Lawmakers Concerned Homesteaders Could Bear Brunt of Telecom Fiasco

Mar 10, 2020

Sandwich Isles Communications was once the exclusive provider of telecommunications service to Hawaiian home lands beneficiaries statewide.Now the company is facing legal trouble and Hawai'i lawmakers are concerned Hawaiian homesteaders could bear the brunt of it all.
Credit Sandwich Isles Communications

Sandwich Isles Communications began auctioning off its assets last week to pay off hundreds of millions of dollars in debt. The once-exclusive provider of telecom services to Hawaiian home lands also faces legal trouble, and Hawaiʻi lawmakers are worried services to homesteaders could be interrupted.

What began as a business venture to provide internet service to underserved rural homestead communities has turned into a telecommunications fiasco. State Sen. Jarett Keohokalole held a briefing last week on Sandwich Isles Communications and its ability to deliver services to homesteaders while involved in two federal court cases.

"It seems to me like it's extremely unclear at this point when and what the outcomes of these proceedings are going to be but, at the end of the day, the beneficiaries are entitled to service," said Keohokalole.

Sandwich Isles provides telecom services to 3,600 homesteaders statewide. Tyler Gomes, Department of Hawaiian Home Lands Deputy director, says the agency is keeping an eye on the Sandiwch Isles legal cases although it is not a party to either. Despite the company's suits, he was upbeat.  

"To be extremely clear, we have no reason to believe at this point that there should be an interruption of the services that are provided to our beneficiaries," said Gomes.

In one case, the U.S. government is suing Sandwich Isles for $129 million in unpaid loans. The company is also named in another lawsuit that seeks about $250 million in unpaid lease payments to a fiber cable network owner, Paniolo Cable Company.

"It sounds like Sandwich Isles and Paniolo is in complete disarray," says Waiʻanae Sen. Maile Shimabukuro.

Shimabukuro said she’s been hearing a host of complaints from Hawaiian Home Lands beneficiaries who are dissatisfied with the current service provided by Sandwich Isles.

"They call, and two weeks later, there's no calls from Sandwich Isles," said Shimabukuro. "There’s some people that had Spectrum or some other company before this exclusivity thing happened and then they wanted to expand and they were told, 'Oh, you cannot.'"

Sandwich Isles secured an exclusive license with DHHL back in 1995. But in 2017, the Federal Communications Commission found the exclusivity provision was unenforceable. Ryan Kanakaʻole with the state attorney general’s office said, legally, there is no exclusivity.

"The question, however, is a practical matter, because the infrastructure is owned by Sandwich Isles Communications," said Kanakaʻole.

Burt Lum, who leads the state’s efforts to increase Hawaiʻi’s access to broadband services, says if a new telecommunications company were to take over, it would need to get access to roads, trenches and other rights of way for equipment. But right now, that is all controlled by Sandwich Isles.

"Whether it’s Hawaiian Tel or a charter, they would have to maneuver around those rights of ways," says Lum, "So it’s not a simple matter of putting a (Request for Proposal) out and enlisting any of the telcos to come into the area."

Until all of that is resolved, service to homesteaders may remain spotty at best. 

Disclosure: Burt Lum, quoted in this story, also hosts HPR's Bytemarks Cafe.