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North Carolina guaranteed Internet access to everybody by 2003. Audacious? Yes.

by / November 6, 2000 0
BY SHANE PETERSON | NEWS EDITOR

North Carolina guaranteed Internet access to everybody by 2003. Audacious? Yes.

Attainable? Yes, again. Heres how the state orchestrated the deal.

Like many state officials, members of North Carolinas administration and legislative houses have spent considerable time worrying about the digital divide. States know full well that they cant depend on old-world infrastructures in todays move-fast-or-get-left-behind economic milieu.

North Carolina is in a difficult position as it continues to make its transition to the Information Age -- tremendous growth in its metropolitan areas, flat or lagging growth in rural areas coupled with a disproportionate number of layoffs in those areas, and a disappearance of income from tobacco, which has been, and still is, the states number one cash crop, said Leslie Boney, staff director of the Rural Prosperity Task Force.

Gov. Jim Hunt formed the task force in 1999 to craft recommendations to revitalize the states rural areas, and, not surprisingly, the task force identified high-speed Internet access as one solution.

North Carolina placed sufficient emphasis on this recommendation to guarantee high-speed Internet access to all areas of the state within three years and local dial-up access from every telephone exchange within one year. Behind that guarantee is the deal the state orchestrated with its three largest telecommunications companies -- BellSouth, Sprint and GTE.

What Not to Do

Although the deal was eventually hammered out, it wasnt the easiest undertaking ever brokered by state officials. One early hurdle was the way it was first presented.

The task force first proposed a deal that included the one-year and three-year goals and an eight-cent surcharge on every monthly phone bill in the state for three years -- this would have added up to approximately $15 million that would have been used to fund the roll out of telecommunications services to rural areas of the state.

"Basically, everybody would have been paying a dollar more per year on their phone bills to help fund something we called the Rural Broadband Access Fund," Boney said. "The providers, whether they be ILECs [incumbent local exchange carriers], CLECs [competitive local exchange carriers] or some other provider, could then have applied to that fund to help them make the business case to deploying to rural areas sooner rather than later."

This provision -- which the task force proposed because the legislation that created the Rural Internet Access Authority, the group that will be responsible for implementing the goals and objectives of the deal, did not allocate funds for the authority -- did not make the telecommunications companies happy.

"They didnt like the idea of their customers being asked to pay an additional surcharge on their bill every month," Boney said. "They didnt think that would go over well with their customers. They were concerned that the proposal as the task force designed it would have put them in the awkward position of being blamed for an increase in peoples phone bills when, in fact, they didnt have anything to do with it. Nobody likes to be blamed for something thats not their fault."

The parties huddled in their respective headquarters, and the telephone companies came back with a version of the deal that didnt include any surcharges -- solving that particular problem.

North Carolina officials were careful from the outset to avoid another potential hurdle, becoming fixated on the technological approach.

"A lot of people get hung up on technology in this sort of deal," said Tom Runkle, chief planning officer of the states Office of Information Technology Services. "Technology is the least important thing. Just agree that you dont care about the type of technology and let the right type at the right time win. Otherwise, people will debate satellite vs. cable vs. DSL for hours, days and months -- its unending."

What to Do

While there is no hard and fast template to work from when brokering this type of deal -- given the inherent differences in states infrastructures, relationships with telecommunications companies and geographic distribution of population -- North Carolinas deal does offer a platform to build on.

"When we started this, there were very few precedents to go by," said Runkle. "There are still few, if any, statewide precedents. There are a lot of isolated groups and regions that have addressed this, but not many states have addressed it on a statewide basis like we have."

First, while all parties agreed to a clear set of goals and objectives -- what Boney called the "proposal behind the proposal" -- they didnt let themselves be derailed by the means to those ends.

"The task force was asked to suggest solutions for and ways of carrying out every public-policy goal that they recommended," said Boney. "In this case, the telephone companies came up with a proposal that met the public-policy goals, although it differed from the specific means that the task force suggested. There was no objection to that on the part of the task force members. The public-policy goal was to ensure ubiquitous access within three years, and the idea proposed by the ILECs was something that would enable us to do that."

Telecommunications companies need to create their own business cases when they participate in this sort of deal, and they know what they can or cant do, said Boney. "Every state is going to be different, and we have public-minded ILECs in the state that saw the importance of doing this to the people they serve and were able to be creative in finding a way that they could make money in the process. What I personally care about is that theyve agreed to meet this goal."

Second, North Carolina created an inventory of what telecommunications facilities were in place. This could well have been the most exhausting part of getting the deal off the ground. "We have a complete inventory of whats out there," said Runkle. "There are 431 end telephone offices in North Carolina. We know whats in each one of them: what the capabilities are, how many switches; what the charges are for the services; and what the population is around them. We also know what range of population around those offices can be served by such technologies as DSL.

"Knowing what youve got, in detail, is very important," he continued. "You cant get anywhere without knowing that. Its grunt work. Let me tell you, its hard to get that inventory."

But having that inventory will help target the geographic areas that need connectivity; how much money will be required to get the connectivity to those areas; and provide participants with ways to formulate concrete answers to questions, such as: What is the problem? How big is the problem? Where is the problem? and How will your
recommendations solve the problem?

Third, state representatives stressed opening the deal-making process to all possible participants.

"The key to putting the deal together is to have as many people involved as possible," said Runkle. "There [are] so many interest groups now -- youve got CLECs, ILECs, the inter-exchange carriers --it doesnt do you any good to have connectivity if you dont have an ISP. Youve got a variety of players, and any one of them can be potential show-stoppers. Diplomacy may be a key success factor, and the lack of diplomacy is a key failure indicator."


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SEVEN GOALS OF NORTH CAROLINAS TELECOM DEAL

1. Provide local dial-up Internet access from every telephone exchange within one year.

2. Make affordable, high-speed Internet access available to every citizen of North Carolina within three years.

3. Establish two pilot Telework Centers in either Tier 1 or Tier 2 counties within the next 18 months.

4. Achieve significant increases in ownership of computers, related Web devices and Internet subscriptions throughout North Carolina.

5. Provide through the Internet accurate, current and complete information to citizens on the availability of present telecommunication and Internet services with periodic updates on the future deployment of new telecommunications and Internet services.

6. Promote the development of e-government Internet applications to make citizen interactions with government agencies and services easier and more convenient and facilitate the delivery of more comprehensive programs, including training, education and health care.

7. Employ "open technology approaches" to encourage all potential providers to participate in the implementation of high-speed Internet access with no technology bias.

SEVEN IMPLEMENTATION APPROACHES

1. Develop organizational structures, action plans and performance measures for achieving the goals, including a system for periodic progress and accountability reporting to participants and governing oversight bodies.

2. Explore and quantify the basis for incentives for private investments in high-cost areas that would otherwise not be served under the current agreement.

3. Develop and maintain a North Carolina Telecommunications and Internet Access Web site under the direction of the Office for Information Technology Services, with the initial development and implementation funded by the service providers. Subsequent maintenance and updates will be provided by the ITS. This Web site will provide accurate, current and comprehensive information to citizens on the availability of present telecommunication and Internet services with periodic updates on the future deployment of new telecommunications and Internet services.

4. Create and supervise seven regional Internet deployment teams to implement Internet-connectivity goals within regions of the state.

5. Seek funding from public and private sources to develop programs to encourage the acquisition of personal computers and Internet-related devices and access to the Internet for low-income individuals.

6. Promote Telework Centers in economically distressed counties where residents could go to conduct business over high-speed Internet connections at affordable rates. Telework Centers would also provide training and technical advice for e-commerce.

7. Develop, with the assistance of the North Carolina Progress Board, metrics and measurements to determine the success of any particular Internet access goal or objective.


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Implementing an E-Government Vision Rick Webb, former CIO of North Carolina, rose to success by embracing the collaborative process. It was his business approach that set the foundation for the implementation of the states e-government vision. And he did it with a light hand.

"Instead of fighting alligators, we were draining the swamp," he said. What resulted -- after collaborating with private industry, other state agencies and key legislators -- was an IT system that leads most other states in policy development and implementation. This was accomplished with active support from Gov. Hunt, legislative approval and a CIO post that carried responsibility for more than 400 employees. "I grew a lot personally by having that kind of responsibility," he admitted.

Webb is particularly proud of the states passage of SB 222, legislation that defined and enabled North Carolinas e-government effort. The bill, which Webb crafted, offered more partnerships with e-government companies, cost savings for North Carolina and a host of online systems for NC @ Your Service, the states portal. But there is still a long way to go. "This is not a sprint race," said Webb. "This is a journey; a long-term commitment to doing it right."

Webb is glad to relinquish the intensity and long hours of his CIO post. "I dont see this as an ending, but a beginning," he said. "I have so many more career goals that I want to achieve."

Webbs recent move to the private sector as director of e-government for PricewaterhouseCoopers came at the peak of his success. But he performs best when faced with a new challenge. "Ive always been more of a hunter than a farmer," he said. "And, Id like to share parts of the North Carolina experience with other states and governments around the world."