4 This focuses frozen support on areas that are likely to need such support, much as the Commission proposes that a non-contiguous price-cap ILEC electing frozen support in lieu of CACM-based support will have to demonstrate that it used its support in areas not already served by fixed broadband and voice meeting the Commission’s requirements.

GCI would work with the Bureau to define specific performance requirements sufficient to demonstrate this, focusing on providing service to eligible locations, which has the advantage of being measurable and administrable, as opposed to the historical and indisputable difficulties with extensive cost reviews. The up to seven other Alaska CETCs would have to work out their accountability plans with the Bureau.

For communities without any wireless service. The Commission would conduct a reverse auction of up to $27 million per year in support for carriers that would commit to deploying mobile broadband service in those communities at the level of 768 Kbps down/256 Kbps up.5 This would target support specifically to these unserved communities, would provide a way for service to be introduced into these communities without duplicative support, and would be phased up as legacy non-Remote Alaska CETC support is phased down or otherwise terminated.

After 5 years. During this five-year interim period, the Commission would determine the most appropriate successor mechanism for both the served and unserved areas that are not served by AT&T or Verizon LTE. One such mechanism could be a reverse auction for all such areas.

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1 See Connect America Fund, et al., Report and Order, Declaratory Ruling, Order, Memorandum

Opinion and Order, Seventh Order on Reconsideration, and Further Notice of Proposed Rulemaking, FCC 14-54, WC Docket No. 10-90, et al., ¶ 256 (rel. June 10, 2014) (“FNPRM”)..

2 See id. ¶ 250 (“we propose to freeze support for wireless providers serving remote areas in Alaska as of December 31, 2014, and to maintain those frozen support levels until a specified date after winning bidders are announced for ongoing support under Tribal Mobility Fund Phase II or Mobility Fund Phase II, with that date depending on whether wireless providers become winning bidders of such support”); see also id. ¶¶ 256-57.

3 All GCI CETC support, irrespective of legacy divisions between mobile and wireline, and all ACS Wireless support would be treated as support to a single company, as all support would flow to their jointly owned Alaska Wireless Network. See Applications of GCI Communications Corp., ACS Wireless License Sub, Inc., ACS of Anchorage License Sub, Inc., & Unicom, Inc. for Consent to Assign Licenses to the Alaska Wireless Network, LLC, 28 FCC Rcd. 10433 (2013).

4 See FNPRM ¶¶ 244, 256. 5 To the extent that a CETC decided to forego frozen support or was required to repay support because

of failure to meet performance objectives, that support could be added to the support for unserved areas.