AP: Idaho Governor Knew About Losing Federal Funds on Broadband


At the tail end of last year, CivSource reported on a troubling contracting relationship surrounding broadband expansion in Idaho. At the time, a judge voided the contract to fund an educational broadband network in Idaho saying the contract was awarded illegally. Since then, state lawmakers have been in a handful of sessions focused on what to do to keep the network afloat and maintain federal funding. Ultimately, those efforts failed. (The legislature will take up the network again in the next session.) Now, according to a letter obtained by the Associated Press, Governor Otter knew that federal funding was gone well before he alerted lawmakers.

In November of last year, the $60 million contract was at the center of a contractor challenge led by Syringa Networks, following a whistleblower complaint about how the broadband contract was awarded.

The original contract was awarded to both CenturyLink, its partner Verizon, and ENA and its partner Syringa. According to the complaint, CenturyLink and Verizon amended the contract to cut Syringa out of the deal which prompted the lawsuit. The company cited unfair process and the judge agreed, voiding the network. The problem was the decision came down in the middle of the school year, and some schools were already connected. Lawmakers spent the next several months trying to find funding options and ultimately, the network dissolved leaving connected schools to figure out their own funding with some help from the state.

CenturyLink was also pushing the state for backpay on the work already completed.

Failure to get the network on track also meant that the federal government stopped providing funding contingent on developing a network. Late yesterday, news broke from the Associated Press that in a letter, Otter knew federal funding was off the table earlier than he let on. From the AP:

According to a letter obtained by The Associated Press, Otter wrote to one of the program’s contractors on Nov. 4, 2013, that federal funding — known as “e-rate” dollars, which come from monthly fees on landline and cellphone bills — had stopped because of a recent whistleblower complaint regarding the state’s $60 million broadband contract. However, state lawmakers weren’t informed until near or after the start of the 2014 legislative session in January.

“As you know a recent ‘whistleblower’ complaint was filed with the (Federal Communications Commission) concerning the use of E-Rate funds,” Otter wrote to Education Networks of America. “The result is a disruption in federal funds that satisfy the state’s obligations related to the network during the course of the review.

Former Department of Administration Director Teresa Luna eventually resigned after she became aware of the situation and told officials, facing stark criticism that she didn’t let them know sooner. Otter’s letter to contractors was aimed at reassuring Education Networks of America which was the administrator on the account that there were enough state funds to make up the gap.

The Department of Justice is also investigating the contracting process. At the time of the original court ruling, an article in the Spokesman-Review noted that a few of the players involved were campaign contributors. ENA had donated over $18,000 to Governor Otter since 2006, and CenturyLink has given $35,000. CenturyLink’s donations came through its political action committee – CenturyLink Idaho PAC. Syringa donated $10,000 to Otter opponents in the last two elections.


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