The utility also said yesterday it would provide the information it was ordered to give to TelHawaii Inc., a carrier authorized by the state commission to replace Hawaiian Tel as the primary phone company for the Kau area of the Big Island.
Hawaiian Tel said that action likewise is being done under protest.
The commission on Monday levied the fine - the largest ever by the PUC - for Hawaiian Tel's failure to comply with an order to provide financial and technical information to TelHawaii.
The order also directed Hawaiian Tel to negotiate with TelHawaii for the transfer or use of Hawaiian Tel assets needed to serve the Kau market.
Hawaiian Tel has appealed that order to the Hawaii Supreme Court. Among its arguments: the company shouldn't be forced to dispose of assets. If the appeal is successful, Hawaiian Tel expects to get the fine refunded.
Hawaiian Tel spokesman Calvin Tadaki said the company decided to pay the fine and provide the information in order to mitigate the potential effect on the utility. The fine was to have increased by $15,000 for each day the company failed to comply with the order.
Tadaki said the company interprets the order to mean the utility should provide TelHawaii access to Hawaiian Tel's Kau facilities on an interconnect basis. Under such an arrangement, TelHawaii would lease capacity from Hawaiian Tel and resell it to customers.
But David Proudfoot, TelHawaii's attorney, said the PUC's order goes beyond that.
The commission opened the Kau market to TelHawaii after residents there repeatedly complained of poor service.
The PUC has levied only one other fine against a utility in at least the past 30 years.