March 22, 2010
Monday PM

Never mind that GCI is forty times KPU's size; the backers of the sale of KPU Telecom say that it is unfair for a public utility to compete against a private company. But the competition has been good for Ketchikan, facilitating the lowest telephone and cable TV rates in Alaska and bringing a variety of Internet related services not found in most other Alaskan communities.

Monopolies, public or private, can result in poor service, arrogant decision making, and bloated profits. Competition produces efficiency, and lowers costs. Keeping KPU guarantees that there will be competition in Ketchikan. That is the utility's real value.

If KPU Telecom is sold, Ketchikan customers will not have a say in the extent of service its successor will offer, the quality, or the price. The purchaser may simply be another utility company positioning itself to be bought out by a much larger company such as Verizon or AT&T. Or, it may be trying to grow itself into a regional utility. It could decide for instance that the cellular spectrum that KPU purchased for use in this community should be used at another of its sites in southeast Alaska, Juneau perhaps.

The city cites the costs of future technology improvements as a reason for selling. But those costs will be borne by the ratepayers whether KPU is privatized or not.

The city doesn't tell you that the purchaser will recover its investment through increased rates and possibly selling off parts of the utility. That's how business buyouts work. Even its debt service will be passed on to Ketchikan ratepayers.

Fifteen years ago, Anchorage decided to sell their telephone utility. With the proceeds, the Anchorage Assembly set up a fund to subsidize water and electric rates, much as the Ketchikan city council proposes to do. The fund lasted just five years before the assembly diverted the money to other uses.

About the same time, 1996, Ketchikan voters decided not to sell KPU Telephone. Today because we have two utility companies serving the community, Ketchikan residents have the lowest utility rates in Alaska.

Which community made the better choice?

Mike Harpold
Ketchikan, AK

About: "Mike Harpold served on the Ketchikan City Council from 1998 to 2001"

Received March 20, 2009 - Published March 22, 2010

Related Viewpoint:

Don't Sell KPU Telecom By Mike Harpold

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