Comparison of State Financing of Telecommunications and Networking Projects

The states that are deploying or upgrading telecommunications and computing networks have passed legislation supporting the investment in such networks. "The sources of educational telecommunications funding can be divided into about five general categories: foundations, technology companies, federal grants, state grants, and school district or college general revenue funds" (Hezel, 1994). States such as Georgia and Michigan have even earmarked massive windfalls of recaptured funds from telecommunications providers who overcharged consumers.

Information was collected on those states that appear to be the front runners in telecommunications developments. Table 7 provides a simple summary of the state funding initiatives. The bullet items list additional information on investments that states are making in information technology.

Table 7: Matrix of State Financing of Telecommunications and Networking Projects

Georgia has developed a massive fund pool to support telecommunications and networking projects. The Georgia Public Service Commission recaptured over-earnings from telephone companies that has resulted in $50 million that has been earmarked for interactive audio and video networks that focus on distance learning and telemedicine applications. Additionally, the Georgia legislature mandated that K-12, adult and technical education, and higher education receive a fraction of state lottery revenues (approximately $15 million per year) to enhance technological resources and equipment. Higher education uses about 20 percent of its funds to support and enhance PeachNet, an Ethernet data network based on the Internet protocol that connects the public colleges and universities. A portion of the Public Service Commission over-earning funds have been used to establish an Office of Information Technology that has worked to coordinate projects, establish and maintain networking and equipment standards, and set policy regarding distance learning and other activities. The office personnel report to the Vice Chancellor for Information Technology in the Georgia public system of higher education.
Iowa has created a $100 million state-financed and state-run fiber optic (DS- 3) audio/video network for distance education, telemedicine, government information/services, and other voice, video and data transmissions. All financing has been done through state bonds that have been issued between 1989 and 1994. Currently 126 sites are connected to the Iowa Communications Network (ICN) including schools, public and private colleges and universities, libraries, a few state agencies, Iowa public television, and the Iowa national guard. Within five years the ICN will be expanded to 543 sites including Federal agencies, the state judicial system, the state corrections system, additional schools, hospitals/clinics, and state agencies.
In 1989, the Maine legislature initiated the Maine Education Network to provide courses that are designed for 2-year associate s degrees. Initially the state legislature provided $3 million for equipment and $5 million per year for operating costs. In addition, approximately $6 million in private and federal grant funds have been secured to support Maine's Education Network. During 1995, the Maine legislature will be presented with an initiative to expand the network to education facilities (private colleges, technical schools, and every high school in the state). That bond initiative will be for an amount between $14 million and $90 million depending on whether the network is entirely public (like Iowa's ICN) or completely leased lines and equipment. The current network is a DS-3 video network that connects the seven state institutions of higher education. In addition, there are T1 lines that handle data traffic. From the colleges and universities, Instructional Television Fixed Service (ITFS) one-way audio and video is provided to regional high schools. Currently 105 high school sites are functioning and 170 courses are offered that include entire associate s and master s degree programs. Furthermore, the University of Maine is trying to secure a $10 million bond to create a new, completely electronic campus that will offer bachelor s and master s degree programs.
Bell Atlantic and the state of Maryland are deploying a $30 million statewide Asynchronous Transfer Mode (ATM) network. Maryland's ATM network has a super high-speed backbone, OC-48 SONET optical fiber. The network is designed to transmit data and full-motion video and audio for distance learning applications. At present, about 270 secondary schools, community colleges and universities are connected to the Maryland network. Within five years Maryland expects to have 1,800 sites connected to the network. Bell Atlantic is donating $50,000 per site of ATM networking equipment to 270 sites. There is a monthly tariff of $1,365 per connection (which is scheduled to increase to $2,730 in 1997). In addition, a special appropriation of $1.5 million has been made for schools to build distance learning curriculum and applications.
The state legislature in Michigan appropriated $10 million for information technology. Funds have been used to establish the Michigan Information Technology Network (MITN), a satellite education distance learning network that offers courses for teachers, colleges, universities, businesses and government offices. Additionally, MICHNET, a publicly supported statewide data network, connects nine of Michigan's four-year public universities. The Michigan Public Service Commission recently recaptured excess earnings from GTE and Michigan Bell. The funds, $24 million, have been earmarked for networking and telecommunications projects in K-12 schools and higher education.
Missouri has imposed a tax on video tape rentals that yields more than $3 million per year for elementary and secondary distance education projects. In addition, the Missouri legislature established an annual technology fund for K-12 schools. The technology fund will receive between $3 million and $5 million per year.
North Carolina was the first state to create a statewide telecommunications network that uses Asynchronous Transfer Mode (ATM) technology. North Carolina's ATM network provides users with significantly greater bandwidth for a plethora of voice, video and data applications including distance learning, telemedicine, video court arraignments, medical imaging, remote diagnostics, digital libraries and remote super computer connectivity. The North Carolina Information Highway (NCIH) is owned by a consortium of telecommunications companies including GTE, Southern Bell, Carolina Telephone, Access On, and 25 independent telephone companies. AT&T is providing the ATM super high-speed backbone, SONET optical fiber (OC- 48). The NCIH is valued at $160 million (that investment has been made by the telecommunications companies) and the state is providing $20 million per year for the Microelectronics Center of North Carolina, a quasi public/private firm, to manage the deployment, upgrades and maintenance of the NCIH. The 1994 North Carolina General Assembly approved an additional $7 million for grants for organizations to pay for ATM equipment to connect to the NCIH. All public and private four-year colleges are connected to the network and many state agencies, courtrooms, prisons, hospitals and about 100 elementary and secondary schools are connected. Eventually the ATM network will link 3,400 sites throughout North Carolina. Sites typically pay $75,000 for the necessary ATM equipment and pay an initial tariff of $4,000 and $50 per hour of connect time.
The North Dakota legislature appropriated $3 million in 1993 to partially support a statewide Interactive Video Network (IVN). The balance of funds (approximately $6 million) come from federal grants. The North Dakota legislature is expected to appropriate about $2 million per biennium to support the IVN. Additionally, millions of dollars in general revenues for the North Dakota university system have been redirected to the IVN project. Currently, 15 organizations are connected to the North Dakota IVN, including 11 public colleges/universities, hospitals, the state capitol, and two high schools. The IVN is a two-way interactive compressed video network that is designed to provide courses, workshops, and conferences to students and faculty throughout North Dakota. All sites are connected via T1 lines. The network offers 12 complete college degree programs and 65 interactive college level courses in 21 subjects (roughly 80 percent of the courses are in nursing, health related fields, business, and education).
The Oregon legislature appropriated $8 million in 1981 for three networking projects. Additionally, wireless communications and cable providers have provided considerable support and in-kind contributions to the networking projects. EdNet is composed of two separate audio/video networks. One serves elementary and secondary schools and the second is a higher education distance learning network that offers more than 100 college courses and staff development programs. A third network is a data network that connects the public institutions of higher education together and to the Internet. The data network is becoming increasingly important and is beginning to offer distance learning and tutoring programs through the WWW with software such as Mosaic. Within the next few years public colleges and universities will ask the legislature for additional funds to expand and improve the networks. Additionally, in 1994 the Oregon Board of Higher Education has allocated $500,000 for higher education technology demonstration projects.
In 1994, the Utah legislature passed an initiative called Technology 2000, that provides $28 million for a wide area network "with capacity for interactive, full-motion video, audio, graphics and data." The primary beneficiary of the initiative is UtahNet, a communications network that uses a closed-circuit television (microwave) system, Instructional Television Fixed Service (ITFS) and satellites to provide public institutions of higher education and K-12 schools with an audio/video network. The microwave system provides interactive audio and video for courses. The satellite system allows Utah to receive satellite programming that can then be distributed throughout the state via UtahNet, ITFS or through public television stations. The Utah higher education system will receive $9.05 million of the total funds allocated for the initiative. Much of the higher education funding will be spent for faculty assistance and development, course development, technology enhancements for classrooms, improvements in library connections and databases. A portion will be used to develop complete electronic degree programs that will offer courses on demand via CD-ROMs. Roughly $4 million of the $28 million will be used to enhance the data networks and Internet capabilities at the Utah public colleges and universities.

Many other states have recognized that telecommunications and computer networks are one of the most important elements to education in the 1990's. Rhode Island has not made any special investments in initiatives to improve telecommunications and computer networks in education. Funding and work that is going into the support of RINet and Ocean State Free Net (OSFN) is largely due to gratis and in-kind efforts, as well as grant funding from organizations other than state government. Technology funding at URI, RIC and CCRI, is primarily from general institutional funds, grants secured by faculty members, and student technology fees. As the number of states making significant investments in technology and statewide networks grows, Rhode Island will continue to fall further behind and will have even greater difficulty catching up. Our public colleges and universities may not be able to attract and retain first-rate faculty who have not only come to expect high quality computing and communications facilities, but require such facilities in order to function as teachers and researchers. Further, it would not be unreasonable to expect that neglecting to invest in new technology will have an adverse and compounding effect on enrollments. It is becoming clear that many high school graduates (prospective college students) and their parents expect universities and colleges to have a technology base that offers high-powered workstations/microcomputers that are widely accessible throughout campuses and from dormitory rooms. Additionally, remote access (typically from home) via high-speed communications links and modems to institution networks and global networks is becoming an ingredient essential to the higher education experience.

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