Telephone company hearings hit the road

Telephone company hearings hit the road - 2004-10-09 - Pacific Business News (Honolulu)

The Hawaii Public Utilities Commission has taken to the road -- to the skies, really -- to hold hearings around the state on the proposal of Verizon Communications to sell its former GTE operations in Hawaii to the Carlyle Group, a mainland investment group, for $1.65 billion.

The Garden Island, the Lihue newspaper, reported this week that more than 50 people showed up for the Kauai hearing, including union employees of Verizon's local operations who support the acquisition.

Pat Bustamente, president of Pacific LightNet, has made himself a part of the process by raising questions about the technical expertise of the prospective buyers, and by calling on them to put any rate promises in writing. Former Federal Communications Commission Chairman Bill Kennard, who is now managing director of the Carlyle Group, has said the venture intends to undertake significant technical upgrades without raising rates.

Pacific LightNet, like Time Warner Oceanic, is both a telecoms competitor of Verizon Hawaii and a customer, since it is a unique feature of the telecoms industry that competitors must cooperate to complete calls from one provider's phone to another's. Inept technical or billing operations by company X can adversely affect company Y. Bustamante asserts that Verizon Hawaii got a previous rate hike with promises of technical upgrades that have not been wholly forthcoming.

Verizon Communications took scores of jobs from Hawaii when it moved local billing and other "back office" functions to the mainland. First Hawaiian Bank Chairman Walter Dods, who is advising the Carlyle Group in its effort to acquire the phone company, says Carlyle intends to bring those functions back to Hawaii. This has been seen in some quarters as one of the best features of the proposed deal, but Bustamante questions whether Carlyle can rapidly assemble such an operation.