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A HISTORY OF THE "TELEPHONE COMPANY" IN HAWAII--Part
[NOTE: Last week we said this would be the last installment. Forget
that. This series will continue for a few more weeks. Enjoy.]
The Carlyle offer to buy Verizon Hawaii is pending and we continue
the series on the history of the telephone company is Hawaii This
installment begins with the end of the company's first century and
beginning of it second in 1983. This benchmark was also the start of
an upheaval in the telecommunications industry unprecedented in the
entire history since Watson answered Bell's hail.
This new era exploded the sedentary legacy phone company attitudes
nationwide with a whole new vocabulary of technology and business
Some of these were "unbundled", "modem" "fiber optic", "satellite",
"digital", "data packets", "cellular phone", "fax", etc. None of
these were instant to 1982-83, but had their origins going back to
the 1920's. The Bell "public monopoly" kept many of these
innovations from reaching the public.
Two seminal lawsuits, the "Hush-a-Phone" case filed in 1948 and the
"Carterphone" case filed in 1958, which were fought in the courts
for decades, finally were resolved to the public's benefit. As these
changes were implemented on the Mainland, Hawaiian Tel was slow to
move off its legacy.
The beginning of the largest egg laid by Hawaiian Tel was in 1983
when it began installing the infamous GTD-5 switches. The PUC was
asked to grant the expenditure of $61.7 million for these switches.
The issue went public because the seller was Automatic Electric
whose parent was GTE, the same as Hawaiian Tel. Why not go out for
competitive bidding was the question? The answer was GTE Service
Corp. performed a competitive analysis and concluded the AE GTD-5s
best suited Hawaiian Tele's needs and that price was not the only
consideration. The PUC, by the way, rejected the application to
raise phone rates to cover the cost.
Jumping ahead to 1988, those switches consistently failed and
knocked service out on a regular basis. We'll detail those failures
at the chronological point.
The next foray into increasing revenue was the company's filing to
adopt "Usage Sensitive Service" (or measured unit charging). This
was to reset the charges to by-the-minute in addition to monthly
service charges. This was rejected by the PUC in May 1985 and again
1983 saw the explosion of third party long-distance companies taking
chunks of it business. In the first year, five percent of
Hawaii-Mainland calls were made through the third parties. (In
December 1982, these companies completed 180,000 calls to the
The irony was GTE Corp (parent) bought Southern Pacific
Communications' Sprint for $750 million in June 1983.
Also in 1983, Hawaiian Tel surrendered to the Hush-a-Phone case and
unbundled the phone instruments from the basic charge. You could now
buy and plug in your own instruments to the network. If you still
wanted a Hawaiian Tel phone, you paid a monthly rental charge.
In 1985, the independent payphone movement began, and Hawaiian Tel
once again fought the movement, but eventually won the first round
in Sept 1987 with the PUC.
In April 1986, the company installed 26 credit card phones at
Honolulu International Airport.
The conversion to digital switching was half completed in August
1986 with completion scheduled for 1992. This would cover all of the
79 switching centers at a cost of $220 million.
Also, the company opened a Manila sales office for sales and service
On Jan 1st, 1987, the company implemented the deregulation of
interior wiring; it now belonged to the customer and if something
went wrong, you had to pay the company to come out and fix it.
Ever possessive about its monopolistic "rights", Hawaiian Tele
protested when Bank of Hawaii agreed with Hawaiian Electric to run a
fiber optic cable between the Bishop St. headquarters and the Nuuanu
St. data center in May 1987.
In Oct 1987, the company partnered with the Hawaii High Tech
Development Corp (HTDC) to open a small business incubator in half
of the then vacant 7,000 sq ft of space at it Kaimuki switching
center. Eventually, this facility was named "KAITEC".
On Dec 28, 1987, the first of "no dial tone days" occurred when
40,000 subscribers lost service in the downtown and Manoa districts
twice in one day. Blame was placed on those GTD-5 switches that came
from the GTE parent.
On Jan 14, 1988, the switch went down again, silencing 40,000
On Jan 26, 1988, the GTD-5 was referred to as and "Edsel" of a
On Mar 14, 1988, GTD-5 syndrome struck Waikiki and put 16,500 lines
out of service for ten hours.
On Apr 29, 1988, 1,120 phones went out in Downtown as the company
was switching over from a GTD-5 to a new DMS-100 digital switch.
On May 31, GTE admitted at a PUC hearing that the switches were
"below par" based on a standard of no more than one hour of downtime
in 20 years.
Yet, he admitted, the Hawaiian Tel switches malfunctioned 136 hours
from 1984 through 1987.
On June 6, 1988, 30,000 lines went silent.
On the same day, a GET executive refused to reveal data on the GTD-5
switch because he didn't want the information open to
On June 9, 1988, Waikiki went dial-less as 16,277 lines went down.
On June 20, 1988, for the second time that week, Kailua's 15,000
subscribers had no dial tone.
On June 30, the PUC ordered Hawaiian Tel to get competitive bids on
The denial period ended on June 20, 1988, when GTE announced it was
selling 50 percent of switch subsidiary to AT&T in a joint venture
last15 years when AT&T would own 100 percent. The JV said it would
develop switches with ISDN capability.
During 1988 the company started new ventures such as an auto
maintenance service for non-company fleet operators, systems
integration and services for computer users and cellular phone
In April, 1988, Hawaiian Tel said it expected approval or its
Hawaii-Japan video conferencing service.
In May 1988, the company began cracking down on subscribers using
modems but weren't paying business rates.
Next week we'll begin with 1989.
Copyright 2004 Creative Resources, Inc. All Rights Reserved
Copyright not asserted for materials from third party publications.
Part 1 HERE
Part 2 HERE