Though it promotes lighting-fast internet service, the Massachusetts Technology Corp. is no speedster when it comes to paying a balance due.
After coming out the loser in an arbitration case, MassTech must pay $8,202,603 to two firms that for years have operated the publicly owned Mass Broadband 123 network at a loss. The agency disputed the math in the arbitration award and saw the total cut, first by $4 million (from its original $12.2 million) and then by another $200,718.
Both changes were related to computational errors in a case that produced 1 million pages of documents.
But interest charges have been accruing since Nov. 8 and MassTech has not paid, subjecting it — and ultimately, taxpayers — to late charges of more than $2,700 a day, according to an attorney for Axia NetMedia Inc., one of two firms still waiting to receive checks.
Given that the arbitrator has twice revised the award, MassTech could be waiting for the dust to settle, given that it has disputed the effective date of late fees. The agency declined to comment on its plans.
For the first month MassTech was in arrears on the settlement, the late fees came to $80,000, according to Axia's attorney, Brian P. Voke of the Boston law firm Campbell Campbell Edwards & Conroy.
Voke said his client has laid out a plan to MassTech to record the arbitrator's judgment in federal court and move toward collection.
But Voke said MassTech isn't playing ball. "[MassTech] has ignored Axia's efforts to submit a form of judgment and to collect on the judgment," he said in an email, in response to questions from The Eagle. "Meanwhile unnecessary legal fees and interest expense continues to pile up on the backs of the hard-working taxpayers of Massachusetts who in the end must foot the bills"
What it could buy
To put the daily late fees in perspective, consider that $2,700 is more than enough, according to the U.S. Bureau of Labor Statistics, to cover the average American's food costs for one year. (The bureau pegs the cost at $2,641.)
The daily late fee could buy 138 official New England Patriots knit caps from an online merch outlet. In this holiday season, the daily amount could put 785 "My Little Pony" toys bought on sale at Target under Christmas trees.
On the more practical side, the one-day late fees could pay the monthly rent at a listed one-bedroom apartment on Howland Avenue in Adams more than four times over, or fill three and a half 250-gallon heating oil tanks, based on current average fuel prices.
In the Berkshires town of Mount Washington, home to 158 people as of last year, MassTech's first month of late fees to Axia and KCST USA Inc. would be enough to give more than $500 to each resident.
MassTech's payment, when it comes, will help close years of litigation over operation of the state's 1,200-mile fiber-optic network.
The agency hired Axia in February 2011 to operate the system, then being built with $90 million in state and federal grants. But MassTech and its operator were soon arguing over the terms of the contract.
MassTech claimed in a U.S. District Court action that Axia owed it $30 million for failing to perform under its contract. But Axia countered that MassTech failed to turn over the network it advertised and that it was the wronged party, entitling it to compensation of $18 million.
Arbitrator Philip D. O'Neill sided with Axia. His original Oct. 2 decision held MassTech mainly responsible for problems with the contract, causing Axia to lose millions of dollars. His $8.2 million award to Axia and a related business, KCST USA, compensates those companies for their losses.
Axia will receive $4,199,986; KCST will receive $4,002,617. Plus late fees.
Larry Parnass can be reached at lparnass@berkshireeagle.com, at @larryparnass on Twitter and 413-496-6214.