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A HISTORY OF THE "TELEPHONE COMPANY" IN HAWAII--Part EIGHT

As the Carlyle Group waits to take over Verizon Hawaii, we continue with the saga of telephone in Hawaii.

In 1989, after 105 years of service, Hawaiian Tel went modern by leasing an IBM 3090-200E mainframe computer to handle its accounting "chores". The company would not disclose the cost of the lease.

The next month, Hawaiian Tel opened its customer bills to advertising, selling ads to increase revenue.

Also in February, pay phone long distance went into "open access"
status. No longer did AT&T have the monopoly on providing long distance to Hawaiian Tel pay phones. The premise management could now choose the carrier and earn 15% to 25% of the gross long distance revenue.

In March, as the company was converting to digital switching, it tracked down subscribers who had not paid for "Touch Call" (Touch
Tone) service by paying $8.50 for start-up and $1.75 per month per telephone number for continuing service. The company said it found 7,000 users in Alakea, Manoa and Puunui that they hadn't been converted but were using touch tone phones to make calls. Hawaiian Tel offered an alternative: get a rotary phone or touch phone with a pulse switch. The company earned $7.4 million a year for the touch call service that year due to the $8.50 start-up charge. By the way, Verizon Hawaii continues to charge its customers the $1.75 per line touch call charge to this day. With 707,000 subscriber lines, Verizon earns $1,237,250 annually for this.

In August, US Sprint purchased locally owned Long Distance/USA Inc.
LD/USA's gross revenues were $44 million for year ending Aug 30. No purchase price was disclosed.

As year came near the end, AT&T wanted to install its Card Caller telephones in Hawaii, but GTE Hawaiian Tel said it wanted assurances "the phones are not the equivalent of the camel's nose creeping into the tent, soon to be followed by rest of the beast."

The situation was Hawaiian Tel's airport phones could only be used for local and interisland calls. Certain pay phones were equipped for credit card calling for Mainland and International calls. Both Hawaiian Tel had these phones at the airport.

What AT&T wanted was to allow its phones to make local and Interisland calls. That what put the HawTel anti-camel jockeys in a frenzy. Also, AT&T was going to charge $1.05 per call for using the credit card plus the long distance charges.

1990 began with HawTel losing an arbitration involving using Mainland contract employees that started in April 1989. Between April and December the company had hired 150 Mainland contract workers and 107 local employees to be trained. The IBEW said the company was extending the six-month contracts and not hiring local replacements.
The ruling stated that the contracts had to end at six months or, if extended, the individuals had to join the IBEW and pay union dues.
HawTel said it started the Mainland hiring to "improve service".

The communications zoo grew larger in late January when telecos around the country began lobbying for the right to offer cable TV.
HawTel said it had 2,500 miles of fiber optic cable in place (38 percent of total network) with another 2,100 miles planned for 1990.

Oceanic's President said for cable companies to compete with telecos "would be like wrestling the grizzly." The State Regulatory director
commented: "Put another way, the entry of another shark into the cable waters, presumably to compete with the sharks already in these waters, is not a substitute for development of control and management mechanisms.

Of course, none of these folks asked the animal fodder and fish bait (the customers) what they thought! Had the issue in 1990 been VoIP, one of these institutional types would have probably called it a "rattlesnake".

In May 1990, HawTel said it would be installing a 9,000-line phone system linking the state government, the judiciary and the Legislature in more than 100 locations throughout the state.

The company said the system was expected to generate $12.4 million in revenue and up to $2 million in equipment revenues over the next four years. (Yes, the state does need the rattlesnake!)

In August, the company began construction of its third earth satellite station, its first digital one. It was on a 34-acre Kapolei site. The general contractor was GTE Spacenet International Systems Division, keeping the money in family.

But nine days later, after two-years of deliberation, the PUC approved a plan the required HawTel to get competitive bids for equipment it previously bought from a sister company. [See last week's installment on the GTD-5 switch failures.]

Two weeks later, the PUC ordered an investigation on whether Hawaii was benefiting from the previous years' GTE reorganization. One of the proposals was "centralizing" service operations (on the Mainland) causing job losses in Hawaii.

Next installment starts with 1991.


Shaloha,

Marty Plotnick
martycri@lava.net


Copyright 2004 Creative Resources, Inc. All Rights Reserved Copyright not asserted for materials from third party publications.
Part 1 HERE
Part 2 HERE

Part 3 HERE

Part 4 HERE

Part 5 HERE

Part 6 HERE

Part 7 HERE

 




 

 

 

Copyright [2004] [Creative Resources, Inc.]