Ex Parte Communication with Chairman Tom Wheeler and Patrick Halley

Transcription

1 Dykema Gossett PLLC 4000 Wells Fargo Center 90 South Seventh Street Minneapolis, MN Tel: (612) Shannon M. Heim Direct Dial: (612) Direct Fax: (866) September 3, 2014 Ms. Marlene H. Dortch, Secretary Federal Communications Commission th Street SW Washington, DC Re: Ex Parte Communication with Chairman Tom Wheeler and Patrick Halley Dear Ms. Dortch: On August 28, 2014, myself, Doug Neal, OTZ Telephone Cooperative Chief Executive Officer, the OTZ Board of Directors and several employees hosted Chairman Tom Wheeler and Patrick Halley in Kotzebue. We toured Kotzebue and held a luncheon meeting at OTZ. Also attending our meeting was Senator Mark Begich and his telecommunications staff member Andrea Sanders, Christine O Connor, Alaska Telephone Association Executive Director, and Jason Suslavich from Congressman Don Young s office. OTZ appreciates the time that Chairman Wheeler and Mr. Halley spent with OTZ, its Board and employees north of the Arctic Circle. OTZ presented the attached power point presentation and Annual Report. We discussed the steps OTZ s consolidated operations have taken to dramatically decrease costs. For example, five positions have been eliminated or left unfilled for a total cost savings of more than $300,000. We also discussed the middle mile crisis facing Alaska. The State is facing a once-ina-generation opportunity to build middle mile infrastructure and connect Alaskans to the modern economy. OTZ strongly supports the middle mile proposal advocated by the Alaska Rural Coalition. OTZ believes that middle mile projects funded with federal support, like the TERRA project, should be available at a fair and cost-based price. OTZ stressed that its current options for middle mile transport are inadequate and prohibitively expensive. It is at a competitive disadvantage because it cannot obtain fair and equal access to federally funded middle mile transport resources like TERRA. OTZ urged Chairman Wheeler and Mr. Halley to continue to work to provide predictable and sustainable federal support for both wireless and wireline providers. OTZ provides a vital function in its community and without adequate support, it will no longer be able to provide the California Illinois Michigan Minnesota Texas Washington, D.C.

2 Ms. Marlene H. Dortch, Secretary September 3, 2014 Page 2 telecommunications services its members depend upon or continue to support its communities with good, high paying jobs. Pursuant to Section of the Commission s rules, a copy of this letter is being filed via ECFS. If you have any questions or I may be of assistance, please do not hesitate to contact me. Thank you. Sincerely, DYKEMA GOSSETT PLLC /s/ Shannon M. Heim cc: Tom Wheeler Patrick Halley California Illinois Michigan Minnesota Texas Washington, D.C.

3 OTZ Telephone Cooperative High Cost Impacts of FCC Actions Doug Neal, OTZ Shannon Heim, Dykema Gossett

4 Thank You For Recent Progress Elimination of the Quantile Regression Analysis and acknowledging high price of construction in Alaska Pause of the CETC Phase Down in Alaska Consideration of Long Term Freeze in CETC Phase Down in Alaska Consideration of Freeze of CAF Funding in Alaska for Rural LECs

5 Update re OTZ Cost Savings Five positions eliminated or not filled for an annual savings of approximately $300,000 Pay frozen for all employees in 2014 Wireless build out solution found for about 70% less than original forecast

6 Financial Forecast for OTZ Telecom AKT

7 Financial Forecast for OTZ Telephone 8,000,000 7,000,000 6,000,000 5,000,000 4,000,000 Revenues Expenses 3,000,000 2,000,000 1,000, AKT

8 Universal Service Support Projection AKT

9 Tribal Customers All OTZ Board members are Inupiat Eskimo and 73% OTZ staff are Alaska Native. Most OTZ customers are Inupiat Eskimos practicing a traditional subsistence lifestyle Federally Recognized Tribal Entities: Native Villages of Ambler, Buckland, Deering, Kiana, Kivalina, Kobuk, Kotzebue, Noatak, Selawik, Shungnak, Noorvik Native Community AKT

10 Middle Mile Crisis in Remote Alaska Access to Affordable Middle Mile Critical To Survival Increasing obligations require access to affordable middle mile Consumers demand access to advanced telecommunications services FCC Should Require Access to Existing Monopoly Middle Mile GCI s TERRA Project unaffordable Project funded with federal support FCC Proposal to Fund Middle Mile in Alaska $10 Million is too low to make a difference AKT

11 AKT 2012 OTZ Revenues dependent on FCC policy/implementation All Other Revenue 26% Revenue dependent on FCC Control 74% 9

12 Loss of Services in Remote Alaska Internet/Landline Without OTZ, satellite or substandard cellular service will be the only option in many villages Villages depend on OTZ for technical support and maintenance Wireless Unlike OTZ s 20-mile safety umbrella of wireless coverage around each village, GCI s service does not extend beyond the village boundaries Without OTZ s additional coverage, village residents safety will be compromised and lives will be lost GCI s service often cannot be used inside a building in the winter this is more than an inconvenience

13 OTZ Needs Help Fair access to Middle Mile networks Delay phase down of identical support Predictable support for wireless and wireline support. Freeze Alaska support. AKT

14 Thank You Doug Neal, OTZ: Shannon Heim, Dykema Gossett: AKT

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