Of the 23 parties presenting testimony, however, several either opposed the deal or asked the PUC to conduct a thorough examination of Carlyle and possibly place conditions on the sale. Much of the concern centered on whether Carlyle was capable of running a telephone company, as well as Carlyle's strong political ties.

Halawa resident Keali'i Collier took exception to Carlyle's plan to turn Verizon into a locally run phone company called Hawaiian Telcom.

"This whole idea of local, local, local — to me, it's kind of an oxymoron because you're talking about a local company owned by a global equity firm," he said. "And as a Native Hawaiian consumer, the title Hawaiian Telcom, to me that's like a slap in the face because I am Hawaiian.

"The Carlyle group does not reflect my perspectives on the environment, my perspective on other indigenous peoples, my outlook on how people should live in the world."

The hearing was the only one scheduled to solicit comment from Honolulu customers on the deal, which includes Verizon Hawaii's local telephone operations and print directory, long-distance and Internet service-provider businesses, but excludes Verizon Wireless. Hearings are planned for the Neighbor Islands.

For Verizon Hawaii's union, which supported the deal, the key concern was Verizon's plan to retain an excess of funds in the employee pension, said Scot Long, business manager for the International Brotherhood of Electrical Workers Local 1357, which represents 1,300 Verizon employees.

"We believe, bottom line, it's good for the consumer — we stay focused here," he said.

Don Shaw, a Waimanalo resident and Verizon customer, said he showed up because he wanted the PUC to question Carlyle officials about the company's level of experience in the telecommunications industry.

Others were concerned about the future of the company after Carlyle exits. Carlyle, with assets of $18 billion, specializes in leveraged buyouts and equity investments in regulated industries using money raised from investors. Carlyle officials said the group typically holds on to its investments for about four years.

"When you make a phone call, you're giving them money. Is that in the best interest of state of Hawai'i?" Shaw said before the hearing started.

Ken Matsumiya, 37-year employee of Verizon, said he was interested to hear what the Carlyle officials had to say.

"I don't know, it sounds really good. I'm at the age where I can retire, but the decision is under who. I'm here to listen and get a feel for it," he said.

Carlyle Group has pledged that it would not raise rates and that new jobs would be created as operations now done by Verizon on the Mainland are brought to Hawai'i. With about 1,700 employees, Verizon Hawaii is among the state's larger private employers and is Hawai'i's main provider of telephone services.

The deal, which is expected to close around March of next year, already has received Federal Communications Commission approval, but still requires the blessing of the state PUC and the U.S. Department of Justice.

Carlyle made the case again that it could achieve its goals, which hinge in part on turning the phone company into a locally run company.

However, the company said it was too early to disclose details on exactly how many jobs it will create, on how much will be invested to modernize Verizon Hawaii's network and on the kinds of new services that will be offered to consumers.

BILL KENNARD

Kennard did not directly address several concerns raised by consumers.

"I will say that I've heard a lot of disinformation tonight about what our plans are about, who the Carlyle Group is and what we've done and what we've tried to accomplish in the state of Hawai'i, but I'm confident these issues are being addressed in the (PUC's) record," he said. "We're more enthusiastic than ever that there's a great opportunity for us here to build a great local phone company."

Mel Horikami, president of Verizon Hawaii, said previous ownership changes have made the phone company better. Verizon was formed in 2000 when GTE merged with New York-based Bell Atlantic. Connecticut-based GTE Corp. acquired Hawaiian Telephone Co. in 1967.

"Through all of these past ownership changes, one thing has remained constant," Horikami said. "And that is our company's dedication to Hawai'i, to our customers and to our employees."

Just before the hearing, Carlyle said Walter Dods, chairman of First Hawaiian Bank and the head of a group of local investors, will join Hawaiian Telcom's board of directors. Carlyle will retain board control.

Dods said last week that he expects the deal to ultimately receive the needed regulatory approvals to proceed.

He acknowledged that at some point Carlyle would likely look to cash out of its investment, but said the investment group would leave the telephone company in better shape.

"You never know what might happen but unless they do well by employees, they can't bring the company to market anyway," Dods said.

"We're confident in the end that this will get approved and the company will be a good company" for Hawai'i.