Editorial
Islanders pay the freight for private carriers
Posted December 7, 2006
The Steamship Authority's decision to allow HyLine to shutter its wintertime fast-ferry Oak Bluffs-Hyannis service is disappointing in two respects.
Disappointment Number One: When HyLine applied to the Steamship Authority for license to operate the new service, the private ferry company's owners contemplated a generous, multifaceted marketing effort to attract Vineyard patrons to what remains, in prospect, a convenient opportunity for the many Islanders who do personal business and shop in Hyannis. HyLine ought to have been held to standards of promotion and performance that would result in a reasonable test of the new service's potential.
Disappointment Number Two: It continues to be the case that the services furnished by private carriers, under licenses granted by the Steamship Authority, contribute in one way or another to the financing difficulties experienced by the quasi-public SSA. Either by spiriting away revenue the boatline might otherwise have found helpful, or by paying small licensing fees that do not materially improve the SSA's financial position.
The question has been and remains, apart from the grandfathered services which may not be extinguished by the SSA, how much control does the SSA have, under the licensing power granted it by the state legislature, over the expansions of those services and the terms under which they are allowed to upgrade, expand, or otherwise change? And, whatever that control may be, given the language of the state law, is it sufficient for the 21st century Steamship Authority, whose operations are now handcuffed by insufficient revenues, for which the only near-term cure appears to be ever increasing rates.
The questions facing the Authority members each time a licensee asks for change or expansion are: 1) Is this change a benefit to our Island constituents? and 2) If it is, how can we guarantee in our license to the private carrier that our constituent Islanders will receive the benefits that the service proposes to deliver; and 3) How can the Authority profit from granting the license, so as to help defray the uncompensated costs associated with delivering the mandated services year-round that the Authority must, by law, provide? These are the questions, but this week, as ever, they are not confronted.
In theory, the licensees are merely extensions of the Steamship Authority's operating burden, and they must be pressed into service either by providing transportation on certain routes or providing revenue that contributes meaningfully to the financing of ongoing SSA operations.
As an example, for the past 10 years, SSA licensing fees have accounted for no more than $1.50 of the ticket price paid by a HyLine passenger for his SSA-licensed, HyLine-provided transportation to and from Nantucket, according to figures furnished to SSA members this week by Wayne Lamson, the boatline CEO.
Of course, there are benefits when a licensee offers a service that customers value and desire. But, as Mr. Lamson explained to the SSA members, "that does not mean the benefits of that service should, to such a large extent, continue to be paid for by island residents who need to buy all of the essentials of life that are transported on the Authority's vessels or who need to travel with their vehicles to and from the mainland."
No, indeed it does not. Remember, the SSA is charged with delivering service to the islands whether it's profitable or not. HyLine provides service that's profitable.
The HyLine's Oak Bluffs-Hyannis fast ferry service operated at what Mr. Lamson called a "significant loss." Well, fine. But that was the possibility when they asked for the license. Here was a service that might have been developed into a valuable adjunct to Island transportation. There is no evidence that HyLine extended itself to promote or encourage the service, and there is no reason why the SSA should grant profitable seasonal ferry licenses without demanding service considerations - for instance, winter service, profitable or not - or hefty fees in return. The boatline has missed an opportunity here to lay down a marker for future license applications. The boatline's treatment of for-profit, private competitors needs to be overhauled and stiffened. Private carriers now and for decades have gotten too sweet a deal from the SSA, and Islanders have paid dearly for it.
