CenturyLink and Education Networks of America are suing the state of Idaho for $37 million over claims that it broke the terms of their broadband agreement, one that includes expanding their fiber network to support a state broadband project for local schools.
This suit follows a decision made by Idaho Attorney General Lawrence Wasden demanding the two companies repay the millions of dollars that the state had paid them for services.
The pair said they want to be paid for the work they did. Additionally, the two companies said they want to be compensated for the investment they made to meet the future terms of the contract, including the extension of fiber facilities to hard to reach rural areas.
In its lawsuit, CenturyLink officials said that state officials -- including Idaho Gov. C.L. "Butch" Otter and other legislative leaders -- told them that Idaho should pay for the network services the telco provided to them.
A spokeswoman for Wasden would not provide the Salt Lake Tribune comment on the lawsuits, adding that state officials are looking at them.
Although state lawmakers proposed an $8 million settlement, Idaho will have to pay out a larger amount of money for the troubled state broadband plan. The project, which was launched in 2008, aimed to provide one broadband network for all schools across the state. To date, Idaho taxpayers have paid over $29 million for the project.
Previously, a judge ruled that Idaho officials violated state law when they changed one of the contractors in the winning bid for another company a month after the broadband contract was awarded.
This network build has seen trouble since the start. Syringa Networks, the original contractor for the statewide network, sued the state in 2009. At that time, Syringa alleged that then-Administration Director Mike Gwartney prevented them from getting $60 million in business when he awarded the contract to CenturyLink and partner Education Networks.
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