Category Archives: Consumer issues

Facing the rail conundrum

Honolulu’s rail project poses a particularly tricky issue at this point in its life.

We’ve already spent a vast amount on it, but the estimated total still to go keeps growing at an alarming pace.

And there’s no real reason to believe that current estimates are more accurate than those that came before.

So what do we do now?

The mayor now says we should just end at Middle Street and defer the remainder of the project until funds are available.

That’s a political fantasy. I don’t think any elected official is going to touch that political “third rail” once the first segment is capped off and the construction crews demobilized. It is just very, very unlikely to happen. And, of course, the crippled initial segment is just going to be a constant reminder of how badly this idea was executed and the costs, economic and political, of trying and failing.

UH Planning Professor Karl Kim, who has a background in transit issues, published a column in the Star-Advertiser which I hoped would have some sage advice (“Five fixes could help put Honolulu’s rail back on track“). Unfortunately, Kim’s suggestions would have been constructive if we were just starting out in designing a rail system, but not very useful when facing a mid-construction crisis in both finances and confidence.

He suggests simply getting over the blame game, finding a new consensus, coming up with a workable revenue model, developing more appropriate technology, and redesigning to incorporate elements of social justice.

It seems to me that this is all pie in the sky. Not going to happen. And can’t happen in a time frame that would give us any way forward from the current mess.

Then there was a comment on a recent post here expressing the “just do it, get it done” sentiment.

Here’s an excerpt:

Not having enough funds to complete elevated rail to Ala Moana is an entirely self-created dilemma. A funding cap BEFORE bids were opened was dumb. It’s a completely SOLVABLE problem that both HART and city council could be discussing because it’s entirely within their authority to address the funding cap issue.

It’s also within the mayor and council’s authority to discuss using property taxes. There are lots of good reasons why Honolulu taxpayers SHOULD be paying more for our own transportation system but I’ll save that for another discussion.

I have a of sympathy for this point of view, although this rail design was not my preference. I don’t agree with those who argue that if not for rail, these billions could have gone to other public projects. I don’t think that’s true. It took a truly major project like rail to muster the political forces to put an excise tax increase into play to cover the costs. We tried to get an increase for education, and that went nowhere.

And when you look around, it’s hard to say that the rail tax has crippled the economy. We’ve got low unemployment, lots of investment coming in, etc., etc. And although the big numbers are scary, the half cent out of each dollar spent isn’t one of the big factors in everyday finances. Obviously, housing is the biggie. The rail GET really doesn’t compare to those big expense categories at the micro level, only at the macro level. So would we really feel the pinch if it were extended farther into the future to pay for completing the system?

But David Johnson, a UH Sociology prof and a friend, wrote in Civil Beat that we need to challenge the idea that since we’ve gotten this far, there isn’t any alternative to just pushing forward to completion. He refers to this the fallacy of sunk costs.

He explained:

But to view rail in terms of costs already incurred is to commit the fallacy of sunk costs. A sunk cost is a cost that has been paid and cannot be recovered. In many areas of life and policy, decision-makers become preoccupied with sunk costs when they would be better off forgetting them. Couples commit this fallacy when they refuse to leave a lousy film before it ends (“We paid $20 for these tickets!”). And the United States committed a much grander version of it during the Vietnam War (“Giving up would mean our soldiers died in vain.”).

And Johnson concludes:

So I end with three conclusions: 1) Common sense says we do not need a rail project that ends at Middle Street. 2) A decent regard for reality leads to the conclusion that we cannot afford a rail project that goes where it should. 3) And recognition of the sunk cost fallacy counsels that we should walk away from this colossal mistake now.

Here’s a link to his column, “Honolulu’s Runaway Rail Project And The Fallacy of Sunk Costs.”

Perhaps we need a contest to come up with the best idea for alternative uses of the rail segments built to date if we just “walk away”. What other uses could be made of the elevated concrete platform?

It’s all just such a mess that it boggles my mind. None of the solutions really “work.”

Overcharging by cable companies under scrutiny

Have you checked your cable bill recently? There’s lots of buzz in the news today about overcharging by the big cable companies, including Time Warner and Charter.

See the Washington Post, “This cable company is expected to overcharge Americans $2 million this year alone,” and Ars Technica, “Cable company overcharges might be even worse than you realized.”

The articles review a new Senate committee report, as well as a separate report by Sen. Claire McCaskill.

All worth reading, for sure.

Bus rapid transit surfacing again

Former Gov. Ben Cayetano is using his Facebook posts to tout the use of a Bus Rapid Transit system to move passengers from the Middle Street terminus of a truncated rail system to downtown Honolulu and beyond.

Cayetano has been a fan of BRT for years, and he proposed a flexible bus system as an alternative to rail during his unsuccessful 2012 campaign for Honolulu mayor.

During the campaign, Civil Beat fact checked Cayetano’s claim that that bus rapid transit systems were “sweeping the country.” CB concluded the claim was “Mostly True.”

And its interesting to look at another Civil Beat article from 2012, “Bus Rapid Transit: The Devil’s in the Details, But What Are They?

The regrettable thing is that Honolulu was far down the path to a BRT system under a plan put in place by by the city during the administration of Mayor Jeremy Harris. But it was immediately dismantled by his successor, Mufi Hannemann, who chose instead to bet the house on the elevated rail system the city is currently building.

It’s interesting, in retrospect, to skim the 2006 final evaluation report on the Honolulu Bus Rapid Transit project, in light of the financial meltdown of Hannemann’s rail project.

Say hello to Oceanic-Charter Communications

Oceanic-Time Warner Communications is going, although the company website still boasts the TWC name.

Say “Hello” to Oceanic-Charter Communications, which apparently will soon carry Charter’s Spectrum brand.

I’ve been wondering about how little local news coverage there’s been the takeover of Oceanic Cable’s parent company, Time Warner Cable, by Charter Communications. The deal closed last month, but it barely made a ripple here.

The Star-Advertiser ran an Associated Press national story when the deal closed, but I don’t recall anything local.

Since Oceanic has had such a large presence statewide for so long, the silence is noticeable.

The newspaper came around to the issue through the back door on Sunday in a column about control of broadcast rights of Hawaii high school athletics (“Hawaiian Telcom hopes to gain access to high school sports programming“).

The article reports on questions raised about Oceanic’s current lock on high school and UH sports.

It references comments Hawaiian Telcom filed with the FCC as part of the Charter-Time Warner docket.

I found two, the first dated August 25, 2014 and the second dated October 13, 2015.

The Star-Advertiser reported:

Oceanic, the dominant provider in the state with a reported 76 percent video market share and 69 percent of consumer broadband sales, has exclusive contracts with the University of Hawaii, the public high school Oahu Interscholastic Association and the Hawaii High School Athletics Association, which represents all schools, public and private, for state championships.

And then this caught my eye:

The OIA reportedly receives approximately $100,000 from their contracts with Oceanic, with additional monies paid to the HHSAA, but parties declined to discuss terms.

Wait. Is it possible that the broadcast contract covering Oahu’s public school teams is exempt from disclosure by routing it through the nonprofit OIA? Does the Department of Education know what the terms of the deal are? Is the contract a public record?

Interesting questions.

I hope we see some clarification of this point in light of the state’s public records law.

Blame the private equity firm buyout for long Safeway checkout lines

What does the quality of service at your local supermarket have to do with wall street?

Everything, it seems.

A friend of mine has been complaining about long checkout lines and slow service at his neighborhood Safeway in Hawaii for a while.

This morning he called me after having a conversation with the store manager. According to this manager, individual stores are hamstrung by orders from up the corporate chain of command.

Here’s the background.

Private equity firm Cerberus Capital Management bought Safeway in a 2014 deal valued at more than $9 billion. At the time, there were mixed predictions about what would happen to the supermarket chain. Some thought it would bring new investment in stores and improved customer service, while others feared the chain would be sold off in pieces rather than operated as a supermarket chain.

Well, the next thing that happened was a merger with Albertson’s, another chain that had been taken over by Cerberus, and in the process dozens of stores were sold or closed.

And then came plans to take the new Albertson’s/Safeway combo public with an initial public offering of stock, presumably with Cerberus walking away with a hefty profit.

But stock market conditions took their toll, and the company put its IPO on hold, where it remains, for now.

And, according to my friend’s local Safeway manager, the reason for such poor service is that individual Safeway stores have been told to cut back the amount spent on checkout and floor services. Total spending has been capped, and managers have to figure out how to live within those caps.

The lines aren’t long, and the number of open registers small, because somebody didn’t show up for work, or some other short-term excuse, my friend now explains. It’s because of the private equity owners trying to squeeze a bit more profit out, probably so that the company can boast that tiny additional profit when its stock is finally sold off to investors.

As my friend said in his quaint way, “apparently it’s f*** the customers!”

I guess it’s an example of one of the little insults we experience, where people are expected to yield to the machinery of Wall Street profits. Just the kind of thing that has spawned the anger we’re seeing expressed in this year’s presidential campaign.