AT&T, NECA Resist Sandwich Isles Proposal To Resolve Cost-Recovery Dispute
AT&T and the National Exchange Carriers Association took issue with a Sandwich Isles Communications (SIC) restructuring plan to reduce the amount of disputed cost recovery it needs from a NECA pooling mechanism to pay for its Paniolo undersea cable network…
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in the Hawaii Islands (see 1604290035). "SIC claims that it has somehow restructured the Paniolo lease and that as a reward it now should be allowed 100% recovery of these restructured lease payments. SIC’s post-hoc justifications should be rejected," AT&T said in its reply comments in an FCC proceeding in docket 09-133 to refresh the record. NECA also wasn't convinced by Sandwich Isles' recent plan. "SIC’s proposal is unclear, has not actually been implemented, and does not take into account the substantial additional costs associated with the Paniolo cable system that are part of the 'lease expenses subject to dispute,'" the group said in its reply. "Even the proposed revised lease cost of $8.1 million for the Paniolo cable system is unsupported either as to cost or demand. SIC’s alleged 'comparable' cost analysis is not submitted for evaluation. SIC has failed to meet its burden of justifying its inclusion of the lease expenses in its revenue requirements. Therefore, NECA’s conclusion that the Paniolo cable system lease cost is not used and useful is still valid, even at the lower level." The FCC should resolve the open issues based on "existing and verifiable facts," NECA said. In its reply, SIC said NECA's previous funding resistance is "now moot" due to its recent proposal. "The refinancing proposal SIC has advanced in its Initial Comments -- a proposal that NECA has publicly stated, although not on the record in this docket -- that it will 'consider' is a complete response to the set of issues that NECA has raised," Sandwich Isles said. "Given NECA’s record of unwillingness to accept a valid Bureau Order specifying the level of recovery, we are constrained to answer the NECA arguments on their own terms. We submit that the position it has taken is wholly without foundation, with respect to both the facts and legal analysis."