PUC plans public hearings on Carlyle, Verizon deal
By Sean Hao
Advertiser Staff Writer
The state Public Utilities Commission yesterday reversed an earlier decision and will hold public hearings on the proposed sale of Verizon Hawaii to The Carlyle Group, a Washington, D.C.-based investment firm.
The PUC's reversal comes after Verizon union workers, state lawmakers and others complained that the public was not allowed a venue to voice their opinion on the planned $1.65 billion sale of Hawai'i's main provider of telephone service.
The sale of Verizon Hawaii is "of considerable interest to the general public, and soliciting public comments ... will be helpful, beneficial and in the public interest," the commission said in its written order yesterday.
Earlier this month, the commission said the public could submit concerns in writing, but that no hearings would be held.
The Hawai'i State AFL-CIO argued for public hearings last week, saying it wants to voice its concerns that Carlyle maintain employee benefits, job security and customer service. Local 1357 of the International Brotherhood of Electrical Workers represents 1,300 Verizon Hawaii employees. Verizon Hawaii is among the state's larger private employers.
Two state lawmakers also took issue with the decision not to hold hearings. Sen. Ron Menor, chairman of the Senate Consumer Protection Committee, and Rep. Ken Hiraki, chairman of the House Consumer Protection and Commerce Committee, told the PUC last week that Verizon Hawaii's telephone and Internet customers should have the opportunity to state their concerns about the sale's potential impact on service availability and quality.
The two lawmakers threatened to hold their own joint informational briefing on the Carlyle deal.
Menor, D-17th (Mililani, Waipi'o), said yesterday that he was pleased the PUC changed its mind about the need for hearings.
"Consumers will benefit from the PUC conducting these kinds of hearings," he said.
The dates and locations of the hearings will be announced later, the PUC said. The format likely would include presentations by Carlyle and the state consumer advocate, along with public testimony, said Kris Nakagawa, chief legal counsel for the commission.
The proposed transaction between Verizon Communications and Carlyle includes Verizon Hawaii's local telephone operations and print directory, long-distance and Internet service provider businesses, but excludes Verizon Wireless. Carlyle hopes to close the deal early next year.
Carlyle, with assets of $18 billion, specializes in leveraged buyouts, equity investments and equity private placements using money raised from institutions, wealthy families and individuals, and other investors.
Carlyle has extensive political ties and has sought out leaders with local experience and influence such as Walter Dods, chairman of First Hawaiian Bank, who will head a group of local investors that will join Carlyle in the purchase.
In May, Carlyle sold Horizon Lines LLC, the second-largest ocean shipping company operating in Hawai'i, to New York private equity firm Castle Harlan for $650 million. That was more than twice the $300 million Carlyle paid for Horizon when it bought the company in February 2003.
The sale of Verizon Hawaii to Carlyle is subject to approval by the state PUC, the Federal Communications Commission and the U.S. Justice Department.
Among those opposed to the sale is Pacific LightNet Inc., a Honolulu-based telecommunications company.
The U.S. Defense Department and Time Warner Telecom of Hawaii Inc., doing business as Oceanic Communications, also have expressed reservations.
Reach Sean Hao at 525-8093 or email@example.com.