Sept 95 Level of Govt: State Function: Telecommunications Problem/situation: Should Iowa run their statewide fiber-optic telecommunications network, or is the private sector a better choice? Solution: To be determined Jurisdiction: Iowa Vendors: Iowa Network Services Inc

Contact: Tami Fujinaka, Iowa Communications Network 515/281-7246. Dick Vohs Iowa Network Services Inc. 515/830-0110

By Brian Miller Features Editor The Iowa Communications Network (ICN) - the only statewide, publicly owned telecommunications network in the country - may soon be sold to the private sector. Ownership of the network has been the subject of debate since its inception six years ago

In an effort to explore its options and make a decision on the ownership issue, the Legislature ordered an ad hoc task force to report by this October on the potential effects of several options, including: * Selling the network * Partnering with private companies * Keeping the network in the public domain The task force consists of representatives from various interests, including the private sector, schools, state network administrators and nonprofit organizations

"The balance of the discussion will be what to do with the [fiber] backbone," said Speaker of the Iowa House Ron Corbett. The questions being explored include whether the "state should operate it, or a utility, or some other entity." NETWORK DEVELOPMENT The network currently consists of about 2,000 miles of fiber providing services for 105 schools and colleges, three hospitals, three prisons and a National Guard armory. The $94.7 million third phase of network construction was approved by the Legislature this spring. The money is to be used to connect about 500 additional sites - mainly school districts - plus cover operating and maintenance costs over the next four years

Iowa's ICN is often hailed by the media as a model of future telecommunications infrastructure. But some Iowans question whether the state should have become involved in building a network in the first place

When the state began the project in 1989, it did not intend to own a network. Vendors responding to the first- and second-phase RFPs could bid lease capacity on existing lines or lay cable for the state, and they could bid on all or portions of the state. But only two responses to the request were submitted, and both were proposals to construct the network for the state

Iowa filled the vacuum by having the private sector build the network, then developed the organization to run ICN. More schools and hospitals have been connected to the backbone over the past six years

The state pays to have fiber cable installed to school buildings, and the school is responsible for purchasing equipment, including cameras and monitors. There is a $5-per-hour fee for schools using distance learning facilities

NONPARTISAN ISSUE The options facing the Legislature have backers from both sides of the aisle, and those interviewed said that what to do with the network remains essentially a nonpartisan issue

Corbett said he would prefer to sell the fiber-optic network, partly because the agency running it "was growing and growing, and we do not see an end to that. So the state may not be the best owner of it. We could sell it, and lease it back." He wouldn't venture a guess at how the House will eventually decide the issue

On the Senate side, meanwhile, there is the possibility that lawmakers could "throw up their hands" and "say dump this thing," said Senate Minority Leader Jack Rife. The Republican noted that ICN representatives have frequently come to the Legislature asking for supplemental appropriations in addition to working capital acquired through state bond sales. "What we have is a telephone company with a cash-flow problem," Rife said, explaining some lawmakers' frustrations with the network and a possible motivation to privatize it

The latest construction approved comes from the general fund. This means