Tied in knots

August 05, 1993

Telecommunications expert Francis J. Knott may have unwittingly tied himself in knots. In attempting to cut a good deal for his longtime friend Gov. William Donald Schaefer on a far-sighted fiber-optics network connecting Maryland schools, Mr. Knott may have created a conflict of interest that makes the whole proposal look suspicious.

Mr. Knott chairs the governor's new Information Technology Board, which negotiated an agreement with C&P Telephone Co. to build the $30 million fiber-optics system. Yet Mr. Knott is also a paid consultant for a huge equipment supplier that could well benefit from such a project. A spokesman for one of C&P's rivals went so far as to describe Mr. Knott's role as "improper and inappropriate. . . .the potential for conflict exists."

Cable companies are especially upset over the Knott panel's deal with C&P. Mr. Knott became the state's chief negotiator in working out details with C&P over a fiber-optics network. No other telecommunications company was asked to participate. The appearance is one of a closed-door deal.

If that's the case, C&P could gain a tremendous advantage over some of its competitors. A statewide fiber-optics network linking schools via a vast array of telecommunications devices would give C&P the infrastructure to start signing up business customers to tap into the same statewide fiber-optics line. No other company would have that edge.

None of this would have happened if Mr. Knott's board had adopted the state's standard procedure for handling contracts: seeking competitive bids. Instead, Mr. Knott now is in the uncomfortable position of defending his own honor while also defending the C&P deal. That, too, can't help but give the appearance of a conflict.

Mr. Knott's lawyer says the board chairman is "100 percent focused on the best interests of the state." That is a commendable attitude. Maryland can use someone with a vast understanding of the complex and fast-changing telecommunications industry. But by negotiating with only one company, could Mr. Knott have lost a key advantage? Wouldn't the state be in a better position if it threw open this contract to all comers, even cable companies? The board might well discover that other firms are anxious to match or even better C&P's generous offer.

Mr. Knott can insulate himself from future criticism if this contract is awarded on the basis of competitive bids. The board should take care to craft bid specifications that are fair to all parties, not just C&P, and that encourage even broader and cheaper state-of-the-art telecommunications for Maryland schools. Maryland and Mr. Knott could both wind up winners.

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