By: James Brooks, Alaska Beacon
The Regulatory Commission of Alaska has unanimously approved a series of requests for financial secrecy filed by attorneys representing John Malone, the telecom billionaire seeking to take a controlling interest in Alaska’s largest internet firm.
The approval means Malone will not be required to publish his personal finances and that the financial condition of three GCI-related subsidiaries will also remain secret. The finances of GCI Liberty, the parent company, are already public due to required filings with the U.S. Securities and Exchange Commission.
In October, Malone, 84, told the Wall Street Journal that he would be stepping away from day-to-day operations of his various companies but would retain his controlling interests. Bloomberg has estimated his net worth to be approximately $10.6 billion.
The approval was published just before 4 p.m. on Black Friday. The five governor-appointed commissioners said they were granting the requests because they were in line with the commission’s prior practices, because they don’t have the power to regulate much of GCI Liberty’s business, and because “the public interest in disclosure of the financial information of (the three subsidiaries) is outweighed by the potential competitive financial disadvantages demonstrated in the petition.”
The chair of GCI’s parent company, GCI Liberty, Malone holds shares controlling 53.5% of GCI Liberty’s voting power. But Malone’s personal power has been restricted until recently to 49.32% of the company’s voting power, regulatory filings state.
Now, Malone is seeking to increase his voting power above 50%.
The commission’s Friday order does not decide that request; it addressed the combined requests for financial secrecy on behalf of Malone and the three GCI Liberty subsidiaries.
Alaskans submitted a combined 67 comments across three dockets related to Malone’s proposal. Almost all were opposed to the request for secrecy.
In a response to those comments, Malone’s attorneys said “no legitimate public interest will be served by requiring (Malone) to file his personal financial information.”
The response also said that “the acquisition … will be seamless and transparent to customers because the GCI companies will continue to provide the same services to Alaska customers under their same experienced management. There will be no operational or management changes to the GCI companies as a result of the acquisition.”
GCI’s attorneys had argued that the financial statements of the three subsidiaries should stay confidential because GCI’s competitors were not required to reveal their finances, and it would be unfair for them to open their books.
“We find that disclosure … might create a competitive or financial disadvantage,” the regulators concluded.
In addition, unlike the way that water and power utilities’ rates are regulated by the RCA, GCI’s prices are not regulated by state law.
For that reason, plus the fact that GCI Liberty’s combined financial statements are publicly available, regulators concluded, “public interest in disclosure … is outweighed by the potential competitive financial disadvantages demonstrated in the petition.”
On the request for secrecy covering Malone himself, Malone’s attorneys argued that he isn’t legally obligated to provide financial support to GCI Liberty, and thus, “requiring the submission of his personal financial information would not advance a public interest objective.”
They also argued that in 2018, when wealthy telecom entrepreneur Jane Eudy obtained full control of several Interior Alaska telecom companies by taking 100% control of American Broadband, a national firm, the RCA did not require her to publicize her finances.
Members of the public argued that disclosure is in the best interests of Alaskans.
Megan Johnson, one of dozens of people who offered public comments, said, “Telecommunications in Alaska are not just about convenience, they are lifelines for education, healthcare, emergency services, and economic development, especially in rural and Indigenous communities. Decisions made by owners unfamiliar with our terrain, seasonal challenges, and cultural values risk undermining the progress we’ve made in closing the digital divide.”
Kirsa Hughes-Skandijs of Juneau wrote, “I am gravely concerned about the idea of concealing financial information, particularly when it comes to consolidating control of a public good like an ISP, broadcast and telecommunications company.”
Commissioners ultimately sided with Malone.
“We find the circumstances presented in these dockets similar to those we considered (in 2018),” they wrote.
“We find that under the circumstances … no legitimate public interest will be served by requiring Dr. Malone to provide a statement of financial condition.”
Commissioners are scheduled to make a final determination on Malone’s takeover by April 1.