It was brought to my attention a few days ago that Sandwich Isles Communications is petitioning the FCC to overturn the NECA’s decision on May 5, 2009.This ruling declared that their operating costs for the new inter island submarine fiber-optic network do not qualify for subsidies.
NECA claims that SIC should explore leasing inter-island transport capacity from Pacific LightNet or continue to lease it from Hawaiian Telcom. NECA asserted that leasing this capacity from PLNI would be at a lower cost than through their own network. However Sandwich Isles had apparently asked PLNI also but the numbers were much higher than what was provided to the NECA.
This was due to the fact that the price quoted to NECA apparently did not include leasing space at the land based facilities. There was also service reliability concerns with PLNI’s network also. NECA’s suggestion that SIC should continue leasing facilities from Hawaiian Telcom was dismissed also on the grounds that their network was old and lacked the bandwidth for Sandwich Isles needs.
The aspect that interested me that the USDA RUS pulled their funding for the inter-island submarine network when SIC’s study area waiver for USF subsidies was challenged in 2004. The USDA RUS did not restore the funding for this part of the project when the FCC upheld this waiver in 2005.
This action necessitated Sandwich Isles seeking private financing for the construction of this submarine network.Paniolo Cable Company LLC would build and own this network and subsequently lease it back to Sandwich Isles Communications.Parker Brophy, the Denver venture capitalist who owned Paniolo Cable, sold his majority interest to Blue Ivory Hawaii Corporation in 2008.Blue Ivory Hawaii Corporation is headed by an attorney who works for Waimana Enterprises which is the parent company of Sandwich Isles Communications.
Sandwich Isles Communications and the NECA have jointly asked that this petition be placed under protective order.Comments can be submitted until August 31,2009 and replies have to be sent by September 10.
August 19th, 2009 at 5:18 AM
Aaron: Would you clarify what you think should happen regarding Sandwich Isle. I don’t understand all of this and would appreciate a bit more commentary as to what you think this is all about. MW
Aaron- Margaret, Sandwich Isles is already receiving significant universal service fund subsidies for their land based networks serving DHHL lands.They attempted to qualify their new inter-island submarine fiber-optic network to receive subsidies also.However the NECA rejected their request. Thus SIC has filed an petition to reverse this rejection with the FCC.