General Communication Inc. announced late yesterday the close of an agreement to invest $29.5 million in wireless provider Alaska DigiTel on Jan 1. The investment could help AKD meet the needs of Anchorage Mayor Mark Begich, who said last month he wants to blanket his city with wireless Internet.

The city is offering telecommunications companies free placement on city-owned light posts and rooftops in return for covering the costs of creating and maintaining a wireless network.

For its investment, GCI received a majority equity interest in AKD, but will not own voting control of the venture. GCI also entered into a revolving credit loan agreement with AKD that allows AKD to draw as much as $15 million, subject to certain restrictions and financial covenants. GCI's investment has received approval from the FCC.

GCI is the largest Alaska-based and operated integrated telecommunications provider. It provides local, wireless and long-distance telephone, cable television, Internet and data services. AKD provides CDMA wireless services in Alaska to more than 32,000 subscribers and has roaming relationships with the major U.S. CDMA wireless carriers.

The investment came amid the financial distraction of GCI filing an amended, audited third-quarter earnings report on Dec. 4. Nasdaq had notified GCI two weeks earlier that it faced delisting for filing an unaudited quarterly report. GCI filed its third-quarter report before its auditors had completed their review of the financial statements.

KPMG, GCI’s auditor, was in the midst of an internal audit by the Public Company Accounting Oversight Board, a private, nonprofit organization created by the Sarbanes-Oxley Act to oversee the auditors of public companies, and told GCI executives the day before the report was due that the accounting firm would not be able to complete the audit on time.

GCI filed a report with notice that it would later file an amendment after the audit was completed rather than file for an extension. The audit earlier in November found an accounting error, which resulted in GCI restating its per-share net income.

GCI also said last week it is digesting the FCC decision last week in an Anchorage forbearance case that grants Alaska Communications Systems some relief in five of its 11 Anchorage wire centers from its statutory obligation to provide unbundled loops throughout the Anchorage market.

GCI expects the decision will result in an increase in the unbundled loop rate in the five Anchorage wire centers by the end of the year from $18.64 per loop per month to $23.00. GCI said the decision will cause the company to redouble its efforts to complete the conversion of customers in Anchorage using ACS unbundled loops to GCI's own facilities.