The Mess we are in: eRate, IEN, ENA, USAC and the Idaho Taxpayer

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This week in JFAC we heard from Department of Administration Director Teresa Luna that we need $7 million to keep our schools connected to the internet. She is also asking for another $7 million for 2015. She is asking Idaho taxpayers to pay for something that previously has been paid by a telephone tax. She did her best to explain this situation, but honestly it wasn’t clear at the time to me how we got here, but I really wasn’t too surprised, since when I read a Supreme Court decision last spring I got concerned. It is a complicated story with many acronyms so let’s get started.

Last March Betsy wrote about an Idaho Supreme Court decision. This goes back to before I was even running for office, 2009 when players were vying for a state wide contract to get broadband to schools. The Court said the contract had been awarded incorrectly and should be set aside, “for further proceedings”. I wondered quite a bit about the concurring judges reference to the charges not filed, but I was mainly worried about what this meant to Idaho taxpayers.

How does payment for broadband to the schools work? If you get lost or confused, click on a link for further reading. Here come the acronyms. On your phone bill you will see a small tax. This is collected by the FCC and administered by USAC. Newspaper reporters, even Director Luna called this “federal money” but it actually isn’t, the initials make one think of Uncle Sam, but it is the Universal Services Administration Company. Schools and libraries can apply to USAC for E-Rate payments for approved services. The application is awarded based on the cost of broadband services and the percent of free and reduced lunch students in the district. In Idaho this can range from 50% to 95% eligible, but the state average is about 75%, a measure of our poverty. Schools can receive E-Rate money directly or have it sent to a service provider. Before the legislature made Idaho Education Network (IEN)  a law, many schools were getting the money and paying local service providers, but with IEN, the plan was to develop a statewide network and have the contractor receive the E-Rate payments directly; thus the contract in 2009 between Idaho Department of Administration, Qwest and ENASyringa bid on the contract but got pushed out, even though they had the lowest bid and were an Idaho company; thus the lawsuit that led to the March Supreme Court decision. ENA has been collecting the E-Rate dollars from USAC up until the payments were shut off in May of 2013, after the Idaho Supreme Court decision.

By the way, ENA was also awarded the multi-year wireless contract for grade schools this last summer by Superintendent Tom Luna (brother of Teresa Luna) over competing and lower bidding Idaho companies.

As best I can tell from 2009 to 2012 ENA has received about $7 million from USAC in E-Rate payments. So far this year they have not received about $7M, after the payments were held.  If the Supreme Court decision is upheld and the contract is invalid, I am afraid the state will need to reimburse all the E-Rate payments sent to ENA. I can respect USAC being prudent about payments since they are under scrutiny themselves.

I hope the citizens of Idaho can get some clarity on this mess. I am working on it.

About ddxdx

A Family physician, former county coroner and former Idaho State Senator
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One Response to The Mess we are in: eRate, IEN, ENA, USAC and the Idaho Taxpayer

  1. An Idaho School District Technology Director says:

    This is a very complicated issue. You have done a great job of capturing the service, the ERate program and the situation that we Idaho taxpayers find ourselves in!
    Is there nothing written into the contract with ENA that protects Idaho citizens should the ERate program be discontinued, altered, frozen, etc? If someone offered me a service and told me that I only had to pay a small percentage of the cost and that the rest of the cost would be picked up by some other program, you would hope that I would ask what happens if something goes wrong? I would hope that I would budget for 100% of the cost should Erate be delayed or denied OR either write it into the contract the the balance owed be covered by the company, covered by the party at fault, etc. I have experienced numerous delays and issues with Erate in the past, so have learned to be cautious and question gifts that look too good to be true.
    If Idaho must pay the bill for the current year plus prior years, should we not be questioning how to proceed for next year? Has anyone asked each district what their situation is should the state ENA contract be discontinued? Many districts, such as mine, will be fine without it. No discontinuation of Internet service whatsoever. I maintain my own 2nd connection to the Internet and apply for Erate reimbursment because I need the additional bandwidth and have found a local Idaho provider that is less expensive. Other Idaho Districts are the same.

    Distance learning and video conference systems will still work. Those who will try to convince you that the two must go hand in hand as one project either do not understand or do not want our state officials to understand. How can we connect a classroom using one of these systems for a virtual field trip to a location in Austrailia if being connected to the IEN was a requirement? Is Austrailia part of the IEN? No, of course not.

    ENA probably needs to remain the vendor for some remote districts for a time (or forever), but not for all. Wouldn’t it be less expensive to cancel the ENA contract for next year and help the districts that still need them file the proper Erate paperwork right now for July 1, 2014 before time runs out? The filing window will close soon! We could cancel the state-wide contract and save a lot of money next year. One size fits all isn’t the most cost effective way to go about it on this one.

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