Hawaiian Telcom
Encyclopedia
Hawaiian Telcom is the incumbent local exchange carrier
(ILEC) or dominant local telephone company
, serving the state of Hawaii
. It was formed in 2005 by The Carlyle Group, following its purchase of the Hawaii assets of Verizon Communications
, which was known as Verizon Hawaii, Inc., and previously as GTE Hawaiian Telephone Company, Inc. and Hawaiian Telephone Company.
Hawaiian Telcom provides local phone, long distance, internet services
(dial-up and DSL), and is a directory
publisher and mobile virtual network operator
using leased
capacity provided by Sprint and Verizon Wireless
's CDMA
networks. Verizon Wireless's Hawaii operations were not included in the deal, and Verizon Wireless continues to operate in Hawaii as before the divestiture.
Carlyle's purchase of Verizon Hawaii was quite controversial with the public and competitive local exchange carrier
s, Time Warner Telecom
and Pacific LightNet
, who had doubts about the Carlyle's lack of experience operating telecommunication
businesses, and their intentions as to raising rates, upgrading the network with optical fiber
as former-parent Verizon was doing on the mainland, and possible resale of the business in just a few years, all seen as being detrimental to the public interest
.
Since breaking off from Verizon in April 2005, the company has been overcoming difficulties transitioning to its own systems. Issues ranged from extremely long hold times to speak to representatives, to duplicate and delayed bills. In February 2007, the company announced that it had reached a settlement with its original systems consultant, BearingPoint
, and had hired a new contractor, Accenture
, to complete the transition to the new systems.
Hawaiian Telcom announced on February 4, 2008, that it was replacing CEO Michael Ruley with turnaround expert Stephen F. Cooper, chairman of Kroll Zolfo Cooper. Cooper's previous management engagements include Enron
and Krispy Kreme
.
On May 8, 2008, the company named Eric Yeaman as its new CEO, succeeding interim CEO Cooper. Yeaman previously served as Chief Operating Officer of Hawaiian Electric Company, the electric utility serving the island of Oahu. The company also announced that Walter Dods, former president of First Hawaiian Bank
and one of several local investors in Hawaiian Telcom, was assuming the role of Chairman of the Board.
On December 1, 2008 the company filed for Chapter 11
bankruptcy
after missing an interest payment on its debt. The company's plan to reduce its debt by more than $800 million was approved by Judge Lloyd King of the U.S. Bankruptcy Court on November 13, 2009. The plan required approval by the Hawaii Public Utilities Commission.
On June 24, 2011, The State of Hawaii Department of Commerce and Consumer Affairs issued a 15-year cable franchise license to Hawaiian Telcom, thus ending Oceanic Time Warner
's 35-year monopoly as the state's sole cable TV provider. Hawaiian Telcom launched the service on July 1, 2011 after a year of testing in the Honolulu area, with islandwide service to expand in 2012.
Incumbent local exchange carrier
An ILEC, short for incumbent local exchange carrier, is a local telephone company in the United States that was in existence at the time of the breakup of AT&T into the Regional Bell Operating Companies , also known as the "Baby Bells." The ILEC is the former Bell System or Independent Telephone...
(ILEC) or dominant local telephone company
Telephone company
A telephone company is a service provider of telecommunications services such as telephony and data communications access. Many were at one time nationalized or state-regulated monopolies...
, serving the state of Hawaii
Hawaii
Hawaii is the newest of the 50 U.S. states , and is the only U.S. state made up entirely of islands. It is the northernmost island group in Polynesia, occupying most of an archipelago in the central Pacific Ocean, southwest of the continental United States, southeast of Japan, and northeast of...
. It was formed in 2005 by The Carlyle Group, following its purchase of the Hawaii assets of Verizon Communications
Verizon Communications
Verizon Communications Inc. is a global broadband and telecommunications company and a component of the Dow Jones Industrial Average...
, which was known as Verizon Hawaii, Inc., and previously as GTE Hawaiian Telephone Company, Inc. and Hawaiian Telephone Company.
Hawaiian Telcom provides local phone, long distance, internet services
Internet service provider
An Internet service provider is a company that provides access to the Internet. Access ISPs directly connect customers to the Internet using copper wires, wireless or fiber-optic connections. Hosting ISPs lease server space for smaller businesses and host other people servers...
(dial-up and DSL), and is a directory
Telephone directory
A telephone directory is a listing of telephone subscribers in a geographical area or subscribers to services provided by the organization that publishes the directory...
publisher and mobile virtual network operator
Mobile virtual network operator
A mobile virtual network operator is a company that provides mobile phone services but does not have its own licensed frequency allocation of radio spectrum, nor does it necessarily have all of the infrastructure required to provide mobile telephone service...
using leased
Leased line
A leased line is a service contract between a provider and a customer, whereby the provider agrees to deliver a symmetric telecommunications line connecting two or more locations in exchange for a monthly rent . It is sometimes known as a 'Private Circuit' or 'Data Line' in the UK or as CDN in Italy...
capacity provided by Sprint and Verizon Wireless
Verizon Wireless
Cellco Partnership, doing business as Verizon Wireless, is one of the largest mobile network operators in the United States. The network has 107.7 million subscribers as of 2011, making it the largest wireless service provider in America....
's CDMA
Code division multiple access
Code division multiple access is a channel access method used by various radio communication technologies. It should not be confused with the mobile phone standards called cdmaOne, CDMA2000 and WCDMA , which are often referred to as simply CDMA, and use CDMA as an underlying channel access...
networks. Verizon Wireless's Hawaii operations were not included in the deal, and Verizon Wireless continues to operate in Hawaii as before the divestiture.
Carlyle's purchase of Verizon Hawaii was quite controversial with the public and competitive local exchange carrier
Competitive local exchange carrier
A competitive local exchange carrier , in the United States, is a telecommunications provider company competing with other, already established carriers ....
s, Time Warner Telecom
Time Warner Telecom
tw telecom is headquartered in Lone Tree, Colorado, United States.tw telecom provides business class managed voice, Internet and data network services, specializing in Ethernet and transport data networking, Internet access, local and long distance voice, VoIP and security, to enterprise...
and Pacific LightNet
Pacific LightNet
Pacific LightNet is a locally-owned, facilities-based CLEC, providing both voice and data services to its customers in Hawaii. At the core of its products and services is a 10,000 fiber mile submarine and terrestrial fiber optic network connecting the state’s six major islands, the only of its kind...
, who had doubts about the Carlyle's lack of experience operating telecommunication
Telecommunication
Telecommunication is the transmission of information over significant distances to communicate. In earlier times, telecommunications involved the use of visual signals, such as beacons, smoke signals, semaphore telegraphs, signal flags, and optical heliographs, or audio messages via coded...
businesses, and their intentions as to raising rates, upgrading the network with optical fiber
Optical fiber
An optical fiber is a flexible, transparent fiber made of a pure glass not much wider than a human hair. It functions as a waveguide, or "light pipe", to transmit light between the two ends of the fiber. The field of applied science and engineering concerned with the design and application of...
as former-parent Verizon was doing on the mainland, and possible resale of the business in just a few years, all seen as being detrimental to the public interest
Public interest
The public interest refers to the "common well-being" or "general welfare." The public interest is central to policy debates, politics, democracy and the nature of government itself...
.
Since breaking off from Verizon in April 2005, the company has been overcoming difficulties transitioning to its own systems. Issues ranged from extremely long hold times to speak to representatives, to duplicate and delayed bills. In February 2007, the company announced that it had reached a settlement with its original systems consultant, BearingPoint
BearingPoint
BearingPoint is an independent management and technology consulting firm. Following a post-bankruptcy management buyout in August 2009, BearingPoint has been operated by its European management team and is organized as a partnership...
, and had hired a new contractor, Accenture
Accenture
Accenture plc is a global management consulting, technology services and outsourcing company headquartered in Dublin, Republic of Ireland. It is the largest consulting firm in the world and is a Fortune Global 500 company. As of September 2011, the company had more than 236,000 employees across...
, to complete the transition to the new systems.
Hawaiian Telcom announced on February 4, 2008, that it was replacing CEO Michael Ruley with turnaround expert Stephen F. Cooper, chairman of Kroll Zolfo Cooper. Cooper's previous management engagements include Enron
Enron
Enron Corporation was an American energy, commodities, and services company based in Houston, Texas. Before its bankruptcy on December 2, 2001, Enron employed approximately 22,000 staff and was one of the world's leading electricity, natural gas, communications, and pulp and paper companies, with...
and Krispy Kreme
Krispy Kreme
Krispy Kreme is the name of an international chain of doughnut stores that was founded by Vernon Rudolph in 1937 in Winston-Salem, North Carolina. The parent company of Krispy Kreme is Krispy Kreme Doughnuts, Inc...
.
On May 8, 2008, the company named Eric Yeaman as its new CEO, succeeding interim CEO Cooper. Yeaman previously served as Chief Operating Officer of Hawaiian Electric Company, the electric utility serving the island of Oahu. The company also announced that Walter Dods, former president of First Hawaiian Bank
First Hawaiian Bank
First Hawaiian Bank is a regional commercial bank headquartered in Honolulu, Hawaii at the First Hawaiian Center. It is a subsidiary of BancWest Corporation, which itself is a subsidiary of the French banking company, BNP Paribas...
and one of several local investors in Hawaiian Telcom, was assuming the role of Chairman of the Board.
On December 1, 2008 the company filed for Chapter 11
Chapter 11, Title 11, United States Code
Chapter 11 is a chapter of the United States Bankruptcy Code, which permits reorganization under the bankruptcy laws of the United States. Chapter 11 bankruptcy is available to every business, whether organized as a corporation or sole proprietorship, and to individuals, although it is most...
bankruptcy
Bankruptcy
Bankruptcy is a legal status of an insolvent person or an organisation, that is, one that cannot repay the debts owed to creditors. In most jurisdictions bankruptcy is imposed by a court order, often initiated by the debtor....
after missing an interest payment on its debt. The company's plan to reduce its debt by more than $800 million was approved by Judge Lloyd King of the U.S. Bankruptcy Court on November 13, 2009. The plan required approval by the Hawaii Public Utilities Commission.
On June 24, 2011, The State of Hawaii Department of Commerce and Consumer Affairs issued a 15-year cable franchise license to Hawaiian Telcom, thus ending Oceanic Time Warner
Time Warner Cable
Time Warner Cable is an American cable television company that operates in 28 states and has 31 operating divisions...
's 35-year monopoly as the state's sole cable TV provider. Hawaiian Telcom launched the service on July 1, 2011 after a year of testing in the Honolulu area, with islandwide service to expand in 2012.