Microsoft settlement gives local schools windfall

ADDISON COUNTY/BRANDON — Eleven area schools have been tapped to receive about $450,000 to pay for computer hardware and software as the result of the settlement of a consumer fraud suit against Microsoft Corp.
Superintendents in all four of the local supervisory unions this week received letters from the Vermont Department of Education telling them that some of their schools would be among the 135 Vermont schools that will share in $4.7 million Microsoft agreed to pay in order to settle a 2001 court case. The payouts will come in the form of vouchers that could be used to purchase certain computer software and hardware products, and related services, which need not be from Microsoft.
“It’s like manna from heaven,” said William Mathis, superintendent of the Rutland Northeast Supervisory Union.
Three Rutland Northeast schools will get vouchers: Whiting and Neshobe elementary schools and Otter Valley Union High School.
Other area schools that will receive vouchers include Bristol Elementary, Mount Abraham Union High School, Bridport Central, Middlebury Union High School, Vergennes Union Elementary, Vergennes Union High School and the Granville/Hancock Village School.
Since 2001, Microsoft has settled cases in Vermont and 16 other states that allege the software giant illegally attempted to leverage its near monopoly in PC operating systems to harm competition.
According to a template used in all 17 states, the money Microsoft agreed to pay was targeted for schools that served low-income students. In their negotiations on the specific Vermont terms, the state attorney general’s office and Microsoft determined that schools where at least 40 percent of their student population receive free and reduced lunches would qualify. In addition, if those schools are elementary schools, then the high schools that serve those elementary schools would also receive a portion of the settlement, explained Bill Romond, Educational Technology Coordinator for the Vermont Department of Education.
“It did not create a bigger pot of money, but it spread it around more,” Romond said.
What the money can be put toward is very specific. Bill Owens, education technology coordinator the Addison Northwest Supervisory Union, understood that half of the money each school got could be spent on hardware and half was for software. That was a strange split, he said, because most schools spend a lot more money on computer hardware than on software.
“Thirty-five-thousand dollars for software (at VUHS)? I don’t think we’ve spent that much in the last 10 years,” he said. “The general purchase of hardware, we’ll (spend) that amount by the end of this school year by getting reimbursed for purchases in past years.”
Owens also noted that his school district doesn’t spend much money on curriculum software, which apparently the school could put the Microsoft money toward. Addison Northwest does buy software for school administration and network management, but it is unclear whether the new money could be put toward that.
If the terms of the settlement do only allow reimbursement for curriculum software, the school board and administration will need to make long-term plans about how such software would fit into the education plan since starting down the road with a new teaching tool like that would require a long-term commitment, Owens pointed out.
The schools will also have to keep up with staff education so teachers and administrators can manage whatever new technology arrives at the school, said Evelyn Howard, superintendent of the Addison Northeast Supervisory Union.
“The staff’s ability to manage new equipment is always a challenge,” said Howard.
Schools and school boards also need to decide how much of the windfall will be used to reduce the local tax burden and how much will be used to catch up to previously identified computer needs that haven’t been met for lack of funds, Howard noted.
“The biggest problem we face is replacement of equipment,” Howard said. “It doesn’t take long for equipment to become obsolete.”
Mathis agreed that the money could help catch up with computer replacement.
“We put things (computer hardware) on a five-year upgrade cycle,” said Mathis. “We’d like to keep up with that, but the cost is just prohibitive.”
The schools won’t get a lump sum payment, Romond explained. Instead, the school will submit receipts for purchases to the Vermont Department of Education, which will decide if they meet the terms of the settlement and align with the school’s technology plan. If they do, the department will send the school a voucher, which the school in turn will submit to a national administrator for the settlement, who will reimburse the school.
The settlement is retroactive so that schools may submit receipts for qualifying computer purchases back to May 27, 2004.
The pool of money being set aside for Vermont schools was originally earmarked for Vermont consumers who bought Microsoft software between 1995 and 2002, Romond said. The 2004 court ruling created a fund of about $9.7 million in technology vouchers for consumers who could show they had purchased Microsoft products. Only about 3 percent of Vermonters claimed their vouchers (Romond said that rate was higher than in most states). Half of the left over money went back to Microsoft and half — $4.7 million — was earmarked for schools.
“I know I overlooked it when I got mine in the mail,” Romond said. “It was only about $6 or $8 and it had to be spent toward Microsoft products. Besides, I knew it would be going to the schools.”
Like consumers, Vermont schools face a time limit for spending the Microsoft money. Vouchers may only be submitted through the middle of 2009. Anything leftover in the fund will revert to the Redmond, Wash., software maker.
Area school officials, though, said it was unlikely that their piece of the pie will go unspent.
“It’s hard to believe we won’t use it,” Howard said.

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