HI. TECH
Pacific Telecommunications Council was due for downsizing in light of recent events

By John Duchemin
Advertiser Staff Writer

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More accurately, the council was a restructuring waiting to happen.

After two years of the worst decline in telecom industry history — two years featuring billions upon billions of losses and write-offs, hundreds of thousands of layoffs, not to mention monumental accounting fraud, corporate corruption and bankruptcy scandals — it was simply PTC's turn to get whacked.

The nonprofit group, which for 25 years has held the most significant annual business conference in Hawai'i, had somehow managed to avoid major changes, even as the clouds melted from beneath its member companies' castles. In mid-2001, according to the council's nonprofit tax filings, PTC still had roughly two dozen employees, an executive director earning a six-figure salary, and $1 million in the bank.

Later financial data are not available, but council officials have confirmed that 2002 — with the aftermath of Sept. 11, the U.S. recession and the collapse of Global Crossing and WorldCom — was not exactly a banner year.

Nonetheless, the council harbored hopes that its January 2003 conference, which in years past had drawn 1,800 registered attendees from hundreds of firms to Hilton Hawaiian Village, would be about as healthy as usual.

By New Year's Day, however, the council's governing board knew this hope was a fantasy. Only 1,150 ended up registering for PTC2003 — and the group was $900,000 below its budgeted revenue goals for the event.

For a group drawing yearly revenues of about $2.5 million, and with about 75 percent of those revenues coming from its annual and smaller midyear conferences, the shortfall was devastating.

To add injury to injury, the council's sponsorship revenues were down 26 percent in 2002, and its membership revenues, which regularly add $500,000 to the group's coffers, were off 18 percent.

Facing these difficulties, PTC's board started swinging the hatchets. Gone is Hoyt Zia, the spiky-haired executive director, a former Clinton administration official who urged the council to become more involved in local Hawai'i events. Zia's $145,000 annual salary and benefits package represented almost one-seventh of PTC's salary expenses.

Gone also are spokeswoman Puja Borries and seven other employees. The PTC secretarial staff, which works out of the Japanese Cultural Center in Mo'ili'ili, has shrunk to nine.

PTC profusely apologized and promised to keep holding its conferences, which have regularly drawn first-rate telecommunications executives and top-drawer government officials for high-level discussions and deal-making — about all Hawai'i could ask for in an annual meeting.

It's unclear, however, how well PTC can deliver on its promise. The $900,000 shortfall surely ate into the council's assets, and a midyear meeting in Tokyo looms for the newly trimmed staff.

Is it bad, therefore, for Hawai'i that PTC is going through a painful crash diet? Certainly — especially if the council is forced to reduce its annual meetings to mere shells of their former vibrance.

But its struggles have little to do with Hawai'i. PTC's problems merely mirror those of its members and their peers — the Alcatels, TyComs and Lucents of recent notoriety. If anything, Hawai'i can be glad the damage wasn't worse — many high-tech conferences have been forced to shut down entirely.

Reach John Duchemin at jduchemin@honoluluadver tiser.com or at 525-8062.