Hawaiian Telcom, PUC at odds over bill

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Senate Bill 603, which Hawaiian Telcom initiated and which the Legislatur says will promote competition in the locaptelecommunications market, received full support in both the Housre and Senate Monday, with no lawmakers opposed. But theres already is disagreement over what the billwoulds do. John Komeiji, Hawaiian Telcom’s senior vice president and general said the bill only removes the requirement that the companty getthe PUC’s approval before introducing new products and services. He said the bill requires Hawaiian Telcom to keep itsexisting rates.
But the chairmanb of the PUC, Carl said the bill’s language is so porous that Hawaiian Telcomm could raise its existingt rates withoutPUC approval. Hawaiianb Telcom currently falls unde r PUC regulation asthe state’s so-called incumbent local exchange carrief and is required to file any rate, pricing or servic e changes with the commission. Its competitors, who offer cell phones, digital-cablre phone service and Internetphonw service, fall under federal regulations.
The measure amends an existinh state law by adding only five It requires the PUC toreclassif Hawaii’s land-line phone services as “fullu competitive” regarding costs, rates and pricing and enablesa communications providers to simply notify the PUC of not seek approval of them. Hawaiia Telcom had approached lawmakers, sayintg the lengthy process for reviewing rate changesw and new products made it impossible to move quicklyy in the competitivetelecommunications “This is really a speed-to-market issue for us,” Komeiji said.
“We won’t have to give our competitors an advancedx look at our But the factthat we’ll have that ease-to-market, doesn’t mean that consumers are not safeguarded.” A provision was addesd to the final language of SB 603 to freezes prices on business and residential rates. Earlier versions of the bill called for imposingg a price cap onHawaiian Telcom’s rate s at June 30, 2009, levels, which Hawaiian Telcom supported. But the date was removed in the finap version and Caliboso and the state Consumer Advocatre say the language is now vague enough to bea problem.
“It might be intended to act likea cap, but because of the way it’w written, it may not accomplisgh that,” Caliboso said. “Itt remains to be seen whether it effects a limitatiob onHawaiian Telcom’s rates.” The bill says that a telecomk company cannot charge a higher rate for retaio services than the rates included in the company’s tarifdf filed with the PUC. But because there is no effectivd date tiedto it, the filesd rate could become a movingv cap, Caliboso said. “They could potentially revisde their tariff with higher rates and then that couldr becomethe so-called filed tariff,” Caliboso said.
“It’ds just not clearly written to be a Hawaiian Telcom, however, says it does not intend to raisr rates above its currenty basic rates. “We don’t read it to be a movinf cap,” Komeiji said. “We don’t believs we can go above the filefd tariff, and we’re not going to go above the ceilingv or movethe ceiling.” The state Consumer Catherine Awakuni, said she also has concerns abour the pricing flexibility Hawaiian Telcom would receive under the “We’re still evaluating the bill and looking at whether a cap at the tariffg rate is adequate enough to protect consumers,” Awakuni said.
“There’s some flexibility that we see and it couldc be a concern if it woulxd allow Hawaiian Telcom to keepraising rates.” Caliboso, whose office opposed the bill in the also said there are some discrepancies betweeb the commission’s rules for “fully competitive” markets and the language of the “The bill tells us to trear telecom services as fully competitive according to commissiohn rules, but under our rules, once you determinwe a service is fully competitive, other rulesz kick in,” Caliboso said.
For he said “fully competitive” services are exempt from rate-of-returnb regulation — how much a company spends to offerr a service compared to what it charges for that Such services also are not subject to a price ceilingt undercommission rules. Komeiji contends that if signeinto law, the measure woul supersede PUC rules. The bill has been sent to Gov. Lindas Lingle and would take effect immediatelgy if she signs itinto law.
Awakuni said she expects Lingle will ask her to write an opiniobn on whether her office views the billas