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Published in Print: January 17, 2001, as Federal Scrutiny Stalls Troubled E-Rate Project in Georgia

Federal Scrutiny Stalls Troubled E-Rate Project in Georgia

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A troubled effort to create an online network to provide teleconferencing and digital videos to hundreds of public schools in Georgia may never get off the ground, despite its having received nearly $18 million in federal E-rate discounts and hundreds of thousands of dollars from school districts.

Federal money was cut off from the project last summer pending the findings of an audit by the accounting firm Arthur Anderson on behalf of the Universal Service Administrative Co., which runs the federal education-rate program.

And, to make matters worse, the Atlanta-based Metropolitan Regional Educational Services Agency, which conceived and runs the Georgia project, is the subject of a possible FBI investigation, according to A. Bernard Hatch, MRESA 's executive director.

MRESA, a regional service agency that serves 17 school districts, most of them in the Atlanta area, launched MRESAnet2000 in 1997 and received a $28.8 million commitment of federal money for the first year to pay for telecommunications services and equipment. At the time, the project was the largest E-rate project in Georgia and one of the largest in the nation. From the outset, MRESAnet2000 was plagued by organizational and procedural problems, a lack of support from many of the school systems that had initially agreed to participate, and several changes of the project's contractors. The current contractor is Heroes Inc., based in Vienna, Va. ("Huge E-Rate Project Runs Into Problems," May 12, 1999.)

Ambitious Plan

The project involved installing powerful computers, called servers, at each school. In the initial plan, 319 schools were supposed to receive servers in the first year, with several hundred more schools to be added in the second year of the project. Beyond that, the project planned to wire any classrooms in those schools that were not already wired for Internet access.

Using the new system, teachers were supposed to be able to search through a vast collection of online instructional videos and other educational materials that were stored at a central site. The teachers could then download the material to classroom computers.

Organizers said the system would also allow teachers or students in any classroom to hold video conferences with students and teachers from other participating schools. But none of this has happened.

In fact, all but five school systems backed out of the project because of doubts about its promised benefits or because they decided they couldn't afford to participate. Mr. Hatch said the current participants are the districts of Atlanta, Dekalb County, Decatur, Glynn County, and Savannah-Chatham County.

The 34,000-student Savannah-Chatham County school district has invested about $400,000 of its own money in the project, said Bennett Dixon, the district's director of networks and infrastructure. He said servers and wiring have been installed at 26 schools, with an additional 17 schools in line for the same treatment.

But the video- delivery and teleconferencing system still isn't working, he said, even though the contractor for the project had told him it would be up and running in December. The system originally was supposed to be operating by fall 1999.

Interviews by FBI

So far, MRESAnet2000 contractors and vendors have been paid $17.8 million in federal E-rate funds for equipment and installation work, according to USAC spokesman Mel Blackwell.

But funding has been cut off—including $6.9 million awarded for the second year of the project—pending the outcome of the audit. No money has been committed to MRESAnet2000 for the third year, Mr. Blackwell said.

The Federal Bureau of Investigation does not comment on possible investigations, according to Richard Kulko, a spokesman for the FBI's Atlanta office.

But both Mr. Hatch, the MRESA executive director, and Nancy A. Collins, a former coordinator of the project, who was employed by MRESA from October 1999 until last Sept. 22, said they have been interviewed by the FBI about the project. Ms. Collins also said she provided records to auditors visiting MRESA's Atlanta headquarters in August.

In a strange twist to the troubled project, its chief architect and director, MRESA technology associate Edward E. Kramer, was indicted in November on criminal charges of child molestation.

Mr. Kramer has pleaded not guilty to the charges, said James Altman, his Atlanta lawyer.

Mr. Hatch, who has hired Paul Sligh to replace Mr. Kramer as the director of the project, said he believes that MRESAnet2000 eventually will become operational, although he doesn't know when.

Vol. 20, Issue 18, Page 9

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