State’s broadband costs fall $5 million below projections

Lawmakers received $5 million worth of good news Tuesday morning. The state’s bill for school broadband could come in well below budget.

One reason for the savings: School districts have been able to tap into federally administered dollars that had been cut off during the Idaho Education Network broadband contract dispute.

All told, the state could wind up paying $1.3 million to keep high-speed Internet in its high schools through June 30, State Department of Education chief technology officer Chris Campbell said Tuesday. The 2015 Legislature had earmarked $6.3 million for broadband for 2015-16.

That means the state should be able to return a $5 million balance to Idaho’s general fund, Campbell told a legislative interim committee studying Idaho’s broadband issues.

What happened?

  • First off, nearly 60 school districts were able to secure more bandwidth for 2015-16, at a lower price. All told, broadband costs are projected at just under $2.5 million.
  • Second, school districts applied for, and will collect, more than $1.8 million in “e-Rate” funding. The e-Rate money comes from landline and cell phone surcharges, and once covered nearly three-fourths of the costs for the statewide Idaho Education Network system. But a Federal Communications Commission contractor cut off Idaho’s e-Rate funding during the extended legal battle over the $60 million Idaho Education Network contract. That required legislators to cough up millions of dollars to keep the network online.

Broadband costs could still creep up during the year, Campbell told lawmakers. Some districts will need to add bandwidth during the school year, leading to cost increases. But $1.3 million represents a worst-case scenario for 2015-16 broadband costs.

The latest news of cost savings was not unprecedented. Earlier this year — after Ada County District Judge Patrick Owen voided the Idaho Education Network contract — school districts were able to find short-term broadband contracts at significant savings. In February, the 2015 Legislature earmarked nearly $3.4 million to keep broadband systems online through the end of the school year; the State Department of Education returned nearly $1.4 million to the general fund.

Earlier Tuesday morning, the state’s lead contractor on the defunct Idaho Education Network contract said it has been able to slash broadband costs.

In this year’s open-market scramble for broadband business, Education Networks of America was able to secure contracts with 24 school districts. On average, these districts’ costs have fallen by 70 to 75 percent, ENA vice president and chief technology officer Michael McKerley told lawmakers.

McKerley bristled at the suggestion that ENA slashed its costs simply because it was thrust into a competitive bidding process. Instead, he said, the company was able to cut costs to districts because it was able to subcontract with 18 local Internet providers.

For much of his presentation, McKerley echoed many sentiments from Monday’s hearings, when a procession of Internet vendors offered a postmortem of the Idaho Education Network collapse, and suggestions about how to reboot school broadband service.

McKerley said the state needs to tap into the more than 80 companies now providing telecommunications and Internet across the state, since no one vendor can effectively serve the entire state.

And even in states where ENA is running a statewide broadband system — in states such as Indiana and Tennessee — the contract allows individual districts to opt in or opt out of the system. McKerley, like executives from other Internet vendors, advocated an opt-in approach.

“We do not think we should force the schools to do anything.” McKerley said. “We’re more than happy to compete on the open market.”

Formed in the aftermath of the Idaho Education Network collapse, the interim committee is supposed to draw up broadband recommendations for schools and state agencies. The committee is expected to meet again in November, to hash out recommendations to present to the 2016 Legislature.