pay for development of new Web services. But with the hybrid model, the state will pay for the infrastructure to be built, after which agencies will pay for interactive applications they want NIC to build out of their own budgets. It will be up to the agencies to decide how they pay for applications, said George Floyd, Oklahomas director of telecommunications.

Hybrid funding makes sense for state governments, Neff said, because its often better to spend money thats been allocated for IT purposes instead of having that money sit and possibly be reallocated before its spent.

"We have seen other governments, especially local governments, moving toward this hybrid-funding approach where there is a subsidy in order to get the infrastructure up and running, and then it will revert over to a self-funding or a transaction-based model," Neff said. "I think we will see more states and municipalities moving in the direction of hybrid funding."

"We felt that this was the way to go," Floyd said. "We think well grow business this way."

Battles Loom Over Cell Phone Fees

NEW YORK -- In what could be a harbinger of future 911 battles, five Democrats in New Yorks Assembly introduced a bill that would force the state to fork over substantial amounts of money to the city raised through a surcharge on every cell phone user in the state.

The surcharge helps support the state polices handling of emergency 911 calls.

Thirty-one counties and New York City run their own 911 response systems in the state, and the largest is New York City, said Stephen Sigmund, spokesman of the New York City Public Advocates Office. Under the bill, the state would have to refund 90 percent of the money that cell-phone-toting city residents pay in surcharges each year. The total dollars paid each year have increased yearly by approximately 30 percent since the state began collecting the surcharges, Sigmund said.

"Last year, the [states] total tax take was $43 million, half of which came from New York City cell-phone users," he said. "The original law, which went into effect in 1991, anticipated a return of about $2 million per year. Obviously, that was well before anybody could see the growth of cell phones. Now you have this substantial tax -- half of which is paid by city cell-phone users -- and theyre not getting any benefit out of it."

If the bill is passed in a form similar to its current version, New York City would get about $20 million back from the state.

Internet for All?

BRUSSELS, Belgium -- The European Union (EU) may extend universal service to include Internet access.

At a meeting of the EUs Telecommunications Council in late June, telecommunications ministers agreed to widen the scope of universal service to include dial-up access to the Internet.

"Where there is a regular phone line, there is the ability to access the Net using a modem," said Matt Peacock, a spokesman for America Online Europe.

This is one of the reasons AOL Europe has been pressing for flat-rate access to the Net in most Western European countries.

"Even with the best will in the world, its not possible to offer broadband access to all customers, so its important that users can access the Internet via dialup modem connections on a sensible, flat-rate package deal," Peacock said.

The agreement is the latest in a set of proposals being discussed by the EU for nearly 18 months. Ministers are looking for the proposals to be formally adopted by the end of the year. -- Newsbytes

Electrifying Internet

ESSEN, Germany -- RWE Powerline launched a commercial Internet service in