Goedde: Broadband network faces potential shutdown

(UPDATED, 5:24 p.m., with conclusion of working group meeting.)

In order to keep the Idaho Education Network online, the Legislature may need to cough up $1.6 million in 17 days.

That was the grim message from John Goedde, the former Senate Education Committee chairman hired by Gov. Butch Otter to sort out the high school broadband network contract crisis.

Goedde, JFAC, 2.5.15
John Goedde, foreground, Gov. Butch Otter’s aide on the Idaho Education Network, fielded some pointed questions from Sen. Dean Cameron and other budget-writers.

On Thursday morning, Goedde was back before the Legislature’s Joint Finance-Appropriations Committee — and in essence, he put budget-writers on the clock. If the state doesn’t pay the $1.6 million by Feb. 22, CenturyLink could pull the plug on a system that provides broadband and online learning to high schools across Idaho.

Here’s the problem, as outlined by Goedde:

The state has not paid its broadband contractor, Nashville, Tenn.-based Education Networks of America, since September. The state now owes ENA $3.7 million for providing broadband to schools. The state owes $540,000 to CenturyLink for providing broadband to state agencies — a separate component of the network contract.

The state froze its payments to ENA in November, when District Judge Patrick Owen tossed out the disputed $60 million contract. ENA manages the network, and is expected to pass along payments to CenturyLink for its work: maintaining the “backbone” of high-speed Internet in the schools.

But now, ENA is behind on its payments to CenturyLink. In a Jan. 23 letter, CenturyLink says ENA owes more than $1 million in past-due payments, leaving the broadband service “in jeopardy of being interrupted or disconnected.” CenturyLink demands payment within 30 days — or Feb. 22.

“Certainly they drew a line in the sand,” Goedde told reporters after the JFAC presentation. “It would certainly be within their right to pull the plug.”

In order to prevent this, Goedde said, the Legislature needs to pass a $1.6 million supplemental spending bill covering network costs from March 1 until June 30, the end of the budget year. The Legislature would also have to attach “intent language” that authorizes the state to pay ENA.

The $1.6 million request was no surprise. Lawmakers are aware that they have only provided funding for the network through February — and Otter announced the $1.6 million request on Jan. 12.

The intent language could actually open up some legal questions.

In essence, this intent language would authorize the state to pay contractors on a contract that has been voided in court. State law prohibits agencies from making payments on an illegal contract. And in November, the state put its payments to ENA on hold, because officials do not know if Owen’s ruling goes so far as to prohibit the payments.

Attorneys for the state have asked Owen to clarify his ruling.

Goedde and Administration Department Director Teresa Luna spent almost an hour presenting the broadband budget requests and fielding questions.

Many of the most pointed questions centered on another short-range fix: the Administration Department’s plan to award a one-year contract to maintain the contract.

‘Bridge contract’ explained — and criticized

Goedde walked budget-writers through the plan to award a broadband “bridge contract,” a plan first reported at Idaho Education News Wednesday.

The scope of the contract will be identical to the existing contract. “We are not asking for anything outside the box we’ve already got.”

That prompted a string of questions from budget-writers — who were clearly skeptical about following the framework of a contract that has been tossed out in court. At one stage, JFAC co-chair Sen. Dean Cameron, R-Rupert, asked whether the new contract would be as “tainted” as the current one.

State officials looked at several options, Goedde said, before settling on the bridge contract. He also said the state needs to move quickly. The state needs to work through the bidding process on a new contract by late March, in hopes of again collecting federally administered “e-Rate” dollars to offset the state’s costs.

But Goedde conceded there are unknowns about the bridge contract plan.

An unsuccessful bidder could challenge the contract — and Goedde conceded that the current contractors have “knowledge and ability” that might give them an inside track to secure a bridge contract.

There’s also no guarantee the new contract will qualify for e-Rate dollars. These phone bill surcharges once covered three-fourths of the network’s costs. But a federal contractor, the Universal Service Administrative Company, put Idaho’s e-Rate payments on hold in March 2013, citing concerns with the original network contract.

Otter launches broadband ‘working group’

Over speaker phone Thursday afternoon, Otter gave a committee of lawmakers and state and education officials a homework assignment: find a solution to the broadband crisis, this legislative session.

“I challenge you folks to get the job done,” said Otter, during the first meeting of a working group that will chart the network’s short- and long-term future.

But after a two-hour closed meeting, the group adjourned no closer to a solution.

The group, appointed by Otter and chaired by Goedde, met for the first time Thursday afternoon at the Statehouse. The committee quickly went into closed session. The group discussed potential litigation and the bidding process, two topics that are exempt under Idaho’s open meeting law.

Afterwards, Goedde said the group discussed the two topics that dominated JFAC’s discussion eight hours earlier: the short-term budget crunch and the one-year bridge contract. Some committee members suggested that the state may be better off dropping the idea of a bridge contract and focusing on its plans to award a long-term contract in 2016, Goedde said. But this would mean the state would have no chance of securing e-Rate dollars for 2015-16 — and force the state to find $6.7 million to make up the difference.

Before Goedde closed the meeting, Otter admonished the group to find a long-term funding solution for the network, even if it takes state general funds to wean the project from e-Rate dollars. He also urged the committee to look for ways to install more bandwidth in the schools, and look for ways to tap into the network to support state agencies and promote e-commerce.

Twenty-two people have been invited to join the group, including 11 legislators, two aides to State Superintendent Sherri Ybarra and Luna. (For a full list, here’s a link to the governor’s news release.)

Much more coverage: The broadband contract mess, explained. A look inside one Idaho Education Network classroom. And in-depth video segments from our broadcast partners, KIVI and KNIN-TV.

 

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