One-vendor broadband contract represents sweetheart deal

By Steve Wilson | Mississippi Watchdog

Sweetheart deals don’t get any better than this.

A 10-year contract with no competition gets a two-year extension, even before the contract expires.

Mississippi’s broadband contract with AT&T is structured in such a fashion. The worst of it is state and federal taxpayers could be paying more for state government’s broadband contract than need be.

Mississippi’s State Master Contract with provider AT&T began in 2005 and was scheduled to end in 2016. Last year, it got a two-year renewal that ends in 2018. No competitive bids were allowed.

Marvin Adams, technology coordinator for the Columbia School District, joined several other school district technology coordinators around the state to file comments with the Federal Communications Commission on the state’s master contract in regard to the E-Rate program.

“The SMC is not competitive in the spirit of the whole E-Rate program,” Adams said about the state contract. “It is an all-inclusive telecom contract. If they would break out various components, they could easily have multi-vendor participation in at least some of it.”

A decade ago, Adams said, AT&T was the only vendor that could meet all of the requirements for the state. Now, he said, plenty of competitors exist, and they should get a shot at satisfying all or part of this lucrative contract.

Adams has helped 15 other school districts launch competitive bidding processes, rather than relying on the state contract, to meet their broadband needs. They’ve seen firsthand that competition can lower prices.

This master contract is a lucrative one. The only state government groups exempt from using the contract’s broadband provider are K-12 education and libraries. About 30 percent of school districts have competitively bid broadband contracts and often pay less for service than through the master contract.

Schools and libraries in the state have their broadband costs subsidized by the E-Rate program, which provides discounted telecommunications, Internet access and internal connections and is funded by the Universal Service Fund. The school systems and libraries have the option of receiving broadband service through the State Master Contract or securing their service through a state-mandated bidding process.

Roger Graves, director of Telecommunications Services for the Mississippi Department of Information Technology Services in charge of the state government’s broadband, did not respond to repeated requests for comment.

Complicating matters is the status of the master contract. Adams said the contract has been closed by a court order in Hinds County. It is open to inspection only by government customers of ITS, a fact confirmed by state E-Rate coordinator Gary Rawson in a response to the FCC, which disputed the comments of the technology coordinators

Rawson said in his response that districts benefited from the advantage of the state purchasing broadband service in bulk, it was available even in the most rural of school districts and the only procurement process to be audited for those using the contract provider was the state’s. He also said the master contract prices had dropped every two years.

A bill that would’ve compelled school districts to launch competitive bidding programs for broadband, Senate Bill 2741, died in committee in the 2014 legislative session, which ended in April.

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