**Before the**

**Federal Communications Commission**

**Washington, D.C. 20554**

+----------------------------------+----+------------------------------+
| In the matter of                 | *  | WC Docket No. 03-18          |
|                                  | *) |                              |
| Alascom, Inc., Tariff FCC No.    | ** |                              |
| 11,                              |    |                              |
|                                  | *  |                              |
| Petition for Waiver of Annual    | *) |                              |
| Filing Requirement               | ** |                              |
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|                                  | *) |                              |
|                                  | ** |                              |
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|                                  | ** |                              |
|                                  |    |                              |
|                                  | *  |                              |
|                                  | *) |                              |
|                                  | ** |                              |
+----------------------------------+----+------------------------------+

**ORDER**

**Adopted: August 13, 2003 Released: August 13, 2003**

By the Senior Deputy Chief, Wireline Competition Bureau:

# INTRODUCTION

1.  In this order, we address Alascom Inc.'s (Alascom) petition for a
    waiver of the Commission's requirement that it file, on at least 35
    days' notice, annual revisions to its Tariff FCC No. 11.[^1] This
    tariff sets transport and switching rates for the origination and
    termination of interstate, interexchange traffic to and from Alaska.
    Alascom is a common carrier providing interstate interexchange
    transport and switching services that are necessary for other
    interexchange carriers to provide services in Alaska up to the point
    of interconnection with each Alaska local exchange carrier. For the
    reasons discussed below, we deny Alascom's *Waiver Petition* and,
    accordingly, require it to file annual revisions to its Tariff FCC
    No. 11 no later than September 26, 2003.

# BACKGROUND

2.  In 1994, after a six-year proceeding conducted by the Federal-State
    Alaska Joint Board (Joint Board), the Commission issued an order
    adopting almost all of the Joint Board's recommendations for
    establishing a new market structure in Alaska.[^2] One objective of
    the Joint Board's proceeding, expressly adopted by the Commission,
    was to allow competitive entry into the market for
    telecommunications services in Alaska.[^3] In adopting the Joint
    Board's recommendations, the Commission stated: "We conclude that
    the market structure in Alaska should be restructured to promote
    more competition, open entry, and improve efficiency . . . ."[^4]
    The Commission further found that such a restructured market:

> will enhance competition, thereby increasing the availability of new
> services at lower prices for Alaska telecommunication consumers . . .
> . Competitive markets encourage carriers to adopt new technologies,
> develop new and innovative services, reduce costs by eliminating
> waste, provide service more efficiently, and improve customer service.
> Increased competition should ensure that there is continuing
> investment in the telecommunication infrastructure for Alaska both for
> existing and new services.[^5]

3.  The *Market Structure Order* required Alascom to offer "common
    carrier" services on a non-discriminatory basis at rates that
    reflect the costs of the services.[^6] These Alascom common carrier
    services are defined as "all interstate interexchange transport and
    switching services that are necessary for other interexchange
    carriers to provide services in Alaska up to the point of
    interconnection with each Alaska local exchange carrier."[^7] The
    *Market Structure Order* further required Alascom to establish two
    geographic rate zones and to allocate the costs of providing service
    to these two zones pursuant to a cost allocation plan (CAP) to be
    developed by Alascom and approved by the Commission.[^8] The *Market
    Structure Order* described the two geographic rate zones as
    "locations subject to facilities competition (non-Bush) and . . .
    locations where Alascom has a facilities monopoly (Bush)."[^9] The
    Commission adopted the two-rate-zone and CAP requirements in
    response to the Joint Board's expressed concern that the cost of
    providing service to bush areas was substantially higher than the
    cost of providing service to non-bush areas, thus providing Alascom
    a possible incentive to discriminate against competitors or
    cross-subsidize competitive, non-bush services with revenues from
    non-competitive bush services.[^10] Finally, the *Market Structure
    Order* required Alascom to revise its common carrier services tariff
    annually to reflect current costs.[^11]

4.  After requiring certain revisions, the Bureau approved Alascom's CAP
    in 1995*.*[^12] Alascom filed its first common carrier services
    tariff with rates produced by the CAP, Tariff FCC No. 11, in 1995.
    Petitioners challenging the tariff raised questions regarding its
    lawfulness, and, therefore, the Bureau suspended the tariff, imposed
    an accounting order, and instituted an investigation.[^13] The
    Bureau has similarly suspended all of Alascom's subsequent annual
    Tariff FCC No. 11 filings and incorporated them into this same
    investigation, which is still ongoing.[^14]

5.  In 1997, the Bureau reconsidered its approval of the CAP and
    decided, among other issues, to prevent Alascom from changing the
    classification of bush and non-bush areas based solely on the
    presence of a competitor, whether facilities-based or not.[^15] The
    Bureau expressed concern that, by reclassifying a bush area as
    non-bush upon entry by a competitor, Alascom could immediately lower
    its rates and drive the new competitor from that bush area. The
    Bureau concluded that these competitive concerns justified a
    requirement that bush and non-bush areas could be reclassified only
    by petition to the Bureau.[^16]

6.  Alascom is presently the only provider of facilities-based common
    carrier services to many of the Alaska bush areas. This situation is
    an outgrowth of the Commission's "bush policy," developed to
    regulate the private provision of telephone service to Alaska. The
    Commission, concerned about the unnecessary costs of constructing
    duplicate satellite earth station and space segment facilities,
    decided generally to allow only one facilities-based provider of
    origination and termination services for interstate, interexchange
    traffic in Alaska.[^17] In a separate proceeding, the Commission
    recently abolished the Alaska bush policy.[^18]

7.  Since the Commission's adoption of the *Market Structure Order*, the
    Bureau's approval of the CAP, and Alascom's filing of its first
    Tariff FCC No. 11, several of the conditions under which Alascom
    provides its common carrier services have changed. First, shortly
    after adoption of the *Market Structure Order* and while the Bureau
    was reviewing the CAP, Alascom became a wholly-owned subsidiary of
    AT&T. In authorizing the transfer of Alascom to AT&T, the Commission
    imposed on the new AT&T Alascom entity all of the *Market Structure
    Order's* obligations, including the tariff filing requirement. The
    Commission stated:

> Applicants assert that their proposed transfer is in conformity with
> these requirements of the *Market Structure Order*. Applicants state
> that they seek no material modifications of the *Market Structure
> Order* and that Alascom, under new ownership as "AT&T/Alascom" will
> continue to exist as a separate subsidiary of AT&T with no change in
> corporate, legal or *regulatory* status.[^19]

8.  In addition to obtaining control of Alascom, AT&T separately sought
    and obtained from the Commission a reclassification of its status as
    a dominant carrier for the provision of domestic interstate
    long-distance services to a non-dominant carrier for such services.
    In granting AT&T's motion for reclassification, the Commission
    affirmed that the reclassification "does not affect the continuing
    effectiveness and validity" of the *Market Structure Order* and the
    lengthy Joint Board proceeding underlying it.[^20] The Commission
    also noted that AT&T had "voluntarily committed . . . to comply with
    all the obligations and conditions set forth in the *Alascom
    Authorization Order*, the *Market Structure Order* and the *Final
    Recommended Decision*."[^21] On reconsideration, the Commission
    confirmed and clarified its holding that AT&T/Alascom's obligations
    under the *Market Structure* *Order* would continue after AT&T's
    reclassification, stating:

> Indeed, the Commission noted in the *AT&T Reclassification Order*,
> \[citation omitted\] and we clarify here, that, to the extent
> AT&T/Alascom has been found to be dominant in the provision of "common
> carrier" services . . . AT&T/Alascom's regulatory obligations with
> respect to those services remain unchanged, and therefore AT&T/Alascom
> is required to file tariffs for such services on a dominant carrier
> basis.[^22]

Thus, despite significantly changing how Alascom's parent, AT&T, is
regulated, the Commission has consistently and expressly maintained
Alascom's obligation to file a tariff for its interexchange transport
and switching services in Alaska.

9.  Another change since adoption of the *Market Structure Order* is
    that General Communication, Inc. (GCI), a carrier providing
    telecommunications services in Alaska in competition with Alascom,
    obtained a temporary waiver of the Commission's bush policy and
    provides competitive service in about 50 areas originally designated
    as bush areas.[^23] Even more recently, as mentioned above, the
    Commission repealed the Alaska bush policy, so that GCI and other
    carriers will now be free to provide facilities-based services in
    competition with Alascom in all Alaska bush communities. Finally,
    before repeal of the Alaska bush policy, Alascom petitioned the
    Commission to remove the conditions imposed on it by the
    Commission's *Market Structure Order*, including the requirements
    that it file annual tariffs and allocate costs between bush and
    non-bush areas in accordance with its CAP.[^24] The Commission has
    not yet addressed this petition, and, therefore, Alascom is still
    bound by the conditions imposed by the *Market Structure Order*,
    including the obligation to file annual tariffs.

# DISCUSSION

## Initiation of Current Proceeding

10. Commission rules require Alascom to have filed its annual revision
    to its Tariff FCC No. 11 for 2003 by November 27, 2002. In lieu of
    filing a tariff by that date, Alascom filed a statement indicating
    only that it was unable to determine whether rate revisions were
    warranted because such a determination would be "burdensome."[^25] A
    carrier that believes circumstances warrant a waiver of Commission
    rules must petition for a waiver of such rules.[^26] Accordingly,
    the Bureau informally directed Alascom to file a petition for a
    waiver, which Alascom did on January 7, 2003. Alascom's petition
    asks for a waiver of its November 27, 2002 tariff filing requirement
    and seeks to freeze Alascom's tariffed rates at their 2002
    level.[^27]

11. Alascom's petition provides some elaboration of its claim that a
    tariff filing would be burdensome, claiming that the CAP is
    increasingly outmoded and the burden on Alascom to collect the cost
    data required to set new rates pursuant to the CAP has
    increased.[^28] GCI opposes Alascom's petition.[^29] In its
    opposition, GCI argues not only that Alascom's petition should be
    denied but that Alascom should be fined by the Commission for
    failure to file its tariff in a timely manner.[^30]

## Access to Supporting Documentation

12. When Alascom filed its *Waiver Petition*, it sought confidential
    treatment of a declaration supporting the petition.[^31] Pursuant to
    standard practice when filing carriers seek confidential treatment
    of cost information supporting their tariffed rates, the Bureau
    adopted a protective order to grant access to the supporting
    information to commenting parties that execute the requisite
    nondisclosure agreement, while protecting the information from
    general public disclosure.[^32] GCI promptly executed the requisite
    nondisclosure agreement and submitted it to Alascom. GCI sought to
    obtain both the allegedly confidential declaration supporting
    Alascom's *Waiver Petition*, and, in order to evaluate Alascom's
    claim that the CAP is outmoded, the CAP and the data underlying it.
    Alascom released to GCI the allegedly confidential declaration, but
    it refused to release the CAP and the data underlying it, claiming
    that this information was too sensitive to be released to its
    competitor GCI, even subject to a protective order.

13. In response to Alascom's refusal to release the CAP and underlying
    data in this *Waiver Petition* proceeding, GCI sought to obtain the
    CAP and its underlying data from the Commission through a Freedom of
    Information Act (FOIA) request.[^33] The Bureau found that GCI
    needed to review the CAP and its underlying data to respond
    effectively to the *Waiver Petition* and granted GCI's FOIA request,
    agreeing to provide GCI the materials in its possession that are
    responsive to the request subject to a protective order.[^34]
    Alascom sought Commission review of the Bureau's grant of GCI's FOIA
    request, challenging both the decision to grant GCI access to the
    requested materials and the sufficiency of the protective order
    pursuant to which the materials would be released.[^35]

14. While Alascom's Application for Review has been pending, Alascom and
    GCI, with the encouragement of Bureau staff, have agreed to a
    revised protective order for use in both the FOIA and *Waiver
    Petition* proceedings that provides additional safeguards to protect
    from disclosure all of the information that Alascom considers
    confidential.[^36] Nonetheless, Alascom continues to refuse to
    disclose the CAP and its underlying data to GCI unless the
    Commission denies its Application for Review of the Bureau's grant
    of GCI's FOIA request. Thus, GCI has never seen, and the Bureau
    currently cannot release to GCI, the CAP and its underlying data
    that supports Alascom's *Waiver Petition*. Given Alascom's current
    position regarding release of this information, GCI will not see it
    unless and until the full Commission denies Alascom's

    Application for Review and Alascom has exhausted any opportunities
    for judicial review of the Commission's decision.[^37]

## Application of Waiver Standard

15. The Commission has discretion to waive a rule for "good cause"
    shown.[^38] Generally, the Commission may grant a waiver of its
    rules where the particular facts make strict compliance inconsistent
    with the public interest if applied to petitioner and when the
    relief requested would not undermine the policy objective of the
    rule in question.[^39] Petitioner must demonstrate that, in view of
    unique or unusual factual circumstances, application of the rule
    would be inequitable, unduly burdensome, or contrary to the public
    interest.[^40]

### Changed Conditions 

16. Alascom bases its waiver request primarily on its contention that
    market conditions in Alaska have changed since the Commission
    adopted the *Market Structure Order* in 1995. These changed market
    conditions, according to Alascom, include the fact that AT&T is now
    not only Alascom's parent, but the only "substantial" customer
    purchasing service under Alascom's common carrier services
    tariff.[^41] Further, according to Alascom, "\[b\]y 1999, at least
    two interexchange carriers had facilities-based access to more that
    90% of all Alaska access lines."[^42] GCI has also increased its
    market share of interstate traffic for all of Alaska, from
    approximately 33 percent in 1993 to 45.5 percent in 1998, and,
    according to Alascom, it is strongly positioned to offer bundled
    interexchange services including Internet access.[^43] GCI is
    serving more than 50 communities originally determined to be bush
    communities pursuant to its temporary waiver.[^44] Finally, Alascom
    adds that its ownership of undersea fiber-optic cables connecting
    Alaska to the lower 48 states has declined from almost 90 percent to
    less than 10 percent.[^45] These assertions are the same claims
    Alascom makes in its separate *Petition for Elimination of
    Conditions*, in which it seeks relief from the conditions under
    which it provides service in Alaska.[^46] Alascom's desire to be
    freed from these conditions is not "good cause" for waiving its
    obligation to file a tariff for services that only Alascom provides.
    Its allegations raise broad issues that are beyond the scope of this
    waiver proceeding. The Commission has not yet addressed the merits
    of Alascom's *Petition for Elimination of Conditions*, and we will
    not do so in a waiver proceeding.

17. Alascom raises its transfer to AT&T as a basis for waiving its
    annual tariff filing obligation for its common carrier services.
    Previously, however, in order to obtain the Commission's approval of
    the transfer of Alascom to AT&T, AT&T assured the Commission that it
    was seeking no modification of its obligations under the *Market
    Structure Order.*[^47] Further, the Commission expressly retained
    Alascom's tariff filing obligation when it reclassified AT&T as a
    non-dominant carrier.[^48] The conditions that led the Commission
    repeatedly to reaffirm Alascom's tariff filing obligation persist
    today: Alascom is still the only provider of facilities-based
    transport and switching services for origination and termination of
    interexchange traffic to and from many Alaska bush communities. The
    fact that AT&T is the largest purchaser of Alascom's common carrier
    services does not change the fact that these services remain the
    only way for wireline carriers other than AT&T to serve their
    customers in the Alaska bush. Therefore, we conclude that AT&T's
    acquisition of Alascom is not a basis for waiving Alascom's annual
    tariff filing obligation.

### Public Interest

18. Alascom argues that granting its waiver request would serve the
    public interest.[^49] Alascom supports this assertion with a
    declaration concluding that the CAP model may no longer function as
    it was intended, the burden to Alascom of running the CAP model to
    prepare a tariff outweighs the benefit of complying with the tariff
    filing requirement, and "emerging" problems with the inputs to the
    CAP model make its output increasingly unreliable.[^50] Alascom
    fails, however, to demonstrate why these purported problems with the
    CAP result in the public interest being served by releasing Alascom
    from its obligation to file a tariff.

19. Alascom asserts that the CAP requires adjustment because "there are
    concerns raised by the nature of the market in which Alascom
    operates that could affect the way in which the CAP should be
    conceived and constructed."[^51] These "concerns," according to
    Alascom, are increased cell phone and calling card use, the
    "explosive demand in Internet access, which can conceivably create
    non-traditional competition in the long distance market through
    Voice over Internet Protocol ('VoIP')," and potential competition
    from cable telephony services.[^52] The effects of this increase in
    "non-traditional" competition, according to Alascom, are exacerbated
    by the Commission's decision, when it reconsidered its approval of
    the CAP, to prevent Alascom from changing the classification of bush
    and non-bush areas without the Bureau's consent.[^53]

20. Even assuming that Alascom's assertions are correct,[^54] Alascom
    has not shown how changes in network demand, however dramatic they
    may be, cause the CAP to fail to function as it was intended.[^55]
    The purpose of the CAP, from its inception, has been to allocate
    Alascom's costs of providing service between bush and non-bush
    communities, or areas without facilities-based competition and areas
    with facilities-based competition.[^56] Yet Alascom provides no
    precise indication of how changes in overall network demand affect
    the CAP's ability to allocate costs between bush and non-bush areas
    in a reasonable manner. While Alascom has shown a change in network
    demand between two specific years, it has not shown that network
    demand in bush communities has shifted dramatically relative to
    non-bush communities, or that such a relative shift in demand has
    affected the integrity of the CAP's cost allocation process.
    Finally, Alascom has failed to establish any link between this
    alleged failure of the CAP to function as intended and how it might
    serve the public interest to release it from its obligation to file
    annual tariffs.

21. Alascom also argues that the tariff filing requirement should be
    waived because the cost and effort of running the CAP model to
    produce rates has come to outweigh any need for such a process.[^57]
    According to Alascom, "the CAP process . . . require\[s\] near
    continuous polling of AT&T switches in Alaska, transmittal of as
    many as 2 million individual call records a month to cost analysts
    in New Jersey, and consolidation of call records . . . and
    significant efforts to check data integrity before the process can
    even be run."[^58] Alascom has not demonstrated that the CAP process
    is an unwarranted burden. Alascom has two switches in Alaska, and
    Alascom makes no claim that these switches cannot be polled
    electronically. The need to transmit the call records to New Jersey
    appears to stem from Alascom's decision to base its cost analysts in
    New Jersey. Without additional information, we are unable to
    determine exactly how burdensome the process of consolidating call
    records and checking data integrity really is.

22. Thus Alascom has not demonstrated that filing a tariff is unduly
    burdensome. Further, Alascom has failed to demonstrate that the
    burden on Alascom outweighs any benefit to the public of filing a
    tariff.[^59] Pursuant to the *Market Structure Order*, Alascom must
    offer transport and switching services for the origination and
    termination of interstate calls to and from Alaska bush communities
    on a non-discriminatory basis at rates that reflect the cost of the

    services.[^60] Alascom has failed to establish any link between
    relieving it of the burden of filing a tariff and the public
    interest.

23. Alascom's final basis for claiming that a waiver of its tariff
    filing requirement would be in the public interest is "emerging"
    problems with the inputs to the CAP model.[^61] The three "emerging"
    problems are that much of the 2002 call data required to prepare
    inputs to the CAP are missing, many CAP inputs are "hard coded" and
    cannot be updated, and the percentage of costs that can be directly
    assigned or directly attributed by the CAP to either bush or
    non-bush categories has declined.[^62]

24. With respect to the missing 2002 call data, Alascom explains that a
    key employee retired in late 2001, and consequently collection and
    consolidation of call records to assign or attribute costs to
    specific cost locations never occurred for nine of the 12 months of
    the 2003 tariff year.[^63] While Alascom attempted to feed network
    usage data directly to AT&T personnel who were assigned to run the
    CAP model, these employees were not able to reproduce the summarized
    input required.[^64] Alascom subsequently persuaded the key employee
    to return from retirement, and the necessary data began to be
    collected again beginning in August 2002.[^65] Alascom asserts that
    it cannot reconstruct the missing records because, \"\[i\]t would be
    a monumental task to write the software to search all \[365 million
    AT&T long distance call records per business day\] in an effort to
    identify the relatively small number of Alascom interstate calls
    that were made during the first 7 months of 2002."[^66] Alascom
    concludes, therefore, that its 2002 tariff filing requirement should
    be waived, and it should be allowed to continue using the same rates
    it filed for 2001. Although Alascom mentions this failure to collect
    data in the context of its public interest case, Alascom does not
    explain the link between its failure to collect the data and the
    public interest.

25. In response to Alascom's contentions, GCI asserts that the missing
    data could be collected without undue burden to Alascom, and it
    provides a declaration from its expert describing how the collection
    could be achieved.[^67] GCI also claims that Alascom's billing
    contractor could produce the required data.[^68] GCI alternatively
    suggests that Alascom could annualize the data it has or compute
    rates using last year's network usage data and this year's
    costs.[^69] Alascom disputes the GCI expert's assessment of the
    difficulty of reconstructing the

    missing data and counters that neither method will produce
    cost-based rates that are as "sound" as Alascom's 2001 rates.[^70]

26. We are not persuaded that the failure to collect data was the result
    of facts entirely outside of Alascom's control, nor that it would
    serve the public interest to grant Alascom's waiver because of this
    failure. Alascom has undoubtedly faced employee retirements in the
    past and could have ensured that the retiring employee transferred
    sufficient knowledge to other employees to permit Alascom to file a
    tariff in 2002. Further, Alascom has not demonstrated that no
    reasonable method for reconstructing the missing data exists. The
    record here is insufficient for us to determine the precise effort
    required of Alascom to reconstruct the missing data, or the best
    method for producing cost-based rates for 2003 based on the data
    that were collected. Therefore, when filing its 2003 rates, Alascom
    should determine the method most likely to produce appropriately
    cost-based rates based on available data, and use it to run the CAP
    model. When Alascom files its 2003 rates, parties will have an
    opportunity to challenge the method Alascom chooses to produce its
    rates in the tariff review process.

27. The second "emerging" problem is Alascom's "discovery" that many of
    the CAP model's inputs are "hard coded" into the CAP computer
    program and cannot be updated. This problem, according to Alascom,
    makes the CAP inputs increasingly stale, and supports its argument
    that the CAP should be updated.[^71] The hard coded inputs include:
    the classification of each cost location as bush or non-bush; direct
    assignment of certain network costs to bush and non-bush locations
    based on outdated information about each location; old network usage
    data such as dial equipment minutes; "study area loop and trunk
    circuit miles," some of which are allocated to the interstate
    portion of Alascom's investment by a "frozen" allocation factor;
    customer operations expense factors; an interstate and intrastate
    allocation factor based on the 1994 distribution of interstate and
    intrastate switching minutes; various outdated allocations for the
    separations process; and bush and non-bush percentages used to
    develop the accumulated, deferred federal tax.[^72] Alascom contends
    that it has only recently discovered these allegedly outdated, hard
    coded inputs because it only recently hired consultants to examine
    the workings of the CAP.

28. We are hampered in our assessment of the validity of these claims,
    and their effect if demonstrated, by the fact that Alascom has
    refused to allow GCI, who opposes its *Waiver Petition*, or any
    other party, to examine the CAP and its underlying inputs.
    Therefore, we have no alternative, independent evaluation of the CAP
    and its functioning to compare with Alascom's claims. Alascom is
    directly responsible for this lack of an alternative, independent
    evaluation, because it has refused to release to GCI the CAP and its
    supporting data, or to permit the Commission to do so. This lack of
    an alternative evaluation is precisely the situation the Commission
    sought to avoid when it adopted its policy of allowing parties
    wishing to examine potentially confidential tariff cost support
    materials to obtain those materials subject to protective
    order.[^73] Alascom bears the burden of proving that there is good
    cause to grant its requested waiver, and its refusal to allow GCI to
    review the CAP and its supporting data contributes to its failure to
    meet that burden. Based on this record, which includes no
    alternative, independent evaluation of the CAP and its functioning,
    we cannot conclude that the CAP and its inputs are outdated, that it
    no longer functions as it was intended to function, or that allowing
    Alascom to freeze rates for its common carrier services at their
    2002 level would be in the public interest.

29. Finally, Alascom claims that the percentage of costs that can be
    directly assigned or directly attributed by the CAP to either bush
    or non-bush categories has declined from about 93 percent in 1995 to
    a much lower, but unspecified, percentage today.[^74] Alascom states
    that this shift has occurred because, with the passage of time since
    the CAP was developed, operating expenses and depreciation have
    become a greater proportion of Alascom's costs, and the CAP books
    these expenses to administrative accounts that are allocated among
    all Alascom locations (both bush and non-bush), rather than being
    directly assigned or attributed to a particular bush or non-bush
    location.[^75] Further, according to Alascom, the percentage of
    costs that the CAP directly assigns (as opposed to attributing or
    allocating) to specific locations has declined from 20 percent in
    the original CAP model to eight percent in 2001.[^76] Alascom states
    that it cannot explain why the CAP model functions in this way
    because the CAP was designed for Alascom's prior owner, Pacific
    Telecom, Inc., and Alascom has no institutional memory of the CAP
    design and development.[^77] Therefore, Alascom will be able to
    understand the CAP's functioning only after a "*de novo* examination
    of the code and input data in an effort to infer what the model
    designers originally intended."[^78]

30. While the CAP model's alleged failure to assign costs directly to
    specific locations may be problematic, we do not believe that
    Alascom's proposed response, a waiver of its tariff filing
    requirement, is the solution that best serves the public interest.
    Instead we believe that this problem with the CAP, and the
    additional problems discussed above, indicate that the public
    interest is best served by careful scrutiny of the CAP and its
    functioning through the tariff review process. Therefore, as stated
    above, we direct Alascom to run the CAP model to the best of its
    ability, prepare rates for 2003, and file a tariff no later than
    September 26, 2003. [^79]

# CONCLUSION

31. In summary, we conclude that Alascom has not demonstrated in its
    *Waiver Petition* that it meets any of the established standards for
    grant of a waiver from a Commission rule. First, Alascom has not
    shown that there is "good cause" for grant of a waiver.[^80]
    Although Alascom has asserted here and in other Commission
    proceedings that there is no longer any need for it to be regulated,
    the Commission has not decided this question, and we will not
    attempt to resolve it in a waiver proceeding. Alascom's desire to be
    freed from the conditions under which it currently operates is not
    "good cause" for waiving its obligation to file a tariff for
    services that only Alascom provides. Similarly, Alascom fails to
    demonstrate that, in view of unique or unusual factual
    circumstances, application of the tariff filing requirement would be
    inequitable, unduly burdensome, or contrary to the public
    interest.[^81] As discussed above, Alascom has failed to prove that
    the CAP no longer functions as intended, that Alascom is unduly
    burdened by running the CAP model to produce 2003 rates, or that the
    CAP is increasingly unreliable. Alascom bases its allegation that
    granting its requested waiver is in the public interest on these
    unproven claims. Therefore, it has failed to demonstrate that
    granting a waiver is in the public interest. Further, Alascom has
    not shown that particular facts make strict compliance with the
    tariff filing requirement inconsistent with the public interest when
    applied to Alascom, or that waiver of the tariff filing requirement
    would not undermine a policy objective of the rule in question.[^82]

32. Finally, we decline to grant Alascom a waiver due to its refusal to
    allow GCI to examine the CAP and its underlying inputs.[^83] Alascom
    has the burden of demonstrating good cause for waiver of Commission
    rules. Alascom bases its claim of good cause on allegations that the
    CAP no longer serves its intended purpose, running the CAP is unduly
    burdensome to Alascom, and the CAP produces increasingly unreliable
    results. Thus Alascom has made alleged problems with the CAP a
    primary issue in this proceeding. Nonetheless, it refuses to allow
    GCI access to the CAP and its inputs, despite having agreed to a
    protective order affording protection for the material Alascom
    considers confidential. Without such access, GCI cannot fully
    evaluate Alascom's claims, dispute their accuracy, or participate
    meaningfully in any discussion of whether the CAP produces
    appropriately cost-based rates. Further, as an interested party,
    GCI, which has duly executed the requisite nondisclosure agreement
    that adequately protects Alascom's interest in keeping its data
    confidential, has the right to participate in this waiver
    proceeding. Therefore, we cannot find that granting Alascom a waiver
    from its obligation to file a tariff is in the public interest.

33. For all of the foregoing reasons, we deny Alascom's petition asking
    us to waive the Commission rule requiring Alascom to file a 2002
    tariff for its common carrier services.

# ORDERING Clauses

34. Accordingly, IT IS ORDERED that, pursuant to sections 4(i), (j),
    201, 202, and 203 of the Communications Act of 1934, as amended, 47
    U.S.C. §§ 154(i), (j), 201, 202, and 203 and sections 0.291 and 1.3
    of the Commission's rules, 47 C.F.R. §§ 0.291 and 1.3, Alascom's
    petition for waiver of the 2002 annual tariff filing requirement in
    section 61.58(e)(3) of the Commission's rules, 47 CFR § 61.58(e)(3),
    IS DENIED.

35. IT IS FURTHER ORDERED that Alascom SHALL FILE 2003 revised rates
    based on current cost for services offered pursuant to Tariff FCC
    No. 11 no later than September 26, 2003.

36. IT IS FURTHER ORDERED that this Order is effective upon release.

    FEDERAL COMMUNICATIONS COMMISSION

    Jeffrey J. Carlisle

    Senior Deputy Chief

    Wireline Competition Bureau

[^1]: *Alascom Petition for Waiver of Commission's Rules Regarding its
    Annual Tariff FCC No. 11,* WC Docket No. 03-18 (Jan. 7, 2003)
    (*Waiver Petition*). *See also* 47 C.F.R. § 61.58(e)(3).

[^2]: *Integration of Rates and Services for the Provision of
    Communications by Authorized Common Carriers between the Contiguous
    States and Alaska, Hawaii, Puerto Rico, and the Virgin Islands*, CC
    Docket No. 83-1376, Memorandum Opinion and Order, 9 FCC Rcd 3023
    (1994) (*Market Structure Order*); *Integration of Rates and
    Services for the Provision of Communications by Authorized Common
    Carriers between the Contiguous States and Alaska, Hawaii, Puerto
    Rico and the Virgin Islands,* CC Docket No. 83-1376, Final
    Recommended Decision, 9 FCC Rcd 2197 (Jt. Bd. 1993) (*Final
    Recommended Decision*).

[^3]: *Market Structure Order,* 9 FCC Rcd at 3023.

[^4]: *Id.* at 3025.

[^5]: *Id.* at 3024.

[^6]: *Id.*

[^7]: *Id.* at 3023, n.5.

[^8]: *Id.* at 3023.

[^9]: *Id.* Prior to the *Market Structure Order*, a bush community
    generally had been defined as a rural community of less than 1000
    residents isolated from larger cities. *See, e.g., Policies
    Governing the Ownership and Operation of Domestic Satellite Earth
    Stations in the Bush Communities in Alaska,* CC Docket No. 80-584,
    Tentative Decision 92 FCC R2d 736, n.1(1982). In denying petitions
    to reconsider its approval of Alascom's CAP, the Commission's
    Wireline Competition Bureau (then the Common Carrier Bureau)
    (Bureau) interpreted the terms "bush" and "non-bush" to mean areas
    where Alascom is the monopoly service provider and areas where
    Alascom faces competition. *Alascom, Inc. Cost Allocation Plan for
    the Separation of Bush and Non-Bush Costs*, File No. AAD 94-119,
    Memorandum Opinion and Order on Reconsideration and Order Approving
    Cost Allocation Plan, 12 FCC Rcd 1991 (Com. Car. Bur. 1997) (*CAP
    Approval Reconsideration Order*). Alascom's Application for Review
    of this decision is pending. *See* *Alascom, Inc., Cost Allocation
    Plan for the Separation of Bush and Non-Bush Costs,* File No. AAD
    94-119, Application for Review (Mar. 12, 1997) (*Alascom CAP
    Approval Application for Review*).

[^10]: *Market Structure Order,* 9 FCC Rcd at 3023. *See also Final
    Recommended Decision*, 9 FCC Rcd at 2205-06.

[^11]: *Market Structure Order,* 9 FCC Rcd at 3027. Until 2002, Alascom
    filed the annual revisions to its Tariff FCC No. 11 to become
    effective on the first day of each year. Commission rules require
    Alascom to file its annual revisions on at least 35 days' notice. 47
    C.F.R. § 61.58(e)(3).

[^12]: *Alascom, Inc. Cost Allocation Plan for the Separation of Bush
    and Non-Bush Costs,* Order, 10 FCC Rcd 9823 (Com. Car. Bur. 1995).

[^13]: *Alascom, Inc. Tariff FCC No. 11,* *Transmittal No. 790,* CC
    Docket No. 95-182, Order, 10 FCC Rcd 3703 (Com. Car. Bur. 1995).

[^14]: *Alascom, Inc. Tariff FCC No. 11, Transmittal No. 807,* CC Docket
    No. 95-182, Order, 11 FCC Rcd 10833 (Com. Car. Bur. 1996);
    *Transmittal No. 852*, Order, 12 FCC Rcd 3646 (Com. Car. Bur. 1997);
    *Transmittal No. 921,* Order, 13 FCC Rcd 187 (Com. Car. Bur. 1998);
    *Transmittal Nos. 921, 937, 941 and 942*, Order, 13 FCC Rcd 4659
    (Com. Car. Bur. 1998); *Transmittal No. 1088*, Order, 15 FCC Rcd 6
    (Com. Car. Bur. 1999); *Transmittal No. 1184*, Order, 16 FCC Rcd 19
    (Com. Car. Bur. 2000); *Transmittal No. 1260*, Order, 17 FCC Rcd 24
    (Com. Car. Bur. 2001).

[^15]: *CAP Approval Reconsideration Order,* 12 FCC Rcd at 2003.

[^16]: *Id.* at 2004-05.

[^17]: *Establishment of Domestic Communications-Satellite Facilities by
    Non-Governmental Entities,* Docket No. 16495, Memorandum Opinion and
    Order, 38 FCC 2d 665, 696 (1972). Carriers used satellites to
    provide most telephone service to Alaska in the early 1970's.

[^18]: *Policy for Licensing Domestic Satellite Earth Stations in the
    Bush Communities of Alaska,* IB Docket No. 02-30, RM No. 7246,
    Report and Order, FCC 03-197 (rel. Aug. 12, 2003).

[^19]: *Application of Alascom, Inc., AT&T Corporation and Pacific
    Telecom Inc. For Transfer of Control of Alascom, Inc. from Pacific
    Telecom, Inc. to AT&T Corporation*, File No. W-P-C-7037 *et al*.,
    Order and Authorization, 11 FCC Rcd 732, 741 (1995) (*Alascom
    Authorization Order*) (emphasis supplied).

[^20]: *Motion of AT&T to be Reclassified as a Non-Dominant Carrier,*
    Order, 11 FCC Rcd 3271, 3335 (1995) (*AT&T Reclassification Order*).

[^21]: *Id.* at 3333-34.

[^22]: *Motion of AT&T to be Reclassified as a Non-Dominant Carrier,* CC
    Docket No. 96-61, Order on Reconsideration, Order Denying Petition
    for Rulemaking, Second Order on Reconsideration, 12 FCC Rcd 20787,
    20800-01 (1997) (*AT&T Reclassification Reconsideration Order*).

[^23]: *See Petition of General Communication, Inc. for a Partial Waiver
    of the Bush Earth Station Policy*, File No. 122-AT-WAIV-95,
    Memorandum Opinion and Order, 11 FCC Rcd 2324 (Int'l. Bur. 1996).

[^24]: *AT&T Corp. and Alascom Inc. Petition for Elimination of
    Conditions*, CC Docket No. 00-46 (filed Mar. 10, 2000) (*Petition
    for Elimination of Conditions*).

[^25]: *Investigation of Alascom, Inc. Interstate Transport and
    Switching Services, Alascom, Inc., Tariff FCC No. 11*, CC Docket No.
    95-182, Statement of Alascom, Inc. (Nov. 27, 2002). Both GCI and ACS
    Long Distance (ACS-LD), carriers purchasing service under Alascom's
    Tariff FCC No. 11, opposed allowing Alascom to avoid filing its
    annual tariff. *Investigation of Alascom, Inc. Interstate Transport
    and Switching Services, Alascom, Inc., Tariff FCC No. 11*, CC Docket
    No. 95-182, GCI Response to Statement of Alascom, Inc. (Dec. 10,
    2002); ACS-LD's Response to Alascom's Statement (Dec. 12, 2002).

[^26]: 47 C.F.R. § 1.3

[^27]: *Waiver Petition* at 11.

[^28]: *Alascom, Inc. Petition for Waiver of Commission Rule and Orders
    Requiring Annual Tariff Revision, Tariff FCC No. 11,* WC Docket No.
    03-18, Attachment A, Declaration of John C. Klick and Julie A.
    Murphy (Jan. 7, 2003) (*Klick-Murphy Declaration*).

[^29]: *Alascom, Inc. Petition for Waiver of Commission Rule and Orders
    Requiring Annual Tariff Revision, Tariff FCC No. 11,* WC Docket No.
    03-18, GCI Opposition to Petition for Waiver (Feb. 5, 2003) (*GCI
    Opposition*).

[^30]: *GCI Opposition* at 1, 14, 16 and 19. Alascom filed a reply to
    *GCI's Opposition*. *Alascom, Inc. Petition for Waiver of Commission
    Rule and Orders Requiring Annual Tariff Revision, Tariff FCC No.
    11,* WC Docket No. 03-18, Reply to Opposition (Mar. 5, 2003)
    (*Alascom Reply*), and both parties filed numerous subsequent
    pleadings.

[^31]: Letter from Charles R. Naftalin, Counsel for Alascom, to Marlene
    H. Dortch, Secretary, Federal Communications Commission, dated Jan.
    7, 2003.

[^32]: *See* *Pleading Cycle Established for Alascom, Inc. Petition for
    Waiver of the Commission's Rules Regarding Its Annual Tariff FCC No.
    11*, WC Docket No. 03-18, Public Notice and Protective Order, 18 FCC
    Rcd 704 (2003). The Bureau uses such standard protective orders not
    only for tariff filings, but other types of proceedings, such as
    petitions for pricing flexibility, waiver, or forbearance, where
    parties submit allegedly confidential data to support their claims.

[^33]: Letter from Timothy R. Hughes, Counsel for Alascom, to Managing
    Director, Federal Communications Commission, FOIA Request Control
    No. 2003-208 (Feb. 26, 2003).

[^34]: Letter from Joseph T. Hall, Assistant Bureau Chief, Management,
    Wireline Competition Bureau, to Timothy R. Hughes, Counsel to GCI,
    FOIA Request Control No. 2003-208 (Apr. 10, 2003).

[^35]: Letter from Charles R. Naftalin, Counsel for Alascom, to John
    Rogovin, General Counsel, Federal Communications Commission (Apr.
    24, 2003).

[^36]: *General Communication, Inc., On Request for Inspection of
    Records*, FOIA Control No. 2003-208, *Alascom Petition for Waiver
    from the Commission Rule and Order Requiring an Annual Tariff
    Filing,* WC Docket No. 03-18, Protective Order, DA 03-2278 (WCB July
    10, 2003).

[^37]: *See* 5 U.S.C. § 552(b)(4); 47 C.F.R. §§ 0.457(d), 0.461(i)(4).

[^38]: 47 C.F.R. § 1.3.

[^39]: *WAIT Radio v. FCC*, 418 F.2d 1153 (D.C. Cir. 1969), *appeal
    after remand*, 459 F.2d 1203 (D.C. Cir. 1972), *cert. denied*, 409
    U.S. 1027 (1972) (*WAIT Radio*); *Northeast Cellular Tel. Co. v.
    FCC*, 897 F.2d 1164 (D.C. Cir. 1990) (*Northeast Cellular*).

[^40]: *WAIT Radio*, 418 F.2d at 1159.

[^41]: *Waiver Petition* at 7.

[^42]: *Id.*

[^43]: *Id.*

[^44]: *See* para. 9, *supra.*

[^45]: *Waiver Petition* at 7.

[^46]: *See* para. 9 and n.24, *supra.*

[^47]: *Alascom Authorization Order*, 11 FCC Rcd at 741.

[^48]: *AT&T Reclassification Reconsideration Order*, 12 FCC Rcd at
    20800-01.

[^49]: *Waiver Petition* at 9.

[^50]: *Klick-Murphy Declaration* at 2-4, paras. 5-8.

[^51]: *Id.* at 2, para. 6.

[^52]: *Id.* at 10, para. 19.

[^53]: *Alascom Reply* at 5; *Alascom, Inc. Petition for Waiver of
    Commission Rule and Orders Requiring Annual Tariff Revision, Tariff
    FCC No. 11,* WC Docket No. 03-18, Reply Declaration of John C. Klick
    and Julie A. Murphy at 4, para. 9 (Mar. 5, 2003) (*Klick-Murphy
    Reply Declaration*). *See also Alascom CAP Approval Reconsideration
    Order,* 12 FCC Rcd at 2003.

[^54]: In support of its claims regarding long-term changes in network
    demand, Alascom cites only national statistics regarding increased
    calling card and cell phone use, not Alaska-specific statistics, and
    it provides only a limited comparison of network demand figures for
    two of the eight years for which the CAP has operated. Alascom
    provides no statistics for Voice over IP or cable telephony
    services. *Klick-Murphy Declaration* at 8, para. 16. Therefore,
    Alascom's assertions and limited demand figures do not evidence
    long-term network demand trends.

[^55]: GCI also points to this flaw in Alascom's analysis. *GCI
    Opposition* at 18. Alascom admits that it has not undertaken "the
    detailed analysis of the CAP process that would be required to
    definitively determine how each of these new developments would flow
    through the CAP and affect the costs that it calculates. . . ."
    *Klick-Murphy Reply Declaration* at 4, para. 9.

[^56]: *Market Structure Order*, 9 FCC Rcd at 3023; *Final Recommended
    Decision*, 9 FCC Rcd at 2205-06.

[^57]: *Klick-Murphy Declaration* at 11-13, paras. 21-25.

[^58]: *Id.* at 11-12, para. 22.

[^59]: While Alascom's petition is not clear, this alleged imbalance
    appears to be one basis for Alascom's claim that granting its
    requested waiver is in the public interest.

[^60]: *Market Structure Order*, 9 FCC Rcd at 3023.

[^61]: *Klick-Murphy Declaration* at 3, para. 8.

[^62]: *Waiver Petition* at 10-11.

[^63]: *Klick-Murphy Declaration* at 14, para. 27. Because Alascom's
    2002 tariff filing was due 35 days prior to January 1, 2003, 2003
    rates should be based on data collected from July 1, 2001 to June
    30, 2002.

[^64]: *Id.* at 15, para. 29.

[^65]: *Id.*

[^66]: *Id.* at 15, para. 28.

[^67]: *GCI Opposition* at 12 and Exhibit 3, Statement of John Leahy.

[^68]: *Id.* at 12-13.

[^69]: *Id.* at 12.

[^70]: *Alascom Reply* at 6-7; *Klick-Murphy Reply Declaration* at 10,
    paras. 18-19.

[^71]: *Klick-Murphy Declaration* at 16, 18, paras. 30, 31.

[^72]: *Id*. at 16-17, para. 30.

[^73]: *Implementation of Section 402(b)(1)(A) of the Telecommunications
    Act of 1996*, CC Docket No. 96-187, Order, 12 FCC Rcd 2170, 2213-14
    (1997).

[^74]: *Klick-Murphy Declaration* at 5-6, para. 12.

[^75]: *Id.* at 5-7.

[^76]: *Id.* at 6-7, para. 13.

[^77]: *Id.* at 7, para. 15.

[^78]: *Id.*

[^79]: We note that GCI asserts that we should fine Alascom for failing
    to file its tariff. *GCI Opposition* at 1, 10, 14, 16, and 19. We
    deny GCI's request that the Commission assess forfeitures against
    Alascom in this proceeding. Section 503 of the Communications Act of
    1934, as amended, gives the Commission the discretion to assess
    forfeitures. 47 U.S.C. § 503(b). *See also* 47 C.F.R. § 1.80(e). If
    the Commission determines that Alascom's failure to file a tariff
    warrants the issuance of a Notice of Apparent Liability for
    Forfeiture under section 503 of the Act, it will issue such a notice
    in a separate proceeding.

[^80]: *See* 47 C.F.R. § 1.3.

[^81]: *WAIT Radio*, 418 F.2d at 1159.

[^82]: *Id.* at 1157.

[^83]: *See* paras. 12-13, *supra.*