Competitor
gears up to
challenge
HawTel

The PUC clears the way for
opening the local phone market

By Craig Gima
Star-Bulletin

At least one competitor to GTE Hawaiian Tel will step up efforts to offer telephone service to small businesses after the state Public Utilities Commission finalized rules on opening the local phone market.

GST Telecom Hawaii said it has formed a small business team and hired new salespeople to push its service, which the company said can offer savings of 20 to 25 percent off of Hawaiian Tel's business rates.

The company will only offer the service in Waikiki and Punahou until equipment is installed at other locations and it is not targeting residential service at this time, said Art Sprake, vice president of GST Telecom Hawaii. Sprake said the new PUC rules mean "more competition, more choices and hopefully better prices" for phone customers.

Other companies anxious to go head-to-head with GTE Hawaiian Tel include AT&T Corp. and Sprint Corp.

Over the past few years, long-distance, neighbor island long-distance and other phone services have been opened to competition.

The thick packet of rules finalized by the PUC yesterday essentially establishes the way companies will compete for local phone service.

Most Hawaiian Tel customers will not see any immediate change in service, said Joel Matsunaga, vice president of GTE Hawaiian Tel.

Matsunaga said any change in GTE's phone rates, even a lowering of rates, must be approved by the commission.

But a related "rate rebalancing" case before the PUC may eventually mean that GTE will be able to charge for the actual cost of providing the service and Oahu customers would no longer subsidize local service for neighbor islanders.

"If rates were rebalanced so they reflected their costs as they would in a competitive market, neighbor island rates would increase and even some Oahu rates," Matsunaga said.

He noted, however, that the increase in some rates would be offset by lower interisland long-distance rates, lower business rates and the elimination of some fees like touch-tone dialing.

"The net impact would be relatively minor since many of the increase would be accompanied by decreases," Matsunaga said. "In some cases the net impact may be a lower average bill."

Matsunaga said GTE is still reviewing the final rules. However, he said one significant rule is that all competitors will have to charge a Universal Service fee to provide a subsidy for phone service to those who may not be able to afford it.

"We're pleased that the PUC realizes all parties should contribute to that goal," he said.