Minnesota network stalls

Minnesota state officials are considering their next step after recently

terminating an agreement with a developer unable to get additional funding

for the installation of a 2,200-mile fiber-optic network. The network was

to be a boon to half the state's population — people living outside the

Minneapolis/St. Paul metropolitan area. Officials hoped to bring high-speed

transmission, greater bandwidth and emerging technologies to rural areas

by late 2002.

"We are starting to have a discussion with private companies and other

public-sector people to see what business model we should use to move forward,"

said Adeel Lari, director of the Department of Transportation's Office of

Research Services. The state's DOT and Department of Administration led

the project.

Under the agreement, Denver-based developer International Communications

Services/Universal Communication Networks (ICS/UCN) was to entirely finance

the estimated $200 million project, which opened interstate and state highway

rights-of-way to fiber-optic installation.

However, the company was unable to obtain additional financing by a

Feb. 15 deadline. It had apparently laid down an estimated 250 miles of

the network and invested $30 million.

The project would have brought the state's public sector — elementary

and secondary schools, universities, libraries, and state and local governments

— access to 20 percent of network capacity and a future 20 percent.

The vast majority of the network would have been available to the private

sector, and the state hoped it would spur economic development, competition

among telecommunications providers and result in lower rates for businesses

and residential users.

"We were disappointed they could not finance it, but we understand the

economy has changed," Lari said.

The project, known as "Connecting Minnesota," has encountered construction

delays stemming from regulatory and legal challenges since negotiations

began in 1996.

Construction began in 1998 along Interstate 94, linking Moorhead, St.

Cloud and Minneapolis and then leading from Minneapolis to the Wisconsin

border.

Lari said the state may change the scope and dimensions of the project

and possibly use more than one vendor. He hoped a decision would be made

within the next couple of months.