R-08-3 FAQs

Frequently asked questions about the changes resulting from the Regulatory Commission of Alaska (RCA or Commission) decision to change the way the Alaska long distance telephone network is funded.  These changes will be effective July 31, 2011.

1.  What changes will I see on my telephone bill because of these new regulations? 

You will see changes to your long distance, local telephone and cellular telephone bills: 

  • Long distance bill – A significant drop in rates for in-state long distance calls you place beginning on July 31, 2011. 
  • Local telephone bill – An increase in the Network Access Fee (NAF).
  • All telephone bills – long distance, local and cellular – An increase in the Alaska Universal Service Fund (AUSF) surcharge.  

 2.  Will Lifeline customers pay more for their service?

 

Lifeline customers will continue to pay just $1 for service but the higher AUSF surcharge will be applied.

3.  Why is the Commission making these changes?


The telecommunications market is evolving.  More Alaskans want mobile and advanced services. To keep pace with the changes in technology and telecommunications users’ needs, the RCA has determined these changes are needed so that in-state long distance rates can be reduced to parity with out-of-state rates.  This is necessary in order to ensure this vital infrastructure remains reliable and continues to be increasingly capable of providing the services consumers all over the state want and need.

4.  How did the cost of the long distance in-state network get paid for in the past?

 

A large portion of the cost of the landline connections from customers’ homes and businesses to the long-distance network within Alaska has historically been paid for by the long distance service providers which then recover that cost from customers through rates for in-state long distance calls.  This is part of the reason Alaska’s rates for long-distance calls within the state have not declined as much as the rates for long-distance calls out of state. 

 5.  Why are calls to other states less expensive than calls within Alaska?


The regulator for interstate calls, the Federal Communications Commission, made changes to its regulations about ten years ago that are similar to what the RCA is doing now within the state of Alaska.  Since then the rates for interstate calls have decreased significantly.  The growing divergence between in-state and out-of-state rates is part of what has prompted this action by the RCA.

6.  Can you provide more information on the rate changes?

 

Changes to rates will be as follows effective July 31, 2011:

  • Lower in-state long distance rates.  The long distance carriers have committed to reducing their rates for in-state long distance calls to parity with out-of-state rates.  You will need to visit the website of your long distance provider for specific information on its rate changes.

  • A phased-in increase to the network access fee (NAF).  The NAF is the monthly charge to connect landline service to the long-distance in-state network.  It will increase from $3 to $3.75 per month with annual increases over four years until the monthly fee reaches $5.75.  This mirrors the approach used by the FCC, which resulted in lower out-of-state long distance rates. 

  • An increase in the state universal service surcharge.  The Alaska Universal Service Fund (AUSF) provides funds to help ensure Alaskans have access to affordable telecommunications services and to ensure all customers will have a phone.  The current surcharge on customer bills will increase by 9.3% to fund any in-state network costs not covered by the increased NAF.  The AUSF surcharge will then decrease as the network access fee increases.  The AUSF surcharge is applied to all telecommunications services including wireless.

 7.  Why do wireless services have to pay a surcharge to pay for the landline network?

 

Wireless service, as well as internet-based communications, actually does depend on the same facilities that long distance carriers use and pay for but, other than through any universal service surcharges, these other types of service providers do not pay.  In part because of this cost advantage for wireless and internet-based telecommunications, customers have migrated away from long distance services.  Costs of the network, however, are fixed and so haven’t diminished because fewer calls are being made.  The long distance carriers cannot continue to operate with revenues declining and costs either staying the same or increasing.  Healthy long distance carriers are vital to our state and vital to all types of calling options available to consumers today.  They provide the only means for many remote communities to participate on a regular basis in the state’s commercial enterprises, government resources and emergency services.  They also keep families connected when members move from one community to another.  Spreading the costs among all users of the network is both fair and necessary.

 8.  Are there other reasons why taking these steps that mirror the approach taken by the FCC is prudent?

 

Not only will these changes result in lower rates for long distance calling, making them is important for other reasons.  The system of supports for universal telephone service nationally is currently being reformed.  Reformers of the national universal service fund are considering many factors as they decide how universal service support should be changed.  One of the factors being considered for determining eligibility for some types or levels of funding is whether a state is contributing to its own cost of universally-available telephone service.  Because of Alaska’s vastness and small population, the cost of telecommunications is much higher in many locations than the national average.  As a result, Alaskan carriers receive a significant amount of federal universal service funding and this keeps rates affordable in many locations.  The Commission’s current actions will show that Alaska is a partner with the federal universal service fund in ensuring reliable and affordable telecommunications services throughout the state.

 9.  Who are the long distance carriers for the North Slope region of Alaska?

 

  • ASTAC:  # 1-800-478-6409
  • ACS (Deadhorse/Prudhoe Bay only):  # 1-800-808-8083
  • AT&T:  # 1-888-388-3884
  • GCI:  # 1-800-800-4800
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