The second of two Hawaii regulatory agencies has blessed the pending sale of local phone, TV and internet service provider Hawaiian Telcom to Ohio-based Cincinnati Bell.
Members of the state Public Utilities Commission voted 3-0 Monday to approve the $650 million deal with several conditions.
The PUC decision followed an approval by the Cable Television Division
of the state Department of Commerce and Consumer Affairs in December with some similar conditions.
Conditions include spending $20 million over the next four years to expand and improve the company’s network, mainly by adding or upgrading service connections to 15,000 homes, including 9,000 on the neighbor islands.
The PUC will use forecasts for capital spending that Hawaiian Telcom made before the sale announcement to make sure the
$20 million investment is an additional benefit to customers beyond what already was planned. The PUC also is requiring annual progress reports from the company.
Other, similar conditions endorsed by the company include maintaining Hawaiian Telcom labor agreements and local management.
Unique DCCA conditions included continuing an internet service offer with connection speeds of up
to 7 megabits per second for downloads and up to
1 Mbps for uploads at $9.95 per month, and having
Hawaiian Telcom deploy a mobile app for public Wi-Fi throughout the state via partnerships with Hawaii businesses within two years.
From the PUC, additional conditions include a check on how much debt Hawaiian Telcom can carry, and a requirement for a one-time $5 million contribution to an unfunded pension liability.
The International Brotherhood of Electrical Workers supported the acquisition, as did the state Consumer Advocate.
Rival TV, internet and phone service provider Charter Communications, which does business as Spectrum, opposed the
Hawaiian Telcom deal. Charter had proposed its own conditions dealing with interconnection agreements, customer phone number portability and
using Hawaiian Telcom poles and conduits.
Hawaiian Telcom said it would continue to allow competitors access to its network in a fair and nondiscriminatory manner.
The PUC ruled that Charter’s requests would have improved Charter’s market position and not other competitors’.
On the whole, the PUC said the Hawaiian Telcom acquisition, which the company characterizes as a merger, is in the public interest, will improve the company’s financial condition and will not hurt competition.
“It does not seem that
the proposed merger will negatively impact robust competition in the telecommunication market in
Hawaii,” the commission said in its written order.
The PUC drew a distinction in its order with its 2016 rejection of Florida-based NextEra Energy
acquiring Hawaiian Electric Industries. The commission had concerns about financial risk of Hawaiian Electric under NextEra ownership and had more
issues with negative impacts on customers because Hawaiian Electric is a regulated monopoly, unlike Hawaiian Telcom.
Hawaiian Telcom reserved comment on the PUC decision Monday because company officials were still reviewing the
70-page order.
The company announced its sale agreement in July and has previously said it expects the deal to be completed in the second half of this year if all state and federal regulatory approvals are obtained.
In November the deal cleared a federal Hart-Scott-Rodino Act review. The
Federal Communications Commission has yet to make a ruling.
