EXHIBIT


             ESTIMATED COST PROFILES FOR CONNECTING 
           SCHOOLS AND LIBRARIES TO ADVANCED NETWORKS


I. Introduction

     Based on a review of some available studies and data from
several grants awarded under NTIA's Telecommunications and
Information Infrastructure Assistance Program (TIIAP),[1] this
exhibit presents estimated cost profiles for connecting schools
and libraries to the National Information Infrastructure (NII). 
The connection needed to link schools and libraries to the NII --
which is subject to the universal service discount under the
Snowe-Rockefeller amendment to the 1996 Telecommunications Act
(Act)[2] -- represents only a part of the expenditure that will
be incurred by any school or library seeking to use services
offered over the NII.  The preferential rate scheme under the Act
will cover some or all of these connection costs for schools and
libraries.  Because most available data includes costs beyond
those for connection, we have attempted to use broader cost data
encompassing other aspects as well (e.g., obtaining and deploying
hardware, software, training, and technical support) to put
connection costs in context.  

     There is a great need to explore the potential costs of
hooking up the schools and libraries, despite the difficulty of
providing precise estimates at this time.  Accordingly, we have
relied on some data that is now available in order to commence a
dialogue on this issue.  As explained below, variations in the
networks and needs of the schools or libraries could affect the
connection costs.  For that reason, we present a number of
different scenarios to illustrate the possible range of costs.

     For example, the total cost of providing access to the NII
for schools and libraries depends on those entities' specific
requirements with respect to investment in capital and human
resources, as well as recurring expenses (such as subscription to
telecommunications or information services).  Technology choices
can also significantly affect the magnitude of the outlays:  a T-
1 connection will cost more than a regular voice-grade line but
will also deliver higher-speed transmission (1.5 Mbps versus 34
Kbps or slower).  Full-motion video may necessitate an even
faster, broader, and more expensive 45 Mbps DS3 link.  Decisions
as to the number of instructional rooms connected and student-to-
computer ratios will also have an impact on connection costs. 
These various outlays will include both initial deployment, or
"up-front," costs and those that will be ongoing.  Moreover,
development of alternatives for connecting the schools and
libraries -- such as the potential for wireless connections --
may also change the cost landscape.

     Decisions on other factors will also affect overall costs. 
The cost of hardware will vary widely depending on the specific
system selected.  For example, a Macintosh computer costs more
than an Apple II personal computer (PC), a Pentium microprocessor
costs more than a 386, and a laser printer costs more than an
inkjet or dot matrix printer.  Educational software will be
needed, as well as training and technical support.  Furthermore,
the level of overall expenditures will be a function of the
deployment schedule:  a five-year roll-out would be much more
expensive than a 20-year timetable.[3]  Due to the myriad choices
confronting school administrators about Information Age
capabilities and budget allocations, any cost profile must be
developed on the basis of different options.  Accordingly, the
cost profiles presented are only broad estimates that provide a
starting point for further discussion of the most expedient means
to bring the Information Age to schools and libraries.

     The following analysis begins with an examination in Section
II of recent studies on the total costs of achieving and
maintaining access to the NII for the nation's public schools and
libraries.  Information about the connection component that could
be eligible for discounted services under the Snowe-Rockefeller
amendment to the Act is broken out where possible.  In Section
III we examine some "real-world" examples of schools in regional,
inner city, or rural areas that received TIIAP grants for NII
connections.  Section IV presents some general implications from
the cost data.  Finally, Section V discusses more specific
implications that pertain to the discounts to be accorded the
schools and libraries under the Snowe-Rockefeller amendment to
the Act.          


II. Recent Studies on Costs of NII Connection 


     A. Public Schools

     A comparison of two recent major studies yields some broad
estimates of the costs of access to the NII for the nation's
public schools.  Again, we recognize that under the Snowe-
Rockefeller amendment, discounts that may be covered by the
universal service fund apply only to interconnection costs when
telecommunications carriers provide certain services to the
schools.  It should be noted that where the data covers total
costs, we have attempted to break out connection costs for
purposes of discussion and debate on the costs of ultimately
linking each classroom to the NII.

     Rothstein Study.  Building on his 1994 working paper for the
Department of Education (ED), as well as a subsequent
collaboration with Lee McKnight, Russell Rothstein developed five
cost models of K-12 school networking.[4]  Each of the models in
his 1996 study encompasses five schools that are connected to a
school district office, which is, in turn, linked to the
Internet.  The different models are briefly described below:

     Model 1 features a single PC dialup connection to the school
district office, hooked up to the Internet via a 56 Kbps line,
with very limited training (two-to-four teachers) and limited
support at the district office.  For all public schools,
Rothstein estimated one-time total costs of the full connection,
hardware, training, and other costs would be $70 to $370 million,
with ongoing costs of $110 to $430 million.[5] 

     Model 2 consists of a local area network (LAN) with a shared
modem that supports only a few users at a time, with 56 Kbps
Internet service at the district level, where five-to-twenty
staff are trained per school, and one-to-two support staff
provided per district.  Total one-time costs for all schools were
estimated at $2.01 to $6.08 billion, and on-going disbursements
would be $1.18 to $2.68 billion.  

     Model 3, which builds on Model 2, includes a LAN that uses a
router and assumes one PC per classroom in three-quarters or more
of the rooms, with a 56 Kbps school hookup to the hub and to the
Internet service at the district office.  The construct assumes
training of ten-to-twenty staff per school and one-to-two support
staff provided per district.  Total one-time costs for all
schools would range from $4.13 to $10.49 billion, and ongoing
expenditures would be $1.22 to $3.38 billion.  Rothstein
concluded that each of these first three models would fall short
of meeting the vision of the NII initiative.[6]  He indicated,
however, that the remaining two models would be more consistent
with the goal of providing access for every school classroom.  

     Model 4, Rothstein's second most sophisticated model, is the
one he regards as meeting the NII "baseline."  He assumes that a
PC is supplied for every eight students (three per classroom that
averages 25 students), and that LANs, local file servers, and a
56 Kbps connection to the district office are installed.  The
level of training (40-50 staff per school) and support provided
(two-to-three staff per district) exceeds the three models above
but is less than in Model 5.  One-time total charges for all
schools under this scenario would be approximately $9.19 to
$22.05 billion, and recurring charges would be an estimated $1.74
to $4.6 billion annually.[7]

     Model 5 is Rothstein's most advanced scenario under which it
is assumed that a PC is provided to every student, plus
installation of LANs, local file servers and high-speed wideband
(1.5 Mbps) connectivity for all public schools, and training for
all teachers.  For a system characterized by access to the full
range of text, audio, graphical, and video applications available
over the Internet and a well-staffed support team, he calculated
that one-time (hardware, retrofitting, and initial training)
charges would range from $49.25 to $112.67 billion, while annual
recurring (connections, Internet service, support, training)
charges would approximate $3.57 to $10.03 billion over a five-
year timeframe.[8] 

     For at least Rothstein's NII models, the sum of PC
purchases, initial training, and retrofitting would together
comprise the largest one-time cost for launching a school's
network, and support of the network represents the largest
ongoing annual costs.[9]  Support and training could account for
a substantial proportion (e.g., 46 percent, or almost half, in
Rothstein's NII baseline Model 4) of the total costs of
networking schools.  Telecommunications lines and services would
be a significantly smaller cost element (e.g., 11 percent in
Model 4) for both start-up and ongoing connection costs.[10]      

 
     McKinsey Study.  A study completed by McKinsey & Company
during mid-1995 on behalf of the U.S. Advisory Council on the
National Information Infrastructure estimated the costs of
accessing the NII by network element and also by deployment
option.  McKinsey determined that the largest up-front cost would
involve the purchase and installation of hardware, while teacher
training and support would account for most of the ongoing
deployment cost.  Connection costs would be a relatively small
proportion (four to 15 percent) of either initial or recurring
expenditures, regardless of the deployment plan.[11]  McKinsey
presented four deployment "models," each of which would include a
district server and local area network; one or more school
servers, printers, and scanners; software, professional
development, and support.[12]  The results of the four models are
described briefly below:

     The Lab Model resulted in estimates for initial deployment
ranging from $11 billion for a 25-computer lab using an Ethernet
LAN and ten telephone lines.  Annual operations and maintenance
expenditures were estimated at $4 billion per year.

     The Lab Plus Model added a computer and modem for the
teacher to the Lab model, resulting in estimated costs of $22
billion in up-front expenditures.  Annual operations and
maintenance were estimated at $7 billion per year.  

     The Partial Classroom Model would provide one-half of all
classrooms with one computer per five students, an Ethernet LAN
across and within all classrooms, and a T-1 connection at a cost
of $29 billion.  Annual operations and maintenance expenditures
were estimated at $8 billion over a five-year period.  

     The Classroom Model resulted in estimates of $47 billion to
connect every public school classroom to the NII during a ten-
year interval, assuming five students per computer, with a T-1
communications channel that transmits data, video, and voice at
1.5 Mbps.  Annual operations and maintenance expenditures were
estimated at $10 billion during a ten year period.[13]  McKinsey
concluded that this model most closely meets the Administration's
vision of connecting every classroom to the NII.  


     B. Public Libraries

     As with schools, the data from these studies go beyond the
connection portion that might be funded under the Snowe-
Rockefeller amendment to the Act.  Realizing that the subsidies
would apply to interconnection costs, it is nevertheless useful
to examine broader cost data and gain some perspective on total
costs for bringing the NII to the public libraries.[14]

     In reviewing the results of the studies, it is important to
realize that rural libraries have special needs attributable to
their relative remoteness.  In New York State's "Project GAIN"
initiative, researchers determined that a "reasonable" start-up
cost for basic computing equipment, connections, and support
(including training) for a rural library was $8,000 to
$10,000.[15]  Long distance calling -- a necessity for many rural
libraries because there is often no nearby interexchange carrier
"point-of-presence" -- can average $175-350 per month (without
preferential rates).[16]  A 1995 study sponsored by the National
Commission on Libraries and Information Science (NCLIS) reached
similar conclusions.  This study, which was performed by McClure,
Bertot, and Beachboard, estimated that a rural library using a
single work station and text-only access could achieve a minimal
level of Internet connectivity for $1,475 in one-time costs and
$12,635 in annual recurring costs.  Telephone toll charges and
Internet provider connection and usage fees would account for
more than 80 percent of the total outlays for one-time and annual
recurring costs, taken together.[17]  Thus, a first-year
expenditure on a single-work-station, text-based Internet access
for a rural library would average less than $15,000.  

     If telephone toll charges -- the biggest ongoing cost factor
identified in rural environs -- are largely removed from the
calculation, the corresponding expenditure for a city library
could be less than $10,000, on average.[18]   Accommodating five
simultaneous users (i.e., five terminals) in a city library,
however, would increase the required first-year outlay to an
average of $42,290 -- $13,040 in one-time costs and $29,250 in
annual recurring costs for basic Internet access.[19]    For a
single workstation in a single urban library with multimedia
capabilities, the first-year cost for Internet access capability
would be $6,570, including $4,615 for one-time costs and $1,955
for annual recurring charges.[20]  A more complex and
sophisticated level -- adding multimedia capabilities at multiple
work stations at a main city library with four branches and much
more network management -- would raise costs to an estimated
$434,595 for Internet access and $568,495 if Internet service
provision is included.[21]

     McKinsey developed cost estimates for public libraries on
the basis of a scenario assuming the deployment of 25 networked
computers with ten simultaneous users and a local area network. 
The analysis divided libraries into two general categories based
on type of connection.  Under the selected scenario, those
serving populations of more than 25,000 would use T-1 (1.5 Mbps)
lines, while the smaller libraries split 60-40% between ISDN (56
to 128 Kbps) and POTS (14.4 to 34 Kbps).  Initial deployment
costs to connect libraries to the NII -- including hardware,
software, training and support, connections, and system
integration -- were estimated at $1.6 billion, while ongoing
costs -- using the same categories as initial deployment plus
content/resource development -- were estimated as exceeding $1.3
billion per year.  Similar to the schools, connections to the NII
for libraries would constitute a relatively low proportion of
total costs:  four percent of initial deployment and nine percent
of on-going costs, with another 23 percent of annually recurring
costs disbursed mainly for information services.[22]


III. Cost Data from Some TIIAP Grants

     Examination of three illustrative school projects funded
through NTIA's TIIAP program sheds light on real-life cost
experiences.  As with the presentation of data from the studies
discussed above, while we recognize that the Snowe-Rockefeller
amendment applies only to the connection portion of costs, we
present the data in the broad context of costs for accessing and
using services offered over the NII.  Examples from regional,
inner city, and rural cases, respectively, are as follows:

     Rockbridge Project, located in Lexington, Virginia, involves
a regional grant to 17 K-12 schools that includes a central
computer, routers, and a multi-media workstation for each school,
as well as Internet access through a Wide Area Network (WAN),
training, and maintenance.  Hardware represents the largest one-
time cost element (65.0%, $144,040), followed by maintenance
(18.9%, $41,820) and communications (9.5%, $21,139).  Among
annual costs, communications represents the largest component
(63.9%, $58,824).  More specifically, an Internet service
provider (ISP) will provide both 56 Kbps service at $1,000 setup
plus $350 per month, and T-1 service at $2,400 plus $1,400 per
month.  Connections from the ISP to each central site include
standard ($120 setup and $28 per month) and foreign exchange
($120 plus $140 per month) dialup; 56 Kbps local ($443 and $156
per month) and inter-office ($450 plus $250 per month) lines; and
frame relay to the ISP, both 56 Kbps ($1,305 and $363 per month)
and T-1 ($2,110 and $897 per month).  Besides Internet access,
these connections permit store-and-forward e-mail, network news
discussion groups, and information access to the World Wide Web,
Gopher, and File Transfer Protocol (FTP) services.  Electronic
document delivery and dialup ports for home access are other
capabilities. 
 
     Harlem Environmental Access Project (HEAP), an inner city
setting in New York City, received a TIIAP grant for six schools. 
Based on the average estimated cost per school, hardware ranked
first (60.6%, $10,266), followed by training (21.7%, $3,666) and
connection (17.7%, $3,000).  Connection also contributes $5,600
annually to expenses.  Each school received four computers and
printers, a T-1 line, Internet access, and training.  Through
this connection, Columbia University and the Environmental
Defense Fund are collaborating with local schools to bring
computer equipment and infrastructure, Internet access,
technology assistance, and environmental information and
curriculum development to an underserved community in a New York
City Empowerment Zone. 

     Green Valley High School, a rural suburb of Las Vegas,
received matching grants to install three computers, a fiber
optic backbone and related cabling to three classrooms, a T-1
link, teacher training, and technical maintenance and support. 
Total up-front costs equaled $85,500, of which connections
(installation, switching, and service) accounted for 58.3%
($50,000).  Connections incurred $9,840 in annual recurring
costs.  Initially, the T-1 line cost was $795 per month, but as
the number of computers increases by 75, the link costs will rise
to $1875-2000 per month.  Services subscribed to include Internet
access and "unlimited use" for $25 per month. 


IV. General Implications of the Cost Data

     The limited data available on the cost of bringing the NII
to schools and libraries provides a starting point for
determining the potential connection costs for these institutions
and, more specifically, the extent of any subsidy that might
occur pursuant to the Snowe-Rockefeller provision of the Act. 
Accordingly, we must stress that the following implications are
meant to commence a dialogue rather than serve as final
conclusions on the cost issue.

      Under McKinsey's assumption of a relatively high-end
deployment, such as wideband (T-1) capability, connectivity to
virtually all classrooms, and one computer for every five
students as the norm, the total costs for connecting schools
would be an estimated $109 billion for connections, hardware,
software, training, and support over a ten-year time period. 
This would translate into about $11 billion per year.[23]  Under
a scenario with less support and training, a somewhat higher
ratio of students (eight) per computer, longer hardware
replacement cycles, and no packaged software or upgrades (as in
Rothstein's Model 4), the total cost over a five-year span falls
into a range: the low end may reach $20 billion, or $4 billion
per year, and the high could approach $50 billion, or $10 billion
per year.  For libraries, assuming a Lab scenario (i.e., single-
room deployment, 25 computers, ten simultaneous users), the
McKinsey study projected a much lower total outlay: initial
deployment at $1.6 billion, with $1.3 billion in annual recurring
costs, or apparently less than $10 billion over five years, or
less than $2 billion per year.  The cost of connections --
including up-front and recurring costs -- appears to be a
relatively small proportion of the overall cost, on average, for
K-12 schools with all classrooms linked to the NII, perhaps on
the order of ten percent of the total described above.[24]  

     The resulting costs for public libraries is less clear from
the analyses but point to moderate albeit somewhat higher
percentages with respect to connection costs than for the
schools.  In one study, for libraries providing World Wide Web
services and supporting multiple, multimedia workstations with
Internet access at T-1 speeds, "communications hardware and fees"
accounted for about eight percent of one-time costs and 29
percent of ongoing costs, or roughly 20 percent of total
deployment costs.[25]  A second analysis would appear to yield
results that are not dissimilar:  a small up-front cost of four
percent for T-1, ISDN, or POTS connections, but ongoing costs of
nine percent for connectivity plus 23 percent for primarily
information services ("content").[26]  

     The differing percentages between schools and libraries may
reflect several factors.  One plausible explanation may be the
much greater volume of hardware (e.g., PCs) needed to equip all
the classrooms at a given school relative to a typical library. 
The libraries' figure may also reflect the cost of additional
educational software and subscription to on-line services.  An
important factor potentially influencing the magnitude of the
cost for a given institution (besides hardware, software,
technical support, and training) could be the type of service
required to reach the serving long-distance carrier's "point-of-
presence" (POP) for Internet access.  For many rural libraries
and schools, this would require long-distance calling, which may
be difficult to control.[27]

     Thus, the estimates derived from the data reviewed above
afford -- at best -- a rough estimate of the average annual costs
that could be incurred for connecting and sustaining schools' and
libraries' use of the NII.  If the per-annum cost of deployment
for public schools were roughly $4-11 billion, and for public
libraries
$2 billion, the aggregated figure would be roughly $6-13
billion.[28]  If the connectivity percentage were estimated at
ten percent for schools and 20 percent for libraries --
admittedly very tentative figures based on the limited data
available -- the annual aggregated amount for connections would
be roughly $.8-1.5 billion.  Any provision of discounted services
under the Snowe-Rockefeller provision would reduce the latter
figure by the extent of any subsidy from the appropriate
universal service mechanism.  The impact of the Act's provision
according discounts for schools and libraries under Section
254(h)(1) will depend on the actual network configurations
selected by those institutions.       

     Again, the data from the models reviewed serves only as a
starting point for exploring this issue.  The above-mentioned
TIIAP grants help illustrate the variability of an institution's
telecommunications outlays or "connection" costs as a proportion
of total expenditures needed for access to the NII.  In the case
of rural Green Valley High School, communications expenses ranked
first in both up-front costs and annual recurring costs.  On the
other hand, up-front connections or communications registered the
lowest ranking for both Harlem, an inner city school, and
Rockbridge, a regional cluster of schools.  In Harlem and
Rockbridge -- similar to Green Valley -- annual connections or
communications disbursements ranked number one among recurring-
cost categories, but the amounts per school ranged from less than
$1000 (Harlem) to more than $9,800 (Green Valley) for varying
capabilities.  In each case, networking centered in a lab or
media room -- in lieu of connectivity for all classrooms --
tended to reduce hardware, training, and support costs for both
one-time and recurring expenditures relative to more extensive
networking systems.


V.  Specific Implications for the Snowe-Rockefeller Amendment

     Importantly, "connections" represents the portion of the NII
costs for schools and libraries that come under the Snowe-
Rockefeller amendment to the Act, permitting these institutions
to obtain, upon bona fide request, FCC-authorized "special
services" to be used for "educational purposes" at rates less
than the amounts charged for similar services to other parties. 
If the costs are relatively small, the burden to fund the
discounts may not be substantial; if relatively high, however, a
significant contribution to the fund may be required.

     In view of the above data, the connections portion of total
deployment costs would seem to be relatively low for libraries
and schools.  The discounted connections services which may draw
support from the universal service mechanism would tend to
represent only a fraction of the expenditures incurred by the
schools and libraries.  Based on the foregoing data,
implementation of the preferential rate scheme in the Act is
likely to cost significantly less than achieving the remainder of
the task of connecting and sustaining schools and libraries --
obtaining and deploying hardware, software, training, and
technical support.  

     Thus, the demands placed on the new universal service
mechanism may be a relatively modest proportion of the total
costs of bringing schools and libraries into the Information Age. 
The specific outlays relating to telecommunications will vary
according to the needs of a given institution but, generally
speaking, will be of a much lesser magnitude than those for PCs,
technical support, and training where all classrooms are
connected to the NII.  Exceptions may occur where network usage
rises relative to up-front costs, and rapid technological change
could put pressure on institutions to upgrade their hardware and
associated training and technical support.  For schools or
libraries in rural, often higher-cost or lower-income areas,
outlays may be higher because of the greater need for long-
distance calling in order to reach the Internet or other
destinations, or perhaps due to requirements for substantially
longer local loops.

     In conclusion, the goal of connecting and sustaining access
for schools and libraries to the NII requires the integration of
a number of elements.  Preferential rates under the Snowe-
Rockefeller amendment to the Act represent only one ingredient --
albeit an important one -- in the mix.  Other key elements
include computers, educational software, trainers and training
programs, and support such as maintenance and repair.  A critical
part of the process will be for those in the educational
community to integrate the information afforded by the NII into a
meaningful curriculum for students.  Library administrators can
also contribute to this goal by providing user-friendly
capabilities and technical assistance to those using their
facilities.  

     Thus, the Act's preferential rate scheme for schools and
libraries is an important linchpin for full realization of the
benefits offered by the NII.  The Snowe-Rockefeller provision
presents an unusual opportunity to help ensure that our nation's
schools and libraries are able to fully participate in the
burgeoning Information Age.  Based on an analysis designed to
catalyze a needed debate on this issue, NTIA has found that the
cost of connections as a proportion of total expenditures
required to permit schools and libraries to become active
partners in the NII appears to be moderately low.  Concomitantly,
the demands that would be placed on the universal service fund in
recovering the discounted portion of connections costs for these
institutions would not be extreme, as feared by some.  
                            ENDNOTES

[1]  TIIAP refers to the Telecommunications and Information
Infrastructure Assistance Program, which provides matching grants
to non-profit organizations for the purpose of improving the
quality of, and the public's access to, education, health care,
government services, and economic development.  Since 1994, TIIAP
has awarded 209 grants in 47 states, the District of Columbia,
and several territories.  

[2]  See Telecommunications Act of 1996, Pub. L. No. 104-104, 
254(h)(B)(1),  110 Stat. 56 (1996).  This analysis excludes rural
health care providers, which are assured by the Act of receiving
telecommunications rates that are "reasonably comparable" to
urban counterparts also located in their states.

[3]  For example, using model projections, a 1995 study by the
University of Florida's Telecommunications Industries Analysis
Project concluded that total costs for a 20-year broadband
deployment program would range from $14.7 billion for connecting
only teachers to $118.3 billion for hooking up all students and
teachers in public schools.  If a five-year accelerated
deployment schedule were pursued, then the range would be $28.6
billion to $204.4 billion.  See Carol Weinhaus et al., Schools in
Cyberspace: The Cost of Providing Broadband Services to Public
Schools, Executive Summary 5-6 (July 1, 1995) (Presentation at
the July 1995 NARUC Meeting, San Francisco, CA).  The Project's
study focused on hardware, software, training, wiring, and
Internet access costs incurred by schools or LECs.  Tariffed
rates for telephone services or enhanced broadband services were
excluded, as were ongoing expenses for maintenance and
operations. Id. at 21.

[4]  Under the auspices of the Department's Office of Educational
Technology, Russell I. Rothstein authored the study, Connecting
K-12 Schools to the NII: A Preliminary Assessment of Technology
Models and Their Associated Costs, August 4, 1994.  Analyst John
C. Beachboard notes that the recurring charge estimate is
"substantially" understated because it omits equipment
maintenance charges.  See Comments of Syracuse University School
of Information Studies at 11, n. 39, NTIA Inquiry on Universal
Service and Open Access (December 19, 1994).  The following year,
Rothstein and McKnight revised the study.  See Technology and
Cost Models of K-12 Schools on the National Information
Infrastructure, Massachusetts Institute of Technology, February
10, 1995.  Rothstein further developed the analysis in his
Master's Thesis at MIT.  See Networking K-12 Schools:
Architecture Models and Evaluation of Costs and Benefits,
submitted to the Sloan School of Management and the Technology &
Policy Program (May 10, 1996) [hereinafter MIT Thesis].

[5]  Id. at 35-38.

[6]  Id. at 35, 39-42, Table 3.  Rothstein bases this conclusion
on the Federal Information Infrastructure Task Force's (IITF)
assessment that the NII:

     promises every...school...in the nation access anywhere to
     voice, data, full-motion video, and multimedia applications. 
     Through the NII, students of all ages will use multimedia
     electronic libraries and museums containing text, images,
     video, music, simulations, and instructional software.

See MIT Thesis, supra note 4 at 44, fn. 14, citing IITF, NIST
Special Pub. 857, Putting the Information Infrastructure to Work
(Washington, D.C.:  U.S. Government Printing Office 1994). 
Rothstein indicated that these three models would not provide
access to such services, whereas Models 4 and 5 could.

[7]  MIT Thesis, supra note 4 at Table 4, see generally Chpt.
Two.

[8]  Id.  Table 5.  The costs for educational software and
applications were not included due to the need for further
research.  In the models, it was assumed that schools would be
able to obtain free versions of educational software. 

[9]  Id. at 16-17.

[10]  Id. at 43-46, Figure 7.  The percentage is based on an
average of low and high cost estimates, excluding PC purchases
over the first five years of deployment.  Rothstein argues that
because the "value of PCs goes well beyond their use as
networking devices... the costs should be allocated across other
parts of the technology budget."  Id. at 45.         

[11]  U.S. Advisory Council on the National Information
Infrastructure, KickStart Initiative:  Connecting America's
Communities to the Information Superhighway, 90-91 (Jan. 1996).

[12]  McKinsey notes that the ED/MIT studies "informed [their]
approach early on" but the Rothstein/McKnight analysis factored
in less training and support, much longer hardware replacement
cycles, and no packaged software or upgrades, and did not allow
for either declining hardware prices over time or differing
rural/urban connection requirements.  McKinsey & Company,
Connecting K-12 Schools to the Information Superhighway 63-64
(1995) [hereinafter McKinsey Study].

[13]  Kickstart Initiative, supra note 11 at 92-95.  McKinsey
also considered a Desktop model that would place a networked PC
on each student's desk, but the consultant abandoned an in-depth
examination because of the perceived high costs of
implementation.  For example, initial installation costs were
estimated to be 3.5 times greater, and ongoing costs 2.5 times
greater, than the figures calculated for the Classroom model. 
McKinsey Study, at 24.

[14]  While the studies discussed present a mix of per-
institution and aggregate library costs, the insights provided
tend to outweigh any incongruities. 

[15]  Hearings on Internet Access Before the Subcomm. on Science
of the House Comm. of Science Space and Technology, 103rd Cong.,
2nd Sess. 8 (1994) (statement of Charles R. McClure, School of
Information Studies, Syracuse Univ.); see also NYSERNet, The
Project GAIN Report: Connecting Rural Public Libraries to the
Internet 8 (Feb. 15, 1994).

[16]  NYSERNet at 29.

[17]  Charles R. McClure, John Carlo Bertot, and John C.
Beachboard, National Commission on Libraries and Information
Science, Internet Costs and Cost Models for Public Libraries,
Final Report at 15, Figure 6 (June 1995).

[18]  Id.

[19]  Id. at 15-16, Figure 10.

[20]  Id. at 15, Figure 8.

[21]  Id. at 19, Figure 14.

[22]  KickStart Initiative, supra note 11 at 94-98.

[23]  Gauged by another measure, implementing the above scenario
would require an expenditure of an estimated four to five percent
of the budget for K-12 public schools in the peak (tenth) year --
compared to the current proportion of 1.3 percent. Id. at 90. 
For Rothstein's Model 4, with eight students per computer and 56
Kbps connection to a school district office with a T-1 link over
a five-year period, the percentage would be three to seven
percent of national educational expenditures.  MIT Thesis, supra
note 4 at 49.

[24]  For example, McKinsey estimated such costs under the
Classroom scenario to be four percent of all initial deployment
costs and seven percent of all recurring costs. KickStart
Initiative, supra note 11 at 90-91.  McKinsey cautioned, however,
that usage costs could go up over time, and that one strategy to
mitigate this effect would be to install greater-capacity
connections up front. Id. at 92.  Rothstein estimated that costs
for telecommunications lines and services would account for 11
percent of the total costs of networking schools, which is
"...lower than the costs assumed by much of the technology
community, including the telecommunications service and equipment
providers."  R.I. Rothstein, Connecting K-12 Schools to the NII:
A Preliminary Assessment of Technology Models and Their
Associated Costs, Technical Horizons in Education Journal 2 (Oct.
1995).

[25]  See Comments of the American Library Association, CC Docket
No. 96-45 at 14 (April 10, 1996) citing NCLIS, Internet Costs and
Cost Models for Public Libraries, Final Report (June 1995).  The
20 percent figure is not provided in the NCLIS report, but
represents a very approximate averaging of one-time and ongoing
costs (where the weighting for the recurring costs increases as
more years are assumed, resulting in a communications/total cost
percentage of, e.g., 17.2 percent for one year, 24.9 percent for
five years).

[26]  KickStart Initiative, supra note 11 at 96-98.

[27]  For documented problems of controlling such "variable"
costs in households, see, e.g., Lyndon B. Johnson School of
Public Affairs, The University of Texas, The Evolution of
Universal Service Policy in Texas (1995); and Milton Mueller and
Jorge Schement, Rutgers University School of Communication,
Universal Service From the Bottom up: A Profile of
Telecommunications Access in Camden, New Jersey (1995).

[28]  It should be kept in mind that this broad estimate
represents a calculation based on models, not a detailed
inventory of every school and library.  In practice, existing
stocks of networking equipment or software, or levels of training
and support, could differ from those assumed in the models, and
actual deployment could differ from institution to institution as
a result of varying needs and budgets.  More importantly, a
public-private sector partnership has already begun building the
infrastructure of schools and libraries at nominal charges or for
free through, for example, contributions of new or surplus PCs or
software, or training or support.