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Otter: $3.4 million broadband settlement reached

Posted March 9

— Idaho Gov. C.L. "Butch" Otter and top legislative leaders announced Thursday they had reached a $3.4 million settlement with the vendors involved in a lengthy lawsuit over a failed public school broadband program.

"If you had asked me three months ago, I would not have been hopeful," said Senate President Pro Tem Brent Hill. "I am pleased to have this behind us."

Last year, the Idaho Supreme Court agreed that a $60 million state broadband contract was illegal. The ruling resulted in a flurry of lawsuits from the vendors— and then from the state — arguing over who owed each other money.

Legislative and state leaders have attempted to agree on a settlement for the past year, but even as early as January, hopes of a resolution remained slim.

That changed when Otter's office announced a settlement had been reached Thursday after spending nearly the entire day before in mediation with representatives from the vendors, attorneys and lawmakers hammering out details of the agreement.

A key aspect of the settlement means the vendors, Education Networks of America Inc. and CenturyLink Communications LLC, have agreed to drop their federal lawsuits. The vendors had argued the state owed them millions of dollars in back payments and damages because the state stopped paying them when the contract was deemed void.

"This is welcome progress toward clearing the way for us to continue providing the best possible educational experience to every public school in Idaho," Otter said in a prepared statement. "I'm hopeful that this will help clear the way toward continuing expanded utilization of technology for improving student outcomes and the range of learning opportunities provided by our schools."

A consortium of telephone companies called Syringa Networks sued the state over the broadband contract in 2009, contending the Idaho Department of Administration illegally handled the contract to install the broadband infrastructure in public schools.

The goal of the program was to contract with vendors to provide urban and rural schools with high speed internet and help facilitate students who take classes with video teleconferencing equipment.

A district judge ruled in February 2015 that the broadband contract was illegal and violated the state's procurement laws. Idaho then lost its appeal to the state's highest court. After the contract was voided, schools were left on their own to develop their individual contracts with vendors to maintain services.

Thursday's settlement also means that the separate lawsuit filed by Attorney General Lawrence Wasden will be dropped. Wasden had filed his suit because the Idaho Supreme Court said the state's legal chief or other officials were required to recover millions of dollars from the companies.

As per the settlement, the state won't be paying the vendors back for unpaid services under the voided contract. Instead, the vendors will receive money owed to them by Idaho school districts that had individual contracts with the same vendors but also stopped paying when the broadband contract came under legal scrutiny.

"One of my main objectives throughout this process has been to protect Idaho school districts. I appreciate that all parties were able to come together to develop a resolution that satisfies these concerns and allows the state to move forward," Wasden said.

The settlement funds will come out of a little-known account called the Legislative Legal Defense Fund, which was first created in 2012. Legislative leaders put $8 million the fund last year in anticipation of a possible broadband settlement.

Only the House speaker and Senate president pro tem can approve spending from the fund. So far, it has been used to pay for outside legal advice instead of relying on the attorney general's office. It has never been used for settlements or court fees.

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