A coalition of Hawaiian homestead associations has declared its intent to purchase the beleaguered Sandwich Isles Communications, which in June lost its exclusive license to provide telephone and internet service to homestead communities statewide.
The goal of the potential acquisition, said SCHHA Chair Robin Puanani Danner, is to ensure continuity of service, reduce costs, improve customer service and expand the customer base by creating a sustainable, Native-owned telecom enterprise.
“If successful, this indeed would represent an historic step toward economic self-determination and long-term economic opportunities for our rural communities and our native people,” reads the SCHHA letter to Federal Communications Commission Chairman Ajit Pai.
The SCHHA, which is not directly tied to the Department of Hawaiian Home Lands, has also asked the FCC to re-establish the exclusive license to provide telephone and internet service.
Since its inception in 1995, Sandwich Isles has delivered telecom services to 3,500 households on lands held in trust for Native Hawaiians to ensure that technological parity is achieved in communities that are most expensive and difficult to serve.
Last year the FCC penalized Sandwich Isles with a total of $76 million in fines and repayment orders after it said the company fraudulently collected millions of dollars in subsidies intended to equip rural, remote U.S. communities with affordable and reliable telephone and internet service.
Subsidy payments to the telecom provider were suspended in 2015.
Albert Hee, the former owner of Sandwich Isles’ parent company, Waimana Enterprises, was convicted in 2015 of six counts of tax fraud and one count of impeding the IRS from correctly calculating and collecting his taxes.
Over a span of 13 years starting in 2002, authorities said the brother of former state Sen. Clayton Hee siphoned more than $4 million of Waimana’s funds to pay for personal expenses, including massages, school tuition for his children, false wages for family members and a $1.3 million home in Santa Clara, California, according to court documents.
Service to Sandwich Isles customers has not been disrupted, but the company’s legal troubles have some rural homesteaders concerned about the future quality and cost of their telecom service.
Leaders of the SCHHA, which states on its website its dedication to the fulfillment of the promise of the Hawaiian Homes Commission Act that created a 200,000-acre land trust in 1921 to serve as farms, ranches and neighborhoods for indigenous Hawaiians, assert that dependable telecommunications access is fundamental to the financial and professional well-being of homestead families.
“It’s not such a far-fetched notion that the people most impacted by an enterprise should control that enterprise,” said Danner. “You can’t live in a homestead area that’s hard to get to and not know instantly that telecommunications is everything.”
Tribally owned and operated telecommunications companies exist in Alaska and on the U.S. mainland, where 63 percent of tribal land residents lack access to advanced broadband, as compared to only 17 percent of the total U.S. population, according to the FCC’s 2015 Broadband Progress Report.
As it continues to analyze of the viability of the proposed telecom purchase, the SCHHA has formed a panel of acquisition advisers consisting of current and former professionals in telecommunications, business, banking, law and finance.
At an SCHHA meeting Friday attended by U.S. Sen. Brian Schatz in Honolulu, the coalition’s leaders reaffirmed their commitment to pursue the acquisition.
Schatz declined to comment on the proposed acquisition for this report.
The SCHHA on Aug. 3 filed with the FCC a motion to reconsider its revocation of Sandwich Isles’ exclusive permit to serve Hawaiian homesteads, arguing that it disenfranchises Hawaiian homesteaders.
Whether the SCHHA purchases the telecom provider or not, Danner said the FCC should fulfill its duty to protect the interests of Hawaiian homesteaders by reinstating the exclusive permit.