223
HOUSE OF REPRESENTATIVES             H.C.R. NO.            H.D. 1
TWENTIETH LEGISLATURE, 1999                                
STATE OF HAWAII                                            
                                                             
________________________________________________________________
________________________________________________________________


                     HOUSE  CONCURRENT
                        RESOLUTION
  REQUESTING THE PUBLIC UTILITIES COMMISSION (PUC) TO
    INVESTIGATE, REPORT, AND TAKE ACTION ON THE CIRCUIT COURT
    ORDER INVALIDATING CERTAIN PUC ORDERS, TELECOMMUNICATIONS
    SERVICE QUALITY ISSUES, AND THE PROPOSED GTE/BELL ATLANTIC
    MERGER.



 1        WHEREAS, the Legislature passed Act 80, Session Laws of
 2   Hawaii (SLH) 1994, which, among other things, stated that the
 3   telecommunications service in rural Hawaii was so inadequate as
 4   to be life-threatening and impeded social intercourse and
 5   economic development; and
 6   
 7        WHEREAS, Act 80, SLH 1994, required the Public Utilities
 8   Commission (PUC), upon determination that an area was receiving
 9   inadequate telecommunications service, to order the carrier
10   providing inadequate service to show cause why the PUC should
11   not replace the carrier with an adequate service provider; and
12   
13        WHEREAS, the Legislature passed Act 225, SLH 1995, which
14   set forth the requirements of telecommunications competition
15   and stated that regulatory policies must ensure:
16   
17        (1)  High quality services for all customers at just,
18             reasonable, and non-discriminatory rates;
19   
20        (2)  The development of telecommunications service
21             competition, where practicable; and
22   
23        (3)  Universal availability of telecommunications
24             services; 
25   
26   and
27   
28        WHEREAS, in 1994, after investigation and evidentiary
29   hearings, the PUC found that GTE Hawaiian Telephone Company,
30   Inc. (GTE) was providing inadequate service to all rural areas
31   of the State, including the Ka'u area on the island of Hawaii,
32   by failing to provide single line telephone service to
33   customers who requested it, and that multi-party line telephone
34   service threatened the public health and welfare and the rights
35   of consumers because party lines cannot provide services such

 
Page 2                                                     223
                                  H.C.R. NO.            H.D. 1
                                                        
                                                        

 1   as enhanced 911 services, use of computer modems, and answering
 2   machines, fails to provide privacy to customers, and fails to
 3   allow the uninhibited use of telecommunications services; and
 4   
 5        WHEREAS, after finding that GTE had neither the ability
 6   nor the commitment to improve service in the Ka'u area and
 7   submitting requests for proposals to all interested
 8   telecommunications providers to submit bids to be the
 9   alternative provider of service in Ka'u in 1996, the PUC
10   selected TelHawaii, Inc. (TelHawaii) as the carrier of last
11   resort for the Ka'u area; and
12   
13        WHEREAS, the PUC ordered TelHawaii and GTE to negotiate
14   the transfer or use of the GTE assets needed to provide
15   telecommunications service in the Ka'u area, and clarified its
16   order by stating that interconnection by TelHawaii into GTE's
17   network was insufficient to improve service quality for Ka'u
18   customers because interconnection would result in TelHawaii
19   having to use the inadequate GTE network in Ka'u; and
20   
21        WHEREAS, because GTE refused to negotiate with TelHawaii
22   for the transfer of GTE's Ka'u property, therefore in 1997 the
23   PUC permitted TelHawaii to use its power of eminent domain to
24   condemn the property of GTE necessary to provide service in
25   Ka'u after finding that:
26   
27        (1)  The PUC had such authority;
28   
29        (2)  TelHawaii had the power of eminent domain;
30   
31        (3)  TelHawaii would put the property to better use by
32             providing superior quality service; and
33   
34        (4)  Condemnation was necessary and in the public
35             interest; 
36   
37   and
38   
39   
40        WHEREAS, GTE appealed the PUC's orders selecting TelHawaii
41   as the carrier of last resort and allowing TelHawaii to condemn
42   certain of GTE's property in Ka'u through eminent domain in the
43   circuit court; and

 
 
 
 
 
Page 3                                                     223
                                  H.C.R. NO.            H.D. 1
                                                        
                                                        

 1   
 2        WHEREAS, in his Findings of Fact, Conclusions of Law and
 3   Order (Order) filed on April 1, 1999, in Civil No. 97-4372-10,
 4   Judge Kevin Chang invalidated the aforementioned PUC orders
 5   based upon his opinion that:
 6   
 7        (1)  The PUC orders were appealable;
 8   
 9        (2)  The PUC had failed to make necessary findings of
10             fact;
11   
12        (3)  The PUC did not have the authority to allow TelHawaii
13             to use its power of eminent domain to condemn GTE's
14             property; and
15   
16        (4)  Even if the PUC had such authority, condemnation
17             would contravene the Federal Telecommunications Act
18             of 1996;
19   
20   and
21   
22        WHEREAS, a high standard of telecommunications service
23   quality in all areas of the State, whether urban or rural, in
24   Honolulu or on the Neighbor Islands, is fundamental to
25   effective and reliable communications for residential and
26   business users and is necessary for the public health and
27   welfare, economic development, and continued growth of the
28   telecommunications industry in Hawaii; and
29   
30        WHEREAS, the service standards used by the PUC to ensure
31   that telecommunications carriers such as GTE provide high
32   quality service are reported to the PUC by GTE on an aggregate
33   basis, either by island or state-wide, and not by each
34   exchange; and
35   
36        WHEREAS, the reporting of service quality statistics on an
37   island-wide or state-wide basis may mask specific exchanges
38   that have lower service quality than others; and
39   
40        WHEREAS, GTE has opposed and appealed virtually all PUC
41   decisions that promoted competition in Hawaii; and
42   

 
 
 
 
 
 
Page 4                                                     223
                                  H.C.R. NO.            H.D. 1
                                                        
                                                        

 1        WHEREAS, GTE and Bell Atlantic Corporation have requested
 2   the Federal Communications Commission and the PUC to approve
 3   the proposed merger of the two providers; and
 4   
 5        WHEREAS, the PUC opened Docket No. 98-0345 to examine
 6   whether the merger would be in the public interest; and
 7   
 8        WHEREAS, the public interest in the merger of the two
 9   carriers should require an examination of several issues,
10   including, but not limited to, the impact of the merger on the
11   development of competition in various telecommunications
12   markets within the State, the impact on rates paid by GTE's
13   customers, the means by which cost savings resulting from the
14   merger would flow back to the customers of GTE, the extent to
15   which jobs currently performed by GTE employees in Hawaii would
16   be relocated to the U. S. Mainland, the degree to which the
17   merged entity would be responsive to Hawaii's regulatory
18   agencies such as the PUC, and the overall interests of GTE's
19   shareholders, GTE's employees, the ratepayers, the competitors,
20   and the public in general; now, therefore,
21   
22        BE IT RESOLVED by the House of Representatives of the
23   Twentieth Legislature of the State of Hawaii, Regular Session
24   of 1999, the Senate concurring, that the PUC is respectfully
25   requested to investigate, report, and take action on the
26   following telecommunications issues:
27   
28        (1)  Report on the implications of Judge Chang's Order on
29             the authority and power of the PUC to:
30   
31             (a)  Correct service quality problems;
32   
33             (b)  Allow one public utility to exercise its right
34                  of eminent domain and condemn property of
35                  another public utility;
36   
37             (c)  Select a "carrier of last resort" under Act 225,
38                  SLH 1995; and
39   
40             (d)  Impose requirements on carriers needed to
41                  preserve and advance universal service, protect
42                  the public safety and welfare, ensure the
43                  continued quality of telecommunications services

 
 
 
 
 
Page 5                                                     223
                                  H.C.R. NO.            H.D. 1
                                                        
                                                        

 1                  and safeguard the rights of consumers consistent
 2                  with Act 80, SLH 1994, Act 225, SLH 1995, and
 3                  the Federal Telecommunications Act of 1996;
 4   
 5        (2)  Report on the implications of Judge Chang's Order and
 6             GTE's opposition to and appeal from virtually every
 7             PUC decision promoting the development of competition
 8             on:
 9   
10             (a)  State efforts to create a pro-competitive
11                  regulatory scheme for telecommunications; and
12   
13             (b)  The likelihood of current telecommunication
14                  competitors expanding their businesses in Hawaii
15                  and potential competitors entering the Hawaii
16                  market;
17   
18        (3)  Report on the number and type of consumer complaints
19             formally or informally made to the PUC about the
20             service of each telecommunications carrier actively
21             doing business in Hawaii, as well as the number and
22             type of customer complaints by exchange made to each
23             carrier itself regarding its Hawaii service;
24   
25        (4)  Provide an examination and explanation of the level
26             of service quality provided in each exchange by each
27             local exchange carrier based on the service standards
28             imposed on the local exchange carriers, including a
29             description of the service standard measures for each
30             exchange in the State and the means by which the PUC
31             has verified the accuracy and truthfulness of the
32             service quality reports of each local exchange
33             carrier;
34   
35        (5)  Report on the actions taken by the PUC to correct
36             service quality deficiencies; and
37   
38        (6)  Report on the status of the proposed GTE/Bell
39             Atlantic merger docket pending before the PUC; 
40   
41   and 
42   

 
 
 
 
 
 
Page 6                                                     223
                                  H.C.R. NO.            H.D. 1
                                                        
                                                        

 1        BE IT FURTHER RESOLVED that each telecommunications
 2   carrier doing business in Hawaii, the Division of Consumer
 3   Advocacy (a division of the Department of Commerce and Consumer
 4   Affairs), and the Department of Business, Economic Development,
 5   and Tourism cooperate with the PUC's investigation and review
 6   of the aforementioned issues in a full and timely manner; and
 7   
 8        BE IT FURTHER RESOLVED that the PUC report its findings
 9   and recommendations to the Legislature no later than twenty
10   days before the convening of the Regular Session of 2000; and
11   
12        BE IT FURTHER RESOLVED that certified copies of this
13   Concurrent Resolution be transmitted to the United States
14   Senate and House of Representatives delegates from Hawaii; the
15   senior United States Senator from Alaska; the Governor; the
16   Director of Business, Economic Development, and Tourism; the
17   Chairperson of the Public Utilities Commission; the Division of
18   Consumer Advocacy, Department of Commerce and Consumer Affairs;
19   the International Brotherhood of Electrical Workers Local 1357;
20   GTE Hawaiian Telephone; TelHawaii; AT&T Hawaii; Sprint Hawaii;
21   GST Telecom Hawaii; Oceanic Communications; and MCI/WorldCom.