Final ruling: Judge tosses out broadband contract

A district judge has issued his final word in the Idaho Education Network lawsuit: The $60 million broadband contract is void.

And while Patrick Owen’s Wednesday ruling lends some closure to the court case, it raises a whole new round of questions about back payments — and the future of the embattled project. The ruling casts renewed doubt over high-speed broadband service used by nearly every high school in the state, and a host of state agencies.

The 22-page ruling essentially reaffirms what Owen said three months ago. On Nov. 10, Owen said the amended broadband contract was illegal and could not be salvaged in any part. On Wednesday, Owen ruled that the rewrite — and the state’s February 2009 decision to award contracts to CenturyLink and Education Networks of America — constituted “the initial step in a flawed process that violated several provisions of Idaho code.”

Owen also acknowledged that his ruling could have far-reaching implications. “The court did not come to its conclusions casually. … The court was also aware that its decision likely would have a number of potential adverse consequences to schools and students.”

State officials and their hired attorneys had no immediate comment on Wednesday’s ruling.

Owen’s decision is a resounding victory for Syringa Networks, which has spent more than five years fighting the broadband contract in court. Syringa had argued that it was illegally cut out of work on the project, when the rewritten contracts were awarded to ENA and CenturyLink.

The ruling is also yet another setback for the state and the attorneys hired to defend the contract. In their filing, “motion to reconsider,” attorneys also appealed for clarification about the scope of Owen’s ruling. Specifically, the state wanted to know whether it could pay contractors for work performed under the disputed contract.

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That would appear to be out of the question, as far as Owen is concerned, since he again declared the CenturyLink and ENA contracts void.

The back payment issue is just one of a host of questions clouding the future of the broadband contract.

Last week, legislative budget-writers were handed an ultimatum of sorts — demanding quick action on a $1.6 million budget request. John Goedde, the former Senate Education Committee chairman hired by Gov. Butch Otter to sort out the broadband contract mess, said the Legislature would need to approve the $1.6 million by Feb. 22, to allow ENA to pay CenturyLink more than $1 million it is owed on the project. On Jan. 23, CenturyLink sent ENA a letter demanding payment within 30 days — and threatening to cut office service if the bills aren’t paid.

Goedde also made another request: He said the Legislature would need to add “intent language” to the spending bill, authorizing the state to pay ENA. But such intent language could fly in the face of state law, which forbids an agency from making payments on an illegal contract.

The Legislature has taken no action on the funding request — or the request for authorization to pay ENA.

Regardless of what happens with CenturyLink’s demand for payment, the Idaho Education Network will run out of state funding at the end of the month. The 2014 Legislature provided funding to cover the network through February. Otter’s $1.6 million request is designed to keep the network online from March 1 through June 30, the end of the budget year.

Otter wants an additional $10.5 million to fund the network in 2015-16.

Even before Owen issued his final word on the contract lawsuit, the debate over the network’s future has intensified at the Statehouse.

On Tuesday, Goedde said the state was at risk of losing $245 million in federal funding — if the broadband system went dark and the state was unable to administer online standardized tests this spring. State Department of Education officials also said they had no choice but to deliver online tests, under the state’s waiver from the No Child Left Behind education law.

However, both of these assertions are in question. The state might be at risk of losing only about $620,000 in federal funding, and might be able to get a waiver to administer a paper-and-pencil standardized test, Melissa Davlin of Idaho Public Television reported Wednesday.

Otter has touted the broadband network as a key education breakthrough, providing new curriculum and course options in rural Idaho. Otter has also come under fire for the disputed contract, engineered by longtime confidante Mike Gwartney, former director of the state Department of Administration.

Otter’s office had no immediate comment on Wednesday’s ruling. Network spokeswoman Camille Wells said little about the ruling. “The governor’s office and the Department of Administration are currently reviewing the judgment and a decision about how to proceed will be forthcoming.”

The state’s hired attorneys, Merlyn Clark and Steven Schossberger, did not respond to an email seeking comment. The Administration Department hired outside attorneys to handle the lawsuit; as of this week, the department has paid out $627,989.84 in legal fees.

More reading: More about the ruling, and the implications for state agencies, from Betsy Russell of the Spokane Spokesman-Review.

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