Facing potential financing difficulties on its massive undersea cable project, executives with Sandwich Isles Communications Inc. met with Federal Communications Commission officials earlier this month.

Sandwich Isle is seeking to tap into a special fund paid for by consumers around the country to finance the lease of a 358-mile cable connecting Oahu and the Neighbor Islands.

But the fund's administrator, the National Exchange Carrier Association, recently rejected Sandwich Isle's request as too costly.

In a Nov. 13 letter to FCC Secretary Marlene Dortsch, company attorney David Cosson said he and Sandwich Isles President Albert Hee met earlier this month with the chief of the FCC's Wireline Competition Bureau, Sharon Gillett, and Albert Lewis, the chief of FCC wireline bureau's pricing policy division, in an effort to overturn NECA's decision

It appears that the FCC officials asked a lot of questions and Sandwich Isles agreed to provide further financial data about the lease.

Cosson's letter did not say whether the FCC officials support or oppose the funding but he did say the financing is crucial to Sandwich Isles' survival.

"However, without Commission action to require NECA to accept the network costs, Sandwich Isles cannot survive financially while the network evolves to full utilization," Cosson wrote.

Sandwich Isles provides heavily subsidized phone lines to about 2,000 Hawaiian homesteaders.

The federal government pays Sandwich Isles about $13,000 per customer for providing the service, which is 100 times higher than the average subsidy for rural telephone service on the Mainland.

Under a 20-year lease, Sandwich Isles has exclusive rights to use the fiber-optic cable network, dubbed the Paniolo Cable.

The company recently proposed buying bankrupt Hawaiian Telcom Inc. for $400 million but Hawaiian Telcom opted instead to pursue $460 million, stand-alone reorganization plan, which recently received bankruptcy court approval.

To be sure, Cosson's doom and gloom tone belies Sandwich Isles' shrewdness.

The company earlier this year applied for more than $236 million in federal grant money and $67.3 million in low-interest loans as part of the Obama administration's broadband stimulus funding.

If anything, the company has proven that it's pretty persuasive when seeking federal money.

Tags: Albert Hee, broadband stimulus grants, Federal Communications Commission, Hawaiian Telcom Inc., National Exchange Carrier Association, Paniolo Cable, Sandwich Isles Communications Inc.

This entry was posted on Monday, November 23rd, 2009 at 1:16 am and is filed under Biz Bites. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.