The federal government is offering broadband subsidies to hundreds of thousands of low-income Hawaii residents to help keep them connected during the pandemic, but the founder of the company that provides broadband service on Hawaiian Home Lands says he won’t participate in the program.

Albert Hee, the founder of Sandwich Isles Communications Inc., told an online audience on March 10 he cannot offer subsidies to homesteaders through the Emergency Broadband Benefit program. The program is supposed to provide broadband subsidies of $75 per month to qualifying broadband subscribers on Hawaiian Home Lands.

A spokesman for the Hawaiian Homes Commission said it is still unclear whether homesteaders served by Sandwich Isles can tap the subsidy offered by the Federal Communications Commission, and the FCC did not respond to repeated inquiries about the issue.

The subsidies are managed by the Universal Service Administrative Co., and Hawaiian Homes spokesman Cedric Duarte said USAC also has not responded to the commission’s efforts to determine if homesteaders with Sandwich Isles’ broadband service can qualify.

Robin Danner, chairwoman of the Sovereign Council of Hawaiian Homestead Associations, said apparent exclusion of homesteaders from a federal program for needy families is infuriating.

“So, we pay,” said Danner. “The result is that our community does not get the benefit of the Emergency Broadband.”

The EBB program is funded with $3.2 billion in federal money appropriated in the Consolidated Appropriations Act of 2021. It offers discounts of up to $50 per month for low-income residents to help them afford broadband service, and up to $75 per month for residents of tribal lands, which includes Hawaiian Home Lands.

The program also provides a one-time benefit of up to $100 per household to help purchase devices such as tablets or laptop computers to help families stay connected.

The FCC has made the benefit available to low-income households that receive Medicaid benefits, qualify for food assistance under the Supplemental Nutrition Assistance Program or qualify for free or reduced-price public school lunches.

That means very large numbers of Hawaii families qualify, given that the state Department of Human Service reports that Medicaid enrollment in Hawaii was nearly 430,000 at the start of this month.

Nearly 13,000 families in Hawaii have already signed up for the Emergency Broadband Benefit program, and tens of thousands more certainly qualify, but it is unclear how many homesteaders will be able to tap the subsidy.

Duarte estimated that about 4,000 households on Hawaiian Home Lands are served by Sandwich Isles. Hee’s company was responsible for installing fiber optic lines and delivering broadband service to thousands of homesteads, but Hee has been a controversial figure.

Hee was convicted of federal tax evasion and sentenced to 46 months in federal prison in 2016, and the FCC fined Hee nearly $50 million last year for violations of Universal Service Fund rules that resulted in millions of dollars in overpayments to his companies, including SIC. Hee was released after serving his federal sentence.

Hee’s daughter Breanne Kahalewai was listed as president of Sandwich Isles Communication as of last May, but it was Albert Hee who addressed members of the Broadband Hui last March to explain his concerns with the FCC’s Emergency Broadband Benefit program.

Hee’s comments during a video call with the loose-knit organization known as the Hawaii Broadband Hui came as members of the hui were organizing a public relations campaign to encourage Hawaii residents to apply for the subsidies. But Hee argued the program was poorly designed.

In order to participate, the internet providers are required to provide discounted service to customers, and the FCC then reimburses the providers for that cost.

“We’d love to participate in the FCC initiative, but the way the FCC initiatives are made is … when the user uses that money, that supposed money that the FCC gives to them, the way that they give it to them is to take it away from the provider, and they’re supposed to reimburse the provider for it,” Hee said in the March video call.

“The FCC has found it, uh, whatever, in their interest not to reimburse Sandwich Isles for these monies that they supposedly have given to the user,” Hee said.

“That money should be given to the user, and they make it appear like that’s what’s going to happen, but that’s not what’s going to happen. They say you’re eligible for it. That doesn’t mean they’re going to give it to you. They’re going to try to get us to give it to you, and we just can’t do that,” Hee told members of the hui.

“So, it’s not whether or not we want to participate, it’s the way the FCC has set it up. And most of these things are set up this way, the FCC really is looking for somebody else to pay the bill,” Hee said.

Duarte said materials initially provided by the FCC did not show SIC as one of the providers who were participating in the program. “We weren’t told why. We were just told they were not included,” Duarte said.

Hawaiian Homes then issued a news release outlining how the EBB program works, but did not include Sandwich Isles on the list of participating carriers.

When a handful of homesteaders who use SIC called Hawaiian Homes to ask about the EBB benefit, Duarte said he suggested they try to file for it with their mobile phone providers in the hope that the EBB  subsidies can be used to help pay for their mobile data plans.

The situation became even more confusing when a list of broadband providers was later posted on the FCC web site showing SIC had been added as one of the companies that “elected to participate” in the program.

The FCC did not respond to repeated Civil Beat inquiries about the issue.

“At the end of the day, we just want to make sure we get the information out to our beneficiaries on what they can get,” Duarte said. “I think anytime there’s an opportunity — especially during the pandemic — to provide any sort of relief to beneficiaries, it’s good.”

SIC did not respond to Civil Beat inquiries about its participation in the program made through the company’s web site, its phone system, or through Hee’s lawyer, Lex Smith.