Carlyle Contrivance

Back in August of last year, I
talked about the sale of Verizon Hawaii
telecommunications to
the Carlyle Group. I predicted that services would probably
deteriorate due to the economics of the sale (taking on all kinds
of debt while promising not to increase prices).

Well, its been a little over 12 months, but it’s beginning to
happen. Over the last two months Internet access has not only
slowed from the 2mbps I used to get down to 500kbps but, in
addition, the connection is going dead several times a week.
Prior to these problems, I had had only two outages over a two
year period and was getting a steady 2mbps.

It should be noted that although the Carlyle Group bought out
Verizon Hawaii, Carlyle then turned around and contracted with
Verizon to continue to provide, among other things, Internet
service. The problem is, Verizon has no monetary incentive nor,
apparently, any contractual requirement to upgrade the system as
more users are added. And add new users they have. Hence, the
network is over capacity and thus the slowing speeds and network
outages.

It is my understanding that Carlyle is working on creating its
own network Real Soon Now. But once completed, I have to wonder
how reliable and how fast it will be. I guess time will tell but
I predicted this problem more than a year ago and I can predict
that Carlyle will not be able to provide either speed or
reliability because of the high debt that was part of the
structuring of the deal to buy out Verizon. I hope I am wrong but
I fear that the economics of the deal simply doesn’t allow for
good service.

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