- Associated Press - Wednesday, September 6, 2017

BOISE, Idaho (AP) - Idaho has repaid the Federal Communications Commission $3.5 million to cover federal funds that went to the botched statewide school broadband contract.

State leaders made the payment Tuesday as part of a settlement with the federal agency over claims that the state misused more than $14 million in federal money by putting it toward the illegally awarded contract.

The payment is expected to bring the long-running school broadband scandal to an end.

“I appreciate the willingness of all parties involved to work toward a resolution of these issues so that we can move forward with a clean slate,” Idaho Gov. C.L. “Butch” Otter said in a prepared statement on Wednesday.

Otter, legislative leaders and attorneys for school districts across the state have been negotiating with the FCC for about a year to reach the $3.5 million number. Senate President Pro Tem Brent Hill said the agreement is “in the best interest of everyone involved.”

Lawmakers approved the program to bring broadband internet access to all of Idaho’s schools nearly a decade ago. At the time, they believed the $60 million program would be mostly covered by money from the FCC.

But the project was beset with problems from the start. The state was sued by a company contending that the broadband contract was illegally awarded to more expensive bidders, and the courts eventually agreed.

While the lawsuit winded through the courts, Idaho Department of Administration officials quietly extended the length of the contested contract through 2019, leaving some legislative budget writers incensed. When the FCC heard of the lawsuit, it began withholding the federal funds that were originally expected to cover most of the costs. Otter knew the funds were being withheld, but apparently declined to notify the Legislature of the problem for several months.

The U.S. Department of Justice also began investigating the program’s contracting process.

As the statewide broadband program fell apart, school districts scrambled to arrange their own local internet service. Many were able to arrange for broadband at prices far cheaper than what the state was paying.

All in all, Idaho taxpayers had to pay for a statewide system that went largely unused at a cost of upward of $30 million, plus cover the costs of school districts’ replacement systems, and then pay more than $2 million in attorney fees and other court costs connected to the 7-year-long lawsuit over the illegal contract. About $3.5 million in taxpayer money also went to pay off the vendors on the contested contract, plus Tuesday’s payment of $3.5 million to the FCC.

The final tally for the project and the legal fallout is likely in the $40 million range.

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