Public or Private?

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Iowans speak proudly of the state-spanning communications network that their legislature has built for them since 1991, even if some of them have grumbled along the way about the $200 million in tax dollars it has cost.

The fiber-optic network, which can transmit television-quality video signals between specially equipped facilities scattered across the state, has given farmers a way to discuss the factory-style hog farms that have been moving into Iowa; deaf students a way to speak in sign language across the miles; and rural high schoolers a chance to take languages and advanced courses their own schools don't offer.

Other states have added similar technology to their communications networks the old-fashioned way: by waiting for private industry to do it. But that's left many communities--especially in large, thinly populated areas--on hold, because telecommunications companies have tended to concentrate first on bringing new services to areas that are most lucrative.

When the Iowa Communications Network is completed this spring, it will connect every school district in Iowa, as well as state government agencies, regional education agencies, community colleges, universities, and libraries.

But the debate over whether the state should even be in the telecommunications business has never quite gone away.

SOURCE: Iowa Public Television

In addition to connecting schools, the network is available to businesses and residents for training sessions and meetings. The telephone industry has long complained that private companies cannot compete with the state's heavily subsidized prices.

"The basic price they have today [for videoconferencing services]--about $10 an hour for full-motion video--that's a hell of a price. In the private sector, there's no way we could put it out for the same thing," says J. Kent Jerome, the executive vice president of the Iowa Telecommunications Association in West Des Moines.

The telephone industry's concerns were revived last month by the release of a study on the state's ownership and management options, which include selling the ICN, "outsourcing" its management, or remaining as its owner and manager.

Ultrapro International Inc., a New Jersey consulting firm hired by the Iowa legislature to do the study, pointed out that competition is an important incentive for keeping technology current. As directed by the legislature, however, Ultrapro did not recommend what action the state should take.

Local school officials fear that privatization inevitably would push up the fees they must pay to use the network.

The legislature seems satisfied with not resolving those questions, for now, until the system's construction is complete.

The state hasn't done a bad job of running the ICN, according to Frank B. Withrow, who was the director of educational technology at the U.S. office and department of Education from 1966 to 1982. He helped design the federal Star Schools program, which has given grants to support innovations in distance learning throughout the country.

"Generally, I don't believe the government should get into the telecommunications business," says Withrow, who is now a senior consultant to NASA's Classroom of the Future in Wheeling, W.Va. But so far, he says, Iowa has avoided the pitfall that governments often fall into: failing to update systems when the technology advances.

Jerome says the telephone association has taken no position on whether the ICN should be privatized. He supports the use of the ICN for educational purposes, including K-12 schools and the state's community colleges and four-year colleges and universities.

But he's concerned that the list of users may continually be expanded, taking potential business away from private industry.

Iowa schools that become active users of the ICN are increasingly giving businesses and residents time in their interactive-video labs at a very modest fee. If that trend continues, Jerome argues, it will threaten the revenue streams that the telecommunications companies need to invest in greater efficiency and new technology.

It is widely acknowledged that the state network itself is due for a major upgrade, a step the ICN will soon begin planning for, according to Tammy Fuginaka, the network's director of legislative affairs.

The fiber-optic lines are still first-class, but new devices are needed to use their capacity more flexibly. Administrators want to make it easier for users to put full-motion video into the interactive rooms on one occasion and to send "compressed" digital video to computer desktops throughout a school on another. A whole range of blends of video and software applications is now possible if flexibility is added to the system, Fuginaka says.

The $23 million upgrade, which would have to be approved by the legislature, would entail a fundamental architectural change. Currently, the ICN connections are organized like a wagon wheel, with spokes leading outward from the center hub in Johnson City, near Des Moines. Setting up the connections as a ring would be more efficient.

Vol. 18, Issue 22, Page 31

Published in Print: February 10, 1999, as Public or Private?
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