Oceanic gets OK
on phone service

It will join GST and AT&T
in offering businesses local service

By Rob Perez
Star-Bulletin

Oceanic Communications plans to begin offering local phone service to Oahu businesses by year's end now that it has cleared a key hurdle.

The company -- an affiliate company of Oceanic Cable and an arm of Time Warner Inc. -- last week got the go-ahead from the state Public Utilities Commission to use the same agreement that AT&T has to connect to GTE Hawaiian Tel's local phone network.

"It's a huge milestone for us as far as having the necessary things to get into the business," said Ed Murley, Oceanic's state regulatory director.

For the past three years, Oceanic has been building a fiber-optic network on Oahu that will offer customer's an alternative to Hawaiian Tel's system. GST Telecommunications Inc. also is building its own statewide network.

Oceanic already provides private-line service to businesses, but those lines are used to connect specific sites, like a company headquarters with branch offices. General phone calls aren't routed through the private lines.

Once Oceanic launches local service, it will provide phone lines and dial-tone service for regular calling as well.

The agreement that Oceanic has been authorized to use basically sets the rules under which it will connect to Hawaiian Tel's network and how much that will cost.

Murley said the prices Oceanic will charge customers still haven't been set. But the pricing will be competitive with what GTE charges for similar services, he said.

Murley said Oceanic's entry into the local residential market is at least two years away, mainly because many economic, regulatory and technical issues still must be resolved locally and nationally.

When Oceanic launches the business service, it will become the second competitor to Hawaiian Tel in the local market.

GST already is offering dial-tone service to business customers and a handful of Maui residents.

Rob Volker, GST's regional vice president, said the company provides several thousand lines to probably less than 100 customers on Oahu and Maui. It launched the service in June.

"The response has been very good," Volker said.

After some initial problems with GTE in arranging the network interconnections, the arrangement is working out, he said. "Because we were the first ones, we were the guinea pigs," Volker said.

AT&T executive George Irion said his company still hasn't set a launch date to enter the dial-tone market on a widespread basis.

AT&T provides dial tones for some businesses on a limited basis. In getting the commission to approve Oceanic's use of AT&T's agreement, the Time Warner subsidiary is saving big bucks, especially in legal fees.

It took AT&T 1-1/2 years and lots of legal wrangling to get that agreement in place, with the PUC having to step in to arbitrate the most contentious issues.

GTE is challenging the agreement in court, claiming it is unfair to the utility.

Oceanic could have negotiated its own agreement with GTE, "but why litigate for something I could just sign up for?" Murley said. "None of us have any leverage over GTE other than the threat of litigation."

GTE was compelled under federal law to give Oceanic the same deal as AT&T.

Bill Santos, Hawaiian Tel's government affairs director, said his company is doing so under protest.