November 27, 2013

Ex Parte

Marlene H. Dortch Secretary, Federal Communications Commission445 12th Street SWWashington, DC 20554

Re: Connect America Fund, WC Docket 10-90; Universal Service Reform – Mobility Fund,WT Docket 10-208; Adak Eagle Enterprises, LLC and Windy City Cellular, LLC, Petition for Waiver of Certain High-Cost Universal Service Rules, WC Docket No. 10-90, WT Docket No. 10-208; Modernizing the E-rate Program for Schools and Libraries, WC Docket 13-184

Dear Ms. Dortch:

On November 25, 2013, Chris Nierman and Adam Taylor, both of General Communication Inc. (“GCI”), and Traci Galbreath and I, both of Wiltshire & Grannis LLP on behalf of GCI, met with Daniel Alvarez, Legal Adviser to the Chairman. Messrs. Nierman and Taylor and I also met separately with Nicholas Degani, Legal Adviser to Commissioner Pai.

In the meeting with Mr. Alvarez, GCI discussed the attached presentation regarding universal service issues facing Alaska. As set forth in that presentation, we outlined the significant factors that distinguish the Alaska telecommunications environment from other areas of the United States, particularly those that affect the costs, topology and challenges of mobile and fixed broadband network deployment. We also stressed the critical importance of setting aside at least $78 million for service to Alaska in the Mobility Funds Phase II.

In both the meeting with Mr. Alvarez and the meeting with Mr. Degani, we alsodiscussed the pending application for review and petition for reconsideration filed by Adak Eagle Enterprise and its affiliate Windy City Cellular from the Wireline Competition Bureau’s decision in DA 13-1578. We stated that with respect to Windy City, there is no justification for grant of the waiver. GCI and Windy City compete directly, and GCI serves substantially all of the inhabited locations that Windy City does – and it does so within the $3,000 per line per year annual high cost support cap. While Windy City also serves uninhabited areas using its White Alice site (which it began operating after the FCC proposed the $3,000 per line per year annual cap), given that GCI is willing to either assume operation of that site or extend its own coverage in the event that Windy City ceases operating, and to do so within the $3,000 cap, that is also not a basis for Windy City’s waiver. In any event, there is no reason why any waiver with respect to the White Alice site should ever exceed the incremental costs of constructing and operating the site – without allocation of overhead or other common costs, as GCI explained in it ex parte letter of September 11, 2012 (at 3). With respect to Adak Eagle, the Commission fundamentally must decide whether providing additional support is a good use of universal service funds,

Marlene H. DortchNovember 27, 2013Page 2 of 2

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considering that GCI can provide the supported services within the $3,000 cap (utilizing different technologies).

We also stated that Windy City/Adak incorrectly assert that support for multiple lines is improper. As the Commission is aware, it never adopted a “primary line” approach to high cost after that was proposed by the Federal-State Universal Service Joint Board, and in fact Congress has routinely include appropriations language forbidding the Commission from doing so. This means that all ETCs, whether ILECs or CETCs receive high cost support for providing multiple lines of service to an individual or household. In addition, GCI has voluntarily taken the step ofensuring that it only seeks support for Adak lines on which there has been usage within the relevant reporting quarter.

We also stated that Windy City/Adak incorrectly claim that GCI does not provide 911 service from its wireless phones. GCI is required to do so, and it does. To reach the public safety authorities on Adak Island, GCI must at present route its 911 calls through the ILEC. However, if Adak Eagle ceased to operate, GCI would find a way to deliver those 911 calls to public safety.

Finally, we note that the Section 214(e) gives both the Regulatory Commission of Alaska and the Commission the means to ensure that Adak Island remains served by GCI, an ETC, in the event that Windy City and Adak Eagle Enterprises ceased operation.

Sincerely,

/s/John T. NakahataCounsel to General Communication, Inc.

cc: Daniel AlvarezNicholas Degani

Alaska, GCI & USF Reform

Alaska’s Unique Communications Challenges: Size

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By far the largest state in the U.S.• 1/5 the size of the entire lower 48

Alaska’s Unique Challenges: Sparse Population and Limited Infrastructure

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• Just over 710,231 residents – Approximately 1.2 persons per square mile, compared to 103.8 persons per

square mile in the lower 48

• Limited road and rail system – Over 200 “off-road” communities accessible only by plane, boat, or snow

machine

• Limited interconnected power grid – Rural communities rely primarily on diesel electric generators for power – Electricity is much more expensive than in the Lower 48

• Limited terrestrial middle-mile facilities – Most rural areas rely on satellite to connect to urban centers

Alaska’s Unique Communications Challenges: Climate, Terrain and Location

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Climate • Harsh, long winters and short construction season

(May to October) • Ice in northern latitudes makes submarine fiber

optic cable costly to install and hard to repair during much of the year

• Winds and ice require hardened equipment and expensive repairs

Terrain

• Largely mountains, islands, rivers, and tundra

Location • The Earth’s curvature at extreme northern

latitudes reduces the availability and performance of geostationary satellites

• Almost 1500 miles from Anchorage to the nearest Tier 1 POP in Seattle

• GCI Has Invested Over $1 Billion in Alaska since 1979– Long distance telephone facilities and satellite earth

stations – Hybrid fiber-coaxial cable plant – Submarine fiber construction

• More than $720 Million since 2008– Urban and rural wireless deployment (AWN) – Fiber and Microwave terrestrial middle-mile networks

(TERRA) – Invested in underutilized broadcast stations (KTVA)

GCI Investing in Alaska

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Alaska’s ILEC Exchanges

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Alaska’s ILEC Exchanges

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Impact of the FCC’s 2011 Order on Alaska – So Far

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* Does not reflect cessation of QRA caps from July 2013 to then end of 2014.

• Far more than $78 million per year required to achieve statewide mobile broadband service.

– Modeling estimates the incremental cost at $596 million (capital costs and 5 year present value of operating expenses)

– PV of 5 year stream at $78 million is $316 million

• National auction likely to direct funds from Remote Alaska to Lower 48

– Mobility Fund Phase I – Of $300 million auctioned, Alaska had winning bids for only $3 million

– A comparable result would reduce $105 million in Alaska CETC high cost support to $5 million

• The Commission adopted Alaska-specific approaches to CAF Phase II for price cap and rate-of-return carriers

• Same solution applies to Mobility Fund Phase II for Remote Alaska Wireless Providers

High Cost Reform: Protect and Promote Mobility in Rural Alaska

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• Reserve $78 million of Mobility Fund/Tribal Mobility Fund II support for distribution in Remote Alaska

• Preserves current amounts where demand already exceeds available funding

• Matches the amount already budgeted to size the auctions

• Treatment of Non-Remote Alaska remains same as rest of the U.S.

• Alaska remains eligible for Remote Areas Fund support, consistent with what the Commission decides for the Remote Areas Fund

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High Cost Reform: Protect and Promote Mobility in Rural Alaska

• Connects schools that are otherwise isolated – Without connectivity schools cannot meet national mandates

• Connectivity, particularly terrestrial connectivity, to the anchor tenants helps connect the rest of the community – Without school access, broadband adoption would plummet – Helps to sustain wireless services and vice versa

• Cost of connectivity has come down significantly over time

• Administrative process is known and relatively manageable, but audits are repetitive and performed in a wasteful manner

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E-Rate: Positive Results

• Continue to Focus E-Rate Support on Essential Connectivity – Don’t shift support for connecting schools to funding for internal

connections, equipment, or ancillary services

• Preserve the Available Discount to the Most Isolated Schools – School districts will be forced to decrease service, rather than

increase their budgets

• A Per-student Cap Will Negatively Affect Alaskan Students – Could reduce support in Alaska by 86%

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E-Rate Reform: Focus on Connectivity In the Most Isolated Communities