Hawaiians Electric

April, 2001

Al Hee, president for Sandwich Isles Communications Inc, (SIC) knows that if his company is successful in Kahikinui, it can be successful anywhere. The 20,000 acre ahupuaa on the slopes of Haleakala is the largest and most remote parcel in the state Department of Hawaiian Home Lands’ (DHHL) inventory.

An hour’s drive from Kahului Airport, Kahikinui is up the road from Upcountry Maui’s Ulupalakua Ranch and is as beautiful as it is brutal. Once verdant rainforest, the area, which translates into “big Tahiti,” is now wind-swept scrubland, sunny and hot in the daytime and foggy and cold at night. Since 1998, two families have called the vast area home. They have no electricity or water—true homesteaders. But last month, thanks to Hee and his company, the homesteaders now have telephone service and DHHL can start placing an additional 70 families who have been waiting to settle Kahikinui.

“This is really at the heart of what we are trying to do,” says the camera-shy Hee as he gazes down at far-off Makena and Wailea. “We are bringing telephone service to Hawaiian homesteaders no matter where they live. By the time we are finished people here will be able to surf the Web as well as anyone in Honolulu. They’ll be able to work from home or start their own on-line businesses.”

In 1998 SIC completed its first project, providing telephone service to homesteaders in DHHL’s latest Waimanalo development. Laiopua, above Kona, was next, followed by Kulana Oiwi in Kaunakakai on Molokai in 1999 and Kalawahine next door to Oahu’s Papakolea. Other projects include Puukapu in Waimea on the Big Island, Kapolei on Oahu, and the aforementioned Kahikinui.Founded in 1995, Sandwich Isles Communications Inc. is a rural telecommunications company that has an exclusive agreement with DHHL to provide telephone service to the agency’s 69 non-contiguous parcels totaling some 200,000 acres and located on the six major Hawaiian Islands. The company is financed primarily by long-term, low-interest loans totaling more than $400 million from the U.S. Department of Agriculture’s Rural Utilities Service (RUS), which is responsible for promoting and supporting the development of utility infrastructure and services in rural America. This federal program is not based on race and has been in existence for more than 50 years. SIC’s project is the first application of RUS funds in Hawaii.

“We are going as fast as Hawaiian Home Lands can build their projects,” says retired Vice Adm. Robert Kihnue, SIC’s CEO. “We want to make sure that when they build the easements to their roads our cables go right into that trench.”

“Back when I was doing subdivision work, the cost for telephone infrastructure might have been as much as $1,000 a house,” says Mike McElroy, DHHL’s land management administrator. “It really adds up and that is money we don’t have to spend. We can stretch our dollars much further now.”The infrastructure that SIC builds comes at no cost to DHHL or its beneficiaries, which means the department saves millions of dollars and eventually more Hawaiians can be settled on homelands at an accelerated rate. SIC’s customers pay comparable rates to others in the state for telephone service.

So far, SIC has invested $30 million in facilities, digital switching and related equipment and services. And the road has not always been smoothgoing, with SIC officials facing as many man-made barriers as natural ones. According to Hee, it took him four years to receive a license from DHHL and three years to get through the Public Utilities Commission when it takes three months for other applicants.

“When we first decided to do this everyone was blocking us and doubting us,” says Kihune. “They looked at us like we were crazy. But we had a good goal and that’s what drove us.”

But as difficult as it was to navigate through government bureaucracy or connect places like Kahikinui to the rest of the world, SIC’s job is about to get a lot tougher. Beginning later this summer and over the next three to five years, SIC will be working on the next phase of its grand plan, connecting all these communities (and all of Hawaii) to a 1,500-mile state-of-the-art fiber-optic network. Laying the fiber in the ground, which will stretch from rural landscapes like Kahikinui to the urban jungle of Honolulu and beyond, will cost more than $150 million. Laying down the submarine portions of the network will cost an additional $70 million.

With 48 fibers, the network’s pipes will have at least twice the capacity of any other fiber-optic network in the state. In addition, SIC technicians will have the ability to increase that carrying capacity many times over thanks to recent developments in “multiplying” technology. They will also be dropping five empty conduits in the pipe for good measure. The entire network—the only all-fiber one in the state—will be either underground or underwater during its trek around the state. The cables will be inserted into micro tunnels through the crowded streets of downtown Honolulu, tiny openings as small as five or six inches in diameter that are dug without disturbing the surface. Again, state-of-the- art technology.

According to Hee, the resulting network will benefit Hawaiian homesteaders and nearly all residents of Hawaii in a number of different ways. First, homesteaders will suddenly have access to all that the on-line world has to offer, including cutting-edge communications, distance learning, telemedicine and e-commerce opportunities.

“High-speed Internet access helps fulfill DHHL’s goals in its mission: education, health care and economic development,” says Gil Tam, the vice president who is in charge of administration and community affairs for SIC.

Secondly, SIC will be also wiring DHHL’s nonresidential areas where the department maintains income and economic development property all over the state. According to McElroy, DHHL has designated a wide swath of Oahu as a high-technology corridor, stretching from Kalaeloa (formerly Barber’s Point) to the Stadium Bowl-o-Drome property in Moiliili. Other parcels along this corridor include the Waipahu drum site near Leeward Community College and the Halawa laundry site, across from Aloha Stadium. The department has just completed a feasibility study to build a biotech center in Kalaeloa and will put developer proposals for bid for a high-tech center later this year for the Bowl-o-Drome property. McElroy says that he has received serious inquires about this property from high-profile companies and research institutes because of the cutting-edge connections and proximity to the University of Hawaii at Manoa.

Last, but certainly not least, SIC’s vast network will be available to island businesses all throughout the state. (See sidebar on Page 18.) SIC officials try not to speculate about the possible opportunities that additional high-speed broadband access will bring the Islands. They liken themselves to road builders. What travels on the road or what is constructed beside it is anyone’s guess.

“For the same reason that wide-body jet travel made Hawaii a market for tourism, for the same reason that tall sailing ships made it possible to export products from Hawaii a century and a half ago, broadband fiber is the pathway that allows Hawaii to participate in the new economy of the future,” says Paul Brewbaker, chief economist, Bank of Hawaii.

The impact of 1,500 miles of additional broadband wire may be hard to gauge, but Hee knows for sure that Hawaii’s profile in the global high-tech community will be greatly enhanced. “Mainland executives come to a convention here and listen to all these claims about how much fiber we have coming into the state but that means nothing if they go back to their hotel and can’t hook up,” says Hee. “I don’t know how many hotel rooms in Waikiki have Internet access, and I don’t think there is anywhere you can get a T-1 connection. After we put our network in, you’ll be able to do that.”

According to Hee, isolated Kahikinui and DHHL’s efforts to place Hawaiians on land is emblematic of the plight of the entire state in the electronic global village. “You can bypass the Hawaiian homelands and no one will know the difference,” says Hee. “And you can bypass Hawaii and no one will ever know the difference. The notion that Hawaii is the hub of communications throughout the Pacific is just that, a notion. All the rhetoric doesn’t mean anything if people visit here and aren’t able to hook up to the Internet at the same speeds that they can at home.”


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