The FCC issued a ruling regarding Sandwich Isles Communications ongoing Paniolo Fiber-optic Network petition on September 29th, 2010.
SIC’s request for federal subsidies to cover the operating costs of their new submarine fiber-optic network was denied by NECA last year. Sandwich Isles then filed a petition with the FCC attempting to reverse the NECA’s decision.
The petition discovery process took over a year to complete. So, there naturally has been a lot of rumors about an imminent bankruptcy filing by Sandwich Isles Communications and Paniolo Cable Company. These rumors probably won’t cease for the foreseeable future despite this decision by the FCC.
The FCC directed NECA to only subsidize 50% of Paniolo’s operating costs.
SIC will receive only 7.5 million dollars in subsidies instead of 15 million dollars as of a result of this decision. So, this means they’ll have to find a way to offset the remaining 7.5 million dollar difference. It should be very interesting to see how they respond to this revenue shortfall. I’d first attempt to lock in Oceanic Time Warner Cable into a long term bandwidth lease if I was in charge. In addition, I’d try to attract other companies to lease bandwidth by undercutting the other local telecommunications firms.
I contacted the FCC, NECA, and Sandwich Isles Communications seeking comment on this decision. Sandwich Isles never replied to my inquiry and the FCC/NECA refused to comment.
