Telecommunications in Anchorage

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1 advancing anchorage APRIL 2013 Telecommunications in Anchorage 90% by Meeting the workforce needs of Anchorage Networking It s time to get out of the office School Business Partnership 28 Advancing school and business relationships PRSRT STD US POSTAGE PAID Anchorage, AK Permit #39 Anchorage Chamber of Commerce 1

2 Let s Keep First in Alaska to be certified by The Joint Commission for hip and knee replacements.

3 4 Feature story 22 Entertainment 18 Industry News Letter from the President 3 Advocacy in Action 12 90% by chamberology 16 Networking Advancing Benefits 24 Tax column 26 School Business Partnership 28 Business Leader Profile 30 Ambassador of the Quarter 31 Around Town Calendar 32 Chamber Events 34 New Members 36 executive members

4 board of directors Elected Board Members ( * Indicates Executive Committee Member) * Sandra Heffern EHD Enterprises, Owner (chair) * Bruce Bustamante chair, Princess Cruises (immediate past chair) Julie Anderson Alyeska Pipeline Service Co., Engineering Business Manager (at-large) * Chris Clifford Wells Fargo Bank, VP, Principal Business Relationship Manager (alternate) Andy Coon Alaska Communications, VP/General Manager Business & Consumer Sales * Mike Hayhurst KPMG, Office Managing Partner (at-large) * Bob Heinrich ConocoPhillips Alaska, Vice President of Finance (chair elect) Susan Jensen Bayshore Clubhouse, General Manager David Lamothe Chariot Group, Account Manager Eden Lovejoy Axis Management, Inc., President Greg Mattson BP Alaska, VP of Drilling & Completions * Bill O Leary Alaska Railroad Corporation, Chief Financial Officer (secretary/treasurer) * Janelle Pfleiger Re/Max Properties, Inc., Associate Broker (vice chair) Anne Reed Read Systems, Owner Colleen Starring ENSTAR Natural Gas Company, President Appointed Board Members Marti Buscaglia ADN, VP, Advertising Stig Colberg CIRI, Chief Business Development Officer Randy Cunningham KLEBS Mechanical, Sales Superviser * Bill Evans Sedor Wendlendt Evans and Filippi, LLC, Partner Bill Hannenberg ExxonMobil, Safety, Security, Health & Environmental Rochelle Marshall GCI, Director of Commercial Marketing Andy MacLeod Northern Lights Media dba KTUU Channel 2, General Manager Robert Honeycutt Providence Health & Services, Chief Operations Officer Morton Plumb The Plumb Group, Owner Matt Thiel Hickel Investment, Co., Corporate Controller Richard Watts Carrs Safeway, District Manager J.R. Wilcox Cook Inlet Energy, President 1016 W. Sixth Ave., Suite 303 Anchorage, AK phone (907) fax (907) Anchoragechamber.org President Andrew Halcro Magazine Staff J.J. Harrier, managing editor Published By Northwest Strategies Publisher Amanda Combs Designer Stephanie Johnson Advertising Sales Amanda Combs phone (907) Chris Munroe phone (907) To purchase advertising space in this publication, contact Northwest Strategies. Ex-Officio Board Members Chris Birch Anchorage Assembly, Assembly Representative & Liaison Col. Mark Davis US Army Alaska, Deputy Chief of Staff Col. Brian Duffy US Air Force, Joint Base Elmendorf-Richardson, Commander Ed Graff Anchorage School District, Superintendent Col. Hunt Kerrigan Alaska Army National Guard, Deputy Chief Joint Staff Bill Popp Anchorage Economic Development Corporation, President & CEO Rashmi Prasad UAA College of Business, Interim Dean Julie Saupe Visit Anchorage, President & CEO Christopher Schutte Anchorage Downtown Partnership, LTD., Executive Director * George Vakalis Municipality of Anchorage, Municipal Manager (at-large) 441 W. Fifth Ave., Suite 500 Anchorage, AK phone (907) fax (907) Nwstrat.com Photos submitted will not be returned unless accompanied by a self-addressed, stamped envelope. The Anchorage Chamber reserves the right to edit all information submitted for publication. Cover Photo HagePhoto 2 advancing anchorage magazine APRIL 2013

5 The Anchorage Chamber of Commerce is pleased to welcome you to the inaugural publication of Advancing Anchorage Magazine. This quarterly publication is dedicated to providing our members with a wide array of relevant and topical articles that highlight everything from business features to current public policy issues that affect local businesses. As the Anchorage Chamber celebrates its 98th year in existence, we are constantly striving for new ways to be more efficient and informative in sharing critical information in an ever changing communication environment. The title of our new publication is a nod to our mission of advancing business and advancing Anchorage. April, May and June represent some of our busiest months of the year at the Anchorage Chamber. From our monthly Business After Hours functions and Citywide Cleanup Week, to Military Appreciation Week and weekly Make it Monday forums, the Anchorage Chamber offers a full calendar of opportunities to meet new business contacts while strengthening our community. Business After Hours, hosted by the Anchorage Chamber Ambassador Council, is a member exclusive networking event that provides an opportunity for members to mingle in a relaxed atmosphere while making those important business connections. Held at a different host location each month, this event has grown to be one of the Anchorage Chamber s most popular activities. Recent Business After Hours have been held at local hotels, retail stores, office spaces, warehouses and banks. Bring your business cards and join us at this month s Business After Hours. And if you suffer from shyness that make these types of meet and greet events difficult, as they say, we have an app for that. You can contact the Anchorage Chamber and be connected with an Ambassador liaison, at no cost, and they ll guide you through the event. We are all about connectivity for our members, and this is just another way we help you network within your comfort zone. Consult Anchoragechamber.org to find out when and where the next Business After Hours is being held. For the last 45 years, the Anchorage Chamber has hosted Citywide Cleanup Week, one of the city s largest outdoor community service events. The mission of this event is to remove unwanted trash from around the city s streets, parks and neighborhoods after the winter snow melts. Everyone loves a clean city, including our visitors. During the week, Anchorage businesses, schools and families take to the streets to return our city to its natural beauty, truly making this a citywide event. I can personally remember participating in the Citywide Cleanup in the 1970s as a student at Lake Otis Elementary School. The brightly colored bags, filled with trash lining the sides of Tudor Road made all the difference for a cleaner, brighter Anchorage. In 2012, the Citywide cleanup resulted in 1,500 tons of trash. That is the weight equivalent of 600 Chevrolet Silverado pick up trucks. This year the Citywide Cleanup Week is scheduled from April 27 to May 4, with our iconic orange trash bags available at all Fred Meyer locations throughout town beginning in mid-april. Consult Anchoragechamber.org to find out how you can help make a cleaner, brighter Anchorage. From June 10 to the 14 the Anchorage Chamber celebrates those that sacrifice letter from the president The title of our new publication is a nod to our mission of advancing business and advancing Anchorage. Andrew Halcro for all of us, the men and women of the U.S. military. The military is a billion dollar industry and has played a critical role in shaping Alaska, with state ties to the military dating back almost 150 years. Robert Atwood, an Alaska Pioneer and former Anchorage Chamber board chair described Alaska as a frontier community growing up around a military outpost. The Anchorage Chamber plays a leadership role in strengthening the relationships between the local military and business communities and is host to the largest military appreciation event in the state, and one of the largest in the nation. Anchorage Chamber members attend the Military Appreciation Luncheon, volunteer at the Military Appreciation Picnics, and provide military discounts during the week. Throughout the year, the Anchorage Chamber provides its members with unique opportunities to get connected with other members and the community. We feel our new publication is yet another unique way for members to connect through advertising and member profiles. We hope you ll enjoy the first edition of Advancing Anchorage Magazine, and hope you ll also take advantage of the variety of events the Anchorage Chamber hosts throughout the year to advance business and advance Anchorage. Anchorage Chamber of Commerce 3

6 Verizon Wireless Arrival Photo HagePhoto 4 advancing anchorage magazine APRIL 2013

7 Signals Change FOR Telecommunications Industry By Heidi Bohi Alaska s longstanding telecommunications wars are heating up again as residents and business leaders welcome Verizon Wireless, the country s largest provider. Joining Alaska Communications, GCI and AT&T Alaska, Verizon soon will jump into the race to connect every man, woman and child in the state. Verizon s arrival has been a source of street talk for a while, though during the past two years the country s telecommunications giant, which also provides international services, has made measurable progress readying for a 2013 summer activation of its Alaska network. The company s serious intent can be seen in its recent investments in spectrum, new infrastructure, local hiring and training, and tailoring its business model with the hopes of capturing the hearts of Alaskans, known for their love-hate relationships with large, Outside companies. Having our own network in Alaska allows us to control two things that are very important to us quality and reliability, Demian Voiles, Verizon Vice President for Alaska Sales and Operations, says. We re committed to having the most reliable network nationwide, and we are hearing from employees and customers who travel to Alaska and roam on other networks that they aren t getting the quality they ve come to expect. Alaskans have heard similar positioning statements from the other three largest wireless companies in the state. Still, they are eagerly listening to the new kid on the block, examining how Verizon invests in data speed and technology, which industry leaders say is encouraging the other carriers to upgrade their networks and make the marketplace even more competitive. Looking Back, Looking Ahead Verizon s arrival is testament to the growth of Alaska s telecommunications industry. Currently, national carriers without a local network have roaming agreements with Alaska companies, but the strength and size of the market today makes it attractive enough to draw the nation s leading companies in wireless telecommunications. Having four wireless providers in a market of 700,000 is consistent with other areas across the country, said Anand Vadapalli, Alaska Communications Anchorage Chamber of Commerce 5

8 Top: The Alaska offices for Verizon Wireless will be located at 188 Northern Lights Boulevard in Midtown. Above: A Verizon Wireless technician testing their network at their switch in Anchorage. President and CEO, though it is important to note that national carriers focus on wireless and are selective about the markets they cover. Alaskan customers, whether at home or at work, have data and communications needs that go far beyond wireless and the geographic reach of national providers in the state, Vadapalli says. Conversations with all the carriers indicate their focus on providing comprehensive solutions that meet local needs and are as attractive as offerings in other cities. However, the question remains: can all four succeed in the Alaska market? No one is willing to speculate, though simple economics dictate that new advancements in the market stimulate greater usage. At the same time, Alaska is a unique market. The vast territory presents geographic challenges that must be overcome to serve a smaller subscriber base than those in large urban areas in the Lower 48 States. The cost of this investment results in a smaller piece of the pie for all competitors. Photos HagePhoto 6 advancing anchorage magazine APRIL 2013

9 Verizon is ready to meet the challenge, reaching deep into its pockets to be the first carrier to build, from the ground up, an all-4g LTE market in the country. We are going to set the bar much higher than it has been set before and the industry here will have to play some significant catch up, Voiles says, adding that it is a familiar investment scenario he has seen happen in the Lower 48 States. As diverse as the state s geography are the messages in the market. The industry is aptly dubbed the evolution of confusion because of the constant state of technological and economic flux that is driven by intense competition and new technologies. With Verizon entering the local marketplace as the best carrier in the country, as ranked by Consumer Reports, Alaskans can expect product lines to be even more diverse, and they will have to navigate an even newer set of telecommunications acronyms and quality comparisons. Standing Ground & Joining Forces With 100 million customer connections, Verizon s anticipated entry into Alaska s market is a big game changer. Despite its size and deep pockets, the company will be up against competition that dates back more than 100 years: the Alaska Communications System was created and connected to Seattle by cable in Homegrown GCI prides itself in understanding the critical role telecommunications plays in rural Alaska and since its inception from a basement in 1979 continues to emerge as a leader in this market, providing service to more than 100 rural schools, a link for the largest medical network in the Pacific Northwest that connects more than 200 clinics, hospitals and medical organizations, and the most extensive wireless network in the state with more than 180 rural villages. In almost 35 years, it has invested more than $2.5 billion in capital in Alaska more than any other communications company in the state. GCI s success is driven by our understanding the market we live in, David Morris, GCI Vice President of Corporate Services says. This understanding is shown through diverse product offerings and ventures. GCI built on its 16-year investment in rural Alaska with the recent completion of TERRA-SW, an $88 million hybrid fiber-microwave network that connects 65 villages throughout Southwest Alaska to each other, existing Alaska fiber networks, and to the global Internet. Most recently, it also announced that its subsidiary Denali Media Holdings will acquire KTVA in Anchorage, KATH in Juneau and KSCT in Sitka, looking ahead to cross media applications and building on its cable television services, which are in 90 percent of the state s households with 64 percent penetration. Another competitor, Alaska Communications, is one of the state s leading telecom companies with a Anchorage Chamber of Commerce 7

10 Isis Mobile Wallet and the associated Isis logos are trademark of JVL Ventures, LLC. * ** ww.gsma.com/connectedliving/wp-content/uploads/2012/03/gsma2025everycarconnected.pdf *** Photo HagePhoto 8 advancing anchorage magazine APRIL 2013

11 100-plus-year history in the state and has spent more than $500 million in Alaska since Today its fiber optic network connecting Alaska to the Lower 48 States can carry 33 million calls simultaneously and 20 billion text messages per second. According to Vadapalli, one of its largest investments is in 4G LTE wireless service the latest generation of mobile wireless technology. The network is another example of Alaska Communications examining and anticipating customer needs, he says. Our focus is listening to our customers, understanding their needs and using IT and telecom technology to improve their lives, Vadapalli says. If it s a consumer, that means connecting them with what matters most in their life in a fast, reliable way. If it s a business, that means understanding its business challenges and using IT and telecom technology to address those challenges and improve business results. On the business side, this means that Alaska Communications is the only company in the state, the second in the country, and the third in the world to be certified to offer Ethernet 2.0 services, a world-class standard for the highest quality, most reliable and secure data services available, critical for oil and gas companies, government, Alaska Native Corporations and healthcare, along with small and medium-size businesses that connect multiple locations, or connect to networks outside of Alaska. Over the years, Alaska Communications and GCI have been fierce competitors, so Alaskans were surprised when the two companies recently announced that they are forming the Alaska Wireless Network (AWN), which will design and operate an Alaska statewide wireless network covering more than 95 percent of Alaska s population. The merger comes out of necessity: the wireless business is capital intensive, requires scale to compete successfully against national carriers, and demands more spectrum than either company individually owns. Alaska Communications and GCI see combining resources as the only way to new faces in anchorage Demian Voiles, Vice President of Service and Operations, Verizon Alaska Expanding new technology into the last frontier this is the motivation that brings Demian Voiles, vice president of Verizon Alaska, from Reno, Nevada, to Alaska s largest city. Riding into town on a 15-year tenure with Verizon, Voiles will act as Alaska s general manager for the Alaska expansion, leading a network and sales team through the activation of Verizon s network. Although it is too soon to quantify, he says Verizon s presence in the state will amount to hundreds and hundreds of jobs. In addition to the resulting economic development benefits, Voiles looks forward to offering Alaskans the technological solutions and high performance network that are now available in Outside markets. This is the last time in company history that we will be expanding and building out a completely new market from the ground up. I want to leave my fingerprints on the business, and it doesn t get any bigger or better than here, he says one year after moving here with his wife Kristi and six daughters, including a set of twins and a set of triplets. Voiles interest in Alaska isn t all business. After just one visit, he knew he wanted to raise a family here. People are so friendly, welcoming and honest, he said. And the girls are in love with this place. They will always remember when they caught their first fish and things like learning to look both ways for moose when they go in the yard. Anchorage Chamber of Commerce 9

12 compete with Verizon s purchasing power, which adds up to billions of dollars. By combining our wireless assets, AWN will provide a state-of-the-art Alaska wireless network owned and operated by Alaskans for Alaskans, Vadapalli says. AWN will provide the most geographically extensive network in Alaska, serving communities that would never be served by any national carrier. Verizon Hears Alaskans Now Nationally, AT&T is Verizon s largest competitor, though in Alaska Voiles sees all three existing competitors as forces to be reckoned with because each one brings something unique to the marketplace. We expect to peel customers off from all three, he adds. Besides investing in its own wireless network, Verizon also announced partnerships with Copper Valley Telecom and Matanuska Telephone Association to expand LTE service in those communities. These sites will also include back-up generators so customers can expect wireless service to continue during power outages. This extra step to ensure reliability, Voiles says, differentiates Verizon from its competition in Alaska and nationwide. According to Voiles, Verizon has a one-word mantra: reliability. Part of its investment is in what he calls the most advanced switch in the nation, which is essentially the brain of the wireless network, a state-of-the-art command center. This switch is a clear contrast to many of the aging switch facilities in Alaska, he says, and it is this new nerve center and network of cell sites that will allow Verizon customers to expect more from its service. While the difference in service remains to be seen, everyone agrees that adding another national carrier to the mix will be good for the state as it leads to new choices for Alaskans and pushes other carriers to adopt faster data technology and offer better customer service support. There is tremendous competition in the wireless industry. Wireless phones and devices are extremely popular and thanks to that competition, customers in Alaska and the Lower 48 States have more choices than ever before, Bob Bass, State President of AT&T Alaska says. AT&T Alaska has been here for 20 years and currently has the most wireless subscribers. It has invested $650 million into its wireless and wireline networks since In addition to focusing on expanding its 4G LTE mobile Internet coverage, it made about 250 wireless network upgrades including activating new cell sites, adding capacity, upgrading cell sites to provide fast 4G LTE mobile Internet speeds, and deploying high-capacity Ethernet connections to cell sites. With most Alaskans owning at least one wireless device, what will make them switch to Verizon, considering that all three major carriers have rolled out versions ECONOMIC ENGINE Ted Stevens Anchorage International Airport (ANC) is an important contributor to Alaska s economy and a critical link between Alaska communities, U.S. and international destinations. 1:10 Anchorage jobs is directly or indirectly related to ANC $8 of every $10 spent with Alaska s private sector 265 operating businesses Less than 9.5 hours from 90% of the industrialized world #2 in the country for landed cargo weight World s busiest and largest seaplane base Ted Stevens Anchorage International Airport (907) advancing anchorage magazine APRIL 2013

13 of 4G in key markets and are also vying for the title of Alaska s fastest network? According to Voiles the differentiator is, again, reliability and what he calls true 4G LTE technology. The difference, he says, will be apparent the first time a customer picks up a Verizon device: In terms of data traffic, it s like going from a one-lane road to a 10-lane freeway. Another added benefit will come through Verizon s international partnerships, which he says allow the company to introduce products and services into the marketplace that those in the Lower 48 States enjoy, bringing an end to Alaskans frustration with the not available in Alaska disclaimer that appears in many advertisements from Outside companies. Machine-to-machine or smart connection technologies will create efficiencies in business and add revenue streams. As an example, Voiles points to intelligent buildings in Alaska: real-time energy use will be tabulated with smart meters and sensors and sent over the Verizon 4G LTE network to cell phones, tablets or computers, so businesses and residents can track energy usage and see how much power they are saving through social media alerts. Along with the business opportunities in Alaska, there remain challenges including distance, high costs, and workforce recruitment. Named by Training Magazine as the No. 1 company in employee training for the second year in a row, in Alaska, too, Verizon is investing in hiring and customer service training. This includes learning about Alaskans and the idiosyncrasies that come with doing business in the last frontier. A class at the Alaska Native Heritage Center is helping shape its approach to hiring and customer service training by teaching managers about cross-cultural considerations and the different perspectives Alaska Natives offer. The wireless business changes every week, and beyond excellent customer service, we have to invest in training and educating our employees because they need to be on top of those changes, Voiles says. No one knows Alaska like we do. Trust your business banking to the local team with a genuine interest in your success. Where Alaska s business dreams grow. FNBAlaska.com

14 advocacy in action The Price of Funding Education By Andrew Halcro As Alaska lawmakers face growing state expenses, declining oil revenues and calls from economists to spend less, one issue under consideration that should be given extensive public vetting is the proposal to change the way Alaska funds education. Senate Joint Resolution 9 would allow public money to fund private and religious schools. Since this is a constitutional amendment, it requires a super majority of both the House and Senate to be placed on the 2014 ballot, so voters can make the ultimate decision. If approved by the public, lawmakers could begin adopting voucher programs as early as With ninety percent of Alaska children attending public schools, this constitutional amendment would turn Alaska s public school system on its head. It would also open the floodgates to the state treasury, which is a major concern of the Anchorage Chamber of Commerce. With economists warning lawmakers that structural budget deficits are near, the thought of granting direct access to a politically connected group is fiscally reckless. The theory has always been that students will get a better education if government embraces competition and allows parents to use taxpayer money to pay tuition at private and religious schools. In Alaska, since residents contribute nothing to state education costs, the burden of funding this new program would fall on oil revenues or costs shifts to local property taxpayers. Adopting a voucher program would come at a time where oil revenues are declining quickly and local property tax payers are already being squeezed. But the biggest problem of all is that approving this amendment will grant direct access to the state treasury for some of the most well connected groups in politics. As a former state lawmaker, I ve had the unique advantage of being behind closed majority caucus doors when vouchers and school funding have been argued and I have no doubt this will blow the doors off the treasury. Examples include Florida where the cost of their McKay Scholarship program has grown 38 percent in the last five years alone. Last year, the Alaska state house education committee held hearings on a popular school voucher proposal that has been proposed again this year. The bill allowed parents who were already paying their child s private school tuition, to have the state pay the tuition instead. In addition to reimbursing parents who are already footing the cost of their child s private education, the proposal called for the state to pay the student s transportation cost based on the same cost per student as the host district. In Anchorage the allocation is $384 per student, per year. However, the $384 dollars the Anchorage School District (ASD) gets per student would not come close to covering private school transportation costs. The cost per unit paid by the ASD is base upon moving tens of thousands of students around Anchorage every school 12 advancing anchorage magazine APRIL 2013

15 day. Point being: How long do you think it takes before private schools begin lobbying lawmakers for an increase in transportation funding? The political reality is that many private schools are religion based and the religious community has a voice that carries weight with many lawmakers. If approved, voucher advocates would soon lobby lawmakers for a greater allowance for tuition and other operating costs. They d constantly be after lawmakers to allow them to operate privately with no conditions or accountability. And if there were any objectionable rules, lawmakers would consistently face pressure to issue waivers or exemptions. Several years ago, these same groups flexed their legislative muscle by getting a provision passed that expanded the definition of church homes that were exempt from local property taxes. But more importantly, the constitutional amendment (SJR9) proposed is so vague and broadly written, it could eventually be interpreted to mean any type of private school funding. The proposed amendment to Alaska s constitution would simply state nothing in this section shall prevent payment from public funds for the direct educational benefit of students as provided by law. From a fiscal standpoint, this arguably means that public funds could then be used to build private schools, pay for private student transportation, support private colleges or any other direct educational benefit of students. This year we re paying private tuitions, next year we re funding private school improvements. Anytime you give groups with political power direct access to state coffers, you re If approved, voucher advocates would soon lobby lawmakers for a greater allowance for tuition and other operating coasts. in for a penny, in for a pound. At the Anchorage Chamber of Commerce, one of our top priorities is fiscally responsible budgeting, and given the current condition of state finances, lawmakers should proceed with caution before changing the constitution to allow for another expensive entitlement program. Expertise, Quality Work & Client Focus Tax and Business Planning Financial Statement Preparation Fiduciary Accounting & Taxation Business Valuations Tax Return Preparation Audits, Reviews and Compilations Estate & Gift Planning & Compliance Litigation Support 1400 West Benson Boulevard, Suite 400 Anchorage, Alaska (907) Anchorage Chamber of Commerce 13

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