63Bloomberg Businessweek October 14, 2019
duo named Doug and Mike
Cunningham, who were pursu-
ing a similar network with their
startup, Arctic Fibre Inc. (AFI), they
decidedtoforma partnership.The
Cunninghamssaidtheycouldraise
$640million and committed to
overseeing the international portion
of a 9,500-mile cable that would run
from Japan to England. Quintillion
would be responsible for Alaska,
arguably the most difficult segment.
Pierce, with her blonde bangs
and Quintillion-branded puffer
vests, looked like a friendly-yet-
stern camp counselor. People close
to the former CEO say she could be
aggressive in business dealings, per-
haps a result of her years working
with Alaska labor unions on con-
tract negotiations in the 1990s.
This style—my way or the Dalton
Highway—extended outside the
company, too. In 2014, Quintillion
filed a defamation lawsuit against
a telecom lobbyist in Juneau for
allegedly calling the business a
“big scam” in an email to a cus-
tomer. At an industry conference,
one attendee recalls making a joke
to friends that Arctic cables felt as
sci-fi as a Jules Verne novel. After
she heard the comparison, Pierce
confronted this attendee. “I’d never
even met Elizabeth,” this person
says. “My comment was so trivial,
but she was really angry and defen-
sive. She seemed under a great deal
of stress.”
No major venture capital firm
invested in the Quintillion-AFI projectpriorto2015,accord-
ing to court documents. The marketofteenyArcticcommu-
nities didn’t seem to justify thehugeupfrontexpense,one
reasonQuintillion’srivalsinAlaskamostlyusedsatellitesand
microwaveantennas,ratherthanfiberlines,toreachlow-
population centers in a state morethantwicethesizeofTexas.
At a crossroads, the Cunninghamsproposeda merger.
Pierce agreed but ultimately orchestratedanacquisitionof
AFI’s assets and cut the Cunninghamsoutofmanagement,
according to people familiar withthematter.Shewaswilling
to peddle promises grander thanwhatshecoulddeliver,these
people say. At a meeting with investmentbankOppenheimer
& Co., a relationship Pierce tookoverfromtheCunninghams
to seek financing, an Oppenheimeranalystpredictedthat
Quintillion could squeeze only $30million in annual contracts
fromitsAlaskancable.Piercepoundedthetableandprom-
ised$75million a year, says a person present at the meeting.
“Whenever you challenged Elizabeth, she’d double down,”
the person says. An Oppenheimer spokeswoman declined
to comment.
Oppenheimer set up talks with Cooper Investment Partners,
or CIP, a private equity firm in New York founded by Stephen
Cooper, the CEO of Warner Music Group. Leonard Blavatnik, a
Soviet-born oil magnate who owns WMG, is CIP’s largest share-
holder through a variety of holding companies, according to
an FCC filing. At an introductory meeting, CIP representatives
said the firm would invest only if Pierce could show them com-
pleted contracts that guaranteed a certain amount of reve-
nue upfront. Although Quintillion had previously struggled
to close such deals, Pierce convinced CIP managing directorQuintillion fiber-optic
cables are wired to
downtown Utqiagvik,
population 4,200