Senate shelves decision
on holding special
Verizon hearing
A Senate resolution calling for a special hearing into whether local phone company Verizon Hawaii can be converted into a customer-owned business cooperative has been put on hold.
The Senate committees on Economic Development and Commerce, Consumer Protection and Housing deferred action yesterday on the legislation, which also calls for an informational briefing into a potential sale of Verizon Hawaii.
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& Hawaii Revised StatutesSenate Consumer Protection Chairman Ron Menor (D, Mililani) said he had no information that any sale of Verizon was imminent. He added that legislators do not need a resolution to hold informational briefings.
Mel Horikami, Verizon Hawaii's president, testified that the resolution was premature and duplicative of legally required reviews by the state Public Utilities Commission and the state Consumer Advocate.
Horikami told legislators that parent company Verizon Communications Inc. has had exploratory discussions since receiving an unsolicited inquiry about Verizon Hawaii.
Several news reports have identified the Carlyle Group, a Washington D.C.-based private equity firm, as one of several potential suitors for Verizon Hawaii, which could fetch as much as $1.5 billion.
The bill asks the committees to study whether Verizon Hawaii can be acquired by the state Public Utilities Commission and operated as a cooperative venture modeled after Kauai Electric Co., which is partly owned by its customers.
A companion resolution has been introduced in the state House, but hearings have yet to be scheduled on that legislation.
Kauai Electric, which serves about 30,000 customers on the Garden Isle, is the only utility in the state that operates as a business cooperative. Customers who have elected to be cooperative members own a share of the company and receive a portion of its revenues.
The Kauai co-op was set up in 2002 when Citizens Communications Co. sold the local company to Kauai Island Utility Co-op for $215 million.
George Waialeale, a Verizon employee and former business manager for the International Brotherhood of Electrical Workers Local 1357, said the local phone company has gone through two mergers and acquisitions during the past several decades and each time, the company and its customers have suffered.
"In the past as Hawaiian Telephone Co., decisions were made here in Hawaii regarding the direction the company would be taking to improve the telecommunication infrastructure," Waialeale said.
"Once we were purchased, that decision making was taken away and there was a great struggle to get the best improvements in telecommunications for the residents of the state of Hawaii."
