David Y. Ige

HONOLULU – The state Department of Commerce and Consumer Affairs (DCCA) Cable Television Division (CATV) conditionally approved the transfer of control of Hawaiian Telcom Services Company, Inc.’s (HTSC) Oahu cable franchise at the parent company level from Cincinnati Bell Inc. (Cincinnati Bell) to Red Fiber Parent LLC (Red Fiber). Terms of CATV’s approval include securing a commitment to improve and expand the video and communication infrastructure of HTSC’s networks throughout the state.

Red Fiber, Cincinnati Bell, and HTSC, filed an application in July to indirectly transfer control of HTSC’s Hawaii cable franchise on Oahu, pursuant to a merger transaction between Cincinnati Bell and Red Fiber. Cincinnati Bell, HTSC’s current indirect parent company, provides entertainment and communications services to more than 178,000 video subscribers in Hawaii, Indiana, Kentucky, and Ohio. Red Fiber is a Delaware limited liability company whose wholly owned subsidiary will merge with Cincinnati Bell and leave Cincinnati Bell as the surviving subsidiary corporation. Red Fiber is indirectly majority owned by Macquarie Infrastructure and Real Assets, whose ultimate parent company is Macquarie Group Limited. After the transaction is completed, Cincinnati Bell will continue to be a 100 percent intermediate indirect parent of HTSC.

“After a public hearing and detailed review of the application and related filings, DCCA determined that the proposed transfer of HTSC’s Oahu cable franchise, with the conditions imposed by the state, is in the public’s best interest,” said CATV Administrator Ji Sook “Lisa” Kim. “In addition to the commitment to invest in, improve and expand the video and communication infrastructure of HTSC’s networks throughout Hawaii as set forth in the Decision and Order, Red Fiber also committed to assisting our local communities by developing a discount on video cable service for eligible senior citizens and continuing to provide a low-cost Internet option for qualified consumers during this unprecedented time effected by the COVID-19 pandemic.”

Decision & Order No. 377 granting DCCA’s conditional approval for the transfer can be viewed at https://cca.hawaii.gov/catv. The requirements outlined in the Decision and Order include:

• Invest $20,000,000 to improve and build out HTSC’s networks and infrastructure in Hawaii; and build out, at a minimum, 15,000 new or upgraded line extensions of HTSC’s network to homes and small businesses throughout the state within six (6) years of the close of the transaction.
• Adhere to all terms, requirements, conditions, and obligations of the current Cable Franchise Decision & Order, and any other orders and directives issued by the Director, including obligations related to system upgrades; institutional network connections; franchise fees; public, educational or government (i.e., PEG) access; Hawaii Public Television Foundation; and all other existing cable franchise obligations.
• The transfer of control will not result in service disruption or termination and will not involve a change in any customer’s existing service provider.
• HTSC and its Hawaii-based affiliate companies will continue to be locally managed in Hawaii and its existing union labor agreements will be honored.
• Continue HTSC’s current low-cost Internet service offering (Internet Kokua Program) to all qualifying Hawaii consumers having a total household income at or below 135% of the Federal Poverty Guidelines for Hawaii throughout all areas where HTSC infrastructure is enabled for not more than FIFTEEN AND 00/100 DOLLARS ($15.00) per month, subject to changes and detailed in Decision and Order No. 377.
• Develop and implement a program providing a five dollar ($5) per month senior citizen discount for cable service for seniors who are at least sixty-five (65) years old with a total household income at or below 135% of the Federal Poverty Guidelines for Hawaii, as further described in Decision and Order No. 377, within two (2) years of the close of the transaction.
• Adhere to federal laws and state rules regarding customer privacy standards and requirements for telecommunication carriers with respect to all of HTSC’s services, including customers of cable and broadband services, throughout the state.
• Commit to adhering to the principles of the 2015 FCC’s Open Internet Order (of no blocking, throttling (slowing down) or paid prioritization of Internet service) in the state for at least three (3) years after the closing of the transaction; with the option to seek relief if a change in the law results in competitive disadvantage or harm.
• Increase the number of HTSC’s free public WiFi access points throughout the state within two (2) years of the close of the merger transaction through partnerships with Hawaii businesses.

The transfer of control of HTSC’s Oahu cable franchise will not take place until all state and federal regulatory review of the merger transaction is completed.

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Media Contact:

Jayson Horiuchi
Communications Officer
Department of Commerce and Consumer Affairs
Email: [email protected]

Phone: (808) 586-7582