Hawaiian Homelands Successor ETC Proposal...auction under the F ’s eligibility criteria (id. at para.12). PNH proposes to acquire the SIC assets if given the option of choosing legacy

Pacific Network Holdings, LLCMay 26, 2020

Company Confidential

Ensuring continuity of service and accelerating delivery of high speed broadband to the Hawaiian Homelands

Hawaiian Homelands Successor ETC Proposal

1

Proposal will Ensure Continuity of Voice Service and Make Broadband Available to the Entire Hawaiian Homelands

❖ The financial collapse of Sandwich Isles Communications (SIC) and Paniolo Cable Company and the associated asset liquidation sales scheduled for the summer of 2020 leaves the Hawaiian Homelands at risk:

❖ Of falling further behind the rest of the nation in broadband availability; and❖ Of facing the very real possibility of losing of basic telecommunications service continuity

❖ The RDOF Order’s preliminary list of eligible areas (at para.12) includes census blocks in the Hawaiian Homelands because there is no certified high-cost eligible telecommunications carrier (ETC) providing service and no carrier is expected to deploy broadband

❖ High likelihood that portions of Hawaiian Homelands will not receive a qualifying bid in 904 Auction

❖ The Hawaiian Homelands are a collection of non-contiguous areas spread across six islands

❖ That situation is about to change:

❖ Since the RDOF Order was released the Hawaii State PUC has committed to certify a qualified successor company as an ETC prior to the 904 Auction should the bankruptcy sale be concluded by early summer.

2

PacificNetworkHoldings, LLC


Hawaiian Homelands Over 200,000 Acres Spread Across Six Islands


Company Confidential 3



Network Overview

▪ 275 Miles of submarine fiber optic cable▪ 24 Fiber Pairs per wet segment ▪ 7 Cable Landing Stations connecting

Kauai, Oahu, Molokai, Maui and Hawaii Island▪ 185 Miles of terrestrial multi-duct bundles▪ Capacity to support additional submarine cable

landings

4



Pacific Network Holdings, LLC Paniolo Cable and Sandwich Isles Asset

Acquisition

❖ PNH has an Agreement in Principal with Paniolo Bankruptcy Trustee to be Stalking Horse Bidder in auction of Paniolo Cable and Sandwich Isles corenetwork assets

❖ PNH anticipates the execution of final Stalking Horse Asset Purchase Agreement with Paniolo Bankruptcy Trustee in late June

❖ PNH’s proposal to acquire remaining Sandwich Isles customer facing assetscurrently pending with Department of Justice awaiting Government’s execution of its Summary Judgment against Sandwich Isles

❖ Department of Hawaiian Homelands, Hawaii State Public Utilities Commissionand Hawaii State Consumer Advocate fully briefed on Company’s plans

❖ Deal contingent on ability to re-establish federal support for the study areabased on current legacy high cost and CAF-BLS support

5



Pacific Network Holdings, LLC Paniolo Cable and Sandwich Isles Asset Acquisition

(cont.)

❖ PNH willing to assume SIC’s operations and ensure continuity of serviceto Hawaiian Homelands as part of its comprehensive proposal to the Federal Government to purchase the remaining SIC customer facing assets in addition to acquiring PCC and SIC core network assets.

❖ Reinstating federal support using legacy mechanisms is critical to PNH’s goal to deploy a modern voice/broadband capable network serving all of theHawaiian Homelands.

6

Proposal will Ensure Continuity of Voice Service and Make Broadband Available to the Entire Hawaiian Homelands

❖ The PUC certification of an ETC would eliminate the area’s eligibility for the auction under the FCC’s eligibility criteria (id. at para.12).

❖ PNH proposes to acquire the SIC assets if given the option of choosing legacy support mechanisms and will commit to meeting the RDOF performance requirements and deployment obligations.❖ Will commit to deployment obligations that exceed current legacy mechanism requirements

❖ 10-year support term.

❖ Through a combination of GPON, fiber to the node and fixed wireless technologies PNH will provide voice and broadband services meeting or exceeding RDOF minimum performance requirements.

❖ Will commit to meeting RDOF deployment milestones at network performance levels of at least 25/3 to all locations in the study area by the end of year six.

❖ PNH will honor these commitments even if ETC certification does not occur prior to the 904 Auction.





Principal PNH Proposal Objectives

❖ Seamless transition of existing service to Hawaiian Homelands to SIC successor❖ Establish new ETC certified carrier for Hawaiian Homelands service area❖ Upgrade existing voice service switching platforms❖ Upgrade existing copper-only last mile facilities to FTTP infrastructure

wherever possible❖ Upgrade existing copper-only last mile facilities to minimum FTTN

where full FTTP deployment may not be possible❖ Build out all newly developed Hawaiian Homelands areas utilizing FTTP or

FTTN in combination with high capacity fixed wireless last mile infrastructure❖ Achieve 100% high speed broadband availability to all areas of the

Hawaiian Homelands within six years

8

Next Steps in Pacific Network Holdings, LLCAsset Acquisition Plan



❖ Conclude purchase of PCC and SIC core network assets from Paniolo Trustee❖ Conclude arrangements with Federal Government to provide service to the Hawaiian

Homelands in tandem with the Federal Government's execution of its Writ against SIC❖ Enter into private sale arrangements with the Federal Government to acquire the SIC

customer facing assets❖ File Applications for Special Temporary Authority to serve Hawaiian Homelands and for

expedited processing of Certificate of Authority and ETC Certification upon Court approvals of Paniolo 363 Bankruptcy Sale and Federal Government’s sale of SIC’scustomer facing assets

❖ Obtain FCC approval of Hawaiian Homelands successor ETC carrier proposal

9

Current Conditions andHistorical Background





❖ Legal and operational issues precipitates Sandwich Isles Communications (“SIC”) default on $138 Million in RUS loans

❖ SIC defaults on $257 Million in lease payments to Paniolo Cable Company (“PCC”)❖ Paniolo Cable Company (PCC) Defaults on $185 Million in debt❖ 2015 SIC looses ETC Certification and FCC suspends all high cost subsidy support❖ 2016 SIC Founder and CEO sentenced to federal prison following conviction on

federal income tax charges❖ 2019 Creditors initiate involuntary Bankruptcy action against PCC❖ 2019 U.S. Government brings suit against SIC in Federal District Court to collect

on RUS loans

Financial Collapse ofSandwich Isles CommunicationsAnd Paniolo Cable Company

11



Current Status of Litigation Against Sandwich Isles Communications and Paniolo Cable Company

❖ January 2020, Paniolo Bankruptcy Trustee awarded $274 Million Summary Judgmentagainst Sandwich Isles

❖ March 2020, Paniolo Trustee acquires all of SIC’s core network assets at Marshal’s Sale❖ April 2020, U.S. Government awarded $138 Million Summary Judgment against SIC❖ May 2020, U.S. Government files Application for Writ of Execution to recover

SIC’s remaining customer facing assets❖ May 2020, U.S. Government and Paniolo Trustee engage in negations to synchronize

the Paniolo 363 Bankruptcy Sale and the Government’s foreclosure and sale of SIC’scustomer facing assets and to settle the Government’s objections to the Paniolo 363Bankruptcy Sale

❖ Paniolo 363 Bankruptcy Sale and Government’s Sale of SIC customer facing assets now anticipated to be concluded summer of 2020

12

Litigation Outcomes Pose Threat to Continuity of Service to Hawaiian Homelands

❖ Paniolo 363 bankruptcy sate will strip away from SIC all middle-mile and interisland network assets required to serve the Hawaiian Homelands

❖ Government’s foreclosure on SIC customer facing assets will remove all of SIC’s last-mile assets required to serve the Hawaiian Homelands

❖ Government’s foreclosure on SIC will include transfer or termination of SIC’s 214 License

❖ Loss of assets and 214 License will eliminate SIC’s ability to provide service to the Hawaiian Homelands and cause the collapse of SIC’s commercial access to and use of all middle mile assets and collocation facilities under the terms of SIC’s Settlement and Master Relationship Agreements with the Paniolo Trustee





Current Events Negate Benefit sof Including Hawaiian Homelands in RDOF

❖ PCC Bankruptcy and Government foreclosure against SIC will conclude this summer ❖ PCC Bankruptcy Sale will strip all terrestrial middle mile assets from SIC❖ Government foreclosure actions will strip all last mile and network switching from SIC❖ Government’s foreclosure actions will cause SIC to default of its agreement with

Paniolo Bankruptcy Trustee❖ SIC will be unable to continue service to the Hawaiian Homelands ❖ Uncertainly regarding the level of federal support and possible overbuilding will

negatively impact the Government’s financial recovery from the sale of SIC’s assets❖ An auction based on multiple geographic areas within the Hawaiian Homelands

will likely result in some areas not receiving winning bids (orphan areas)❖ Potential ownership split of SIC core middle mile assets from its last mile customer-

facing assets may jeopardize continuity of service in orphan areas and during thesix-year deployment period of RDOF awarded areas

14

Company Background





Pacific Network Holdings, LLC Company Background

❖ Founded 2017❖ Company Principals are all Hawaii residents❖ Significant Telecommunications industry expertise❖ Excellent relations with the Department of Hawaiian Homelands ❖ Committed to ensuring continuity of service and deploying

high speed broadband to the Hawaiian Homelands❖ Only prospective Bidder in Paniolo 363 Sale to express interest in

acquiring all of Sandwich Isles Assets for purpose of ensuring continuity of service to the Hawaiian Homelands

16



PNHTeam

Robert J. Maloney – CEO & Principal--Chairman & CEO Pacific Data Systems, a privately owned regional Telecom network infrastructure and services company-- 40 years senior management experience in IT and Telecommunications industries-- 25 years experience in planning and managing submarine cable systems and terrestrial fiber optic cable networks-- BA Business Administration and Travel Industry Management, Chaminade University and University of Hawaii

Kenton Eldridge – Principal--25 years as senior executive at DFS (Duty Free Shoppers) and Federated Department Stores; founder of Aina Koa Pono, a biofuels company.--Member of various for-profit and not-for-profit boards including American Savings Bank, BBiTV, Assets School, Nature Conservancy, Straub Foundation.—US Army Officer-served in Europe and Vietnam; BA, MA and MBA University of New Hampshire

Jim Pappas – Principal--Principal (former owner) Honsador Lumber; joined in 1978--50 years of accounting, strategic planning, m&a, executive and entrepreneurial work--Member of various for-profit and not-for-profit boards YPO, UH Foundation, Financial Planning Institute--BA SF State; Graduate work UC Berkeley, Wharton, National War College

Albert Pleus – Principal--Director of, investor in and/or advisor to: , Anthology Marketing Group, Broadband iTV, Grower’s Secret, Midwestern BioAg, Recursive Labs, TruTag Technologies, Variety School and various other for profit and not-for-profit enterprises--25 years experience in investment banking, investing, management and business operations in a broad spectrum of industries.--SB+SM Massachusetts Institute of Technology; MBA Stanford University

Eric Yeaman - Principal--Managing Partner, Hoku Capital, LLC--President & COO, First Hawaiian Bank--CEO, Hawaiian Telecom--SVP & COO, Hawaiian Electric Company; CFO, Hawaiian Electric Industries--COO & CFO, Kamehameha Schools--Director Alaska Air, A&B, Queen’s Health Systems, Castle Foundation, Hawaii Community Foundation--Business Administration Accounting degree, University of Hawaii

17

PacificNetwork Holdings, LLC

For More Information Contact:

Robert J. MaloneyCEO & Principal

Phone: 808-294-2249Email: [email protected]

18

mailto:[email protected]

Documents

Hawaiian Homelands Successor ETC Proposal...auction under the F ’s eligibility criteria (id. at para.12). PNH proposes to acquire the SIC assets if given the option of choosing legacy