HomeMy WebLinkAboutFiber Optics Memo 1996
a ALASKA INDUSTRIAL DEVELOPMENT
AND EXPORT AUTHORITY / => ALASKA
@im™ ENERGY AUTHORITY
480 WEST TUDOR ANCHORAGE, ALASKA 99503 907 / 269-3000 FAX 907 / 269-3044
July 30, 1996
Mr. Gene Strid
Vice President, Engineering
General Communications Inc.
2550 Denali Street, Suite 1100
Anchorage, Alaska 99503-2781
Dear Mr. Strid:
The Alaska Industrial Development and Export Authority (the “Authority”) is in receipt of your
letter containing a formal request for permission and authority to attach a fiber optic line to the
yet to be constructed Northern Intertie transmission line between Healy and Fairbanks. As we
noted in our previous letter to you, there are many unanswered questions that we must
research and seek guidance prior to entering into formal discussions regarding this matter.
This particular request is somewhat complicated by the fact that the utilities will be the owners
of this intertie. Recognizing that State funds will be used to partially finance construction of this
intertie, the State will have some authority with respect to these issues. Please be assured that
the Authority is committed to obtaining the information and guidance necessary for us to
prudently respond and actively engage in business discussions concerning fiber optic cable
attachments to State owned interties.
We look forward to discussing this interesting project with you in the very near future.
Sincerely,
William R. Snell
Executive Director
bec: D. Randy Simmons, Development & Finance Manager
Dennis V. McCrohan, Deputy Director - Energy
Keith Laufer, Esq.
Jon Rubini, Esq.
David E. Germer, Project Manager
Fiber-optic
pioneers
riding herd
to corral
Alaska
market
THE ANCHORAGE DAILY NEWS
Sunday, February 2, 1997
By BRUCE MELZER
Daily News reporter
From Australia, Nebraska and Wash-
ington state, the cable cowboys are rid-
ing north to lasso Alaska with strands of
glass as fine as hair.
Their high-tech lariats contain those
fiber-optic threads that can carry tens
of thousands of telephone and data calls
simultaneously.
This convergence of the wire riders
is turning into a shoot-out at the A.K.
corral. Companies with millions of dol-
lars in their holsters are jockeying to be
the first, the cheapest and the most con-
venient to carry your calls and data
through Alaska.
The company that wins, or at least
leads, stands to reap millions of dollars
in profits for its effort.
Consumers should win, too. Competi-
tion could lower phone rates as the
fiber-optic companies war to sell space
on their cables to phone companies, said
John Ayers, a consultant and former
head of Anchorage long-distance phone
company Alascom Inc.
Moreover, these fiber-optic cables
will create a modern electronic highway.
Cable companies and phone executives
envision moving information, entertain-
ment and business services — many of
which haven’t even been invented yet —
with incredible speed and efficiency.
The competitors range from one of
the state’s largest communications com-
panies to a Washington outfit backed by
Australian investors.
Bes
The Australians are part of Alask
Fiber Star. That company plans to spen
upwards of $40 million to bury a fibe
optic cable along Alaska Railroad track
from Fairbanks to Anchorage and sout
to Whittier, project director Julia
Dinsdale said last week in announcin
the project. The 400-mile cable shoul
be running by October, he said.
Another contender, General Commi
nication Inc., plans its own Anchoragt to-Fairbanks fiber-optic cable, sai
spokesman David Morris. . Th
Anchorage-based.cable TV and long-di:
tance phone company wouldn’t sa
Thursday when construction will sta)
or how much it might cost.
These announcements last wee
came just three weeks after a thir
company, Kanas Telecom Inc., said
too will link Alaska’s two largest citie
“as part of its fiber-optic project alon
the trans-Alaska pipeline from th
North Slope to Valdez. Construction hz
started on the northern section and th
cable will be operating next year, sai
Mike Williams, Kanas’ vice president.
Tom Edrington, president of Ancho)
age’s city-owned phone company is glee
ful about all the new “glass.” That
phone-speak for the hair-thin glas
strands that carry voices and data in th
fiber-optic cables. His company, ATU Telecommunic:
tions, plans to start long-distance phon
service within the next two months an
Please see Page C-2, COWBOY
“a
COWBOYS: Companies shoot it out for Alaska market
Continued from Page C-1
will use someone else's fiber-
optic cables to haul phone calls.
“It’s a wonderful thing to
have choice in the market, so
we love it, we absolutely love itz.
Alaska — and the whole
world — is rapidly becoming
wrapped in new technology.
The demand to move informa-
tion is soaring, but no one knows
how high it will go, he said.
Wiring Alaska is “one of
these games where if you are
not at the starting gate at the
right time, chances are
you’re going to miss the race.
But nobody quite knows
when the race begins,”
Edrington said. “It’s one of
these things when you look
back, you'll know.”
Some wonder if demand
within Alaska can make all of
that fiber optics pay right
now. The risks are high, and
so are the stakes.
“You want tension. You got tension,” ATU’s Edrington
said of the million-dollar bets
announced in January.
“There certainly is a real
exposure for someone to lose” if more than one fiber- optic cuble is built, said Jerry
DeFrancisco. He is president
of Anchorage long-distance
’ phone company AT&T Alas-
com and another potential
user of the cables.
In 1995, AT&T turned
down the opportunity to build
a fiber-optic cable along the
railroad, DeFrancisco said. But where AT&T saw too
much risk, United Native
Telecommunications Inc., or
UNAT, saw _ opportunity.
UNAT attracted Australian
money men and created Alas-
ka Fiber Star to plow a cable
beside the railroad tracks.
The venture will pay the
railroad more than $1 million
a year for the corridor, said
John Burns of the railroad.
UNAT supplies long-dis-
tance phone circuits to the gov-
ernment and military, said
James Nunes, a company board
member. Owning a fiber-optic
cable will boost its business sell-
ing circuits to Alaska’s military.
Cash and expertise for the
project came from Australians
who have financed or built
fiber-optic and power-line pro-
jects throughout Southeast
Asia, said Tony York.
York, from Sydney, helped
assemble a covy of interna-
tional investors, including
Rothschild Bank's Australian arm, he said: Project director
Dinsdale, also Australian,
said he ran power-line con-
struction projects in Viet-
nam, the Philippines, Indone-
sia and Thailand.
Their Alaska cable’s poten-
tial capacity is huge —
enough to carry 32,000 simul-
taneous phone calls, Dinsdale
said. He figures the cable will
be full in four to five years.
When that happens, the ven-
ture is prepared to plant an-
other one, York said.
Mike Williams of the com-
peting Kanas project isn’t wor-
ried about the rival project.
Sure the two companies
will be competing for cus-
tomers and price, he said.
But with oil-pipeline opera-
tor Alyeska Pipeline Service
Co. as a guaranteed user for
Kanas’s North Slope to Valdez
cable, he’s confident his pro-
ject will be a money maker.
His venture is a partner-
ship of four Alaska Native
corporations and Nebraska-
based MFS Network Tech-
nologies Inc.
Chuck Hensley, of fledg-
ling long-distance phone com-
pany Alaska Network Sys-
tems, isn’t so sure all the cable
builders will follow through
with their plans. Perhaps the announcements are coming out now to dissuade the other
guy from going ahead, he said.
All this jockeying in-state
is a prelude for. the even
higher-stakes tussle over
who will own the next fiber-
optic cable linking Alaska to
the Lower 48. The only cable
now, owned by AT&T, is fill-
ing up, DeFrancisco said.
“There’s common agree-
ment that by the year 2000,
there will be another fiber-
optic cable to the Lower 48,”
said Edrington of ATU.
General Communication Inc. wants to build that cable
and has surveyed the undersea
route, said spokesman Morris.
Alaska Northstar Commu-
nication LLP, from Washing-
ton state, has federal permits
to string a cable between
Whittier and Oregon, with a
landing near Juneau, said
president Don Schroeder.
Like many of the cable cow-
boys, Schroeder is reluctant to
say too much about his project,
fearing he'll disclose key infor-
mation to competitors. In the
end, the one who has a firm con-
struction date will win, he said.
“Talk is cheap. Everybody
has got to do what they have
to do. The best thing is for people to do their blocking and tackling and may the best solution surface and come forward,” Schroeder said.
ANCHORAGE/FAIRBANKS INTERTIE
BIA Lands -- BLM
Federal Lands
Too Long
Include in
Procurement Initial Meetings with Lengthy Time Frame
BIA/BLM ——— Consult w/providers Determine Process > 8 months
= Reasonable oK
Time Frame
Provider i Yes ghts be ; Purchase | —-—5 | Purchased by ee | — > ;
of Rights? No AEA? equired?
No
nO Include in
Legislative Authority to Procurement
——— | expend funds derived from
Procurement
Required No
——_— Should Application Duties be
Consult
Providers
Seek Legislative
Authority
Go to
Procurement
Applicant
AEA Files
Applications &
Conducts
Process
Environmental
Process Required?
: be AEA need not be Applicant included in Procurement?
AEA Must be
No
Yes
=—— Go to
Environmental
Process
Go to
Procurement
Insignificant
No
Review Scope of
Easements
No additional
Rights Req'd
Notify Landowners of
Mods for Increased
Reliability
Assess Possibility of
Hold ups/
Litigation
Significant
Consult Providers
Continue
Go to
Procurement
Private Lands
——
Additional
Rights Req'd
Consult Provider
Se
Continue
Include in
Procurement
Require Provider to deal w/
Landowners and Transfer
rights to AEA?
Legislative Authority
Appropriate to
Expend Funds
State Lands
State Lands
Initial Meetings with DNR to
Determine Process
Application Process Requires
Payment/or Otherwise
Cumbersome
Consult Providers
Continue
Legislative Authority
or Fix Required
cas Yes Should Application Process Include in be Included in — = Procurement Yes Procurement
J
AEA Makes Application/
Process
Seek Legislation
Contractual Issues Utilities
Initial Meeting with Utilities
to Discuss
Request & Issues
Consult with SSS Assessment of Utility Position
Utility positions unreasonable
or excessive/agreement unlikely
Providers
Utility positions reasonable/ Continue agreement likely
Negotiations with Utilities
to Reach Agreement
on Fundamental Issues
Agreement to be Included as
Part of Procurement
Consult Providers
Consult
Providers
Seek Legislative
Authority
Continue
Legislative
Authority necessary
Significant
——S——
Process Likely
Environmental Process
Initial Meetings w/
Lead Agency/ies
| Limited Process
Can Process Be Delegated to ——
Provider?
fv
Yes
Sa
Is Consultant
Required?
Yes
Will Significant
Expenditures be Req'd?
No
Procure & Engage
Consultant
Yes
Include in
Procurement
AEA Files and
Revised Procurement
Package
Continue
No Responses
Adequate and
Reliable |
Procurement
Phase |
oo
Determine Elements to be Included
ie., ROW Acquisition, etc.
Develop Preliminary Engineering
Criteria - Utility Input & Approval
Establish Review Criteria/
Appoint Evaluation Committee
Issue Phase | Procurement
Package - Solicitation of Design
Packages - Pre-qualifications SERRE ose
Review Phase | Responses ——ee
Review and Recommendations
by Ind. AEA Engineering Consultant
Cost Analysis of Recommended
Approaches ae
f Efficiency of Design
Reliability of Design
Possibility of Elec. Line Inter.
Magnitude of Line Improvements
{ Capacity of Fiber
Utility Approval of
AEA Approved
Approaches
——
To Phase II
Procurement
Phase II
Develop Phase I| Procurement Packag
- Alternative Approaches
Based on Acceptable
Approved Design
Review of Responses
- Weighting Based on
+ # of Fibers
*Revenue to AEA
Select Winning Bidder 1
Begin Construction
¢ Private land easement acquisition to secure Chugach’s rights to exist on private lands
crossed by the transmission line.
The variation of project right-of-way and permit acquisition costs among the three primary
alternatives is a direct function of the agency lands crossed that require permitting, as well as the
amount of private land crossed’ by the route. Direct costs are those associated with the market
value of the lands encumbered by the right-of-way. Indirect costs are the cost of labor and
expenses to acquire right-of-way, and are directly related to the number of permits and easement
to be acquired.
Fiber Optics: Consideration for the installation of a fiber optic cable as part of the project was
not requested until after the preliminary design was complete. The preliminary design and design
criteria as presented in the Design Section Report do not provide for fiber optics. However, based
on our experience with similar projects, we have estimated the cost of adding a fiber over the
various routes and have summarized those costs below. Costs for the addition of fiber optics to
the Project are not included in the overall Project costs. If the addition of fiber optics is desired,
it is recommended that it be included in the requirements for the final design see Table 9.
From Nas | TABLE 9 SpxPourr SOIR
E cec Lb’ ve Soy FIBER OPTIC CABLE COST ESTIMATION
[ Application | $ in 1,000’s |
Submarine Cable
Underground (Land) Cable
Overhead Transmission
Substations
Total F.O. costs, depending on route
Cost Estimate Summary Tables: The following tables (10 through 12) summarize the base
routes and alternatives by overall corridor and voltage. Refer to the applicable section for detailed
breakdowns of summarized costs. The following acronyms are used. D
ccs B
*OH - High Voltage (138kV or 230kV) Overhead Transmission Line » ce
* SUB - Submarine Type Cable (138kV or 230kV) —
*UG - High Voltage (138kV or 230kV) Land Underground Type Cable |
*SS - Substation (138kV or 230kV)
*RC - Reactive Compensation (115kV, 138kV, or 230kV)
FIBER OPTICS
RIGHT OF WAY ISSUES
The Alaska Energy Authority (AEA) has received a request to install, operate and
maintain a fiber optics cable within the Intertie Right of Way. That request raises
a number of issues with respect to the AEA’s easement rights.' The ultimate
issue is: do the easements granted to the AEA allow the installation, operation
and maintenance of a fiber optics cable? In the event the easements do allow
installation of the cable, are there any contractual or regulatory prerequisites? If
AEA does not have the right to install the cable, a number of corollary issues
arise:
e What rights must be obtained?
e Who should obtain them?
e How will they be obtained?
e What authority is required if the owner will not voluntarily convey?
e What will the acquisition cost and how long will it take?
The right to install issue must be addressed in the context of whether the
underlying ownership is private, borough, state, federal or Alaska Native
allotment.
I. PRIVATE PROPERTY RIGHTS:
For purposes of this analysis the private property owners include: individuals,
native corporations, and electric cooperatives. | With one exception’ the ease-
ments have the same purpose clause:
i All of the easement rights were acquired prior to July 1, 1989 when the corporate name
was changed from Alaska Power Authority to Alaska Energy Authority. For consistency AEA will
be used throughout this document unless APA is used in quoted material.
r Cook Inlet Region Inc. (CIRI) granted six easements for different parcels. The applicable
easement language is as follows:
...for the construction, maintenance and operation of one or more electrical
transmission lines with voltage capacities not to exceed 345 KV, including
structure foundations, guy anchors and all other necessary facilities appurtenant
thereto. Any other use by the APA, its agents or assignees shall constitute a
breach of the conditions of this easement, causing an automatic termination of the
easement and reversion of title to CIRI.
...APA shall have the right... to enter upon the permanent easement for the
purpose of construction, maintenance, repairs, alterations, or reconstruction of said
Fiber Optics Right of Way Issues
Page 1 DRAFT - 10/30/96
a perpetual right-of-way and easement to survey, erect, construct,
reconstruct, operate, maintain, replace and remove electrical
transmission and/or distribution lines, including but not limited to,
foundations, towers, wires, cables, and appurtenant fixtures upon,
over, under, and across the following lands owned by the Grantor....
Except for the right to cross other lands owned by the grantor to access the
easement, the right to remove danger trees from the owner’s adjacent land and
the right of AEA to remove the improvements, the easements do not grant any
other specific rights. However, two of the owners, Cook Inlet Region, Inc. (CIRI)
and AHTNA, Incorporated, did include clauses pertaining to a 345 kilovolt
limitation.®
transmission line or lines without incurring any legal obligation or liability
therefore...
CIRI’s counsel drafted the CIR] easements subject to review by AEA and the Attorney
General's Office. Typically doubts or ambiguities in an easement are construed against the drafter
and in favor of the non-drafting party. Wessells v. State, 562 P.2d 1042, 1048 (1977). In
addition, the public trust exception applies. Under the public trust exception, the court would
construe the instrument in favor of the public and against the private party. See State of Alaska
Department of Highways v. Green, 586 P.2d 595, 603 (Alaska 1978) footnote 24: “As a general
rule, where the language of a public land grant is subject to reasonable doubt such ambiguities are
to be resolved strictly against the grantee and in favor of the government.” CIRI’s strongest
argument is the agreements are not ambiguous and should be limited solely to the specific rights
granted by the document itself.
3 For the CIRI limitation see footnote 2. AHTNA granted two easements. Paragraph number
6 of both easements states:
The easement granted herein is for the Anchorage-Fairbanks Intertie, a transmis-
sion line designed and constructed to transmit electricity at a voltage up to 345
kilovolts.
AHTNA is the owner of a cable company and CIRI’s subsidiary owns television and radio
broadcasting stations. Both may argue that the easement use is limited to electric transmission
line(s) up to 345 kV, and that AEA must acquire additional rights for the cable. The issues raised
by the language of the easements granted by these two owners will be addressed in each of the
three issue sections.
In addition to paragraph 6, the AHTNA easement differs from the CIRI and most of the
other private easements by virtue of the fact that the width of the easement was limited to 170
feet wide, which is only wide enough to accommodate one 345 kV electric transmission line. CIRI
and most of the other private owners granted easements 400 feet wide which could accommo-
date up to two additional 345 kV lines. This would support an argument on AHTNA's behalf that
the easements it granted are more narrowly defined.
In this instance AEA drafted the easements, however, AHTNA was ably assisted by
counsel, and the public trust exception mentioned in footnote 2 applies.
Fiber Optics Right of Way Issues
Page 2 DRAFT - 10/30/96
The issues relating to private property are broken down into three areas: A. Right
to Install Without Obtaining Additional Rights, B. Prerequisites to Installation
Without Obtaining Additional Rights, and C. Acquisition Requirements.
A. Right to Install Without Obtaining Additional Rights
There are three different legal approaches under which AEA may claim the right to
use the existing private property easements without obtaining additional rights
from the owners: 1. shield wire replacement, 2. operate and maintain, and 3.
incidental use.
1; Shield Wire Replacement
As currently proposed, the plan is to replace the existing shield wire with fiber
optic cable. The shield wire itself is an existing integral part of the transmission
line, or an appurtenant fixture. According to the project as-built drawings, shield
wires traverse the entire project. Assuming that OPGW cable is used, * which can
function as a shield wire, the existing shield wires can be replaced with fiber optic
cable.
With respect to replacement of the shield wire with the fiber optic cable, the key
words in the purpose clause are: “reconstruct, operate, maintain, replace and
remove... wires, cables, and appurtenant fixtures”. Use of the words “recon-
struct” and “replace” are particularly significant in that they convey a broad right
to make changes in the transmission line facilities. Those broad rights establish a
strong basis for the position AEA has the right to replace the shield wire without
obtaining additional private property rights.°
2. Operate and Maintain
A secondary, but less powerful position applies to AEA’s right to “operate” and
“maintain” “wires, cables and appurtenant fixtures”. The right to “operate and
4 Power Engineers’ report indicates that an ADSS-dispersion shifted cable which is proposed
for the Alaska Intertie portion is non-conductive; however, the OPGW cable which is being
proposed for the Northern Intertie does perform as a shield wire.
5 See Lower Colorado River Authority v. Ashby, 530 S.W.2d 628 (Tex. Civ. App. 1975);
Strauch v. Coastal States Crude Gathering Co., 424 S.W.2d 677 (Tex. 1968).
® The shield wire is an integral part of the 345 kilovolt intertie. The purpose clause of the
easement specifically allows AEA to “reconstruct, operate, maintain, replace and remove... wires,
cables, and appurtenant fixtures” the 345 kilovolt line. Paragraph 6 of the AHTNA agreement is
not inconsistent with the purpose clause of the easement and does not create an ambiguity.
Fiber Optics Right of Way Issues
Page 3 DRAFT - 10/30/96
maintain” gives AEA the right to enter and maintain the easement and make those
improvements reasonably necessary for its use and enjoyment of the easement.’
Installation of the fiber optics cable will provide revenues, improved SCADA and
other communications-dependent improvements such as weather monitoring, and
shared operation and maintenance efforts such as line surveillance which will
reduce project costs. If the specifications for installation of the cable require
repositioning the sag wire structure, installation of the fiber optics will reduce an
existing operational outage problem caused by sagging, ice-loaded shield wires
faulting the conductor. Making changes to the shield wire assembly would be
particularly important if the ADSS cable is used, since the ADSS cable does not
perform the function of a replacement shield wire.°
3. Incidental Use
A third position is that installation of fiber optics cable is an incidental use of the
right of way by AEA. The emerging trend in the United States is that telecom-
munications cables installed in electric transmission and distribution systems are
an incidental use and within the scope of the rights granted in an electric
transmission/distribution easement.'® This position would apply equally to cable
attached to the structures or buried within the right of way.
Under AS 42.05.311(a) a public utility is required to permit other regulated utilities
to utilize its rights of way for payment of a reasonable fee.'' By virtue of a
= See Section 7.09, Law of Easements and Licenses in Land, Bruce & Ely, Warren Gorham &
Lamont, 1988.
. During snow and ice loading conditions, the load on the shield wire causes it to sag more
than the conductor. In some areas of the intertie, the increased sag of the shield wire and contact
or proximity to the conductor results in an outage. Repositioning the structure holding the shield
wire will reduce the occurrence of outages.
: With respect to the AHTNA and CIRI easements, if the cable is not a shield wire, it will be
incumbent on AEA to make a supportable finding that there are operational and maintenance
benefits that outweigh the cost of installation of the cable, any additional project operation and
maintenance costs associated with the installed cable and any increase in liability to AEA.
ao See C/R TV, Incorporated, v. Shannondale, Incorporated, 27 F.3d 104, (4" Cir. 1994) and
Centel Cable Television Company of Ohio, Inc. v. Cook, 567 N.E.2d 1010 (Ohio 1991).
= AS 42.05.311 promotes joint use and interconnection for public utilities “when the public
convenience and necessity require this use and the use will not result in substantial injury to the
owner (utility)....". If AEA were not exempt from the provisions of Title 42, the joint use and
interconnected provisions would apply to the Intertie.
AS 42.05.311. Joint use and interconnection of facilities. (a) A public utility having
sewers, conduits, utilidors, poles, pole lines, pipes, pipelines, mains or other distri-
bution or transmission facilities shall, for a reasonable compensation, permit
Fiber Optics Right of Way Issues
Page 4 DRAFT - 10/30/96
statutory exemption, AEA is not subject to APUC jurisdiction.'* Notwithstanding
the exemption, it is likely, due to broad legislative policy advocating multiple or
joint use of public utility easements,'* that a court would determine the fiber
optics cable is an incidental right or use of AEA’s electric transmission/distribution
line easement. As an incidental use, unless the fiber optics cable creates an
“undue burden” on the underlying owner’s rights,'* installation would not require
acquisition of additional rights from the underlying owner.
In regards to the “undue burden” issue, the equities are in AEA’s favor. With the
exception of the utility cooperatives’ lands, the private lands are virtually all
unimproved or low density use lands. Installation of the cable on the structures
above a reasonable clearance height, or burial below a reasonable depth to
accommodate other utilities, should impose no additional burden on the owner.'®
another public utility to use them when the public convenience and necessity
require this use and the use will not result in substantial injury to the owner, or in
substantial detriment to the service to the customers of the owners. The cost of
modifications or additions necessary to a joint use shall be at the expense of the
public utility requesting the use of the facilities.
13 AS 44.83.090\(b).
= In addition to AS 42.05.311(a) other examples of legislation relating to utility use of public
rights of way are: AS 19.25.010 - highway rights of way, AS 35.10.210 - public facilities, and AS
42.05.251 municipal streets, alleys and other public ways. As to incidental utility use of a high-
way see Fisher v. Golden Valley, 658 P.2d 127, 129 (Alaska 1983). According to the Alaska
Supreme Court in Fisher, there are four differing views on incidental utility use of public highway
rights of way and it adopted the most expansive view which is “[t]he easement acquired by the
public in a highway includes every reasonable means for the transmission of intelligence, the
conveyance of persons, and the transportation of commodities which the advance of civilization
may render suitable for a highway.” Fisher, supra at 129. The Fisher language quoted fits with
the trend to allow cable as a “technological improvement.” C/R TV, Incorporated, supra, at 107.
" Fisher, supra, at 129.
as Shallow burial or above ground installations that are low enough to interfere with access
across the easement would present a problem. This issue can easily be avoided through appro-
priate permitting stipulations.
An issue limited to the CIRI lands arises with burial of the cable. CIRI granted APA an
easement across the “surface estate” for lands granted under the Alaska Native Claims Settle-
ment Act (ANCSA). Delineation of surface and subsurface rights is limited at best, the act does
not define surface or subsurface. See Chugach Natives, Inc. v. Doyon, Ltd., 588 F.2d 723, (9th
Cir. 1978). See also Koniag, Inc. v. Koncor Forest Resource, 39 F.3d 991 (9" Cir. 1994). Burial
on CIRI lands should be avoided.
AHTNA also received its lands under ANCSA; however, the local village corporation which
owned the “surface estate” merged with AHTNA which owned the “subsurface estate” conse-
Fiber Optics Right of Way Issues
Page 5 DRAFT - 10/30/96
Furthermore, AEA usually paid 90% of the fee simple value for the easement
interest plus any damages to the remainder, indicating the rights or usage
potential retained by the owner were limited.'®
The policy implications arising from AEA claiming incidental use of its right of way
should be examined before taking this position. If AEA is allowed to install a
publicly regulated utility in its right of way as an incidental use, other publicly
regulated utilities may claim that, even though AEA is exempt from APUC
regulation, AEA is acting in proprietary, or private capacity, rather than
governmental capacity and its easements are therefore subject to use by regulated
utilities. Such a position may be persuasive in light of the broad legislative policy
for joint use of public easements. Joint use may be in the state’s best interest;
however, the ramifications of the policy should be analyzed before proceeding.'”
B. Prerequisites to Installation Without Obtaining Additional Rights
None of the private easements place obligations on AEA to notify the owner of
repairs, replacements or alterations. If AEA chooses a course of action that does
not require the purchase of additional rights from private property owners, from a
contractual standpoint, no notification is required. Electrical substation opera-
tional criteria at both the Golden Valley Substation and the MEA substation, the
northern and southern ends respectively, will require coordination, however, both
utilities are aware of potential for addition of the cable and will be involved long
before construction.
quently AHTNA owns the entirety and the easement to APA does not limit the grant to the
surface estate.
16 As to the AHTNA easements, this position is the weakest. None of the other easements
have a paragraph limiting the usage to the 345 kilovolt Anchorage-Fairbanks Intertie transmission
line (singular). Accordingly, AHTNA is in a position to ask a court to find this easement is specific
rather than a general unlimited grant. Under a specific easement, AHTNA can argue that AEA is
permitted to only construct, operate, maintain, etc., one 345 kV electric transmission line, and
that any additional or incidental rights were not contemplated or granted and must be acquired.
2 Whether AEA or a third party owns the cable may play a role in the final decision if
installation is contested. AEA as owner of the cable can more strongly defend each of the three
positions on the premise that the installation is beneficial to AEA and is a secondary or incidental
use of its own right of way. On the other hand, if the cable is owned by a third party and
installed via an attachment agreement or joint use agreement, the underlying owner can raise the
argument that the third party does not have a title interest in the easement. Since AEA’s
easement rights are ostensibly not a public right of way under the APUC jurisdiction, this situation
may be distinguishable from cases involving use of regulated utility rights of way.
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From a policy perspective, it is advisable to notify the owners prior to commence-
ment of the work. Due to the limited number of private owners, 17 original
owners including native allottees, the notice effort should be minimal.
All regulatory requirements must be reviewed to determine if existing permits are
sufficient to allow work to take place on the project.
C. Acquisition Requirements
In the event acquisition of the private interests is required (this analysis will also
include the Alaska Native Allotments), no federal funds are involved, so the Uni-
form Real Property Acquisition and Relocation Act of 1970, as amended, does not
apply.'® Therefore, the acquisition process is a matter of state policy.
Should AEA pursue acquisition, there are approximately 1,250 acres of private
and native allotment lands. Of that acreage, two owners, CIRI with 467 acres
and AHTNA with 552 acres, own all but 230 acres. Most acquisition took place
in 1983. The average price paid per acre was $1,900; prices ranged from $245
to $5,435. A conservative cost to acquire the an additional right to install
telecommunications cable is estimated to range from $1,000,000 to $1,650,000.
The principal problem with acquisition will be lack of AEA authority to condemn
the property of an owner that will not voluntarily sell.'* AEA as an exempt entity
without a certificate of public convenience and necessity or statutory authority
cannot condemn additional rights. Without the right of eminent domain, the
potential exists for a single owner to require relocation of a portion of the line. In
several instances that relocation would be lengthy and the cost would be
significant.2° A separate opinion is required as to whether AEA can acquire
additional rights through another state agency with the power to condemn.
18 This was the position of AEA in the original acquisition, however, AEA did appraise the
individual properties before proceeding with acquisition and generally met the Uniform Act’s
requirements.
"8 The 1993 legislation, Section 10, Chapter 18, SLA 1993, repealed former section AS
44.83.080(15) which gave AEA the authority to exercise the power of eminent domain.
20 AHTNA has a large contiguous ownership. One of the theories they advanced during
negotiation of the Intertie was the “opportunity cost doctrine” or the easement value is $1 less
than the cost to go around the property. Such a position could result in several miles of reroute.
Several other owners own as much as one-half mile of right of way.
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However, a regulated public utility may exercise the right of eminent domain for
its own use.”' An alternative to AEA’s acquisition of additional rights would be to
permit a cable utility to attach to the transmission line structures through a joint
use agreement or attachment agreement, and require the utility to acquire rights
from the underlying owner.??, DOTPF takes a similar position for utility use of its
rights of way.”°
Il. MATANUSKA SUSITNA BOROUGH RIGHTS OF WAY
The Matanuska Borough grant by the same easement document as the other
private owners, however, certain legal principles that apply to private owners are
not applicable to governmental entity. Although not a likely proposition, in the
event the Matanuska Susitna Borough objects to installation of the fiber optics
cable within the easements it granted, the potential issues involve grant interpre-
tation, authority to convey other than express uses, and the right of eminent
domain in the event AEA seeks to obtain interests involuntarily.
A. Grant Interpretation
In disputes with private owners, AEA can argue the position that the instrument
should be construed in its favor under the public trust doctrine.** However,
against the Mat-Su Borough, another public entity, the standard rule of grant
interpretation that doubts are to be construed against the drafter and in favor of
the non-drafting party”® will more likely apply.
B. Authority to Convey other than Express Uses
The Assembly, in authorizing the Borough Mayor to sign the easement passed a
resolution. Unless the resolution expressly granted the additional rights, which it
did not, borough ordinances may make the grant of additional rights ultra vires
2 AS 42.05.631.
22 The concern which arises here again goes back to the question of AEA’s right, or need,
and the public policy as to control the right of way. If another utility obtains a right of way across
the same lands, AEA cannot object to subsequent users unless their use interferes with AEA’s
prior easement rights.
= A rate structure and regulations will need to be established if AEA follows this approach.
ad State of Alaska Department of Highways v. Green, 586 P.2d 595, 603 (Alaska 1978).
2 Wessells v. State, 562 P.2d 1042, 1048 (1977).
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and void as to the borough. Research of the borough ordinances will be required
to determine if their is a limitation that any conveyance of a real property right
must be expressly granted, similar to AS 38.95.010.”°
C. Eminent Domain
Assuming that AEA or a regulated public utility exercises the right to condemn the
property, such effort is subject to a finding that the use the property is being
condemned for is “a more necessary purpose than that to which it has already
been appropriated.”””
Il. STATE RIGHT OF WAY
AEA has an “exclusive private easement” across State of Alaska, Department of
Natural Resources, Division of Land Management (DNR) lands granted by a right
of way permit. The applicable language of the permit is as follows:
{A] right of way... for an electric transmission intertie.... [I]t is under-
stood and agreed by the permittee herein that, as a condition to the
granting of the right-of-way applied for, the land covered by said
right-of-way shall be used for no purpose other than the location,
construction, operation and maintenance of the said right-of-way...
as further described by attached as-built survey made a _ part
hereof....
Limitation on Rights Granted
In comparison to the private easements, the permit does not specifically grant the
right to “replace and remove electrical transmission and/or distribution lines,
including but not limited to, foundations, towers, wires, cables, and appurtenant
fixtures....” By defining the easement rights by reference to the as-built drawings,
the permit limits the rights to the facilities actually constructed.”®
i AS 38.95.010 specifies that: “No title or interest to land under the jurisdiction of the state
may be acquired by adverse possession or prescription, or in any other manner except by
conveyance from the state.”
id AS 9.55.260(3).
= See Section 7.04,pp. 7-27 and 7-28, Law of Easements and Licenses in Land, Bruce & Ely,
Warren Gorham & Lamont, 1988: “When precise language is employed to create an easement,
such terminology governs the extent of usage.” [Citations omitted.]
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Arguably, AEA may seek to replace the shield wire and make revisions for
maintenance and operation purposes and be within the scope of the existing
easement. However, since the permit does not contain the same rights to
“replace and remove” “wires, cables, and appurtenant fixtures” as the private
easements, AEA’s rights under this permit are significantly weaker. Furthermore,
the public trust doctrine expressly applies to all lands under DNR’s jurisdiction”?
therefore, any doubts between AEA’s “exclusive private easement” and DNR’s
rights would be adjudicated in DNR’s favor. In addition AS 38.95.010 requires a
specific conveyance of a state land interest.
Due to the weakness of AEA’s rights and the fact there is no fee, an amendment
to the permit may be the best alternative. The costs for a permit amendment
should be principally administrative costs associated with modifying the permit.
IV. FEDERAL RIGHT OF WAY
For purposes of this discussion, the federal right-of-way refers to the Bureau of
Land Management’s (BLM) grant and amendment to APA. Individual Alaska Native
allotments subject to the federal trust obligations imposed on the Bureau of Indian
Affairs (BIA) by Title 25 of the U.S. Code will be addressed separately.
43 CFR 2800 Right of Way Grant
AEA applied for a right of way under 43 CFR 2800 to construct a 345 kV power
transmission line. Section 2801.1-1(4) applies to “[s]ystems for generation,
transmission and distribution of electric energy”. Section 2801.1-1(5) applies to
“[slystems for transmission or reception of radio, television, telephone, telegraph
and other electronic signals, and other means of communications.” The application
was made under subsection (4). APA subsequently received a Bureau of Land
Management (BLM) Right of Way Grant, Serial Number AA-44361, for a 170 foot
wide right of way across all lands under BLM’s jurisdiction.*°
Under the terms of the grant, prior to any modification of the existing facilities or
addition of new facilities not already authorized by the grant, AEA must obtain
ae AS 38.05.502. Property of the people. Subject to valid existing rights of applicants for
land, upon February 21, 1983, all land in the state and all minerals not previously appropriated are
the exclusive property of the people of the state and the state holds title to the land and minerals
in trust for the people of the state.
” The grant was originally made on June 17, 1983. It was subsequently amended on July
22, 1983 to include the lands within an unapproved native allotment.
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written authorization to proceed from BLM.*' The key issue is whether installation
of fiber optics cable constitutes a modification to existing facilities or is to be
considered a new facility not authorized by the grant. If BLM does not concur
that the cable installation is not an authorized modification to an existing facility, a
notice to proceed will not be issued until an application is made for a separate
telecommunications grant. On the other hand, if the installation is considered to
be a modification of the existing facilities and BLM agrees with that position, it
appears that the only property requirement will be to obtain a notice to proceed
from BLM. Since the regulations have different subsections for electric
transmission and communications systems, and the cases on incidental use of
rights of way on federal lands typically preclude uses not specifically within the
grant,*? a new application is anticipated. A new application will require an
environmental analysis.**
¥. ALASKA NATIVE ALLOTMENTS
With the consent of the three allottees,** the Bureau of Indian Affairs (BIA) made
a 50 year Grant of Easement for Right of Way to AEA. A fourth allotment was
unapproved at the time of the BLM right of way grant and was therefore included
in the amendment to the BLM right of way grant. The applicable purpose language
from each of the three BIA grants is:
The right, easement, and priviledge of placing, erecting, constructing,
repairing, replacing, maintaining, and using lines of poles with wires
suspended thereon and all necessary and proper guys, anchorage,
7 General Stipulation 3.9.6: After construction of the granted right-of-way facilities, the
modification or relocation of these facilities, or the addition of new facilities not authorized under
the provisions of this grant or of any other agreement, permit, or authorization that shall have
been duly approved, issued or granted by the Secretary or his delegate in connection with all or
any part of the granted right-of-way is prohibited, unless approved, in writing by the Authorized
Officer.
8 U.S. v. Gates of the Mountains, 732 F.2d 1411 (1984). Cf. U.S. v. Oklahoma Gas, 318
U.S. 206 (1943), where federal law (25 U.S.C. § 311) specifies the grant of a highway right of
way across an Indian allotment is subject to state law. See also U.S. v. Mountain States
Telephone and Telegraph Co.,434 F.Supp. 625 (1977).
= 43 CFR 3802.4(d)(1).
7 Parcel Allottee
410.5 Maggie Oliver
410.1 Estate of Alfred Tansy
410.1A Jake Tansy
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crossarms, braces and other fixtures for use in connection therewith,
as may be necessary for electrical transmission and/or distribution
lines or systems, and to cut back and trim such portion of the
branches and tops of the trees now growing or that may hereafter
grow upon the herein described premises, as may extend over said
right-of-way, so as to prevent the same from interfering with the
efficient maintenance and operation of said electrical lines or
systems, including incidental purposes consistent therewith as may
be necessary, together with the right of ingress and egress when
necessary for the purposes above mentioned on, over, under and
across the land embraced within the right-of-way....
Federal Jurisdiction
Under Title 25 U.S.C. the Alaska Native Allotments are trust lands under the
jurisdiction of the United States, Bureau of Indian Affairs. With the exception of
highway grants which do allow the application of state law to the highway rights,
the trust lands themselves do not come under the jurisdiction of the State of
Alaska.*°
BIA has the authority to issue rights of way for telephone and telegraph lines, 25
U.S.C. 8319, and “Rights-of-way for all purposes across any Indian lands”, 25
U.S.C. 8323. The regulations promulgated for issuance of rights of way have
different sections for telephone and telegraph lines, 25 CFR §169.26, and power
projects, 25 CFR 8169.27. AEA’s right of way application for electric
transmission lines was under the regulations for power projects under 25 CFR
8169.27. With the specific statutory and regulation sections, a court will most
likely determine the easement does not grant AEA the right to install the
telecommunications cable across the Alaska Native Allotments. Such a
determination will require a new application under 25 U.S.C. §319 and 25 CFR
8169.26 and all of the obligations that are required under those sections.
=e See Mountain States Telephone and Telegraph Co., supra; Gates of the Mountains, supra;
Oklahoma Gas, supra; 25 U.S.C. § 311.
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. Right of Way Issues mM note 2 Bee Identify ownership interests | d. 5 (Mee gn € 7 Private - Inferhs Individuals fr, J] ; @ me ANCSA Corporations d y dt ": f
Native Allotments gz $SuUb2z State fw —
Department of Natural Resources
University
Matanuska Susitna Borough
Federal
Key information
Appraised at 90% of fee simple value
Widths
100 to 300 feet with additional areas for guy structures
Shield wire installation
Maintenance problems associated with shield wires
Easement language:
Purpose language of the grant:
“a perpetual right-of-way and easement to survey, erect, construct,
reconstruct, operate, maintain, replace and remove electrical transmission
and/or distribution lines, including but not limited to, foundations, towers,
wires, cables, and appurtenant fixtures upon, over, under, and across the
following lands owned by the Grantor....”
The easement also gives the Authority the right to cross other lands owned
by the grantor to access the easement, and gives the Authority the right to
remove danger trees outside of the easement.
Identify legal issues concerning AEA use for telecommunications
Within scope of easement granted
Procurement issue
Finding by AEA
Incidental use
No additional burden
Jurisdictional issues
Federal lands
State lands
Use by regulated utility
Not within scope of easement granted
State Lands
Federal lands
Native allotment trust lands
e Specify Alternatives (Include scope, schedule & budget)
Assert right to use and proceed
Assert incidental use and proceed
Acquire additional rights as necessary
R/W Acquisition
State (DNR), Federal, Native Allotment applications
NEPA requirements
Private, ANCSA Corporation, Mat-Su Borough, University
Eminent domain issue
e Make recommendations
Other issues:
2: Procurement Issues
What are the approaches
Competitive Leasing
RFP
Note: Technology and r/w issues should be considered in this determination
3: Policy considerations
AEA
AEA asset concerns
Limitation of Liability
Maximization of revenues
Maximize competition
State
Competitive principles
Technology advancement to support infrastructure of state
_DOA Telecommunications policy implications
4. Engineering Technical Issues - Operating Considerations
Impacts of addition to fiber optics to existing infrastructure
Improvements to project
Permitting requirements
FONSI?
5) Contract Issues
AFI Agreements
New Interties (Grant agreements)
Fiscal Obligations
Revenues
Expenses
Liabilities
Regulatory Issues
APUC
FCC
Conflicts
Board
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Sept. 11, 1996 ‘Poms
FLL
On
Much of our state's history has a common theme: overcoming great barriers and daunting distances. From
the Iditarod to the Alaska Highway, we are a people who have had to overcome great odds to live and
prosper. Today, telecommunications and information technology holds the promise of breaking many of
those barriers and bridging much of that distance. But to take full advantage of that promise, we must
have a well-ordered planning process to guide us. Like the Iditarod and the Alcan, we must know where
we want to go before we start our journey or build our highway. This Draft Plan is the starting line in that
journey, the blueprint for that road.
Dear Fellow Alaskans:
This document is a draft. It is submitted to you, the people of Alaska, for your comments and
suggestions. Consider it a work in progress, which can and will change in the next month, and then
continually change as the planning process moves forward in the years to come. Like a highway or The
Great Race, future obstacles may present themselves which make us change our course. But that should
not dissuade us from doing our best on this starting plan. And that will not change the underlying goals of
the plan, articulated in the introduction of this document.
If you have suggestions about recommendations in this plan, please submit them to my office, attention
Andy Kline, (907) 465-3557 or andy_kline@gov.state.ak.us. Please specify the number of the item you
are commenting on and rewrite the entire item. This will allow us to incorporate changes more easily.
Part of the review of this plan will include public meetings this month through October 11, where we will
be able to hear directly from you. Those meetings are still being scheduled, and my office will notify you
when they are confirmed. Thank you for your interest in this issue and in this plan. The many diverse
opinions we receive on this plan are sure to make it a better and more useful document.
Sincerely,
Fran Ulmer
Lieutenant Governor
State of Alaska
Draft Telecommunications and Information Technology Plan
Telecommunications Information Council
Lt. Governor Fran Ulmer, Chair
Contents
I. Introduction to the Planning Process
IL. Public and Private Responsibilities
IIL. Bandwidth
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IV. Access
V. Services
VI. Information Technology Human Resources
VII. Governance
VIIL. Funding
Please submit comments on this plan to:
Andy Kline
Special Assistant, Telecommunications
Lieutenant Governor Fran Ulmer
P.O. Box 110015
Juneau, Alaska 99811-0015
Phone: (907) 465-3520
Fax: (907) 465-5400
E-mail: andy_kline@gov.state.ak.us
I. Introduction to the Planning Process
Alaska has as much or more to gain from advances in telecommunications than any other area of our
country. Our vast distances, disparate and sparse population, and severe climate make the challenges and
potential gains greater here than anywhere.
But in order to take advantage of that potential, we as a state must have a well-considered plan that maps
out the state's goals and ways that we can achieve those goals. That is the purpose of this document.
This plan is the starting point of a continuing process that will identify and hopefully help us achieve our
high expectations in telecommunications. This document will change over the years, but the underlying
goals are likely to stay the same. The Knowles/Ulmer Administration has set the following goals in
telecommunications:
Improve public access to government information
Maximize service to the public through voice, video and data systems
Optimize government efficiencies
Explore innovative and cost-effective services that meet Alaska's challenges
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Stimulate the development of private and public services
The Telecommunications Information Council (TIC) is responsible for formulating the State's plan for
taking advantage of information technology. This year, there was a recognition that in order to follow the
Knowles/Ulmer goals, a comprehensive look at the State's telecommunications and information
technology needs was required. Paramount in this examination of goals is the need to facilitate a
fundamental change in how state citizens, the customers of state government, interact with government.
This "paradigm shift" in customer service, illustrated in Figure 1 shows how customers now must know
the structure of state government in order to get needed information. Under the new scenario, agency
divisions will become invisible to the customer.
The TIC decided on an intense internal look at where the state is now, and where the State should go in
the short, mid and long term. To bring clarity to these questions, eight internal task forces were formed
which looked at the following areas:
Economic Development
Public Telecommunications
Emergency Communications
Telemedicine
Telecommunications Act of 1996
Public Transactions
Education
Management of Information Systems and Data Processing
After two months of meetings, these groups gave recommendations which formed the building blocks of
this plan. This plan is the State government's portion of the Alaska 2001 plan which was approved by the
Alaska Public Utilities Commission (APUC) in March. That document attempted to articulate the needs
of Alaska's citizens, this plan attempts to articulate the needs of State government.
IL. Public and Private Responsibilities
Summary
One of the major issues the state must grapple with as it works in the telecommunications arena is when
the state should own and operate private networks versus when the state should rely on public
telecommunications providers to answer its needs. The answer to this question must include an analysis
of the costs and benefits to the citizens of the state, the state's responsibility to provide for emergency and
public safety communications needs, the availability of public networks in remote areas of the state, and
the federal laws which govern access to telecommunications facilities in emergencies. The consensus is
that a balance must be developed through partnership between the state and public telecommunications
providers. The following recommendations reflect this philosophy.
Guiding Principles
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1. The State of Alaska acknowledges that it has an important leadership role to play in helping to assure
an equitable provision of basic telecommunications services to all Alaskans.
2. The State should not try to substitute for the market. In general, it should avoid duplicating the public
telecommunications infrastructure, and should avoid financing involvements with it that call for the state
to take on most of the risk of the investment. The State should be a stimulator of public
telecommunications by serving as an anchor tenant in order to encourage the development of advanced
telecommunications technologies. However, the State should not subsidize any one private, commercial
interest at the expense of the state citizenry and competition.
3. The State should be a stimulator as well as a facilitator of private-sector efforts to develop a basic
telecommunications infrastructure.
4. The State should be pro-active and pro-competition throughout these efforts.
5. The State should encourage partnership development for the purposes of information sharing,
coordination, needs assessment, demonstration, and evaluation of statewide projects. (particularly
telemedicine, education)
6. The State should use its market clout as leverage to stimulate the private sector, and to help shape the
infrastructure that needs to be developed.
7. In instances where the private sector by itself may not be able to adequately meet the basic
telecommunications needs of Alaskans, the State should actively and cooperatively seek to ensure that
those needs are met.
Recommendations
By January 1998:
8. The Telecommunications Information Council (TIC) should pursue discussions and explore the
possibility of allowing the private sector to collocate at State-owned telecommunications sites. Legal
issues must be explored and adequate restrictions and safeguards must be in place. To justify collocation,
there needs to be some benefit to the State of Alaska and the public. The possible benefits include having
a portion of any bandwidth or service installed by private enterprise be provided to the state, and the state
having the right to "pre-empt" or "requisition" services during a declared emergency, and/or some other
form of "compensation." There is also a potential use of State-owned rights of way along Alaska's
intertie, railroad and road system corridors.
9. The State should insure that there will be a plan for public and private sector development of
appropriate telemedicine systems. "Appropriate" telemedicine systems should be defined as those
designed to meet the health care delivery needs of the communities served, as well as meeting the State's
goals for telemedicine.
10. The State should create a statewide advisory group consisting of the local governmental entities that
have E-911 systems, federal public safety groups, telephone companies, the state and other private sector
companies with some involvement in E-911. This group would be charged with organizing disaster
recovery/rerouting plans to be adopted by localities to ensure backup for inter-operability and
coordination.
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11. The State should consider requiring that the provision of highway emergency call boxes (cellular) be
part of any agreement to allow private sector collocation at current state communications sites. A
highway emergency call box system is a critical part of a statewide emergency communications
capabilities for citizens. Communities impacted by the placement of call boxes should be consulted prior
to any equipment being installed.
12. The State should control its public safety communication system so that it would not be reliant on a
private vendor or another government entity in a time of emergency. The State should take the lead role
in developing a statewide trunked radio system working with all public safety and emergency response
entities as well as providers.
13. The TIC should appoint a task force to draft policy affecting state operation on the ARCS system and
the question of in-kind subsidy of commercial broadcasting.
By 2000:
14. The State should consider a contract with a Value Added Network (VAN) in order to provide the
needed communication links between it and its various business partners. The State should take
advantage of the commercial infrastructure and associated standards and protocols whenever possible.
15. The State should explore a range of strategies for meeting statewide broadband capacity needs, but
among these should be the option of joining with private sector parties in the development or financing of
a second fiber optic cable linking Alaska to the Seattle telecommunications grid.
16. The State should work with the private sector, including oil companies, banks, telecommunications
providers and other major businesses, to develop a set of minimal technical standards to allow
interoperability of local, regional and statewide systems.
Il. Bandwidth
Summary
Bandwidth refers to the speed at which electronic information can be transmitted. Sometimes this is
defined as a "size" of pipe. Bandwidth is a consistent issue that permeates all telecommunications
discussions in Alaska. With enough of it, all things are possible - without it, many of these points are
moot. The crux of the problem is how to get adequate bandwidth across the state at a reasonable cost.
Guiding Principles
17. The State should encourage development of a basic, statewide telecommunications infrastructure in
Alaska.
Three key pieces of this infrastructure should be focused on:
the special requirements and challenges of rural Alaska
the potential use of State-owned rights of way along Alaska's intertie, railroad and road system corridors
the adequacy of the fiber-optic telecommunications link between Alaska and Seattle.
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18. The State should resist single-bandwidth solutions for public telecommunications problems, insisting
instead upon a mix of narrow to wide pipelines and supporting the continuing development of Internet,
satellite, wireless, cable and other solutions to connection challenges.
Recommendations
By January 1998:
19. The State should evaluate the ability of its network infrastructure to accommodate various forms of
electronic commerce, and the abilities of its contractors and suppliers to engage in it.
20. The State should explore a range of strategies for meeting statewide broadband capacity needs, such
as a second fiber optic cable linking Alaska to the Seattle telecommunications grid.
21. Bandwidth for Internet in Juneau, Anchorage and Fairbanks is not a critical issue at this point. Efforts
to expand bandwidth for the Internet should focus on areas outside these three urban centers, and
education. Technical standards should evolve in concert with society's use of the Internet.
22. Wherever and whenever feasible, the State should allow the private sector to address and meet the
basic telecommunications bandwidth needs of Alaskans. The State should be prepared to actively assist
the private sector, however, should the marketplace not in itself be sufficient to meet those needs
adequately, equitably, or in a timely manner.
23. The State should set standards in multiple uses of bandwidth, including but not limited to voice,
video, data, audio and interactive applications. These standards should allow for interoperability with
existing state equipment. Technical standards should be indexed as wider society and industry standards
develop.
24. The State should investigate the use of wireless technology as a way of filling future bandwidth needs.
25. Because of the State's continuing need for satellite delivered bandwidth for Rural areas the number of
telecommunications satellite providers, type and costs should be known for adequate planning to take
place. The State should encourage a comprehensive study to determine the anticipated available satellite
delivered bandwidth in the year 2000 and beyond.
26. The State should complete the transition from analog to digital system delivery of UA distance
education.
27. The State should continue negotiations for replacement of 2 Ghz microwave systems. At this time,
much of the 2 Ghz spectrum is used by state and local government entities. The FCC auction of these
frequencies will require the State's 2 Ghz system to be replaced with a microwave system of comparable
capability.
28. The State should update its network study conducted in Fiscal Year 1993 to include the
advancements in TCP/IP and Internet use for State business.
By 2000:
29. Following the recommended cooperative providers study, the state should explore how it can
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{
leverage these new and as yet undefined technologies as part of an overall plan.
IV. Access
Summary
Alaska's unique combination of small population and huge size makes access to telecommunications
advances a challenge. Anchorage, Juneau and Fairbanks are well on the road to good access to
telecommunications - but access in rural Alaska is a major problem. One key issue is to make sure that
telecommunications technology does not create "have and have-not" communities in Alaska.
It is not enough for the State to provide information and the ability to transact business online unless
there is a good-faith attempt to make sure citizens have access from all over Alaska.
Guiding Principles
30. The State's communications development policy is to have universal and equitable access.
31. The State's role in access may depend on the extent of infrastructure in different communities. There
may be instances when the State will have a role in access for a community, and there may be instances
where the state will not play a role.
Recommendations
By January 1998:
32. The State should review and if necessary revise its management policies and procurement policies, to
encourage competition among telecommunications services providers on service standards, prices, and
the development and offering of broader band services.
33. The State should have the APUC examine its regulations to ensure that service providers can
compete regarding the delivery of telecommunications services to rural Alaska.
34. The State should adopt regulations regarding the universal service needs of public schools, libraries
and rural health care providers.
35. The State should encourage community and regional consortia networks linking schools, public
libraries, and other agencies.
36. The State should explore ways to provide access in remote areas of the state by sharing costs for
bandwidth coming into a community. In many communities, public dollars are funding separate
high-speed lines for the University, the state's WAN, school districts, libraries, and federal agencies. If the
state partners for public access dial-ups to a shared point of presence in these communities, money
savings and improved access to the public are possible.
37. The State should establish a continuing working group (e.g., as part of TIC, or as an
interdepartmental working group) to identify issues regarding rural telecommunications needs and
capabilities, and develop conceptual frameworks for addressing them. Part of this working group's
mandate should be to look at how other states and countries with similar rural-area concerns have
addressed the special issues surrounding development and implementation of telecommunications systems
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and networks in rural areas.
38. The State should negotiate for lower audioconferencing rates for student phone-ins to teleclasses.
The State should also encourage the upgrading of its audio conferencing networks acknowledging its
importance and appropriate support of education and State affairs.
By 2000:
39. The State should work with the private sector towards:
Connectivity to all educational facilities with existing viable infrastructure
Internet access to rural campuses where infrastructure is in place or upgradable
Internet access to all K-16 sites with viable infrastructure.
40. The State should explore interagency partnering (between the three branches of state government,
local and federal agencies), sharing personnel, operations and equipment to provide telecommunications
and information technology service to the public. For example, the State could make better use of the 21
non-partisan Legislative Information Offices statewide.
41. The State should take a leadership role and should foster leadership in communities to increase rural
access to telecommunications and information technology. The State should encourage agencies, publicly
funded programs, schools, etc., to develop, at the local level, multi-year plans for the expected use of
telecommunications. The State should facilitate community and/or regional consortia to make
regional/community WANs affordable.
42. The State should develop mechanisms for the use of the existing state infrastructure by local
educational entities.
Long Term:
43. The State should facilitate free to student, faculty and staff Internet access at ALL K-16 public
educational sites.
44. Alaska should have high speed, switched, broadband telecommunications capability in every school,
library and educational facility in the state.
V. Services
Summary
There are several core state government functions, including public safety, public health and welfare,
education, resource and environmental management, economic development, and transportation. These
primary services should be mirrored in our telecommunications priorities. Government services in
telecommunications are widespread and far-reaching. The definition of these services will have much to
do with the way citizens perceive state government, and the way they participate in the political process.
As referred to in this document's introduction (Fig. 1), State government is undergoing a "paradigm shift"
in customer relations. Telecommunications and Information Technology are at the heart of this
redefinition of State service to citizens.
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Guiding Principles
45. Telecommunications and Information Technology development in the State should reflect the
“paradigm shift"(fig. 1) in customer service which allows for Alaska citizens to receive information
without detailed knowledge of the structure of state government.
46. The State should identify ways of sharing information resources with local governments.
47. To maximize the value information technologies can bring State government there must be good
alignment of the business objectives and IT. This calls on government to clearly reaffirm what its primary
goals are and to reengineer its business processes with IT used as an enabler.
48. IT planning and evaluation of business goals are a continuing process. To keep this process alive a
strategy for IT governance and deployment must be instituted. While strategic planning sets the general
course, tactical planning addresses specific areas for agencies to proceed with daily operations while
adhering to the State's desire to improve government's delivery of services.
Recommendations
By January 1998:
49. Everyone in State government should be reachable through electronic mail.
50. The State should complete an assessment of its current use of mainframe and distributed, or
networked, computer systems. This "benchmarking" study should compare the state profile with private
industry and other states or large government organizations and analyze whether the state is positioned
well to make the most best use of its computing resources and to serve the public. The study would
recommend a statewide information technology architecture that will best facilitate state government's
business goals.
51. The State should develop a directory of existing State telecommunications and information
technologies services. The State should also develop a directory of electronic State addresses.
52. The TIC should oversee developing a strategy for providing Basic 911 in all areas not now covered.
Statutes should be reviewed and, if appropriate, revised so that areas where there is no formal local
government entity, the State could request (at the request of the community) that surcharges be collected
by telephone companies.
53. The State should assess existing videoconference sites and create new ones or improve existing ones
where appropriate to reduce conflicts on room time. The State also needs to better assess cost-benefit of
departmental use of video conferencing.
54. The State should focus on infrastructure necessary to preserve and extend public broadcasting
services for all Alaskans.
55. The State should develop an equitable assessment and schedule of costs for use of the state satellite
transponder.
56. The State should follow the recommendation of "Marketing Alaska" to streamline the reporting
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requirements placed on the seafood industry by state government, by establishing the capability for
private industry to report required information to state government electronically. One electronic form
could be designed which would be transmitted electronically and shared by the state agencies that used
the data. Department of Revenue and Fish and Game are the primary users of this data. Such a system
would reduce the need for industry to file duplicative data with two different agencies, eliminate
paperwork, and generally improve the speed and accuracy of data collection.
57. The State should interconnect with federal agencies via the Internet. The State should take full
advantage of the communications potential of the Internet in its dealings with the Federal government.
58. The State should address the use of electronic signatures. Electronic signatures will streamline many
internal processes and will position the State for a method of authentication/verification of electronic
communications with the public.
59. The State should increase efforts to reduce paperwork by storing our records electronically. Copies
of these electronic records are admissible in an administrative or court proceeding.
60. The State should conduct a legal review of all relevant Alaska statutes, regulations, codes, and
procedures requiring legal advertising with respect to the advent of Internet publishing.
61. The State should suspend purchases of two-way radios. Most manufacturers will not be coming on
board with the new digital two-way radios for another year. At that time, competition should lower
prices.
62. The State should attempt to resolve the issue of handling fees related to financial transactions such as
credit card fees charged to state agencies by the credit card companies. This may include having the
Office of Management and Budget make a formal determination and then issuing it in budget instructions
or it may be advisable to suggest legislation to assure uniformity.
63. The TIC should evaluate the ability of the State's network infrastructure to accommodate various
forms of electronic commerce, and the abilities of its contractors and suppliers to engage in it.
By 2000:
64. The State should make all publications available to the public, available electronically.
65. The State should identify ways of sharing GIS mapping resources with municipality and borough
governments.
66. The State should establish an Electronic Commerce education program in order to facilitate the
sharing of resources and the resulting savings between the State and the business community.
67. The Department of Education should develop and make accessible an information clearinghouse on
standards, best practices, model rfps, teacher training opportunities, etc.
68. The State should establish a single method of electronic authentication/verification of an entity that
will be used by all agencies. Without this, an individual may have several IDs when communicating with
multiple departments and in some cases possibly several within a single department.
69. The State should accommodate the public's need to do financial transactions in and with state offices
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through a communications requirements study. This would determine the network needs to provide
financial transaction authorizations for credit, debit, and smart cards, and wire transfers.
70. The State should develop an on-going strategy to invest in new technology which will advance the
state's investment in wide scale, cost-beneficial distribution of audio and video services, including public
broadcasting signals.
71. The State should use telemedicine technologies for delivering State health services and information,
to the extent that quality of and access to services and information are maintained or improved, and costs
are maintained or reduced.
Long Term:
72. Basic 911 service should be available in all locations in the State. It is important to have the ability to
dial 911 from any telephone (regular or cellular) and for the call to be routed to one of the "local"
dispatch centers in the State.
VI. Information Technology Human Resources
Summary
Technologies change rapidly, and keeping employees up on the latest developments takes a concerted and
continuing effort. Training is also a large part of the human resources issue in Alaska and in the
telecommunications field in general. The State of Alaska has traditionally had a problem recruiting and
retaining qualified people in the field of data processing. Currently, the State does not compete with
private enterprise wages and if the State aggressively pursues the electronic world we will need to deal
with this problem.
Guiding Principles
73. The State should promote ongoing information technology architecture training for end users and
support personnel to enhance the ability to deliver services to Alaskans. The planning process should
consider the following types of human resource issues:
Whether to allocate or share scarce and expensive human resources among priority projects on a strategic
information plan and, if so, how to accomplish that result
Whether to create new job classes that keep pace with technology and take full advantage of the state's
investment in technology
How to fund training necessary for skill enhancement appropriate for a profession as dynamic as
information management
The extent to which "outsourcing" alternatives should be used to hire skills as needed, so as to provide an
alternative to retaining a skill permanently on staff
Recommendations
By January 1998:
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74. The State should review its options regarding its technical recruiting by conducting a salary and
benefits survey. The survey must include the type of people we want to hire, not just a cross section of
everyone who is looking for a job or who has technical people on staff. The first step in the process is to
interview agency managers to learn what skills are needed and at what competency levels.
75. The State should assess how telecommunications technology might be employed to help educate and
train Alaskans for the changing work force requirements of the future.
76. The State should assess the future needs of Alaskans for training in the uses of technology as part of
the basic K-16 educational experience.
77. The State should emphasize training through a technical grant program or endowment that provides
training and degree opportunities statewide, allowing educators to renew skills.
78. The State should allow for recruiting programs for technology positions at colleges and universities to
be on-going. Incentives of one form or another need to be provided. Incentives for current, qualified
employees is also a must. Also, current employees not working in the field should be provided
encouragement and training if they want to make the career change.
Long Term:
79. The State should explore developing a pool of technical resources to form its own internal "corporate
university." Some of the most talented and dedicated analyst/programmers in State government started
with the State in other positions, and have built upon this experience. This "university" could educate
existing staff who have a fundamental understanding of the business processes and teach them the
technical skills needed to support those business processes as analyst/programmers. The goal of such a
program would be to provide competency in a core set of basic computing skills.
VII. Governance
Summary
State law vests in the Telecommunications Information Council (TIC) the authority to set policy on state
government's voice, video and data systems. With that governance role, the TIC and it's various
subcommittees also assume responsibility for communicating with the private sector, the federal
government and local governments on issues relating to development of the telecommunications
infrastructure in Alaska.
State law charges the TIC with responsibility to adopt this state Telecommunications and Information
Technology Plan, which provides a list of recommendations for action. Many of the recommendations
must be carried out by the TIC and its subcommittees.
This chapter lists the guiding principles and recommendations for action to be carried out by the TIC in
future years. It also includes recommendations for other agencies with missions that relate to
telecommunications and information technology, such as the Alaska Public Utilities Commission , the
Governor's Office and the state Department of Law.
Guiding Principles
80. In order for the TIC to expand and improve its planning process, state government must define its
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"business vision, " which should be primarily concerned with making the internal operations of state
government more efficient and more responsive to Alaskans. Without this as a foundation,
telecommunications goals risk aimlessness.
The business vision will define the short-term objectives of the Governor as well as longer term goals.
81. The TIC's continuing information technology planning process should incorporate the following
goals:
Chosen technologies should support the business of government.
Alignment of information technology among executive, legislative and judicial branches.
Appropriate information exchange and system integration.
Sound management over the transition to distributed and public access technologies while effectively
maintaining, enhancing, and replacing foundation legacy information environments.
Effective management of state technical personnel, hardware and software resources.
82. The TIC should consider standards on an ongoing basis as part of a continuing information
technology planning process. To determine where to standardize and , the process should consider costs
and benefits. Benefits may include:
Reduced costs of acquisition, development and maintenance.
Faster development
Easier sharing of data
Easier sharing of skills
Improved product quality
Reduced demand for some supervisory decisions.
83. State agency capital project requests for information technology and telecommunications should
conform to the goals and recommendations of the State Telecommunications and Information
Technology Plan.
84. Group purchasing of hardware, software and services by state agencies should be encouraged by TIC
policies.
85. The TIC should coordinate the collection and aggregation of locally-based information, and with the
involvement of the public, service providers and other interested parties, use this information to create a
more predictable view of demand for rural telecommunications services.
86. The TIC and the Alaska Public Utilities Commission should take the lead in informing concerned
groups about Federal Communications Commissions proceedings in the Telecommunications Act of
1996, and service in an advisory capacity as requested.
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87. The TIC should lead state government wherever possible in developing partnerships for the purposes
of information sharing, coordination, needs assessment, demonstration, and evaluation of statewide
telemedicine activities.
Recommendations
By January 1998:
88. The TIC should provide a clear, open and visible telecommunications and information technology
planning process. The process should include:
A statewide information technology profile, beginning at the agency level.
An inventory of the existing base of software, hardware, applications, technical support, users, local area
networks, the wide area network, mainframes, etc.
Projected changes over the mid and long terms.
An organization structure at the agency and state level.
A reassessment of personnel issues.
An evaluation of standardization at the state level.
An evaluation of "transition issues" over the life of the plan - organizational, network, software and
hardware.
Development of strategies for funding and timing.
89. The TIC should establish a framework of rules and standards for evaluating information technology
and telecommunications capital projects requested by state agencies and a plan for maintenance of state
government's information technology infrastructure.
90. The Governor should convene a working group or task force to define the State's "business vision" as
it relates to the efficiency of internal operations and better customer service.
91. The TIC should establish a policy which acknowledges Internet E-mail as a legitimate transport for
the exchange of correspondence with the public.
92. The TIC and the Department of Law should work together to assist state agencies in development of
electronic commerce:
The Department of Law should assign at least one position in the Governmental Affairs Section of the
Civil Division to develop an expertise, references, and contacts for changing state statutes to
accommodate electronic commerce.
The TIC should seek legislative approval of minor changes to statutes that would encourage electronic
commerce and revise statutes that mandate a paper product or manual process.
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93. The TIC should adopt relevant standards for which there are no reasonable alternatives. The state
should carefully consider the cost/benefit of standardization in technologies where there are many
reasonable alternations and/or no clearly dominant standard exists. This considerations should be an open,
visible process with broad participation, including private sector and other public sector interests that
could be affected.
94. The TIC should appoint a task force or consortium that provides oversight, marketing and monitoring
support for the satellite interconnect project.
95. The TIC should review Alaska legislation that may impact the development, implementation, and use
of telemedicine systems, and conduct a review of telemedicine legislation from other states.
96. The TIC should lead a review of state management and procurement policies to encourage
competition among telecommunications services providers on service standards, prices, and development
of broader band services.
97. The Alaska Public Utilities Commission should examine its regulations to ensure that service
providers have a maximum ability to compete regarding the delivery of telecommunications services to
rural Alaska.
98. The TIC should establish a working group to develop a clearinghouse proposal for initial
implementation this year of the Alaska State Telecommunications and Information Technology Plan and
the federal Telecommunications Act of 1996.
99. The TIC should establish a state educational telecommunications advisory committee.
100. The TIC should lead the way in establishing an Alaska Consortium for Educational
Telecommunications to collaborate on resources, standards, grant proposals and more.
101. The State should be actively involved in the National Governor's Association "Telecommunications
Working Group."
102. The Alaska Public Utilities Commission should continue to take the lead in compliance with the
federal Telecommunications Act of 1996, particularly with respect to universal service and long distance
issues.
By 2000:
103. The TIC should work with the Alaska Public Broadcasting Commission to update and revise the
commission's strategic plan and to build an increased accountability for the use of state funds by grantees.
104. The TIC should develop a point of focus within state government that would provide the
administration, management, knowledge base, consultation, and, where appropriate, liaison with the
private sector for any one technology. (An example: Electronic Data Interchange. Some agency needs to
be the manager of agency working groups, the source of current state standards, a contact for private
sector firms wishing to "partner" with the state, etc.)
105. The TIC should seek approval of one, or possibly two, full-time staff to assume leadership for
development of Electronic Data Interchange and electronic commerce. The learning curve for EDI and
electronic commerce is high.
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106. The TIC should establish a formalized organization responsible for coordination of statewide
telemedicine activities.
107. The state Department of Health and Social Services should identify the infrastructure needs of the
Alaska health care delivery system. The assessment should be used as the basis for a comprehensive,
statewide, telemedicine plan.
108. The TIC should develop a long-term, statewide emergency communication plan for the State of
Alaska. The plan should address issues such as access, dispatch, coordination, and medical contacts for
emergency medical services.
109. The TIC should convene a forum of federal/military/state/local entities to establish joint participation
On initiatives and issues related to emergency communications.
110. The Department of Commerce and Economic Development should extend its own planning
framework to address ways in which telecommunications technology could be used to support economic
development goals and objectives.
111. The TIC should review and revise all state policies to allow increased flexibility for educational use
of technology and telecommunications.
Long-term
112. The TIC should lead the way in urging that technology and telecommunications standards be met for
acquisition and retention of teaching and administrative licenses.
VIII. Funding
Summary
The cost of a telecommunication and information technology infrastructure within Alaska will require a
substantial capital investment and will require an ongoing operational and equipment replacement budget.
Telecommunications or Information Technology is critical to the development of Alaska. This state is
faced with a very real problem of isolation from the rest of the nation and the world. That potentially
wide gap can be bridged through the creative use of telecommunications. If we do not take advantage of
these tools, we face the very real possibility of being left behind in the 20th century, while other states
and nations progress to the 21st.
Guiding Principles
113. All Alaskans must recognize that there is a State government telecommunications and information
technology infrastructure vital to their well being that must be funded at a basic level each year. It is
incumbent on State government to develop a plan recognizing this and funding that infrastructure's basic
costs.
Recommendations
By January 1998:
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114. The ARCS system should develop a way for communities and individuals to contribute their support
for the system.
115. The State should propose a legislative endowment similar to Alaska Science Technology or
recurring legislative appropriations for the creation and upkeep of telecommunications infrastructure in
Alaska.
116. The State should pursue partnerships with private, community consortiums. These consortiums
could contribute matching funds on community based programs.
117. The State should pursue the option of revenue bonds for information technology infrastructure.
118. The State should provide incentives for a provision or building of new services to providers,
communities or companies for hardware and software requirements. Incentives should not be ongoing or
provided if the service was going to be provided anyway as part of their business plan.
119. The State should consider a telephone surcharge for funding Basic 911 systems and education
technologies.
120. The TIC should investigate funding options, and its role and responsibilities for meeting information
technology needs.
ao
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Power Engineer’s Report Summary
Study objective: prepare cost estimate for installing fiber optic cable (FOC) between
Anchorage & Fairbanks.
Three routes examined - preferred alternative basically follows existing intertie other
alternatives more expense & involve underwater crossing or follow different electric
transmission lines
Cost estimate (less permitting, right-of-way procurement, & attachment fees) is approx. $18.5
million
Two proposed means of installing FOC
1. optical overhead ground wire (OPGW)
2. all dielectric self supporting cable (ADSS cable) ie. no metallic components
Proposed alternative uses both installation forms- ADSS from Anchorage to Healy- OPGW
from Healy to Fairbanks
Technical issues that were examined
1. Low temperature operation - very little concern
2. Ice/Snow loading - much larger problem with OPGW than ADSS cable
3. Proximity voltage effects - only problem with ADSS cable - concern related to effect
of field coupling from transmission conductor in the vicinity of ADSS cable
4. O&M considerations - if attached above conductor then owner/operator should
maintain -if attached under conductor communications firm or owner/utility can maintain
5. OPGW as distribution neutral conductor - decreases communication reliability as
compared to OPGW installed as a shield wire on a transmission line
6. Gun shot damage - OPGW better than ADSS
7. 24 vs. 48 fibers - increases weight & diameter therefore increases wind snow/ice
issues - 48 fibers would require greater additional replacement/reinforcement of
existing structures
ATTACHMENT FEES
from Power Engineers Report
Utilities typically charge Attachment Fees for adding a communication line (fiber optic cable) to
existing facilities. Attachment fees are also known as “Space Rental Fees.” These
Attachment Fees are generally broken into two types, one being for communication lines on
distribution facilities in franchised easements and the second being for communication lines on
transmission or distribution facilities on private right-of-way.
Attachment Fees on distribution facilities in franchised easements are commonly in the range
of $5 to $15 per pole (structure) per year. Attachment Fees are normally negotiated
collectively with several or all potential users of the existing facilities as third party users in a
Joint Use Agreement (agreements between electric and local telephone companies). These
agreements are generally long term contracts and are subject to regulatory review. Many
factors are considered in arriving at these fees including such things as age of facilities,
maintenance, location and quantity of attachments, structure replacement costs, etc.
Attachment Fees for adding communication facilities to transmission or distribution lines on
privately held right-of-way are determined by negotiation. These negotiations are generally
confidential and POWER does not have specific knowledge of these types of contracts.
POWER has heard that these fees can range from several hundred dollars to several
thousand dollars per structure plus a percentage of the annual maintenance costs. The
electric utility may also require the communication company to provide fibers for the utility's
use. In addition, the communication company is generally required to obtain additional rights
for the communication line (assuming the original easement documents do not include a third
party) from each affected landowner.
General Thoughts
What entities should have access to the fiber optic cable network? Should the State own/lease
a few fiber strands for government purposes? Should the utilities be able to own/lease fiber for
SCADA control or be telecommunication providers? -How should lease/RFP be structured to
provide wholesale access to others & allow for future expansion - APUC issue?
Who should receive service from the network?
What regulatory formula or scheme should be applied, since different parties are subject to
different regulatory jurisdictions?
What is the appropriate mix of regulation and competition?
In general the state’s goals should include reasonable rates, universal access to the network
and good service. max reasonable # of fibers
What franchise fees are constitutional and collectable?
What should be done to minimize duplication of facilities?
What can be done now to minimize “cream skimming” of key customers while promoting
competition?
Based on a few telecommunication papers, some of the reasons why
h:\all\dgermer\fiber\attfee.doc
CEWOG
AUG 21 ’96 16:28 GCI
August 21, 1996
Mr. Mike Kelly General Manager Golden Valley Electric Association
758 Dhinois Street PO Box 71249 : Fairbanks, AK 99707-1249
Dear Mike:
In GVEA’s role as project manager for the construction of the Northern Intertie, as an owner and
as a major user of the facilities, we ask that you please consider the following proposal for attachment of a fiber optic ground wire (OPGW) to the new Fairbanks - Healy transmission line.
First of all, GCI has no interest in its employees or contractors having access to the transmission line towers, nor do we see any need to get on the transmission line towers. Our view is that we
would structure an agreement with GVEA as the maintenance contractor for the project to provide maintenance of the OPGW system and its attachment integrity to the towers. Should fiber optic repairs or splicing be required, we would envision that GVEA would provide ends of the cable to be spliced and tested by qualified GCI ground personnel. Reattachment of the spliced cable to the tower(s) would be performed by GVEA personnel (or its approved contractor).
A. Capital cost: GCI will pay all incremental capital costs that the project will incur to provide and install an OPGW instead of a static ground wire. This cost would include all materials, installation, and all special attachment hardware associated with attaching the OPGW to the transmission line towers, bringing it down the towers at designated repeater and cable splicing locations, and providing splice boxes on the towers. GCI proposes that this difference cost be
determined in one of two ways, at the project manager’s option:
1, Through securing two construction bid proposals for the line, one including the OPGW and one which does not (latter bid to include two static ground wires).
2. By including a line item in the construction bid for a) the static ground wire and b) the OPGW.
In the first case the difference cost would simply be the difference in the two bid proposals. In the second case the difference cost would be the cost of the OPGW line item less the cost of the static ground wire line item.
GCI would anticipate that we would be involved in the design of the OPGW system and will work with GVEA to determine who (GCI or the contractor) would do actual cable splicing and OTDR (Optical time domain reflectometer) proof-of-performance testing during construction.
xe. epi Tt DRAFT
2550 Denali Street ¢ Suite 1000 * Anchorage, Alaska 99503-2781 » 907/265-5600
AUG 21 796 16:28 GCI P-373
B. Communication Services: GCI proposes that it would provide, for the term of the agreement,
all internal communications capacity requirements for the Owner(s) along the Norther Intertie
route. Such capacity requirements would be limited to a capacity of 1xDS3 (nominal bit rate of 45
Mb/s) or 1xOC-1 (51.84 Mb/s, SONET rate) and could include any utility internal communication
circuits used for voice, video or data communications internal to any or all Owner(s) utilities that would transit the route of the Northern Intertie. Further, such internal communications circuits and capacities could include those between Owner(s) utilities necessary for the control and operation (including protective relaying, electric load management, and supervisory, control and data acquisition to support the power generation and electric transmission facilities) of the Northern and Alaska Interties. These communication services would be provided in exchange for the right to attach to these towers comprising the Northern Intertie.
C. Maintenance services: GCI would enter into a separate maintenance agreement with GVEA for the maintenance services supporting the OPGW and its repair.
We ask for your concurrence in this type of agreement structure. Please let me know if we need to modify or amend this approach.
Thank you for your prompt consideration.
Sincerely,
Gene Strid Vice President, Engineering
cc: Riley Snell
DRAFT
ALASKA INDUSTRIAL DEVELOPMENT — +f Bh AND EXPORT AUTHORITY / => ALASK;
@@™ =ENERGY AUTHOR
xk ok 480 WEST TUDOR ANCHORAGE, ALASKA 99503 907 / 269-3000 FAX 907 / 269-30-
MEMORANDUM
Ras TO: Jim Ayers
Chief of Staff
Office of the Governor
FROM: William R. Snell
Executive Director
DATE: July 31, 1996
SUBJECT: Fiber Optics Conflict Issues
CONFIDENTIAL - DELIBERATIVE PROCESS
As you know, AIDEA has received a request from GCI, jointly with AT&T to integrate fiber optics
into the existing Anchorage-Fairbanks Intertie owned by AEA. In addition, AIDEA has received
a general letter of interest from MFS regarding the integration of fiber optics into existing and
proposed interties. Most recently, AIDEA received a request from GCI formally requesting that
it be permitted to integrate fiber optic cable into the proposed Northern Intertie.
Wilson Hughes is the Chairman of both the AIDEA and AEA boards. In addition he serves as
Executive Vice President and General Manager of GCI. Because of Mr. Hughes’ dual roles a
conflict of interest issue may arise.
At a previous AIDEA board meeting, Mr. Hughes has disclosed his relationship with GCI and
indicated that, at some point, GCI may be interested in participating in fiber optics projects
DRAFT
CONFIDENTIAL
Deliberative Process
related to the interties. Because GCl’s participation in any of these projects was speculative,
however, no formal determination of Mr. Hughes role was made and Mr. Hughes participated in
two AIDEA board actions related to the Southern Intertie. No resolutions have come before the
AIDEA or AEA boards related to the Anchorage-Fairbanks Intertie or the Northern Intertie.
Because AIDEA has received formal requests from GCI and others regarding fiber optics on the
interties, it is now appropriate to consider the potential conflict of interest issues.
We have spoken with Keith Laufer, Jim Baldwin and Neil Slotnick of the Department of Law to
seek guidance on these issues. Ordinarily, conflicts issues of the sort implicated here, are
resolved under the Executive Ethics Act. Under the Executive Ethics Act, a board member or
his company may not generally apply for, be a party to or have a personal or financial interest in
a contract with the agency on which he serves. If a circumstance arises where such is the
case, generally the board member must either resign from the board or he and his company
would be disqualified from contracting with the agency. There is an exception, however, for
contracts that are competitive solicited, as is expected in this case. Under this exception, the
board member or the company could participate in the bid so long as the board member does
not take any official action with respect to the award, execution or administration of the contract.
Additionally, there is a requirement that the board member may not be "employed by the
administrative unit awarding the contract..." A previous opinion issued by the Department of
Law held that, for purposes of this provision, board members were deemed to be employed by
the agencies for which they served. It is unclear how the Department of Law would rule on the
same issue today.
DRAFT
CONFIDENTIAL
Deliberative Process
To summarize, under the Executive Ethics Act, a board member (or any entity in which the
board member has a significant interest) may not apply for or participate in a contract or lease
with the agency he serves. Under the view likely to be taken by the Department of Law, if a
contract is competitively solicited the board member could apply or participate in the contract if
he recuses himself from all participation from the award, execution or administration of the
contract or lease.
While conflict issues are ordinarily resolved under the Executive Ethics Act, in this case both
the AIDEA and AEA statutes have specific provisions dealing with conflicts of the sort
implicated here. Under the AEA and AIDEA statutes, a board member may not vote on a
resolution relating to a lease or contract to be entered by the agency if the board member has a
direct ownership interest in the company that may be a party to the contract or lease. Thus
under these provisions the contract is permissible if the board member recuses himself from
voting on the matter. Because these statutes are specific to AIDEA and AEA, the Department
of Law is likely to determine that, for conflicts regarding state contracts the specific AIDEA and
AEA statutes control rather than the Executive Ethics Act provisions described previously.
Other provisions of the Executive Ethics Act would continue to apply however. Under these
provisions, the board member would likely be required to recuse himself from all participation in
the matter, not just board action. Thus, the board member would not be allowed to participate
with staff on the matter whether on behalf of the agency or on behalf of the company with which
he is involved.
DRAFT
CONFIDENTIAL
Deliberative Process
Regardless of the legalities of the situation, in light of the contentiousness of
telecommunications issues, the public’s perception of the situation should be considered. This
contentiousness will likely subject this matter to a high level of public awareness. A high level
of scrutiny of the project may lead to a perception of conflict even if it does not exist under the
statutes. This perception could be damaging to Mr. Hughes, the Authority and other parties
involved. With this background in mind, there are several alternatives for dealing with the
current situation:
ak Mr. Hughes could seek a advisory opinion from the Department of Law under the Ethics
Act. The Department of Law would likely determine that the specific AIDEA and AEA
provisions apply. Accordingly, Mr. Hughes could remain on the AEA and AIDEA boards
but would be required to recuse himself from all participation in these matters. While
this would appear to be the correct legal result, telecommunications issues have be
particularly contentious in Alaska. In light of this, other alternatives should be
considered.
2. Mr. Hughes could resign from the AIDEA and AEA boards thus removing any conflict
questions. Because Mr. Hughes is a particularly strong member of the AIDEA and AEA
boards with substantial business experience, it would not be in the best interests of the
state for Mr. Hughes to resign.
3. Fiber optics policy issues and any procurements related to both the Anchorage-
Fairbanks Intertie and the Northern Intertie could be transferred from AIDEA and AEA to
DRAFT
CONFIDENTIAL
Deliberative Process
some other state agency. There are several independent reasons why this might make
sense. First, under AEA’s statutes, AEA is not generally permitted to embark on new
projects. While the issues implicated here are modifications to an existing project, the
modifications are not energy related and therefore could be argued to be outside AEA’s
mission. Second, other state agencies may have particular expertise with some of the
issues involved. The Division of Telecommunications obviously has direct expertise in
telecommunications issues. In addition, as a avalon in the Department of
Administration, it may be particularly suited to administer a procurement which will likely
be required to select an entity or entities for fiber optic installation and lease. Because
there are complex rights of way issues that will be implicated, the Department of
Transportation and Public Facilities may be another appropriate entity. Additionally, the
DCED Division of Energy has expertise in intertie issues.
Because of AEA’s ownership of the Anchorage-Fairbanks Intertie and AIDEA’s grant
administration role related to the Northern Intertie, it would likely be difficult to
completely isolate AIDEA and AEA from all aspects of the fiber optics issues. In light of
the independent reasons for transferring fiber optics issues to another agency, a
combination of approaches 1 and 3 may be the best alternative. Mr. Hughes could seek
an advisory opinion under the Executive Ethics Act as described above. This opinion
would resolve the conflict issue and set the parameters for any residual issues coming
before AIDEA or AEA. If Mr. Hughes follows the advise given by the Attorney General
he would be provided with liability protection in the event someone were to raise a claim
under the Executive Ethics Act. Policy issues and administration of any required
DRAFT
CONFIDENTIAL
Deliberative Process
procurement could be transferred to another appropriate state agency. AIDEA staff
could continue to lend support and expertise to whichever agency is ultimately charged
with these duties. | Negative public perception would likely be reduced under this
approach since the ultimate policy and procurement determinations would be made by
an independent agency.
Our recommendation is that alternative 4 be implemented and that responsibility for fiber optics
policy issues and procurements be transferred to the Division of Telecommunications in
Department of Administration. Because the Division has general responsibility for state
telecommunications issues it would be best equipped to deal with fiber optics issues. We
believe that this will resolve any Executive Ethics Act issues while reducing the likelihood of
negative public perception. Your guidance on these matters would be appreciated.
h:all\bjfllaufer\ayers.doc
2 ALASKA INDUSTRIAL DEVELOPMENT
AND EXPORT AUTHORITY {= ALASKA
@q™ =ENERGY AUTHORITY
480 WEST TUDOR ANCHORAGE, ALASKA 99503 907 / 269-3000 FAX 907 / 269-3044
July 30, 1996
Mr. Gene Strid
Vice President, Engineering
General Communications Inc.
2550 Denali Street, Suite 1100
Anchorage, Alaska 99503-2781
Dear Mr. Strid:
The Alaska Industrial Development and Export Authority (the “Authority”) is in receipt of your
letter containing a formal request for permission and authority to attach a fiber optic line to the
yet to be constructed Northern Intertie transmission line between Healy and Fairbanks. As we
noted in our previous letter to you, there are many unanswered questions that we must
research and seek guidance prior to entering into formal discussions regarding this matter.
This particular request is somewhat complicated by the fact that the utilities will be the owners
of this intertie. Recognizing that State funds will be used to partially finance construction of this
intertie, the State will have some authority with respect to these issues. Please be assured that
the Authority is committed to obtaining the information and guidance necessary for us to
prudently respond and actively engage in business discussions concerning fiber optic cable
attachments to State owned interties.
We look forward to discussing this interesting project with you in the very near future.
Sincerely,
William R. Snell
Executive Director
Kae wr
WW on “0 0D
CONFIDENTIAL
Attorney/Client Communication
tegrati iber Optic lectric Power Intertie:
line sui
I Introduction
A. Request from ATT/GCI re AF Intertie
B: General Request from NTS
c Request from GCI re Northern Intertie
Il. Factual Background
A. AEA ownership of AF Intertie
i AEA owned portion v. MEA owned portion
(a) Original Cost of AEA portion approx. $125 million. This amount
was made by direct appropriation to AEA for purposes of
constructing the Intertie. No return of or on this state investment
has been received
2; Fee ownership by others-- AEA granted rights of way under various
agreements with landowners
(a) Analysis by staff of underlying right of way agreements is
underway. There will likely be legal issues as to whether fiber
optics are an allowable use of the existing rights of way
35 Electrical Utilities have right to transmit power under Alaska Intertie
Agreement
4. Under Transmission Services tes Bae nee o = ing \p oan ad SN
incorporated into AF intertie _, se \eco 9! aces B. Northern Intertie Thi, eet pee es ea awd) —
I AIDEA grant administrator for $___ ‘of state funds
2: Under grant legislation intertie to be owned by GVEA for benefit of
participating utilities
3: Rubini reviewing state ability to require integration of fiber and control
access to fiber
Ill. Legal Issues Surrounding AF Intertie
A. Legal issues under existing AF Intertie Agreement and Transmission Services
Agreement
i AF Agreement only contemplated use of intertie for transmission of Power
(a) Utilities were only granted rights to transmit power
(b) Utilities have the right to request modifications to Intertie to be
borne by utilities to extent it benefits them
2. Utilities pay for all costs associated with the intertie including
maintenance operations and repair costs under a formula set forth in the
Fiber Optics Issues Outline Page |
B.
CONFIDENTIAL
Attorney/Client Communication
intertie agreement-- AEA does not bear any of these costs
3: AEA has the right to make "additions, deletions or changes to the Intertie"
to the line-- AEA to bear all the costs of the modifications (unless the
modifications are a direct benefit the utilities in which case utilities will
bear cost -- IOC must agree in advance to this)
(a) all modifications must be designed and constructed so as not to
reduce intertie reliability and subject to Prudent Utility practice and
"reasonable economics." Design must be submitted to IOC for
review and comment and comments shall be incorporated into
design as they relate to operation and reliability of line
(b) If AEA were to invoke this power to make modifications in order
to attach fiber, Utilities would likely raise the following issues:
(i) outage impacts- utilities will likely request indemnification
or other protection from power outages that Satd occur
from the installation or maintenance of the fiber
(ii) cost implication — coud Occ Ww Anew
(1) a portion of the operations, maintenance and repairs
should be borne by the fiber cable operator -- unfair
that utilities should bear these expenses themselves
(i) agreement provided a procedure for new
electric utilities joining the intertie group
and sharing costs but joinder of other types
of utilities not contemplated
(iii) | design requirements-- utilities have a right thru IOC to
review and comment on modifications required to
incorporate fiber optics== potential for significant
controversy if there are disagreements on engineering
issues
(iv) utilities will likely claim a right to some or all of whatever
revenue is generated from fiber optics on the intertie
qd) unclear under what legal basis claim will be
made-- utilities may claim that under AF
intertie agreement contemplates use
exclusively by electric utilities--- to add use
some how requires there approval
Federal Telecommunications Act-
L, Attachment of fiber optics as contemplated appears to be an unregulated
activity under the telecommunications act
Di Act regulates integration of telecommunications into existing local
telecommunication exchange companies
Fiber Optics Issues Outline Page 2
GC.
dD
CONFIDENTIAL
Attorney/Client Communication
(a) This doesn’t appear to be relevant to the current issues
Act creates "pole attachment" rights and duties as it pertains to public
utilities
(a) utilities defined narrowly-- does not include municipally owned, or
coop owned utilities or state and local governments
(b) since the owner, AEA is a state govt. entity and all the existing
power utility users are either municipally owned or coops, these
pole attachment duties would seem not to apply to these entities
Alaska Public Utilities Commission regulation
2
(See AS 42.05.800-890)
AS 42.05.860 -- requires interstate long distance competition and requires
access
3 AAC 52.375 requires carriers to offer their services to others for resale
Procurement/ Competitive Practices Principals
Is State constitution and statutory principals require that limited state
resources be allocated on a fair and nondiscriminatory basis
(a) generally this is accomplished thru a competitive bid structure as it
pertains to access to state lands or assets
IV. Approaches for Proceeding
A. ompetition for long term lease to install and "own" an erate fiber cable
Under this approach the state would solicit bids or proposals from those interested
in gaining lease rights with respect to the installation of fiber on the existing state
owned structures
i Enter into discussions with utilities-
Because the utilities have a right to review and comment on modifications
to the AF intertie and because of the way costs are borne under the Intertie
Agreement utilities should be brought into discussions at an early stage.
The following are the likely issues where agreement will be necessary in
order to avoid litigation
(a) Agreement on design-- Utilities have a right to comment on
proposed modifications as it relates to reliability of the existing
line. IOC comments are to be integrated into the design to the
extent they are operational or reliability issues.
(b) Agreement on allocation of costs of Intertie maintenance
Under the current Intertie Agreement, the utilities bear all of the
costs related to the intertie. The agreement does not contemplate a
Fiber Optics Issues Outline Page 3
CONFIDENTIAL
Attorney/Client Communication
new non electric utility participant on the line. Equities require
that the new fiber participant be required to pay all costs related to
operation and maintenance of the fiber line itself and a reasonable
proportion of the general intertie maintenance costs that benefit
both the electric and fiber lines. A reasonable method for this
allocation will likely be difficult
Protection for utilities for outages caused as result of installation or
maintenance of fiber line- The utilities will likely seek
indemnification for all costs related to outages resulting from the
. integration of the fiber. They will probable seek to include the
increased cost of replacement power. I believe that the proper
allocation of liability will be to require the fiber operator to bear
the direct costs associated with damage to the intertie structures.
The fiber optic provider should not be required to bear the non-
direct costs (e.g. replacement power) if the operator operated as a
prudent utility. This is the same standard that currently applies to
the power utilities under the Intertie Agreement.
Sharing of Revenues To the extent the fiber lease generates
revenues to the state, the utilities will likely want to share in these
revenues. I believe the state should not be required to share these
revenues for several reasons. First, attachment of fiber will result
in an immediate benefit to the utilities in the form of reduced
operating and maintenance costs since these will now be shared
with the fiber operator. Second, the state as in excess of a $125
million dollar investment in the intertie. To date the state has
never received any return of or on this investments. The intertie
was not granted to the utilities but remains a state asset. Under the
circumstances it is reasonable that the state retain all revenues in
order at least a partial return on its investment. This will likely be
an extremely contentious issue.
Competitive Solicitation for integration of fibers
The authority would conduct a competitive solicitation for bids or
proposals to integrate fiber into the line. Among the key elements of the
solicitation would be the following:
(a)
(b).
(c)
Agreement to the cost sharing and other agreements reached with
the utilities as described above
Winning fiber operator to be responsible for acquiring all rights of
way modifications, permits, and approvals required
Winning proposer will be responsible for all costs related to the
installation of the fiber
Fiber Optics Issues Outline Page 4
CONFIDENTIAL
Attorney/Client Communication
(i) Could specify in the RFP the size of the fiber and
engineering to be used to instal cable as determined by
AEA engineering analysis
(ii) | Could have this a bid variable requiring bidder to specify
size of the cable and how it would be installed. This
method would require utility involvement after receipt of
RFP’s in reaching agreement on the proposed design
(d) | Winning proposer will receive a long term lease for the facilities.
At the end of the lease the fiber cable and modified structures will,
at the option of the state become state property. In the alternative,
the state could also require that the structures be removed at the
end of the term
tili ip and operation of fiber cable
Under this model, the state would contract with the utilities to install and operate a
fiber cable on the existing Intertie
[More to come]
Sale of Intertie
[More to Come]
Fiber Optics Issues Outline Page 5
fi
NOTICE TO PROVEED
& INVOICE SUMMARY
NTP No: Two (2)
Agreement No:
Project No: AEA 95-011
Contractor: HDR Engineering, Inc.
Project Title: Fiber Optics
In accordance with our Agreement, provide the following services (or services as described in the following referenced
attachment):
Review the Anchorage to Fairbanks Fiber Optic Feasibility Study prepared by Power Engineers and provide opinions
on the adequecy of the study as well as identify any omissions.
On an requested basis, provide guidence and advice to AIDEA/AEA on typical fiber optic business practices, and the
general stucture of the commercial terms and conditions of fiber optic addition contracts.
Compensation for this NTP shall be by the Method(s) of Pay adressed in the contract and shall not exceed the
authorized amount(s) specified in the Invoice Summary (below). Agency Manager for this NTP is:
David E. GermerTel No: 907-269-3000
Issued for the Contracting Agency by:
Signature.
Accepted for the Contractor by:
Signature.
QU: [-}
Method of Pay —_ Authorized Prior This Total % Auth- Balance
EP, CPFF or T&E Amount Payments Invoice to Date orized___ Authorized
Fixed Price $ $ $ $ % $
Expenses
Direct Labor $ $ $ $ % $
Indirect Cost
Expenses
Fee
Time (Labor) $22,500 $ $ $ % $
Expenses $ 600
TOTAL $23,100 $ $ $ % $
Payment Request (Contractor):
Signature
Ledger Code Account Code Date
Payment Recommended (Agency Manager):
Payment Approved (Agency Official):
Signature Signature
David E. Germer Date 7/29/96 Date
Performance Evaluation (Agency Manager) N/A Poor Adequate Good
Objectives: 0 1 2 3 4 5
(Ratings to be "circled" and a narrative evaluation Quality: 0 1 2 3 4 5
for any ratings of "1" or "5" must be attached.) Schedule: 0 1 2 3 4 §
Cost Control: 0 1 2 3 4 5
ntp-any DOT&PF FORM 25A281 (Central Region - 3/95), Notice to Proceed & Invoice Summary Page 1 of 2
INSTRUCTIONS TO CONTRACTOR
for
NOTICE TO PROCEED & INVOICE SUMMARY (NTP)
1. Retain an unmarked, as issued, copy of this (NTP) form to be used for reproduction and billing.
NOTE: Several NTPs may be concurrently active under one Professional Services Agreement, each
requiring separate cost accounting.
2. If this NTP is unacceptable, notify the Contracting Agency immediately. If acceptable, acknowledge by
signature where indicated on a copy of this NTP and return it within ten days after your receipt.
3. Submit monthly Invoices to the Agency Manager named in this NTP. You may use your firm's invoice
forms; however you must also provide a copy of page one of this NTP form as the FACE PAGE of
each invoice submitted and with the following entries accurately completed:
a) Sequential Invoice Number for this NTP
b) Entries in the following columns, for each "Method of Pay" where an "Authorized Amount" is listed:
- This Invoice
- Total to Date
- % Authorized amount that "Total to Date" represents
- Balance Authorized
c) Sign and date with printed or typed name under "Payment Request (Contractor)" in accordance
with the following acknowledgement:
"By signature on this form, the Contractor certifies entries to be true and correct for the services
performed to date under or by virtue of said Agreement and in accordance with AS 36.30.400. The
Contractor further certifies that all applicable Federal, State and Local taxes incurred by the
Contractor in the performance of the services have been paid and that all Subcontractors engaged
by the Contractor for the services included in any invoice shall be fully compensated by the
Contractor for such services."
Note "Prior Payments" amounts may NOT be the same as the total of all your prior invoices if some items
were disallowed. If a prior billing has not been acknowledged with any payment, attach a request for
an explanation and remedial action.
4. Substantiate all charges on each invoice, other than for Fixed Prices or Fixed Fees, by attaching a
summary of hours expended and hourly labor rate per employee; Summary of units completed;
subcontractor billings; expense receipts, etc; or other proof of expenditures.
5. PRIME CONTRACTOR'S LABOR AND INDIRECT COST SHALL BE BILLED TO THE CONTRACTING
AGENCY WITHIN 45 DAYS OF PERFORMANCE. SUBCONTRACTORS' LABOR AND INDIRECT
COST SHALL BE BILLED TO THE CONTRACTING AGENCY WITHIN 60 DAYS OF PERFORMANCE.
ALL OF THE CONTRACTOR'S AND SUBCONTRACTORS' OTHER DIRECT COSTS (EXPENSES)
SHALL BE BILLED TO THE CONTRACTING AGENCY WITHIN 90 DAYS OF BEING INCURRED.
CHARGES SUBMITTED AFTER THE ABOVE STATED TIMES WILL, AT THE CONTRACTING eee AGENCY'S DISCRETION, NOT BE PAID.
ntp-any DOT&PF FORM 25A281 (Central Region - 3/95), Notice to Proceed & Invoice Summary Page 2 of 2
expen ec JUL 28 1895
Mr. Riley Snell
Executive Director Alaska Industrial Development
Alaska Industrial Development and Export Aueinstitexport Authority
480 W. Tudor Road
Anchorage, Alaska 99507
Dear Mr. Snell:
General Communication, Inc. (GCI) formally requests permission and authority to attach fiber
optic communication transmission lines to all poles and towers comprising the Northern Intertie
transmission line between Healy and Fairbanks that will be operated and maintained by Golden
Valley Electric Association.
AT&T Alascom and GCI have already commissioned a study of the feasibility of the construction
of a fiber optic telecommunication system from Anchorage to Fairbanks, a portion of which
proposes to utilize the Northern Intertie transmission line. The preliminary design study will form
a basis for discussions of the estimated cost of installation, methods of attachments to the poles
and tower, and maintaining the fiber optic lines. Based on the preliminary design study, a final
project study, and a comprehensive business case, we believe that we should be able to agree on
reasonable terms and conditions of a fiber optic interconnection.
Please treat this as our official request for attachment to the poles and towers described above.
We look forward to discussing this project with you at your earliest convenience.
Sincerely,
GCI My
Title: VA Gvenceviws
Date: J? 22, /79C
2550 Denali Street * Suite 1000 * Anchorage, Alaska 99503-2781 * 907/265-5600
ALASKA INDUSTRIAL DEVELOPMENT
> ¢ AND EXPORT AUTHORITY = ALASKA
@m—™ ENERGY AUTHORITY
480 WEST TUDOR ANCHORAGE, ALASKA 99503 907 / 269-3000 FAX 907 / 269-3044
June 21, 1995
Mr. Gene Strid
Vice President, Engineering
General Communications Inc.
2550 Denali Street, Suite 1100
Anchorage, Alaska 99503-2781
Mr. John Higginbottom
Vice President, Networking
AT&T Alascom
210 East Bluff Drive TC 340
Anchorage, Alaska 99501
Gentlemen:
The Alaska Energy Authority (the Authority) is in receipt of your letter containing a formal
request for permission and authority to attach a fiber optic line to that segment of the
Anchorage to Fairbanks intertie that is owned by the Authority. As you are probably aware,
this request is the first of its kind for the Authority. As such, there are many unanswered
questions that we must research and seek guidance prior to entering into formal discussions
with your firms. Please be assured that the Authority is committed to obtaining the information
and guidance necessary for us to prudently respond and actively engage in business
discussions.
We look forward to discussing this interesting project with you in the very near future.
Sincerely,
Executive Director
(Ar
J
CC: David Ramseur, Office of the Governor
Broa Qe
Mr. Riley Snell
Executive Director
Alaska Industrial Development and Export Authority
480 W. Tudor Rd.
Anchorage, AK. 99507
Dear Mr. Snell:
“General Communications, Inc. (GCl) and Alascom, Inc. dba AT&T Alascom (AT&T Alascom)
formally request permission and authority to attach fiber optic communication transmission lines
to all poles and towers owned and administered by AIDEA (or the Alaska Energy Authority) that comprise portions of the electrical intertie transmission line between Anchorage and Fairbanks.
AT&T Alascom and GCI have already commissioned a study of the feasibility of the construction
of a fiber optic telecommunications system from Anchorage to Fairbanks using the AIDEA and/or AEA poles and towers. The preliminary design study will form a basis for discussions of the
estimated cost of installation, methods of attachments to the poles and towers, and maintaining
the fiber optic lines. Based on the preliminary design study, a final project study, and a
comprehensive business case, we believe that we should be able to agree on reasonable terms
and conditions of a fiber optic interconnection.
Please treat this as our official request for attachment to the poles and towers described above.
We look forward to discussing this project with you at your earliest convenience.
Title VA, NG EL We
Date: G/7/ 9b
Alascom, Inc. Dba AT&T Alascom
Dennis McCrohan
From: Dennis McCrohan
To: David Germer
Subject: Fiber Optics- Northern Intertie
Date: Wednesday, February 07, 1996 5:00PM
February 7, 1996
Dave
Discussed with Steve Hagerson of GVEA their plans on the Northern Intertie. They have had two
presentations by GCI. However GVEA has declined to make any provisions in the Northern Intertie design
for fiber optic cables. Hagerson believes the length of the spans and the cold conditions will make it
uneconomic.
Dennis
Page 1
> Dennis McCrohan
From: Dennis McCrohan
To: David Germer
Ce: Randy Simmons; Riley Snell
Subject: Telecommunications and SE Intertie
Date: Tuesday, December 12, 1995 7:19AM
Dave
KPU is including provisions for an integral telecommunication cable as a phase line in the transmission line
design between Tyee and Swan Lake. Raytheon is doing the environmental engineering studies and the
preliminary engineering of the line.
Raytheon has recommended to KPU this approach and included projections of revenues for
telecommunications into the economic analysis of the transmission line. Rich Trimble, the Project Manager
for KPU , will provide us documentation information and would also be glad to discuss with you.
Dennis
Page 1
x“ pet nes
rs ALASKA INDUSTRIAL DEVELOPMENT
AND EXPORT AUTHORITY {= ALASKA
@E_ ENERGY AUTHORITY
480 WEST TUDOR ANCHORAGE, ALASKA 99503 907 / 561-8050 FAX 907 /561-8998
MEMORANDUM
TO: Jim Ayers
Chief of Staff
ne
FROM: Wi . onell
Executive Director
DATE: December 5, 1995
SUBJECT: Fiber Optic Cable Installation
Issue
Should the Alaska Industrial Development and Export Authority (Authority) actively engage in
business discussions with private entities that desire to install fiber optic cable on State owned
infrastructure, in particular, transmission lines? If so, under what guidelines should the
Authority look at adhering to with respect to terms and conditions recognizing that 1) State
telecommunication policy is under development, 2) that electric utilities have power sales
agreements with the State that provide exclusive operating rights and inhibit other uses of the
lines, 3) the State has previously allowed electric utilities to use State owned transmission line
infrastructure with no entry fee, 4) pending federal telecommunication legislation, and 5) the
many potential benefits to Alaskans from fiber optics.
Background
During the past few months, there has been considerable interest displayed in State owned
infrastructure by companies desiring to install fiber optic cable on this infrastructure. GCI has
expressed interest in the Anchorage-Fairbanks intertie and MFS Network Technologies, one of
the US leading fiber optic companies, has expressed interest in all State owned interties with
emphasis on the Glennallen-Valdez intertie. Interest in the Glennallen-Valdez intertie can be
directly attributed to Alyeska’s desire for enhanced communications for their pipeline
operations. Undoubtedly, there will be interest in installing fiber optic cable on proposed
transmission lines yet to be built.
Memorandum
December 5, 1995
Page 2
The above interest should not be surprising since telecommunications expansions, which
include fiber optic communications, and services are projected to increase at virtually an
exponential rate in the US during the next ten years. Recognizing both the significant financial
and public benefits that could be derived from telecommunication expansion in Alaska,
development of a comprehensive statewide telecommunications policy is necessary to ensure
that Alaskan’s receive the maximum benefits from this rapidly developing industry. Enhanced
telecommunications services have the potential to dramatically change education, rural health
care, government services and the way we do business in the 21st century. Although the
APUC through their recent general inquiry entitled “Alaska 2001” has gathered information and
obtained public input toward formulating a statewide comprehensive telecommunications
policy, no specific policies have been established to guide the Authority in this area.
In the interim, the Authority is in need of guidelines to effectively work with companies that
have expressed interest in installing fiber optic cable on State owned transmission lines. Since
these companies generally utilize conducive utility infrastructure to place their lines they have
also expressed interest in the Alaska Railroad’s rights-of-way. In formulating guidelines for this
particular telecommunication industry, the role of regulation, existing Federal and State
statutes, the State’s prior transmission line actions and the benefit to Alaskans will need to be
assessed. State statute provides telephone utilities with the right to use existing electric utility
easements, poles and rights-of-way by paying the pole or conduit owner a reasonable
compensation. Reasonable compensation in the instance of fiber optic installation may not
have to be monetary and could take the form of exclusive use fibers for educational, power Fe d ‘
generation control or telemedicine purposes. Telephone utilities are cognizant of the fact that
the electric utilities were provided with virtually free access to the transmission lines and
corridors and thus question the rational for attachment compensation.
Since the State has entered in contractual agreements that establish the utilities as operators
of the transmission lines, their interests must be factored into the development of interim
guidelines. In addition to being operators of the State transmission lines, the utilities own
specific transmission line segments that will be required by fiber optic cable firms. Recognizing
the fiber optic cable will be attached to structures that the utilities now maintain and operate,
installation, operation, liability, and safety issues will need to be resolved. The utilities interest
in fiber optic cable installation stems from its potential to enhance revenues and to reduce the
high cost of current communications for generation control.
Potentially Affected Parties
The following Alaska utilities: Golden Valley Electric, Copper Valley Electric, Matanuska
Electric, Chugach Electric, Anchorage Municipal Light and Power and AEG&T
GCI
MFS Network Technologies
Alyeska Pipeline
Alaska Telephone Association
Other State entities
lanl
Memorandum
December 5, 1995
Page 3
Strategies or Alternatives
At this time, the Authority knows of no apparent fatal business reason that would preclude
installation of fiber optic cable on State owned infrastructure. Assuming State owned
infrastructure can be used to support the installation of fiber optic cable by private entities, two
strategies have been identified :
1. The most cautious strategy would be to wait until the Statewide comprehensive
telecommunications policy has been completed and then proceed into business
discussions. This strategy enhances the possibility for lost opportunities and
prolongs receipt of benefits to Alaskans. Trends in the telecommunication
industry are causing a “convergence” or blurring of the boundaries, between
once distinct sub-industries. Arguments can be made that guidelines developed
now for one industry could have significant future impacts on another industry.
2; Develop a working group to establish interim guidelines that would enable the
Authority, as the State’s utility infrastructure owner, to pursue this specific
business opportunity. Guideline developers for this specific telecommunication
industry must be cognizant of the ultimate intent of free competition, the State’s
existing infrastructure ownership position, and the potential long term benefits to
Alaskans. Consideration should be given to the potential effects on other
telecommunication industries.
Recommendation
A working group be established to develop the necessary guidelines to allow the Authority to
prudently respond and effectively engage in business discussions with entities that desire to
install fiber optic cable on State owned infrastructure. We propose that the working group be
comprised of representatives from the following entities: AIDEA, APUC, Legislature, impacted
utilities, TIC, and the Department of Administration.
Timin
Recognizing that the Authority already has two pending requests dealing with fiber optic cable
installation on State owned infrastructure, the task force should be immediately formed and
initiate guideline development.
Press
No press release is advised at this time.
cc: David Ramseur, Deputy Chief of Staff
h:\all\dgermer\deg\fibbrief.doc
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San Rye Aweess FAX Rardag
To: Riley Snell
From: Tom Davidson
MFS Network Technologies
Ph: (805) 736-9711
FAX: (805) 736-8350
Pages: 2 (Including Cover)
Note: Enclosed is a letter expressing MFS
Network Technologies’ interest ia being involved
in utility projects in Alaska which would include
fiber optic communications.
The original is in the mail.
Please let me know how we may become involved
in your process.
Thank You AM
iy r) e Wie NETWORK r 2 TECHNOLOGIES
September 7,1995
William R. Snell, Executive Director
Alaska Industrial Development and Export Authority
480 W. Tudor
Anchorage, Ak 99503
Dear Riley:
MFS Network Technologies is very interested in the opportunity to participate in
any current or future utility projects in Alaska which would incorporate fiber optic
communications systems. MFSNT is uniquely qualified to develop such a
project. A nationally recognized leader in telecommunications systems
integration, we design, develop, and construct a variety of complex systems
including: fiber optic networks, microwave systems, mobile radio systems, and
Intelligent Transportation Systems. We have extensive and varied experience in
relevant projects particularly in the utility market.
We have formed a public/private partnership for the development of
communcations systems using municipal right of way (ROW) for the Bay Area
Rapid Transit District (BART) in the San Francisco area. We have recently
signed a licensing agreement with the Bonneville Power Administration to
develop a fiber optic network using BPA’s ROW. We are installing a 580 mile
fiber optic SONET network for Commonwealth Edison in Illinois. We have
installed over 135,000 fiber miles to date and will provide you with a complete
project list at your request.
We look for to further discussions with you to explore how we might establish
such a joint business development partnership. Please let me know how we may
further these discussions. Very Truly Yours
we Ala
Tom Davidson
Regional Manager
Network Technologies
7320 Santos Road Lompoc, CA 93436 Tal. 805/736-9711 Fax 805/736-8350
s , : Cy
i ALASKA INDUSTRIAL DEVELOPMENT
AND EXPORT AUTHORITY f= => ALASKA
@E_ = ENERGY AUTHORITY
480 WEST TUDOR ANCHORAGE, ALASKA 99503 907 / 561-8050 FAX 907 /561-8998
MEMORANDUM
TO: William R. Snell
Executive Director Pal
Dennis V. McCrohan, P.E.
Deputy Director - Energy
FROM: David E. Germer DEG
Project Manager
DATE: October 19, 1995
SUBJECT: | APPA’s Communications Infrastructure Workshop
The APPA is holding a Communications Infrastructure Workshop on November 13-14 in
Seattle, Washington. Recognizing the recent interest in fiber optic cable installation on the
State’s transmission lines, coupled with the lack of State policy and understanding in this
rapidly expanding industry, this workshop is quite timely and pertinent. Participants will gain a
better understanding of the issues to consider in entering and participating in the
telecommunications arena and valuable insight that will increase benefits and reduce the risk
of potential pitfalls. All course topics appear to be relevant to our planning efforts. With your
concurrence | would like to register for this workshop prior to October 23rd in order to receive
an early registration discount.
h:\all\dgermer\deg\fibwork.doc.
Ranh PP Cosponsored by the Northwest Public Power Association
Communications Infrastructure Workshop
Strategic Opportunities for Public Power on the Information Superhighway
November 13-14, 1995 in Seattle, Washington
PROGRAM OVERVIEW
innovative ways to use existing assets. A greater emphasis is being placed on attracting and retaining
customers. The need for real-time communications has never been greater—to implement energy
conservation programs and enhance the control, reliability and responsiveness of energy services.
Increasingly, public power systems are exploring opportunities for diversification into telecommunica-
tion services in an effort to stay competitive and respond to dramatic technological, regulatory and
legislative changes.
The single best source of information on how public power can employ fiber optics and other new re
communications technologies is APPA’s annual Communications Infrastructure Workshop: Strategic ¥ 5 Ries and ¢:
Opportunities for Public Power on the Information Superhighway. This timely workshop will examine the , DOP PSr ne a Bivic essential role that public power systems can play in developing the National Information Infrastructure. poets
Participants will gain a better understanding of the issues to consider in entering and participating in
the telecommunications arena and valuable insight that will increase profitability and reduce the risk of potential pitfalls. i
WHO SHOULD ATTEND
This course is designed for mayors, city council members, policymakers, utility managers and engineers
who need information on planning a community-wide communications system.
A GREAT LOCATION
Seattle offers a unique combination of scenic beauty, cultural diversity, outdoor recreation and urban
attraction. Located downtown in the heart of Seattle's business and shopping districts, the Stouffer
Madison Hotel is only 20 minutes from Sea/Tac International Airport. Walk to the waterfront, feast on
the treats of Pike Place Market, or take the monorail to the Seattle Space Needle or Seattle Center.
Make your hotel reservations by calling the Stouffer Madison Hotel at 206/583-0300. Be sure to indicate you are attending the APPA program to qualify for our special group rate of $109 single/$119
double (plus tax). The reserved room block will be released on October 13, 1995. Room availability and rates
cannot be guaranteed after this date.
Please turn over for more information and to register... ~~
A CAST OF EXPERT SPEAKERS REGISTRATION FORM ho
Legislative, utility and information experts will facilitate the sessions: Q. Yes, I would like to learn about the strategic opportunities for
1 William Appelgate, board member, Cedar Falls Utilities, LA public power on the information superhighway!
1 James Baller, senior principal, Baller Hammett, P.C., Washington, DC
§ Curtis Johnson, manager of electrical engineering and communica- Dain
tions, Cedar Falls Utilities, Cedar Falls, [A art
wc 1 William Lyren, director, Public Service, Wadsworth Light & Power
Department, Wadsworth, OH, and vice chair, APPA Communications Utility
Committee
i Kennedy Maize, president, Sawmill Creek Communications, Knox- Street Address
ville, MD; author of APPA’s upcoming DEED publication, Electric
Utility Guide to Internet and Online Services City/State/Zip
1 Michael Mandigo, legislative counsel to Congressman Rick Boucher, Washington, DC Phone Fax
1 Craig McCollom, director of conferences/education, Northwest REGISTRATION FEE
Public Power Association, Vancouver, WA
i bi 595 1 Walter McGrath, general manager, Braintree Electric Light Depart- APPA or NWPPA members paying before October 23, 1995 $5 5 each a : sas A APPA or NWPPA members paying after October 23, 1995 $695 each ment, Braintree, MA, and chair, APPA Communications Committee : . Multiple registrants from an APPA member system $595 each I Nicholas Miller, esquire, Miller, Canfield, Paddock & Stone, Washing- Nonmembers $995 each
ton, DC
1 James B. Nelson, account manager of economic development, Salt Q Payment is enclosed
: River Project, Phoenix, AZ Q Please invoice me. This option is only available to APPA members.
1 Joseph J. Nipper, assistant executive director, American Public Power QO Please charge my registration fee to my credit card (circle one): Association, Washington, DC Meeercoe\ wee ¥ William J. ("Billy") Ray, superintendent, Glasgow Electric Plant Sey VISA
Board, Glasgow, KY E 7 Cardholder Name: Signature:
1 Sean Stokes, staff attorney, Utilities Telecommunications Council,
Washington, DC Credit Card Number: Exp. Date:
i Clyde D. Wimmer, director of utilities, City of Manassas, Manassas, VA . . . . 9 Cancellation Policy: In order to receive a refund for course registration fees,
registrants must noufy APPA in writing by October 30, 1995.
CONTINUING EDUCATION CREDIT 2D To obtain more information, phone Jill Kennedy, 202/467-2937. To
APPA has been reviewed and approved as a Certified Provider of continu- register, fax the form to 202/467-2990, or mail it to APPA, 2301 M
ing education and taining programs by the International Association of Street, N.W., Washington, D.C. 20037. (FAX)
Continuing Education and Training. Upon completion of this program, participants will receive a certificate of completion and will be awarded
1.3 continuing education units (CEUs). For those enrolled in the JOINT CERTIFICATION PROGRAM, these CEUs will apply toward fulfilling
the requirements in the management or optional categories.
ail wpyto penis
eof é. (4 i i" 4. scene Facsimile Cover Sheet
Project No.: 120314-01
Original To Follow Via U.S. Mail: Yes O No &
Total Number Of Pages, Including This Page: 3
October 1¢, 1°. 3, 11:22 AM
To: stan Sieczkowski/Dan Beardsley
Fax No.: “79561-8998
Subject: '.yee Transmission Line Improvements
October 24 Meeting Agenda
Message: Please review the enclosed draft meeting invite letter und agenda. I will
issue after rece*pt of your comments, My goal is to fax and mail today. I have talked with
Yvonne at TBPA and she will help me notify the commissioners.
John McGrew »
Contract Manager
ce: RM/RE
PLEASE CALL THE FOLLOWING NUMBER IF FACSIMILE IS. INCOMPLETE OR ILLEGIBLE: (208) 788-2478
THIS MESSGE |S INTENDED ONLY FOR THE USE OF THE INDIVIDUAL OR ENTITY TO WHICH IT IS ADDRESSED, AND MAY CONTAIN
INFORMATION THAT IS PRIVILEGED, CONFIDENTIAL AND EXEMPT FROM DISCLOSURE UNDER APPLICABLE LAW. IF THE READER OF THIS
MESSAGE |S NOT THE INTENDED RECIPIENT, OR THE EMPLOYEE OR AGENT RESPONSIBLE FOR DELIVERING THE MESSAGE TO THE
INTENDED REC: ?IENT, YOU ARE HEREBY NOTIFIED THAT ANY DISSEMINATION, DISTRIBUTION OR COPYING OF THIS COMMUNICATION IS
STRICTLY PROHIBITED. IF YOU HAVE RECEIVED THIS COMMUNICATION IN ERROR, PLEASE NOTIFY US IMMEDIATELY BY TELEPHONE AND
RETURN THE ORIGINAL MESSAGE TO US AT THE BELOW ADDRESS VIAU,9, MAIL SERVICE, THANK YOU.
POWER Engineers, ne, * 3940 Glenbrook Drive + P.O, Box 1036 « Hailey, Idaho 8333 (208) 788-3456 « Fax: (208) 788.208
October 16, 1995
Mr. Roy Martin
President, TBPA
P.O, Box 406
Wrangell, AK 99929Address's
Subject: 120314-01 Tyee Transmission Line Improvements
October 24, 1995 Coordination Meeting
Dear Mr. Martin:
The first Coordination Meeting for the subject project is scheduled to take place on
October 24, 1995 in Wrangell, Alaska at 10:00 a.m. ‘he meeting will be held at the
Thomas Bay Power Authority’s office in Wrangell. We would like to cordially invite you
and the Thomas Bay Power Authority’s Commissioners to the meeting as well as Stan
Sieczkowski of the Alaska Energy Authority. Lowell Highbargain of Thomas Bay Power
Authority is invited and will particpate by teleconference. POWER [ngineers Inc.
representatives will include Randy Pollock, John McGrew and Peter Catchpole. Del
LaRue of Dryden & LaRue will also be attending.
The purpose of the mecting is to discuss the project organization, project status and the direction the project is taking with the information we have available. We also would like
to have the attendee’s provide any information regarding the Tyee line that they want to
share at the meeting.
A meetirg agenda is attached for review and comment. If you or any of the invitee’s would like to add to or modify the agenda please give me a call at (208)788-0475.
Sincerely,
POWER Engineers, Inc.
John McGrew
Contract Manager
Jme:PE
ce: Thomas Bay Power Authority's Commissioners
Stan Sieczkowski
Dan Beardsley
Del LaRuc
Randy Pollock
Peter Catchpole
RM/RF
PEI-HLY 55
TYEE TRANSMISSION LINE IMPROVEMENT PROJECT
COORDINATION MEETING AGENDA
OCTOBER 24, 1995
1. PROJECT ORGANIZATION
Project Team
Project Communications
Work Plan
Schedule
Budget
2. PROJECT STATUS
Data Acquistion
Data Review
Field Investigation
Design Criteria Development
Schedule
Budget
3. OPEN DISCUSSION
Operation & Maintenance
Thomas Bay Power Authority
Wrangell
Petersburg
Dezdend Replacement Project
Project Direction
Other
Dennis McCrohan
From: Riley Snell
To: Wilson Hughes
Ce: David Germer; Dennis McCrohan
Subject: Power Engineers' Informational Request for Intertie Data
Date: Wednesday, October 11, 1995 8:19AM
We are starting the process of producing the information that Power Engineers requested in their October
3,1995 letter to Dave Germer. Not all the information is in our possession and will need to be collected
from the Utilities. We will do this by the fastest way possible, which could include having the Utilities
submit data directly to Power Engineers. The time and cost of producing the information is yet to be
determined. Depending on the expense to reproduce, it may be necessary to seek reimbursement --- once | have an estimate of cost I'll let you know.
We are requesting that a representative of GCI appear at the next IOC meeting to discuss the Project and
the technical support and data requirement needs that Power Engineers will have.
Page 1
Stan will discuss the technical and liability, safety portions of this memo after returning and receiving
the necessary technical information. Due to the pending nature of recent fiber optic requests I’m
providing you with this draft to initiate discussion of this topic.
DRAFTMEMORANDUM.
qa
Bored eiaee
TO: William R. Snell
Executive Director
Dennis V. McCrohan, P.E.
Deputy Director - Energy
FROM: David E. Germer
Project Manager
Stan Sieczkowski
Manager, Maintenance and Operations
DATE: October __, 1995
SUBJECT: — Fiber Optic Cable Installation on Transmission Line
We have investigated the potential contractual usage restrictions and technical issues
associated with the installation of a fiber optic line on the State owned Anchorage to Fairbanks
Intertie (Alaska Intertie) and the Glennallen-Valdez Intertie. This examination was precipitated
from 1) a August 29,1995 letter to C. Hurless, General Manager of Copper Valley Electric
Association (CVEA) from T. Davidson, Regional Manager of MFS Network Technologies (MFS-
NT) that expressed MFS-NT’s interest in potentially installing a fiber optic cable on the
Glennallen-Valdez transmission line that is now operated and maintained by CVEA and 2) an
October 3, 1995 letter to D. Germer from L. Hinzman of Power Engineers, requesting data on
the Alaska Intertie. Power Engineers has been contracted by GCI to complete a study to
determine the methods and costs of installing a long-haul fiber optic transmission line on the
Alaska Intertie.
Telecommunications expansions, which include fiber optic communications, and services are
projected to increase at virtually an exponential rate in the US during the next ten years. Some
lower 48 utilities have already seen significant financial benefits from the growing
Memorandum
September 15, 1995
Page Two
telecommunications industry through the lease of conducive utility infrastructure. Utility
infrastructure includes rights-of way, building entry, conduit pole lines, transmission lines, and
dark fiber (optic fiber not in use). The competition among the telecommunication companies in
the lower 48 is now fierce. Infrastructure is the key or limiting factor to the success of these
companies in providing early service offerings. The utilities possess much of the coveted
infrastructure. Based upon the recent inquiries to AIDEA these companies are now starting to
express interest in State owned conducive infrastructure.
Recognizing the magnitude of grow in the telecommunications industry and the potential
revenues, it may be advantageous for AIDEA/AEA to explore marketing of the various
conducive infrastructure by a company or individual with experience in this field. This group
could act in a manner somewhat similar to a real estate broker and asset manager. It may be
also advisable to investigate the appropriate initial business action to deal with prospective
telecommunication firms. _AIDEA/AEA could proceed with a request for proposals/bids or
perhaps a better way would be to establish an infrastructure lease or lease rates open to all
comers until the resource is exhausted. Concerning revenues, the idea of applying value
pricing concepts (pole attachment fees, etc.) to the available utility infrastructure should be
researched.
The Alaska Intertie Agreement has specific language in section 7.4 that discusses
“Modifications and Additions to the Intertie’. This section states:
Section 7.4 Modifications and Additions to the Intertie
7.4.1 Modifications and additions to the Intertie shall be designed and constructed so as not to reduce
the Intertie reliability, subject to Prudent Utility Practice and reasonable economics. Design for
such modifications shall be submitted to the Operating Committee for review and comment. The
comments of the Operating Committee shall be incorporated into the design of the modifications
and additions as they relate to the operation and reliability of the Intertie.
7.4.2 APA shall have the right to make additions, deletions or changes to the Intertie including taps to
the line to provide electrical services at locations which it deems beneficial and reasonable.
Costs related to modifications or additions covered by this Section 7.4.2 will not be charged to
the Participants as a cost of Intertie use unless such modifications are of direct benefit to the
Participants as determined in advance by the Operating Committee.
7.4.3. Participants shall have the right to request additions, deletions or changes to the Intertie. The
requests shall be in writing to APA with justification for the addition, deletion or change. APA will
not unreasonably withhold making such additions, deletions or changes. Any modification shall
be at he expense of the requesting Participant (s) unless such modification is of direct benefit to
other or all Participants as determined in advance by the Operating Committee, in which case the
Operating Committee shall determine how the Utility Participants will share the cost.
7.4.4 APA shall give reasonable notice to all Participants before making any modification as provided
herein.
Barring technical concerns, there are a few identifiable potential usage issues associated with
the addition of a fiber optic cable on the Alaska Intertie under a MFS-NT proposal scenario (NT
has not expressed interest in this line). Based on the MFS-NT proposal, MFS-NT would be
financially responsible for additions and therefore presumably the owner of such additions not
AIDEA/APA, an agreement participant. MFS-NT is not a participant of the Alaska Intertie
Agreement and certainly doesn’t meet the requirements and qualifications of a participant.
Memorandum
September 15, 1995 Page Fwe~ (A12e
Although uncertain as to the exact nature, | would suspect that there is a legal/business
arrangement or amendment that could be tailored to address and elevate this issue. Such
arrangement would most likely have to be at least reviewed by the Operating Committee if not
approved by the committee and participants. Based on the Alaska Intertie Agreement (7.4.1 &
7.4.2) AIDEA/APA has the right to make any additions (subject to review and comment by the
Operating Committee) to the Alaska Intertie so long as such additions do not reduce the
intertie’s reliability. Depending upon how liability issues were addressed and if MFS-NT would
provide dark fibers to AIDEA, there may be some means for MFS-NT to install, own a portion
and operate the fiber cable under AIDEA/APA’s transmission line ownership position. It is
important to note that in MFS-NT’s proposal that providing “a mutually agreeable number of
fibers” is not much if you don’t have the equipment to utilize the fibers or if MFS-NT restricts
the usage of the fibers. A legal review of this matter may be warranted in the future if there is
continuing interest in installing a fiber optic cable on the Alaska Intertie.
The Acquisition Agreement Between CVEA and APA for Acquisition of the Salomon Gulch
Hydroelectric Project dated May 14, 1982, Long Term Power Sales Agreement (LTPSA) -Four
Dam Pool and the CVEA O&M agreement do not specifically address future additions to the
line. The LTPSA -Four Dam Pool between the purchasing utilities and AIDEA/APA provides
for the sale, delivery and purchase of electric power from the “Initial Project”. The initial project
is defined as collectively the Terror Lake, Salmon Gulch, Lake Tyee and Swan Lake
Hydroelectric facilities as described.... and facilities owned by the Authority that are used or
useful for the delivery of electric power from the Project to the purchaser. Section 1(f) of the
LTPSA-Four Dam Pool states:
Electric Power sold pursuant to this Agreement is Power from the initial Project as defined in this
Agreement. The Parties recognize that additional physical facilities may be constructed in the future and
considered for addition to the Initial Project, but the Parties agree that facilities not included in the Initial
Project as defined in this Agreement may not be added to the Initial Project for purposes of this Agreement
except by subsequent agreement of the Parties.
Perhaps the utilities may consider the fiber optic cable as a upgrade of their existing
communication system since this could/would replace the existing radio SCADA system. A
legal analysis may be warranted to determine the appropriate contractual mechanism for
dealing with this issue. Possibly an amendment to the LTPSA - Four Dam Pool requiring
consent or a resolution by the PMC is the most appropriate means to deal with a fiber optic
cable addition on the Valdez to Glenallen line.
Contractual issues, common to both lines in question, relate to distribution of compensation
from MFS-NT and liabilities/indemnification. AIDEA/APA could assert as line owner that all
fiber optic proceeds be forwarded to the State. From a policy standpoint or from the
ratepayer’s/PMC perceptive proceeds could be used to help offset transmission O&M costs
paid by the Participants (utilities). Resolution of this issue will undoubtedly have a significant
bearing on how many of the other fiber optic cable issues are resolved. Perhaps a shared
compensation scenario similar to the interruptible rates that have been developed by the Four
Dam Pool-PMC that deal with sale of power which is in excess of sales that could be
accomplished at the wholesale power rate could appease all parties (sale proceeds to be split
45% to the selling utility, 27.5% to the Authority and 27.5% to the PMC). Interestingly, Mr.
Hurless in his August 31, 1995 letter to Mr. Davidson of MFS-NT states” | have talked briefly
Memorandum
September 15, 1995
Page Fwe= tou f—
with a consultant and with our attorney and am eager to meet with you and share information
that would allow us to determine ....and (3) appropriate compensation to CVEA for use of our
system. Although uncertain, | suspect that he is referring to that portion of the transmission
line that is owned by CVEA.
Concerning liabilities and indemnification associated with installation and operation of a fiber
optic line on existing transmission line, Stan ..............
Technical issues- tower structural issues (wind & ice loading), civil, special hardware,
installation (outage), evaluation of present structures, ground clearance, outages for
installation.
In the event of a outage effecting the fiber cable, the telecommunications firm will most likely
desire a timely restoration of the infrastructures or fiber cable containing the lessee’s
communication services. | would suspect that such a firm will need something more solid than
“the utility's priority shall be restore electric power circuits before restoration of fiber optic
cables.” If the utility truly wants the additional revenue steam it probably will have to provide
workers and material needed to provide quality service to the lessee. Perhaps there should be
some utility guarantee or commitment to restore the connection within X hours.
Design grounding issue -replacing overhead ground wire, lease agreement
The owner of the fiber optical would have to indemnify the State and utilities. Safety would
have to be addressed , maintenance issues and schedule defined.
h:\all\dgermer\deg\fiberop.doc
[pred dur
_
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B74 ENGINEERS Facsimile Cover Sheet
Project No.: 134009-01-22-01-02
Original To Follow Via U.S. Mail: Yes O No @
Total Number Of Pages, Including This Page: 2
October 3, 1995, 08:14 AM
To. Dave Germer
AIDEA
Fax No.: (907) 561-8998
Subject: Data Acquistion for the Addition of Optical Ground Wire on Existing
Power Transmission Lines Between Anchorage and Fairbanks
Message:
POWER Engineers, Inc. (POWER) has been contracted by GCI to complete a study to
determine the methods and costs of installing a long-haul fiber optic transmission system
on power transmission line between Anchorage and Fairbanks, Alaska. Pursuant to this task, we are requesting any or all of the following supporting data for existing power Sines
along the route.
Design Documents
Design Criteria including Mechanical and Electrical Loading Information
Structure Lists/Staking Sheets
Plan & Profiles
Structure Drawings
Performance Drawings
Maps
Outage Information
Schedule of possible times lines can he taken ont of service
Costs of scheduled outages
We are also interested in any areas of special concern, i.e. long span crossings, re-
occurring maintenance or any other problem areas.
PLEASE CALL THE FOLLOWING NUMBER IF FACSIMILE IS INCOMPLETE OR ILLEGIBLE: (208) 788-0577
THIS MESSAGE IS INTENDED ONLY FOR THE USE OF THE INDIVIDUAL OR ENTITY TO WHICH IT IS ADDRESSED, AND MAY CONTAIN INFORMATION THAT IS PRIVILEGED, CONFIDENTIAL AND EXEMPT FROM DISCLOSURE UNDER APPLICABLE LAW. IF THE READER OF THIS MESSAGE IS NOT THE INTENDED RECIPIENT, OR THE EMPLOYEE OR AGENT RESPONSIBLE FOR DELIVERING THE MESSAGE TO THE INTENDED RECIPIENT, YOU ARE HEREBY NOTIFIED THAT ANY DISSEMINATION, DISTRIBUTION OR COPYING OF THIS COMMUNICATION IS STRICTLY PROHIBITED. IF YOU HAVE REOCIVED TIS COMMUNICATION IN CRROR, PLEASE NOTIMY US IMMEDIATELY B'¢ TELEPHONE AND RETURN THE ORIGINAL MESSAGE TO Us AT THE BELOW ADDRESS VIA U.S. MAIL SERVICE. THANK YOU.
POWER Engineers, Inc. + 3940 Glenbrook Drive + P.O. Box 1066 « Hailey, Idaho 83333 (208) 788-3456 = Fax: (208) 788-2082
ay
Thank you in advance for your assistance in obtaining this information. 1 will be calling to
discuss a time frame for collecting any available data. 1 am hoping to plan for a trip to Anchorage within the first two weeks of October. a Sree 5 Les Hinzman
ce: Dan Wessels (GCI)
Stan Sostrom (POWER)
Ron Carrington (POWER)
File
PLEASE CALL THE FOLLOWING NUMBER IF FACSIMILE IS
INCOMPLETE OR ILLEGIBLE: (208) 768-0577
THIS MESSAGE IS INTENDED ONLY FOR THE USE OF THE INDIVIDUAL OR ENTITY TO WHICH IT IS ADDRESSED, AND
MAY CONTAIN INFORMATION THAT /S PRIVILEGED. CONFIDENTIAL AND EXEMPT FROM DISCLOSURE UNDER
APPLICABLE LAW. IF THE READER OF THIS MESSAGE IS NOT THE INTENDED RECIPIENT, OR THE EMPLOYEE OR
AGENT RESPONSIBLE FOR DELIVERING THE MESSAGE TO THE INTENDED RECIPIENT, YOU ARE HEREBY NOTIFIED TUAT ANY NIQCCEMINA TIAA, METBION TIAN AR CADVING AE THIC COMMUNICATION IC ETRICTLY PROHIBITED. IF YoU
HAVE RECEIVED THIS COMMUNICATION IM ERROR, PLEASE NOTIFY US IMMEDIATELY BY TELEPHONE AND RETURN
THE ORIGINAL MESSAGE TO US AT THE BELOW ADDRESS VIA U.S. MAIL SERVICE. THANK YOU
POWER Engineers, Inc. - 3940 Glenbrook Drive + P.O. Bux 1066 « Hailey, idaho 83333
(208) 788-3456 + Fax: (208) 788-2082