“Government in the majority has still to get it right! The current direction, goal and focus appear to have taken a new direction and latitude, obfuscated by sanctimonious pontification and grandiose pronouncements.” – Kawika Kanahele Sandecker III

1. SUIT BLAMES PUC FOR LOSS OF U.S FUNDS
“We [Sandwich Isles Communication] don’t believe the PUC [Hawaii Public Utilities
Commission] or Consumer Advocate [Department of Commerce and Consumer Affairs
(DCCA), Consumer Advocacy – Public Utilities (DCA)1
[Clarification and Footnote, Supplied] Source: Honolulu Star Advertiser. Web Accessed: December 4, 2016. Provided below.
http://www.pressreader.com/usa/honolulu-star-advertiser/20161201/textview
______________
HAWAII PUBLIC UTILITIES COMMISSION AND CONSUMER ADVOCATE
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Sandwich Isles provides telephone service to a study area consisting of most of the
Hawaiian Home Lands (HHL). Sandwich Isles began operations in 1997, and was
licensed by the Department of Hawaiian Homelands to construct and operate a
modern telecommunications network serving the HHL. Sandwich Isles functions as an
incumbent local exchange carrier (incumbent LEC) for access charge and universal
service purposes and has approximately 2,000 access lines.
[Citations Omitted, Emphasis Supplied]
SOURCE: Federal Communications Commission. Web Accessed: December 4, 2016.
https://apps.fcc.gov/edocs_public/attachmatch/DA-10-1880A1.pdf
1 Footnote, Supplied. “The Division of Consumer Advocacy primarily reviews and acts upon
filings made by telecommunications services providers with the Commission. However, the
Division has also participated in proceedings before the FCC. Due to the critical nature of
communications within modern society, the Consumer Advocate tries to ensure that these
telecommunications services are available ubiquitously at reasonable, affordable rates.”
[Emphasis Supplied] Source: DCA. Web Accessed: December 4, 2016
http://cca.hawaii.gov/dca/telecommunications/telecommunications_history/

2. The HHL, created by Congress in 1921 for the benefit of native Hawaiians, consists of a
total of 203,000 acres in seventy non-contiguous areas. Ninety-eight percent of this
area, which is spread out over the six major islands of Hawaii, is rural. Sandwich Isles
is licensed by the Department of Hawaiian Home Lands and is subject to regulation
.by the Hawaii Public Utilities Commission (HPUC)
[Emphasis Supplied]
SOURCE: Federal Communications Commission.
https://apps.fcc.gov/edocs_public/attachmatch/DA-12-106A1.pdf Web Accessed:
December 4,
2016.
_____________________
Sandwich Isles is a new telephone company seeking to provide telephone exchange
service to rural customers in a previously unserved area. Sandwich Isles states that it
will provide service to approximately 4,700 customers over the next five years. On
May 9, 1995, Sandwich Isles received a license from the Department of Hawaiian
Home Lands ("DHHL") for the construction and operation of a telecommunications
network on Hawaiian Home Lands ("HHL") throughout Hawaii. On November 14,
1997, the Hawaii Public Utilities Commission ("Hawaii Commission") authorized
Sandwich Isles to provide interLATA and intrastate telecommunications services
. Sandwich Isles states that over thewithin and between the HHL throughout Hawaii
next 10 to 15 years it will initiate service to unserved portions of HHL on the Islands of
Oahu, Hawaii, Maui, Kahoolawe, Lanai, Molokai, and Kauai. Sandwich Isles states that
it initiated local exchange service on December 2, 1997, through the services of a
wireless carrier.
SOURCE: Federal Communications Commission. Web Accessed: December 4, 2016.
https://transition.fcc.gov/Bureaus/Common_Carrier/Orders/1998/da980166.txt
Reference:
Suit blames PUC for loss of U.S. funds
--- Regulators have not recertified a telecom firm amid an FCC
investigation, and it goes to court

3. Honolulu Star-Advertiser, December 1, 2016. By Sophie Cocke
scocke@staradvertiser.com
We don’t believe the PUC or the Consumer Advocate followed the
law. The record establishes that SIC meets the criteria for
certification. The PUC’s denial of certification despite that fact is
the basis for the appeal.”
Sandwich Isles Communications, which provides phone and
internet service to about 3,600 residents of Hawaiian Home Lands,
is suing state regulators in the hopes of restoring the flow of about
$1.36 million in monthly federal subsidies that were suspended
last year while federal regulators scrutinized the company’s
finances.
The telecom company has been under investigation and audit by
the Federal Communications Commission since its founder, Al
Hee, was indicted and later sentenced to almost four years in
prison in January on tax fraud charges.
Federal prosecutors said Hee skimmed some $4 million from
Sandwich Isles’ parent company, Waimana Enterprises, to pay for
personal expenses, such as vacations, massages and his children’s
college tuition.
The FCC cut off the subsidy, which supports telecom services in
rural and remote areas, in June 2015, amounting to an overall
financial loss so far for Sandwich Isles of about $24.5 million.
The Hawaii Public Utilities Commission has since declined to
recertify Sandwich Isles on a quarterly basis — a step necessary
for the company to resume receiving federal funding. If the FCC
chooses to restore the subsidy after its investigation, it could take
several more months before Sandwich Isles can get approval from
the PUC, further delaying payments.

4. In a complaint filed in Circuit Court on Oct. 31, Sandwich Isles
argues that it has met PUC certification requirements and that
commissioners have treated the company unfairly, requiring it to
respond to additional information requests that other companies
weren’t subject to.
The “PUC unconstitutionally and improperly relied on additional
qualifications” and held the company to a “heightened standard,”
according to the complaint.
The company asks that the court reverse the PUC’s decision and
certify Sandwich Isles.
“We filed the appeal because we don’t believe the PUC or the
Consumer Advocate followed the law,” Lex Smith, an attorney for
Sandwich Isles who works for Honolulu firm Kobayashi, Sugita
and Goda, said by email.
“The record establishes that SIC meets the criteria for (eligible
telecommunications carrier) certification. The PUC’s denial of
certification despite that fact is the basis for the appeal.”
Before Hee’s conviction on tax fraud charges, Sandwich Isles had
argued in FCC documents that any reduction to its federal
subsidies, which are supported by ratepayers, would push the
company into insolvency. However, the company has continued
to operate for a year and a half since the FCC cut off the funding.
Smith did not respond to questions about whether the company
could continue to operate without the federal funding, or for how
long, or whether the company has had to layoff employees or
scale back operations.
In the PUC’s September order denying Sandwich Isles’
certification request, commissioners said that it didn’t make sense
to certify the company before the findings of the FCC’s audit and
investigation were available.

5. The “commission cannot make a determination based on hoped-
for or anticipated outcomes which may or may not come to pass,”
commissioners wrote.
Commissioners must certify to the FCC that local telecom
companies have used federal funds appropriately.
The PUC has been particularly concerned that the company funds
Hee used for personal expenses came from ratepayer subsidies
provided to Sandwich Isles.
PUC Chairman Randy Iwase said he could not comment on the
court case given that it’s a pending matter before the PUC.
Sandwich Isles has also filed a motion for reconsideration with the
PUC.
Iwase said that usually a party can only appeal to the courts when
there has been a final ruling by the PUC, which there has not
been.
The FCC had indicated last year that its investigation into
Sandwich Isles’ finances could be completed by December 2015
and that the company’s subsidy could be restored by then. But the
inquiry into Sandwich Isles appears to be ongoing.
The FCC did not respond to questions about whether it had
concluded its audit and investigation, or when it expected to do
so.
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