May 17, 2022

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Countless numbers Of Hawaiians Could Drop Cellular phone And World-wide-web Provider Amid Bankruptcy Dispute

Condition regulators have opened an emergency investigation of Sandwich Isles Communications to ascertain if the organization can provide telecommunications products and services to more than 3,000 households dwelling on Hawaiian Home Lands and to uncover possibilities if not.

The Community Utilities Fee, which opened the docket March 11, is concerned that Sandwich Isles’ prospects “could abruptly reduce accessibility to telecommunications services,” a situation the panel considers “unacceptable.”

The investigation comes as Sandwich Isles is apparently blocking accessibility to its telecom infrastructure to a different supplier, Hawaiian Telcom, alleging trespass, submitting police stories and placing client cell phone and web company at danger.

A picture entered as a court docket show depicts how Sandwich Isles Communications seemingly bypassed a Hawaiian Telcom lock and installed a metallic box with its very own lock at the Paniolo Creating in Anahola, Kauai. PUC/Hawaiian Telcom/2022

In the meantime, Hawaiian Telcom has alerted the Section of Hawaiian Property Lands, the Federal Communications Commission, the U.S. Section of Justice, the Hawaii Lawyer Standard and some others that since of the dispute the firm is ready to slice off Sandwich Isles’ access to its telecom network by Might 31.

The PUC stated in a March 11 submitting that it “cannot overstate the paramount great importance of preserving cost-effective and trustworthy telecommunications solutions to the State as a full, and in individual, to buyers on Hawaiian Property Lands.”

If buyers lose fundamental telecom provider, it could have serious overall health, basic safety, financial and instructional penalties, according to Hawaii’s Consumer Advocate, a get together to the docket.

Sandwich Isles Communications is an Oahu-based mostly phone company established in 1995 with a mission to provide communication products and services to Native Hawaiians living on homesteads. In addition to landline and wireless phone solutions for residential and commercial prospects, the enterprise also features broadband and Lifeline, a clinical inform system.

With federal backing, the enterprise constructed the Paniolo Network, a internet of undersea and terrestrial fiber optic cables.

In between 1997 and 2001, the U.S. Section of Agriculture loaned the company additional than $166 million to make telecommunications infrastructure. From 2002 to 2015, it gained above $27 million from the FCC to go over several telecom-similar fees.

Soon after the money started out flowing, issues bought intricate.

In 2015, founder Albert Hee was convicted of legal tax fraud. Federal prosecutors identified that Hee steered millions of dollars from the small business into his personalized accounts to fork out for things like massages, faculty tuition for his small children, family vacations, a car or truck, and a home in California, as perfectly as salaries and rewards to his spouse and young children for function they did not carry out. Hee was sentenced in 2016 to 46 months in prison.

Then in 2020, the FCC fined Hee virtually $50 million for defrauding the Universal Expert services Fund which supports carriers providing telecom services in superior-price tag pieces of the place.

Albert Hee was sentenced to just about four several years in prison and fined $50 million for fraud and other fees in the latest yrs. Hawaii News Now/Screenshot

Sandwich Isles Communications defaulted on loans from the Agriculture Department’s Rural Utilities Services and was slapped with a $138.5 million judgment in February 2020. To satisfy the judgment, a individual bankruptcy trustee ordered the sale of the Paniolo Network to Hawaiian Telcom.

In accordance to the PUC docket, Hawaiian Telcom later sent Sandwich Isles a letter noting the change in possession. But to keep away from any disruption to prospects, Hawaiian Telcom mentioned Sandwich Isles could proceed uninterrupted use of the Paniolo services, briefly, pending a a lot more long term agreement.

Issues speedily went sideways.

Sandwich Isles didn’t make essential payments to Hawaiian Telcom for use of the network, according to correspondence reviewed by the commission.

Hawaiian Telcom mentioned it was prepared to negotiate but if no settlement was attained by March 31, the enterprise would revoke Sandwich Isles’ use of the community, which could interrupt telecom products and services to Hawaiian Residence Lands clients. They have considering the fact that extended the deadline to the close of next month.

But the predicament has ongoing to poorly deteriorate.

Correspondence concerning the two providers implies that Sandwich Isles “has barricaded interior doorways and altered exterior locks to specified sections of Paniolo Network’s amenities,” in accordance to the commission.

In personal bankruptcy court docket paperwork, Hawaiian Telcom states Sandwich Isles has taken off, destroyed or tampered with Hawaiian Telcom locks on perimeter fences surrounding buildings obtained by Hawaiian Telcom. And that Sandwich Isles has installed its own locks and units on properties and premises owned by Hawaiian Telcom, as well as welding shut entry gates. The corporation also states Sandwich Isles has produced a number of false law enforcement reports alleging Hawaiian Telcom is trespassing on its house.

Hawaiian Telcom building on Bishop Street.
Hawaiian Telcom says Sandwich Isles has removed, wrecked or tampered with its locks on perimeter fences surrounding properties it purchased. Cory Lum/Civil Beat/2020

Lynette Yoshida, a Hawaiian Telcom senior functions manager, mentioned in court files that on Jan. 26 she acquired a report from a Sandwich Isles staff stating that company founder Al Hee was requesting that Hawaiian Telcom’s lock on its Paniolo Setting up at Laiopua on the Large Island be replaced. If not, Hee mentioned he would simply call the law enforcement.

Various similar incidents involving law enforcement are in-depth in court papers.

In a Jan. 12 e-mail to Hawaiian Telcom, Hee explained, “I have no intention of escalating this to a trespassing issue until you damage our residence. If you would like to speak about unescorted entry, make sure you let me know.”

Points acquired even uglier just after that.

In a March 29 submitting in U.S. Bankruptcy Court for the District of Hawaii, Hawaiian Telcom asked the courtroom to implement the phrases of the bankruptcy mainly because Sandwich Isles’ conduct is “not only wrongful, but has develop into progressively hazardous and alarming.”

On Friday, the courtroom purchased Sandwich Isles to immediately cease eliminating, destroying, altering or in any other case tampering with Hawaiian Telcom’s locks, chains or other protection capabilities of its Paniolo structures. It also located Sandwich Isles and its officers, supervisors and agents in willful contempt of court docket for its actions.

A cellphone call and electronic mail searching for remark this 7 days to Lex Smith, an legal professional representing Sandwich Isles, were being not returned. A lady who answered the telephone at Sandwich Isles on Wednesday explained no a single was obtainable to speak to a reporter.

In a Sept. 11 letter to clients, Sandwich Isles blamed the scenario on Hawaiian Telcom. Below the individual bankruptcy, Sandwich Isles was authorized to temporarily carry on serving its clients employing a portion of the Paniolo Network for cost-free and spending a nominal total for its gear situated in structures now owned by Hawaiian Telcom, the letter states.

But Hawaiian Telcom “has since reneged on its order obligation” and is demanding that Sandwich Isles spend market fees for using the network and is threatening to lower off provider until it does, in accordance to the organization.

Spending market place premiums would significantly enhance purchaser telecom charges, the letter states.

In court docket papers submitted on April 11, the Section of Hawaiian House Lands sided with Hawaiian Telcom. It explained Sandwich Isles forfeited any desire or proper to property concerned in the personal bankruptcy, such as authentic estate.

Sandwich Isles faces $400 million in judgments, the section pointed out. It estimates the bankruptcy trustee as expressing Sandwich Isles’ latest steps pose a “clear and current danger to the functions, protection and safety of the Paniolo Cable Network.”

The PUC reviewed Sandwich Isles’ recent yearly reviews and described the company’s fiscal problem as “dire.”

A commission investigation into whether or not Sandwich Isles has violated federal legislation is correct, according to the Consumer Advocate. If violations become evident and if remedies cannot be easily observed and implemented, the commission need to make your mind up regardless of whether Sandwich Isles really should be authorized to carry on to work.

It’s of utmost great importance that expert services to Hawaiian Dwelling Lands beneficiaries not be disrupted, stated Dean Nishina, government director of the Division of Consumer Advocacy, in an job interview Thursday.

In May perhaps, get-togethers to the docket will have a probability to ask for information and facts from other individuals. Sandwich Isles has right until June 21 to post its reply.

“Reliable internet and telephone services are a lot more significant than ever,” claimed Cedric Duarte, a spokesman for Hawaiian Dwelling Lands.