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Saturday, June 22, 2024
Sandwich Isles Communications: Twenty Years of Criminality
By Selected News Articles @ 6:19 PM :: 933 Views :: DHHL, Ethics, Hawaii History

Public Comment Submission – HPUC Docket 2024-0164

by Aaron Stene, Kailua-Kona, Hawaii

The Hawaii PUC needs to consider Sandwich Isles Communications and Al Hee’s actions over the long term while dispensing punishment for arbitrarily disconnecting service to their customers on Hawaiian Homelands.

- Sandwich Isles Communications FCC study area waiver, which authorized them for Universal Service Fund subsidies was rescinded and restored by the FCC in 2004

-USDA Rural Utility Service refused to lend to SIC in 2005 after their study area waiver was almost rescinded by the FCC

-Sandwich Isles Communications had to seek private financing to construct the statewide submarine fiber -optic Paniolo Cable as a result of the latter USDA RUS decision

- NECA, the private entity that manages the Universal Service Fund, disputed SIC’s request to provide $15 million dollars in subsidies to operate the Paniolo Cable in 2010. The FCC’s final directive was to provide $7.5 million dollars in subsidies instead.

-The FCC cut Sandwich Isles per line subsidy from $850.00 per line to $250.00 in 2011

-These reductions in subsidies put financial pressure on Sandwich Isles Communications. Their USDA RUS and Paniolo Cable bank loans began be in arrears starting in 2013

- Al Hee was convicted was criminal tax fraud in 2016, which resulted in the FCC and HPUC stripping SIC’s ability to receive USF subsidies

- The FCC declared in 2017 that Sandwich Isles Communications exclusive license to service HHL lands was illegal

-Deutche Bank and USDA RUS started foreclosure proceedings against Sandwich Isles Communications and Paniolo Cable in 2018

- Paniolo Cable’s bankruptcy trustee sells Paniolo Cable to Hawaiian Telcom for 50 million dollars.  The sale includes Sandwich Isles Communications central office buildings, and middle mile fiber-optic cables necessary to operate the Paniolo Cable.

-The latter assets were acquired by the bankruptcy trustee to satisfy Paniolo’s Cable’s lease payment claims against SIC for a 2.5 million dollar credit bid against Paniolo Cable’s 256 million dollar lien.

-The Federal court issued a writ of execution to foreclose on Sandwich Isles Communications remaining assets in 2020. US DOJ declined to execute the writ because it would result in a service disruption for SIC customers.

-The US DOJ decides in 2024 to finally execute the writ to foreclose on Sandwich Isles remaining assets. May 20th was the stated date for the auction of these assets.

- Hawaiian Telcom and Waimana Enterprises were the only bidders for SIC’s remaining assets

-Hawaiian Telcom bid on Sandwich Isles statewide conduit infrastructure for $500,000. Their bid met the minimum bid requirements of $100,000

- Waimana Enterprises Inc bid $10,000 for SIC’s conduit cabling and central office switching equipment. WEI’s bid was deemed insufficient since it didn’t meet the minimum bid requirements.

-Sandwich Isles decides to terminate service to most of their customers as of June 8th, 2024.

- The Federal court is slated to confirm Hawaiian Telcom’s partial purchase of SIC’s assets on July 2nd, 2024. The court will allow interested parties to bid on the assets one final time as long as it meets the new minimum bid requirements. Interested parties can also contest the sale to Hawaiian Telcom.

The above record of the Sandwich Isles Communications saga plainly shows multiple missteps that ultimately resulted in their decision to terminate service. In short, Al Hee wants to blame everyone else for his misfortune – except himself.

* * * * *


News Release from Hawaii PUC, May 31, 2024

HONOLULU – The Hawai‘i Public Utilities issued a notice of violation to Sandwich Isles Communications (SIC) and ordered it not to terminate service to customers and to continue service to its customers without disruption or reduction in quality; to maintain and preserve its equipment in good working order; and to maintain and preserve customer records.

The commission learned May 31 that SIC had announced to its customers it would be abruptly terminating internet and voice services June 1.

“Sandwich Isles Communication failed to provide timely notice to the Public Utilities Commission of its intent to abandon or discontinue service, as required by commission rules and regulations. In line with the Emergency Proclamation issued by Governor Josh Green, M.D., the commission is also concerned that the company may be engaging in conduct that is detrimental to the public interest,” said Public Utilities Commission Chair, Leo Asuncion.

The commission scheduled a show cause hearing for June 17, requiring SIC to explain why it should not be held in violation for failing to comply with rules relating to its provision of regulated service.

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