"I can see every city having one" - such was the 1877 prophecy of a Western Union executive in a memo to employees. The object of these great expectations was no less than the telephone. Today the object of great expectations in the telecommunications world is the information highway. In a technological sense, the concept is perhaps not so extreme as the telephone was in 1877. Switches and multiplexing equipment have been around for a long time; the highway is simply based on the use of better and faster switches and multiplexers. In terms of expectations, however, the highway aligns itself well with Western Union's optimistic prophecies.
In spite of the seemingly endless list of potential highway applications, the project is not without its problems. Deregulation, standardization, the need to assure information privacy and industry convergence are just a few of the issues that will challenge the development of the state and national network for years to come. These challenges are dynamic in that technological advances and government regulation changes are constant and occasionally extreme. Nonetheless, in the midst of this chaotic telecommunications environment, North Carolina is leading the way in the development of its highway.
THE NCIH PROJECT
"The Tower of Babel" is how Secretary of State Rufus Edmisten describes the computer network currently in place within NCSG. In 1992, a Government Performance Audit Committee gave Edmisten and other government officials good reason for such analogies. The committee cited outdated equipment, a lack of competitive purchasing and, last but not least, a proliferation of data processing and telecommunication systems that did not interact with one another. As a result of this lack of planning and coordination through the years, the auditors noted limited productivity and extreme information duplication.
Because the state typically spends nearly $97 million a year on information and telecommunications services, legislators were extremely concerned about the findings in the audit. As a result, an Information Resource Management Commission (IRMC), chaired by Secretary of State Edmisten, was established.
The Information Resource Management Commission
Edmisten declares that IRMC will "have more impact on how state government will look twenty years from now than any other body that [he] can think of, other than the General Assembly." When the Commission was established in 1992, the legislature armed the group with clear-cut powers to make or break state agency projects based on a detailed set of technical standards.
IRMC meetings tend to be standing room only. State agency representatives are present to promote their projects with committee members, although communications vendors represent a sizable group as well. These vendor lobbyists are extremely interested in seeing what level of equipment the IRMC is requiring, not only in order to promote their existing equipment, but to provide product development guidance as well. The IRMC's involvement with the NCIH project has only heightened vendor interest in the commission's meetings.
The IRMC's architecture committee was established to create universal technical standards that can be applied to computer equipment purchased for state projects. These standards are intended to allow for a variety of hardware and software connections, to avoid any bias toward certain suppliers and, most importantly, to allow for flexibility so that future technologies can be integrated with minimal effort. The IRMC architecture committee has and will continue to be an approving authority for the NCIH project. As a result of this level of involvement, NCIH Project Coordinator and senior policy adviser Jane Patterson is in constant contact with the committee.
The current NCSG telecommunications jungle is only one impetus for the NCIH project. A number of pilot projects have been in progress for the past several years, and the success of these programs has further encouraged the development of the NCIH. A brief description of several of these projects follows:
1. CONCERT. This network connects sixteen universities and private institutions throughout the state with DS3 (or 45 mb/s) links. The network, which transports data and interactive video, links more than 18,000 computers to Internet as well as the National Science Foundation's four supercomputer centers.
2. Network For Interactive Learning In Eastern Carolina (NILEC). NILEC interfaces with the CONCERT network and is focused primarily on providing telemedicine and distance learning applications to hospitals and community colleges in Eastern North Carolina.
3. VC. This pilot was a joint effort among Southern Bell, Northern Telecom, NCSG and several other organizations. The network consists of sixteen high school and university sites in four counties in the Wilmington and Charlotte areas.
4. VISTANET. This project is federally funded by the National Science Foundation and is one of only six such projects. GTE and Southern Bell have provided funding for this project as well. The program serves as a rigorous test of the ATM/SONET technology by linking an imaging computer at the UNC School of Medicine to a supercomputer at the Microcomputing Center of North Carolina in the Research Triangle Park. Through this network, CATSCAN data are switched to the supercomputer to develop precise three-dimensional images for cancer treatments.
A number of other smaller pilot programs in addition to those outlined above were designed to assess the viability of the NCIH program in terms of technology and applicability. The success of each of these pilots, when paired with NCSG's current telecommunication systems, convinced the Governor's office to pursue the NCIH project aggressively, and thus Governor Jim Hunt appointed Jane Patterson, his senior policy adviser and technology expert, to head the project.
NCIH Initial Sites
In January 1994, Jane Patterson and Rufus Edmisten announced the first 106 NCSG sites to take a ride on the NCIH. In determining these sites, Patterson and her counterparts used a number of criteria: (1) previous participation in pilot projects; (2) ability to contribute financing; (3) ability to supply information or services to other sites; and (4) the extent to which the site was considered to be in a rural or poor community. The final criterion was intended not only to provide distinct advantages in terms of education and medical information transfer but also to serve as a means of rural vitalization so that industry would have the luxury of information while paying a fraction of the location costs. Patterson indicated at that time the plan was to add eighty additional sites to the highway in January 1995 and ultimately 3,300 state agency sites in the next ten years.
Twenty months later, sixty-three state sites are on the NCIH, with plans for an additional seventy-seven sites by the end of 1995. Obviously these numbers are somewhat lagging the projections of last January. The reason centers primarily around financing, which is one of the key challenges to the NCIH.
According to Patterson, North Carolina is one of only three states in the nation that are fully digitally switched. This factor alone gives the state a jump on other states that are clamoring to jump on the information highway bandwagon. Nonetheless, this technology is not what sets the information highway apart. The highway will utilize a switching technology based on asynchronous transfer mode (ATM), and this technology will be complemented by the synchronous optical network (SONET). ATM switches are capable of crunching and routing data at astonishing speeds, approximately 186,000 miles per second. To get some idea of how fast this really is, an ATM switch can transport a 37-volume set of encyclopedias in 4.7 seconds, compared with the thirteen hours required by today's fastest switching network.
Speed is not the only advantage for users with access to ATM switching. ATM technology will offer users the ability to choose the size of their data pipeline and to change it whenever they need to do so. Today's technology connects two user locations on a point-to-point basis and the user is charged for the connection whether he uses it or not. ATM will allow the user to determine when and how much bandwidth is required, thus the term "bandwidth on demand." A key point here is that, with ATM capabilities, the user is only required to pay for the bandwidth he actually uses.
In addition, the ATM network is switchable, meaning that the user will be able to make direct connections with other users on the network, thereby bypassing routes that probably are considerably longer in the current switching network. Here again, shorter routes should mean decreased costs for the user. Today ten ATM switches have been installed throughout the state. Southern Bell has installed an ATM switch in the Charlotte, Wilmington, Raleigh, Greensboro and Asheville offices. GTE has installed an ATM switch in their Research Triangle Park and Durham offices, while Carolina Telephone has placed the switched in their Fayetteville, Hickory and Greenville offices.
SONET is a new standard for transmission of light signals over optical fiber. This technology allows an unprecedented level of accuracy and customer control. In addition, the standard fosters equipment interoperability between different vendors. The combined use of these SONET standards and ATM switching technology in the NCIH project will place North Carolina as a clear leader in rapid transmission technology.
WHERE WILL THE HIGHWAY LEAD?
The potential applications for the highway are endless. NCSG sees a wealth of opportunities in education, health care and crime control areas, while both the government and local telephone companies have high hopes regarding the highway's impact on the state's economic development.
NCSG's Highway Vision for State Agencies
The areas initially targeted by Patterson and the NCIH committee are education, health care and crime control. In terms of education, the following ideas are just a few of the applications cited by Patterson.
1. Staff Development. Spiral teaching is the term used to describe teachers in the same curriculum using the highway to share ideas and experience.
2. Vocational Education. With the highway, students will be able to talk directly to doctors, lawyers, engineers, etc., in an effort to gain professional insights.
3. Statewide Clubs. Students will be able to participate in science, English, Latin or other clubs where members are spread throughout the state.
4. Distance Learning. Students at rural schools will be able to share the resources of larger, more urban schools through two-way interactive video provided by the highway.
5. Library Access. Public schools will be allowed access to the libraries of major universities and research centers.
Certainly, a myriad of other educational applications exist, but the lesson to be learned here is that the highway can provide a number of exciting alternatives for the state's students and teachers. The true test of its impact will be the level of academic improvement seen in the coming years and determining how much of that improvement is attributable to the highway.
Moving on to health care applications, the possibilities are just as abundant. Again, listed below are just a few that have been cited by NCSG as well as doctors throughout the state:
1. Telemedicine. Patients in remote locations can be examined and treated by physicians at major hospitals.
2. Teaching. The highway will allow medical personnel at teaching hospitals to instruct students in remote locations.
3. Health Care Information System. Databases can be developed that will allow for audio, video and text data on each patient.
4. Vocational Training. Elementary, middle and high school students can get a glimpse of health careers from the classroom.
5. Medical Imaging. Much like the Vistanet pilot project, this concept will allow CATSCAN and other data to be switched and converted to three-dimensional images through a supercomputer, a useful technique for cancer treatments.
Many of the pilot projects in North Carolina have involved primary medical centers throughout the state. The success of these pilots has excited medical professionals about the numerous possibilities the highway presents for the state's health care industry.
Crime control is the NCIH's third primary target for improvement. During interviews, the stories that were relayed to convey the antiquity of the state's current crime control network were disheartening. Due to the absence of links between agency networks, a criminal can be arrested in one county, commit a crime in a different county and authorities will often have no idea about the first crime because it was committed in a different county and is filed in a different database. Edmisten describes instances in which authorities are able to develop an accurate criminal history for an individual as "luck." What follows is a list of improvements NCSG hopes to see as a result of the highway:
1. Universal Database Information System. Law officers will have immediate access to complete database information for each individual, stolen property item, bulletins, etc.
2. Training. Law enforcement officers, emergency medical personnel and firefighters can be trained through interactive video, thus eliminating travel (or at least reducing it).
3. Video Arrangements. Individuals can be arraigned through interactive video, eliminating the time, money and risk associated with transporting prisoners.
4. Video Medical Examinations. Physicians can examine inmates with the aid of a local nurse, again eliminating the need for transporting prisoners.
These possibilities are just a few of the applications that the highway can offer. Because crime control is a key topic these days among the state's residents, improvements such as those cited above will be welcomed.
Anticipated Economic Impact
NCSG and local telephone companies alike are betting on the highway's ability to attract high-tech businesses and industry to the state. Through the highway, businesses will be allowed greater access to market data and information that will facilitate strategic decisionmaking. In addition, businesses ultimately will be able to locate in less expensive remote locations simply because they will still have access to the information base provided by the highway.
The industries that telephone companies believe may be most attracted by the highway are financial institutions, manufacturers, insurance agencies, real estate firms, pharmaceutical companies, engineering firms and computer software developers. Many of these industries will be attracted because the highway will greatly enhance their ability to conduct business; others, e.g., software developers, will see the opportunity to aid businesses in their use of the highway. Hudson Institute, an advisory group that focuses on employment and demographic issues, estimates that by the year 2005, jobs for system analysts, programmers, and electrical engineers will grow by 79,56 and 34 percent, respectively, as a direct result of the national superhighway.
BellSouth commissioned a WEFA study to define quantitatively what the NCIH could mean to the state's economy. The study considered key economic indicators such as personal income, disposable income, retail sales, manufacturing shipments, auto registrations and housing starts. The results of the study are encouraging in that the NCIH project gives a boost to nearly every indicator that makes up the gross state product. For example, personal income is expected to increase 1.81 percent as a result of the highway. Certainly, the most encouraging news from the study is the estimated $2.7 billion and 44,000 jobs that will be added to the state's economy between now and the year 2003 because of the NCIH.
Thus far, commercial interest in the highway does appear to be in keeping with the estimations of these studies. Although the 3,300 ultimate NCSG sites obviously make for a significant anchor tenant, the commercial interest in the highway is keeping local telephone companies busy as well. In June of this year, the North Carolina Utilities Commission gave BellSouth Telecommunications permission to offer commercial customers Advanced Broadband ATM service. Immediately following this offer, Freightliner Corporation made arrangements with BellSouth to be the first private entity to ride the NCIH. The company recently opened a state-of-the-art training center in Cleveland, North Carolina, and cited the state's advanced broadband network as a key determinant in choosing a location. According to John Killebrew, Sales Manager for BellSouth's NCIH project, Freightliner is only the first in a long line of customers who have been waiting for this tariff update and are now clamoring to take a ride on the highway.
These are just a few of the rewards that the NCIH project can bring to state agencies, telephone companies and the state of North Carolina. Patterson also says the highway project can give Carolinians a lot to be proud of as well. According to Patterson, forty-eight states and more than forty countries have sent representatives to North Carolina to learn more about the highway project. Whether the state will serve as a good prototype remains to be seen. In spite of the potential applications for the highway, a number of challenges will likely impede its progress or at least require a few detours.
FINANCING THE NCIH
One would be hard-pressed to find someone who would deny the many virtues of the highway project. Nonetheless, the NCIH project and the national information superhighway project are challenged by a number of issues, chief among them deregulation, universal service, industry convergence, information privacy, alternative facilities and competition. The uncertainty surrounding these issues has made cost projections for the NCIH either nonexistent or extreme. Therefore, many North Carolina legislators are hesitant to commit to finances proposed for the project. Patterson and Governor Hunt have worked diligently to reassure legislators the past year, but nonetheless, the road ahead looks as bumpy as ever.
NCSG Financial Resource Allocation
In early 1994, Jane Patterson hoped that the legislature would approve legislation to pay for the first three years of network charges for each site and that the source for one-time equipment funding would be either the site itself or grants from such agencies as the Advanced Research Projects Agency. Nonetheless, North Carolina legislators greatly revised the NCIH financial allocations proposed by the Governor's office in 1994, and the debate regarding future allocations is ongoing.
The primary problem is that the legislature is becoming more than a little nervous about some of the NCIH expense figures being discussed. Lyn Muchmore in the Fiscal Analysis Department of the State Controller's Office indicated that the NCIH expense details were almost "secretive" initially and that, as the General Assembly was finally provided with more details, the numbers were strikingly inconsistent; the project estimates the legislature was hearing in 1994 ranged anywhere from $30 million to hundreds of millions of dollars. In May 1994, the Governor's Office issued a legislative briefing to clarify and explain expense details associated with the project. Although this briefing represented the most complete set of numbers the General Assembly had received from the Governor's Office to this point, the network charges cited were exorbitant. As a result, legislative uncertainty regarding the highway abounded.
Regardless of the internal estimates the legislature was seeing from Patterson's office, a number of external observations were not making legislators feel any better. The General Assembly was all to familiar with Iowa's attempts at developing an information highway - $60 million for 317 sites. NCIH supporters contended that the Iowa Communications Network project was not comparable to North Carolina's project because the highway was constructed entirely by the government with no input from Iowa's local telephone companies. The project was plagued by cost overruns and numerous complaints regarding the lack of government and business applications. Nonetheless, justification for the expenses did little to divert the legislative eye from the expenses themselves. In addition, a WEFA study indicating that the project would cost a total of $450 million by the end of 1999 and that NCSG would need to pay about $97 million of that total did little to calm legislative nerves. And finally, there was the North Carolina Department of Public Instruction's estimate that nearly $514 million would be required to connect every North Carolina school to the network.
As a result of these worries, the legislature approved $7 million for the NCIH project in July 1994 as opposed to Patterson's requested $9.4 million. In addition, an Information Highway Grants Advisory Council was formed to review applications for funding. The proposed funding was in the form of $100,000 one-time grants to be allocated for a site's equipment purchases. The Legislature made it very clear that the recurring network charges would be the responsibility of the site. North Carolina Senate Appropriations Committee cochairman Martin Nesbitt says, "We simply can't afford to start new programs that obligate us to use recurring money. We already have too many. Recurring expenses automatically appear in the state's budget unless lawmakers vote to stop them." Since July of last year, sixty-three sites have been approved by the Advisory Council and are currently on the NCIH. The grant approval process for the $7 million allocated is ongoing, as is the political debate with regard to this project. Recent estimates by the State Auditor's office of $1 billion for the NCIH project over the next nine years have refueled NCIH debates in the Legislature. The outcome of this political shuffling remains to be seen. Certainly, the financial questions facing Patterson and the Governor need to be asked and answered, but more than likely this issue is not a roadblock for the project, just a sizable pothole.
Few North Carolina politicians, businessmen or citizens will debate the merits of the NCIH project. The applications are endless and the potential contribution to the state's economy is enormous. What government and industry leaders must work to overcome now are the uncertainties associated with the highway and how best to assess the ultimate costs of the NCIH. At present the issue of state funding is posing the greatest challenge to NCSG highway proponents. Unless Patterson and the Governor win legislative support, the NCIH project will suffer a serious setback.
Where will the North Carolina information highway really lead and how fast will we get there? Who knows. We can only hope that the ride to a better tomorrow won't be too bumpy.
Blinch, Russell, "Gore Wants No Highway Barriers," News and Observer, January 12, 1994.
Coates, James, "Workers Needed for Information Superhighway," Triangle Business Weekly, January 24, 1994.
Cook, William J., Jim Impoco and Warren Cohen, "Fast Lane to the Future," U.S. News and World Report, January 17, 1994, pp. 56-58.
Denton, Van, "Information is Power," The Business Weekly, July 19, 1993.
Dentzer, Susan, "Bypass on the Information Highway," U.S. News and World Report, January 24, 1994, p. 63.
Dziatkiewicz, Mark, "XIWT: Can It Make Convergence as Simple as ABC?," America's Network, February 15, 1994, pp. 34-38.
Edmisten, Rufus, Interview with author, February 9, 1994.
Farhi, Paul and Sandra Sugawara, "National Information Highway Proving Difficult to Engineer," News and Observer, April 10, 1994.
Financial Times, "A Bumpy Ride to America's Superhighway," March 8, 1994.
Financial Times, "Roadblocks Hinder Free Flow," March 8, 1994.
Financial Times, "Life in Tomorrow's Fast Lane," March 8, 1994.
Forbes, "Highway on Copper Vs. Fiber?," June 6, 1994, p. 104.
Glister, Paul A., "Business in the Fast Lane," North Carolina Magazine, January 1994, pp. 12-16.
Gray, Tim, "House Likely to Trim Info Highway Plan," News and Observer, June 14, 1994.
Hans, Peter, "The Info Highway: A Long and Winding Road," Spectator Magazine, January 6, 1994.
Iredell County News, "State Should Reexamine the Info Highway," June 9, 1994, p. 4.
Kiplinger, Knight, The Kiplinger Letters, April 29, 1994.
Legislative Briefing Paper: The North Carolina Information Highway, prepared by the Governors's Office, May 1994.
Lines of Communication (Internal Southern Bell Publication), "1993 North Carolina Legislative Session Final Report on BellSouth Issues," July 29, 1993.
Market, Steve, "North Carolina Information Highway (NCIH) Issues Update," Internal memo; September 13, 1993.
Marshall, Kyle, "Report Questions Information Highway," News and Observer, July 8, 1995.
McFadden Kate, "Balancing Highway Interest," News and Observer, April 19, 1994.
McFadden Kate, "BellSouth, Not State, Paid for Study Touting Info Highway," News and Observer, May 13, 1994.
McFadden Kate, "Experts See Info Highway as Net Gain," News Observer, March 11, 1994.
McFadden Kate, "Hunt Unveils Information Network Plan," News and Observer, May 11, 1994.
McFadden Kate, "Information Highway Still a Pitch and a Promise," News and Observer, May 1, 1994.
McFadden Kate, "State Picks 106 Sites for Information Highway Network," News and Observer, January 25, 1994.
McFadden, Kate, "Traffic Laws Being Written For Info Highway," The Business Weekly, July 19, 1993.
McFadden, Kate, News and Observer, July 28, 1994.
McFadden, Kate and Tim Gray, "Phone Companies Must Explain Why Rate Studies Are Secret," News and Observer, May 4, 1994.
McFadden, Kate and Tim Gray, "Users Hope State Will Pay Toils of Information Highway," News and Observer, January 26, 1994.
Mollenkamp, Carrick, "Raleigh Info Highway Could Open Within Weeks," News and Observer, May 26, 1994.
Muchmore, Lyn, Interview with author, January 28, 1994,
NCIH Information Workshop (Video set and visuals provided by MCNC), September 1993.
NC News (Internal Southern Bell Publication), "Company Responds to Information Highway Requests," May 19, 1994.
NC News (Internal Southern Bell Publication), "Information Highway More Than Talk in NC," April 30, 1994.
NC News (Internal Southern Bell Publication), "WEFA Study Draws Attention," May 19,1994.
News and Observer, "Data Highway Goes Rural First," January 6, 1994.
News and Observer, "Gore Debuting Plan for Data Highway," January 11, 1994.
North Carolina State Government General Publication, "Our Future State North Carolina Information Highway."
Patterson, Jane, Interview with author, January 23, 1994.
Patterson, Jane and Scott Anderson, "Take a Ride on Carolina's Information Highway," TE&M Magazine, November 15, 1993, pp. 32-34.
Patterson, Jane and Bill Smith, "The North Carolina Information Highway," IEEE Net Work Magazine, November/December 1994, pp. 12-17.
Reed, Rahn, "High Tech, High Risk," Newsweek, April 11, 1994, pp. 53-55.
Reinhardt, Andy, "Building the Data Highway," Byte, March 1994, pp. 46-74.
Rogoski, Richard R., "Speeding Down the Information Highway, "Triangle Business Journal, April 1, 1994, p. 22.
Rogoski, Richard R., "State, Nation Try to Avoid Technology Potholes," Triangle Business Journal, April 1, 1994, p. 38.
Sandberg, Jared, "Major Firms Are to Join Drive to Learn How Best to Develop Data Superhighway," Wall Street Journal, December 13, 1993.
Schrage, Michael, "Information Highway Paved With Problems," News and Observer, January 18, 1994.
Schrage, Michael, "Threat of Information Poverty Is Contorted Logic at Work," News and Observer, January 11, 1994.
Smith, Bill, Interview with author, May 23, 1994.
Telephony Magazine, "Sorting Through Cable/Telco Fever For a Look at the Future," November 29, 1993, pp. 8-9.
Telescope (Internal Southern Bell Publication), "New Study Shows Emotional 'Blocks' on Info Highway," January 26, 1994.
Telescope (Internal Southern Bell Publication), "New Lane of Information Superhighway Opens for North Carolina Businesses," June 14, 1995.
Thomas, Depelsha R., "Schools Worry State Won't Deliver on Info Highway," News and Observer, June 15, 1994.
USA Today, "Info Highway Boost," June 15, 1994, p. B-1.
Young, Jim, "The Information Highway to Hell, "Pulp and Paper Magazine, June 1994, p. 9.
Stacey H. Moore is a Project Manager for BellSouth Business Systems, Raleigh, NC.…