Alaska Communications Statement on the Federal Communications Commission's Rural Health Care Order

Leonard Steinberg, Senior Vice President, Legal, Regulatory and Government Affairs at Alaska Communications (NASDAQ: ALSK) has thanked the Federal Communications Commission for recognizing that its Rural Health Care program rules have been problematic, and taking steps to adopt new rules that are intended to clarify the program´s funding, the company said.

The Order addresses many topics as they relate to the program. A significant item is the calculation of urban and rural rates, summarized below:

“Pursuant to the applicable federal statute, the Rural Health Care Program funds, amongst other things, the difference between the rural rate and the urban rate for functionally similar services used by health care providers. Under the new FCC rules, the FCC will fund no more than the difference between the median urban rate in a state and the median rural rate for the geographic tier in question in that state. The Universal Service Administration company (USAC) has been directed to establish the urban rate for each state based on the median of all of the urban rate data it reviews across all urban areas of the state. USAC also has been directed to collect all publicly available rural rates for functionally similar services grouped by the geographic areas prescribed by the FCC within each state, and determine the median rural rate for that group of rates. The FCC agreed to create a fourth tier in Alaska due to significant differences between extremely rural on-road and extremely rural off-road areas.”

The new rules eliminate cost-based showings and put USAC in the position of developing a cap (the median) for rural rates in each tier. USAC has two years to work out its process for developing the medians in all 50 states and has hired a consultant to advise them on updating their electronic data systems. The new rate rules will take effect July 1, 2021.

Alaska Communications (NASDAQ: ALSK) is the provider of advanced broadband and managed IT services for businesses and consumers in Alaska. The company operates a highly reliable, advanced statewide data network with the latest technology and the most diverse undersea fiber optic system connecting Alaska to the contiguous US For more information, visit www.alaskacommunications.com or www.alsk.com.