Nov
12
Hawaiian Telcom might have to file for Chapter 11. It might even be a good thing. But its current travails provide an occasion for pondering the future of Hawaii’s three great grids — the telephone company, the cable company, and the electric company.
All three have expensive networks to maintain and develop. All three face upstart competitors who don’t have expensive networks to maintain. All three are trying to come up with fresh ideas for the future. But beyond those similarities we’re talking about three very different stories.
Hawaiian Telcom faces bankruptcy if it can’t negotiate new terms on its debt, and two of the big three credit agencies cut their ratings on its debt in recent days. Bankruptcy would buy time to work on the company’s underlying problems, followed by an investment opportunity if those problems are fixed.
Oceanic Cable and Hawaiian Electric are virtually assured of profitable futures but nonetheless face some major issues of their own.
For Telcom, the problem is simply described. It has an expensive legacy wired telephone network, which revenues will no longer support. The company has lost one in ten of its remaining residential telephone lines in the past year. Mainland legacy phone companies have the same problem but not that bad.
Telcom has a wireless division, but you can’t simply transfer the wired network revenue to the wireless division as people drop their old lines to rely more heavily on their cell phones. For one thing, that revenue from wireless service is much less. For another, there are more choices, and most consumers will choose one of the many other providers.
The company’s strategy, developed by the original management that got shown the door after bungling the transition from Verizon’s operations, is to bundle services. If you have wireless service and a land line from the same provider, you can automatically transfer a cell phone call to your wired phone when you walk through the door. Or you can manage voicemails on your computer, using a Net connection that also comes over the phone line.
The problem, at least so far, is that the advantage of this has not yet proven to be sufficient for large numbers of people to back out of their current separate contracts for cell phone and Web access service. A longer term problem is that if Telcom develops a killer application or a killer marketing idea, there is less of a barrier to entry for a rival wireless provider to offer something similar, or for that matter the cable company.
Which brings us to Oceanic.
Oceanic Cable, or whatever they’re calling themselves these days, also has an expensive wired network. But as a younger company it has a lower cost structure, its network architecture is a little easier to maintain, and instead of aggressive, well-financed wireless competitors it has feckless competition from satellite television services that most consumers seem to have no interest in considering.
Cable companies have more experience than telephone companies at marrying content to technology, and this is especially true of the Hawaii cable company, a national pioneer of interactive services. And now Oceanic can compete with Hawaiian Telcom by offering Internet telephone service over its cable modem Web access channels.
Hawaiian Electric, the third network, could also sell Web access if it wanted to, and it may one day want to. Data can ride an electrical current transmission the same way radio signals ride waves through the air. Hawaiian Electric already does this for internal data transmissions. This is not blue sky stuff, it’s happening now. And the most expensive part of the infrastructure already exists.
The electric company is distracted by a completely different problem. Some utilities on the mainland decided many years ago that it would be more profitable and less controversial to transform themselves into electrical networks only, selling their power plants to others. Let someone else face the anti-nuclear demonstrators or the acid rain complainers. We just run the high-tension lines. But this thinking created a business opportunity for people who wanted to produce power in new ways and sell it to the grid, and the industry took off on the wings of renewable power dreams. For years Hawaiian Electric has been struggling to let individual power producers sell to the grid without making problems for it.
The problem, from Hawaiian Electric’s point of view, is that if the third party provider screws up, it’s still the legacy electric company’s responsibility to make it right. If the wind farm that promised 40 zillion kilowatt hours only supplies 10 zillion because there’s a Kona, the old electric company still has to make up the difference, probably by firing up the expensive old oil-fired generating station that the renewable power sources were supposed to render obsolete. And what if a third party provider sends too much power and the surge damages the grid? A high tension line with too much power will sag! Load balancing, as the electric company people call it, is tricky. It’s an open secret that for years there has been fierce internal fighting at the local electric companies over this, with foot-dragging by the people whose job it is to clean up the mess when third party providers mess up.
And now there are scores of businesses and hundreds of residences installing solar panels to defray their electric bills, intending to sell excess power back to the grid. This makes everything I just said even more complicated, and probably harder to manage as well.
Hawaiian Electric, Hawaiian Telcom and Oceanic Cable have varied opportunities and issues, but they all share this: while they work to solve their problems and exploit their opportunities, they have complex networks to run.
Nov
8
D.C. Five-O
Filed Under Sunrise on KGMB9 | 1 Comment
Once America seized power in Hawaii. Now it’s like the other way around.
Aloha Power has come to the fore in the nation’s capital, where a son of Kalihi will sit in the Oval Office and a former Beach Boy will chair the Senate Appropriations Committee.
West Virginia Sen. Robert Byrd, a nonogenarian who for decades would play the fiddle and sing when he campaigned, is retiring from the chairman’s chair on Jan. 6 and gave his blessing to Sen. Dan Inouye to succeed him. The leadership confirmed Friday that Inouye has got the job.
Sen. Daniel Akaka is in line to chair the Senate Homeland Security Committee if, as expected, the Senate leadership strips Joe Lieberman of the post for campaigning for John McCain. (Maybe they want to drive him to the GOP after seeing what a gripping campaigner he was as Al Gore’s running mate.)
Bobby Byrd used his power as Appropriations chairman to help his state, one of the poorest in the nation. He stood in the way of anything that would hurt the coal industry. He made the IRS site its largest computer center in the eastern panhandle, a two-hour drive from Washington, D.C. He saw to it that every road in West Virginia is well-graded and well-paved and you can drive a beautiful road all the way to top of Spruce Knob, the state’s tallest mountain.
The other Appropriations committee members always support what the chairman wants because they have their own needs. Sen. Inouye could get even more than Byrd, simply because Byrd grabbed at anything that would help his constituents whether it was good for the nation or not, while Inouye has always had the knack of finding things that help Hawaii which ARE good for the entire republic, making it enjoyable rather than distasteful for colleagues to support him.
Homeland Security money would be spent plentifully in Hawaii even if we had junior senators. We handle a lot of international visitors, our ports have the potential to be a remote access point to the West Coast if not guarded well enough, and we are home to many military men and women and their families. I have also been told that Hawaii airports, with their openness to the elements, are good places to test new screening equipment. But with Akaka in charge of the committee, it would be easier to secure such funds.
As for President-Elect Obama, see if he doesn’t name a transportation secretary who will facilitate rail, the mass transit form so well-suited to the linear population centers of our islands. Neighbor islands should explore the possibility of getting federal funds to acquire land for transportation corridors, knowing that rail takes less land than highways and tourists riding trains cause fewer accidents.
Nov
8
Why is it Arbor Day?
Filed Under Sunrise on KGMB9 | Leave a Comment
Very few holidays are located where they ought to be.
John Adams and Thomas Jefferson, who conceived the Declaration of Independence, and who died the same day on a July 4, both thought in 1776 that July 8 would be considered our independence day. The date could have been fixed on any of several dates during a protracted process of writing, voting, signing and printing.
The placement of Christmas and Easter was affected by the Roman church strategy of pre-empting pagan holidays, which had been timed to the winter solstice and spring equinox. Thanksgivings were held all over the calendar map until the government picked a spot on the calendar and made it stick. Other holidays were moved to Mondays for three-day weekends.
But Arbor Day is held on different days in different places because the objective is to plant more trees and shrubs and you might as well time it for the right weather. That’s why the mainland Arbor Day is in April, shower time in a temperate zone, but Hawaii marks it on the first Friday in November.
Jayme Grzebik of the University of Hawaii Extension Service, who comes on “Sunrise on KGMB9″ monthly to discuss planting topics and promote the Saturday morning educational sessions and freebies at the Urban Garden Center in Pearl City, gave me some educational materials that Hawaiian Electric Industries prints up. HEI promotes Arbor Day to be a good neighbor and, I suppose, to counter any neighborhood angst that arises when the electric companies have to trim trees to protect power lines.
The Plant Information Guide is excellent, detailing the origin, height, width, tree form, flower, fruit, growth rate, and sunlight, water and soil needs, of dozens of trees and shrubs. For example, the common fig tree (ficus carica) can grow to 25 feet, grows fast, likes full sun and does not require a great deal of water, but needs soil that drains well. The mountain apple (Syzygium malaccense) by contrast can grow from 16 to 40 feet, has only a moderate growth rate, prefers partial shade, and though it also prefers well-drained soil it requires abundant water.
The booklet specifies which plants are indigenous and which ones work well in small spaces. Sometimes they are the same — some truly kama’aina plants are slow growing, don’t get too big, and work well in areas that are sunny and dry. I learned this recently from interviewing a Big Island developer and a Forest Service lady who are working together on an experiment to see how best to regrow dryland forests. One of the keys is patience because it can take a century before such trees become very large, yet because they’re meant for the habitat they don’t require a lot of expensive watering.
The UH Extension Service has a corps of volunteers who propagate these trees and shrubs to give away to you, with all the instruction you need to make a success of it. Some of the tricks are already well-known to people with some experience in growing, or a good dose of common sense. For example, cutting a tree back is usually very good for it. And if you want to know what to grow on your property, walk around the neighborhood and simply observe which kinds of trees seem to be doing well nearby.
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