Senators grill officials on broadband

Teresa Luna
Administration Department Director Teresa Luna

An attorney representing the state laid out a new worst-case scenario for Idaho’s beleaguered high school broadband program.

If a federal contractor throws out the Idaho Education Network contract, the feds could permanently cut off federally administered funding for the program, now and in the future.

“They have the ability to debar the state,” Merlyn Clark told the Senate Education Committee Monday, during a hearing on funding the Idaho Education Network.

Funding for the network may be the most contentious funding issue standing between legislators and adjourning the 2014 legislative session. Reluctant lawmakers are wrestling with a $7.3 million budget request to keep the broadband system afloat through June 30, 2015. The stakes for schools are higher: the future of a broadband and video conferencing network serving some 90,000 students statewide.

Gov. Butch Otter and his Department of Administration have described the $7.3 million as a bridge loan of sorts, to replace federally administered funds that have been on hold for a year. The Universal Service Administrative Company, a Federal Communications Commission contractor, has put the funding on hold while reviewing the Idaho Education Network contract. Signed by the state in 2009, the contract remains embroiled in a court battle — and this has prompted USAC to launch an independent review of the contract.

Clark, an attorney with the Boise law firm Hawley Troxell, has been appointed to defend the case in the Idaho Education Network lawsuit. Syringa Networks, a subcontractor on the project, has sued, saying it was improperly cut out of a share of the project.

The state Supreme Court has kept alive Syringa’s case against the state — and the court’s language, dismissed by Clark as “gratuitous,” suggested illegalities in the contract. This remark drew a rebuke from Sen. Russ Fulcher, a Meridian Republican and gubernatorial candidate, who said it was unfair to call a Supreme Court’s decision “gratuitous.”

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Meanwhile, the USAC review could determine long-term funding for the network — and the fate of the “e-rate” funding, collected from monthly phone bills, that covers about 75 percent of the Idaho project’s budget.

Since 2009, the state has received $13.3 million in e-rate dollars, Administration Department director Teresa Luna said Monday. And if USAC throws out the Idaho Education Network contract, USAC could demand the state return the $13.3 million.

If the existing contract is voided, the state could award a new contract and again seek e-rate money. But, as Clark told the committee Monday, USAC could turn down the state’s request for funding.

The Idaho Education Network contract has come under new scrutiny at the Statehouse. The Administration Department quietly extended its broadband contract with Education Networks of America in 2013 — a year ahead of schedule, and to the surprise of lawmakers who only recently learned of the decision.

Lawmakers have questioned whether the extension overstepped the department’s bounds.

But in a March 3 email to Senate Education Chairman John Goedde, deputy attorney general Brian Kane wrote that a “reasonable argument” can be made that the department had authority to renew the contract.

And the early renewal allowed the state to upgrade the system, at a savings of about $175,000 a month, network technology director Brady Kraft told the committee.

Senate Education took no action and made no recommendations Monday. Ultimately, the next move on the issue belongs to the budget-writing Joint Finance-Appropriations Committee, which has balked at Otter’s $7.3 million request.

The question, said Goedde, is not whether the state will continue a high school broadband program. “It’s just how we do it.”