Neighbor Islands Get Wired

COMMENTARY

Neighbor Islands Get Wired

By Richard Moody

On a sunny afternoon, a few months ago, Governor Cayetano stood on a podium on Sand Island, just a few yards from a huge cable laying ship. The purpose for his appearance was to usher in an ambitious new telecommunications project that will bring fiber optic links from the mainland to Maui, Kauai, Molokai, the Big Island and Lanai. It was one of those ribbon-cutting events that state officials and the press are obliged to attend, but the public generally never hears about.

Despite the low-key nature of the ceremony, I believe the establishment of a fiber optic network for the neighbor islands is the most significant event for these communities since the inauguration of regularly scheduled interisland airline services.

Bankrolled by GST, a Vancouver, Washington-based telecommunications company, the new fiber network will offer an alternative to GTE's Hawaiian Tel's service on Maui, Kauai and the Big Island. For Lanai and Molokai, it will be the first ever fiber optic link to the outside world.

Early 1997 is the target

The upshot is that by early 1997 this new high capacity network, will provide low cost telephone services between the neighbor islands and the mainland. It will in effect put the neighbor islands squarely on the information superhighway.

Why is this so important for the neighbor islands and for the State of Hawaii?

I believe the fiber optic technology can eventually help wean our economy away from dependence on tourism and spawn the growth of an entirely new telecommunications-oriented industry.

What does this portend for the future of the neighbor islands?

A phone company executive might say the neighbor islands can now receive low cost packet switching, high bit rate transmission, or video conferencing but that probably won't mean a lot to the average person. In layman's terms it signifies that finally the neighbor islands will be on technological par with the mainland. In other words, Kahului or Hilo will be just as connected to the mainland as New York is to Washington, DC. Thus, any Hawaii business that is dependent on sending or receiving large amounts of data, voice or video transmissions can inexpensively communicate with the mainland.

Why, you might ask, is this important? For the first time ever, the neighbor islands can promote themselves as a place to do business in ways that were never possible before. This new technology, combined with inexpensive real estate and ever-lower long distance rates, means telecommunications-related jobs that previously were only feasible on the mainland or on Oahu can now be done in on the neighbor islands. I believe telecommunications technology will be the engine of growth that will catapult Hawaii's economy into the next century.

Want some examples? Currently the Maui Visitor's Bureau employs a fulfillment house on the mainland to process all its requests for brochures. The primary reason for this is that telecommunications costs from Maui are currently more expensive than on the mainland. Once the new fiber optic cables are in place it may be cheap enough to do this work from Maui and employ locals.

What other opportunities are there for neighbor island residents? A landowner on the Big Island could conceivably operate an industrial park that serves as a back office to Honolulu banks, airlines, insurance companies or any other businesses that use large amounts of data. Verifone, a very successful mainland technology company with roots in Hawaii, is already operating a satellite office on the Big Island. With the cost of operating a back office on a neighbor Island less than on Oahu, new jobs could be created where none currently exist.

On a smaller entrepreneurial scale, a business person on Molokai could start a mail order or telemarketing company and get long distance bulk rates to anywhere in the U.S. Similarly, someone on Maui or Kauai could set up a competitive nationwide answering or voicemail service. In a nutshell, anyone that needs to send voice or data information to the mainland can base themselves on a neighbor island and compete with any other locale on the mainland.

What used to be a big cost factor, the price of making long distance phone calls, is no longer an issue. Long distance carriers no longer discriminate against Hawaii for long distance calls. It will soon cost virtually the same to call San Francisco from Hilo as it will to call New York to Los
Angeles.

What does this mean for business growth in Hawaii?

Our marketing research indicates that a whole new telecommunications niche can flourish on Oahu and the neighbor islands. We project that by the year 2000, the local long distance telecommunications industry can grow in this state from the $80 million a year business it is today to a $300 million annual business. By the turn of the century this could create approximately 5000 new, high paying jobs in the telecommunications industry and diversify the state economy while we're at it. At least half those jobs could be generated on the neighbor islands.

Now that you know the potential that the new fiber optic lifeline to the mainland portends, let's look at what's wrong with the current scenario. The most pressing problem is that virtually no one else in the country knows about Hawaii's new telecommunications capabilities. Ninety-five percent of people in the telecommunications business on the mainland, who should know better, still think we communicate by satellite.

Spreading the news

Our state should be informing the rest of the telecommunications industry about our new fiber optic capabilities on the neighbor islands. In every ad paid for by the HVB we should let the public know that Hawaii is the fiber optic center of the entire Pacific.

I believe we are at the dawning of a new era that could bring new jobs and more diverse economic growth to the entire Aloha State. However, to encourage the growth of new jobs and capital, it is incumbent upon us to let the rest of the United States know that we are now a vital link on the information superhighway and a competitive place from which to do business.

Richard Moody is the President and founder of Aloha Conferencing, a Honolulu-based telecommunications company.

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