Posted on: Tuesday, November 2, 2004

Oceanic readies phone service

By Sean Hao
Advertiser Staff Writer

Oceanic Time Warner Cable plans to begin offering a flat-rate long-distance and local telephone service in mid-January.

In doing so, the cable company, which recently received state permission to become a telephone company, will take on a residential phone market now dominated by Verizon Hawaii. Oceanic's hook: the ability to bundle cable television, high-speed Internet and telephone services all on one bill.

The Digital Phone plan would allow customers to eliminate their need for Verizon Hawaii wireline's service, but keep their existing phone numbers, at a charge of $39.95 a month, or $44 a month for non-cable customers. That buys unlimited local and domestic long-distance service, but excludes the cost of a broadband connection and cable TV service.

Introduction of Digital Phone, which was originally scheduled for this month, will begin with Oceanic employees in mid-December. Sales to customers are scheduled to begin one month later, said Norman Santos, Oceanic's vice president for operations.

Mililani will receive the service first, followed by downtown Honolulu and the Windward area. By mid-year the phone service, which routes calls as data via the Internet, should be available island-wide, with the Neighbor Islands following closely behind, Santos said.

"I think we're going to go pretty rapidly," he said. "Half of the island is ready for service."

Verizon Hawaii also offers a flat-rate Internet-based calling service called VoiceWing, but has not revealed any plan to offer a TV cable service that could compete with Oceanic. The cost of Verizon VoiceWing is $34.95 a month. DSL service costs $29.95 a month when bundled with VoiceWing. If customers keep their Verizon Hawaii local telephone service, it will cost an additional $35 to $40 a month.

Both the Oceanic and Verizon offerings allow customers to continue to use their current telephones, which are connected to the Internet via an adapter and modem. In addition, numerous other companies offer similar Internet calling plans over Verizon's phone lines.

Ann Nishida, spokeswoman for Verizon Hawaii, said the company hopes customers will stick with their wired telephone connections because of what she described as Verizon's demonstrated history for reliability as a phone company.

"Our hope is that people look at us as the premier communications company— that they can feel confident in looking to us," she said.

Hawai'i customers who buy Verizon's VoiceWing must choose a phone number with a Mainland area code. That means callers from Hawai'i to those numbers pay a long-distance fee.

Verizon Hawaii has agreed to be acquired by Washington, D.C.-based The Carlyle Group for $1.65 billion. Carlyle has said its intention is to keep current rates unchanged. However, it's unclear how current discounts for bundling Verizon services such as local and long-distance calling and DSL will be affected by the deal.

Nishida said those details have yet to be determined.

Reach Sean Hao at 525-8093 or shao@honoluluadvertiser.com.

Correction: The regular price for Verizon's VoiceWing broadband Internet-based telephone service is $34.95 a month. A previous version of this story reported that as a discounted price.