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57
Technology and Cost Models for Connecting K-12 Schools to the
National Information Infrastructure
Russell I. Rothstein and Lee
McKnight
Massachusetts Institute of Technology
Abstract
It is presumed that universal connection to the national
information infrastructure (NII) will facilitate educational reform
within schools and communities. Several developments suggest that
this might be the case:
•
The federal government is committed to have every
classroom in the United States connected to the NII by the year
2000;
•
A number of telephone and cable companies have
announced plans to connect schools in their service areas at low or
no cost;
•
Modern, high-speed networks have been installed at
a number of progressive, pioneering K-12 schools; and
•
The Internet, a global network of networks, has
grown rapidly, providing connections to an abundance of educational
resources.
However, to date, there is relatively little known about the
costs for connecting schools to the information infrastructure.
Even if the exact costs are unknown, they are expected to be
significant. To reduce these costs, a variety of approaches are
being tried.
Some states have implemented the cost-saving program of
purchasing telecommunications equipment and services for all
schools in the state. For example, North Carolina has saved its
schools 20 to 50 percent of the costs for certain items. Some
states have passed legislation permitting the state public utility
commission to set preferential or fixed intrastate rates for
educational institutions.
Using a baseline of service required for connecting to the NII,
there will be $9.4 billion to $22.0 billion in one-time costs with
annual maintenance costs of $1.8 billion to $4.6 billion. At the
per-pupil level, this is equivalent to $212 to $501 in one-time
installation costs and an ongoing annual cost of $40 to $105.
Hardware is the most significant cost item for schools. However,
most of this cost item is allocated for the purchase of PCs in the
schools. The value of the PCs goes well beyond their use as
networking devices. Therefore, the real costs for PC purchases
should be allocated across other parts of the technology budget,
and not only to the networking component. If this is done, then the
hardware costs for connecting to the NII drop considerably.
Excluding PC expenditures, costs for support of the network
represent about one-third of all networking. Support is a vital
part of the successful implementation of a school network and its
costs must be factored in to the budget. Support and training
together constitute 46 percent of the total costs of networking
schools. Costs for telecommunications lines and services represent
only 11 percent of the total costs. This amount is lower than the
costs assumed by much of the technology community, including the
telecommunications service and equipment providers.
NOTE: Russell I. Rothstein is a research
assistant and Lee McKnight is a principal research associate with
the MIT Research Program on Communications Policy. This paper is
based on a report prepared when Russell Rothstein was a visiting
researcher at the Office of Educational Technology in the U.S.
Department of Education in 1994. Further work was supported by ARPA
contract N00174-93-C-0036 and NSF grant NCR-9307548 (Networked
multimedia Information Services). The invaluable help of Linda
Roberts, U.S. Department of Education, and Joseph Bailey, Thomas
Lee, and Sharon Gillett, MIT Research Program on Communications
Policy, is acknowledged.
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Our research suggests that a number of programs would have a
significant impact on the total costs of connecting to the NII. If
all schools coordinate purchasing at the state level, cost savings
will exceed $2 billion. Colleges and universities often have the
resources to provide technical support to K-12 schools. If a
nationwide program were instituted, potential savings would be $800
million to $1.8 billion. If schools were given free Internet
connectivity, the reduction in total annual costs for school
Internet connections would be between $150 million and $630
million.
Finally, as the costs of networking schools are better
understood, a new question arises: how will these costs be
financed? Many states have programs to fund networking in schools.
The federal government has a role, although it must become more
flexible and coordinated. However, as Vice President Al Gore has
continued to state, the NII will be built by the private sector. A
number of states have initiated cooperative ventures between
businesses and schools. An expansion of these programs may well be
the key for successfully connecting K-12 schools to the NII.
Introduction
On January 11, 1994, Vice President Al Gore challenged the
nation to "connect every classroom by the year 2000" to the
national information infrastracture (NII). In testimony before
Congress in May 1994, Secretary of Education Richard Riley said,
"We may have to go a step further and provide our schools with free
usage of the telecommunications lines that will connect school
children and young people" to the NII. In an address at the Harvard
Graduate School of Education, FCC Chairman Reed Hundt said that "if
the Administration's challenge is met by everyone, education in
this country will be reinvented, forever and for better." Universal
connection to the NII, it is presumed, will facilitate educational
reform within schools. However, to date, relatively little
information has been available about the costs for connecting
schools to the information infrastracture. This paper presents
models for evaluating the total cost of full NII connectivity for
schools through an engineering cost study of equipment, services,
software, and training needs.
Cost Models of K-12 Networking
Five models for connecting schools to the NII are presented in
the next section in order of increasing cost and power to describe
the path that many schools may follow. A school will likely begin
its connection through the low-cost dial-up option described in
model one. As the school builds expertise and develops a need for
greater capability, it will upgrade to a higher level of
connectivity. It is not until the school acquires
telecommunications infrastracture similar to model four that it is
able to take advantage of many of the educational services and
applications provided on the emerging NII. Model five presents the
costs for putting a PC on the desktop of every student, with a
high-speed connection to the Internet. Although this setup is not
necessary for access to many of the coming NII services, it
presents a model of systemic educational reform with information
and networking technology.
These models are representations of the network technology used
in schools. A level of complexity and detail is omitted from these
models, but the simplicity is helpful because the models encompass
broad cross sections of network and school configurations. The
models provide a clearer view of the costs and choices for
networking K-12 schools.
There are numerous ways to define a school network. The models
presented below follow the Internet networking model, in which
schools have digital data connections that transmit and receive
bits of information. The models exclude both analog video
point-to-point networks and voice networks including PBX, centrex,
and voice-mail systems. Audio and video functions are possible in
digital format over the Internet data network. However, many
schools will require video and voice networks in addition to the
data networks. The costs of these systems are important to consider
but are not modeled in this paper.
It should be noted that although voice and video networks have
been separated out from data networks in this paper, schools should
not consider these three types of networks to be wholly distinct.
Some schools have integrated their voice and video networks with
the school data network. The sharing of resources among the
multiple networks can be effective in providing significant cost
savings. At a basic level, it must be understood
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that as a school installs a LAN and puts computer data
connections in every classroom, there are minimal added costs to
concurrently install other types of connections, including
telephone lines.
Assumptions
The assumptions described below are the basis for determining
the costs of networking schools. These assumptions are conservative
but realistic, to ensure that the total costs are not
underestimated.
Technology Standard for Connecting to
the NII
As described by the Information Infrastracture Task Force
(1994), 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." In models four and five, the school has
access to these NII services. The following requirements outline
the needs for those models in order to have full connection to the
NII:
•
A LAN within each school with connections to
multiple machines in every classroom. The power of the network
is greatly enhanced as the number of access points increases
throughout the school. A classroom with one connection is not
conducive to use of network applications in a class of 20 or 30
students. Telecommunications technology will not be a tool for
systemic educational reform until network connections are available
throughout the school.
•
A connection from each school to a community
hub. From 2 to 10 schools should connect to a single hub,
depending on the size of the schools. In most cases, the hub will
reside at the school district office. However, in cases where there
are many schools in a single district, the schools should be
clustered into sets of four to six. Each of these school clusters
will have a group hub, probably at the district office, which will
contain the center of the network for those schools. The rationale
for the use of this architecture is described below.
•
A connection between the school LAN and the
district office hub. With this configuration, every classroom
has a connection not only to every other classroom in the school
but also to the central school district office.
•
A connection from the school district office to
a community-, state-, or nationwide wide area network (WAN).
This connection will allow all schools to connect to the WAN. The
Internet is a good example of a WAN and is used throughout this
report as a model and a precursor for the coming NII.
•
Sufficient bandwidth for these connections.
With a high-bandwidth connection, users in schools can make use of
graphical applications (e.g., Mosaic) and limited video service
(e.g., CU-SeeMe and MBONE). For most school districts, the minimum
bandwidth, or bit-speed, that will support these services is 56,000
bits per second (56 kbps). Therefore, the connection between the
school and the hub must be at or above this level. For the
connection from the district office to the Internet, a higher
bandwidth connection is necessary because all of the schools in the
group connect to the Internet through this line. The suggested
minimum bandwidth for this connection is 1,500,000 bits per second
(1.5 Mbps), otherwise known as a T-1 line.
•
Symmetric, bidirectional access to the
WAN/Internet. It is important that the connection to a school
allow information to flow both in and out of the school at the same
rates. In this way, students can become both consumers and provides
of information over the network.
•
Adequate remote dial-up facilities. With a
sufficient number of modems and phone lines, faculty, students, and
parents can gain access to the school system remotely on weekends
and after school hours.
•
Use of established and tested technologies.
Schools have benefited most from mature technologies that have been
well tested in the marketplace. Use of cutting-edge technologies
has not been as successful in schools due to the instability of the
technologies and the large amount of resources required to support
them. The models assume the use of mature technology and
transmission media. Therefore, modern technologies such as
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wireless and hybrid fiber coaxial systems are not
considered in this study. However, given the rapidity of
technological change and marketplace evolution for networking
products and services, wireless and cable alternatives should be
evaluated in future research.
Each of the successive models progresses closer to this
configuration. The first three models represent the schools and
districts that have not reached this level of networking. It is not
until the fourth model that these requirements have been
incorporated. The fifth model continues on this path and exceeds
the baseline requirements. It is assumed that some schools will
traverse the path through each of the models to connect to the
national information infrastracture.
Architecture of the District
Network
The basic network architecture for these models follows the
"star" network configuration as illustrated in Figure 1. This
architecture is also used in the nationwide telephone network. In
the telephone network, residential telephone lines in an area are
directly connected to a single district office. In the school
network, each school building is connected to the school central
hub. In most cases, the district office will serve as the central
hub. However, in cases where there are either few or large numbers
of schools in one district, alternative sites must be chosen.
Figure 1
"Star" network. SOURCE: Newman et al.
(1992).
The rationale for adopting this architecture is that, when many
schools are connected through a single hub, costs can be aggregated
among the schools. This gives schools stronger purchasing power as
equipment purchases are aggregated by the school district for
volume discounts. It also allows schools to share
resources—such as the data line to the Internet, training
programs, and full-time support staff—that each school might
not be able to afford individually. Therefore, there are costs both
at the school and at the district level for networking schools
across the country. The star network configuration for schools,
utilizing a community or district hub, is recommended in Gargano
and Wasley (1994) and in California Department of Education
(1994).
Cost Areas
The cost models presented in this paper include four types of
costs—hardware, training, support, and retrofitting. The items
included in these categories are summarized below.
•
Hardware. Wiring, router, server, PCs,
including installation, maintenance, and servicing of the hardware
and telecommunications lines.
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•
Training. Training of teachers and other
school staff to use the network.
•
Support. Technical support of the
network.
•
Retrofitting. Modifications to the school
facility to accommodate the telecommunications infrastructure. This
may include costs for asbestos removal (where applicable);
installation of electrical systems, climate control systems, and
added security (locks, alarms, etc.); and renovation of buildings
to accommodate network installation and operation.
The following cost area is not included in the models:
•
Educational software. There are "freeware"
versions of many popular Internet applications. However, other
educational software may be desired by particular schools. The
costs for this software may be high, but they are not included in
the models. Further economic analysis of software costs and their
evolution in the network scenarios analyzed below is required.
Instructional Use of the Network
It is likely that the type of technology model deployed in the
school will greatly affect the use of the network and the
educational benefits obtained. A school with multiple networked PCs
in every classroom (model four) will reap greater educational
benefits from the network than a school with a single PC and modem
(model one). Similarly, video and graphical applications (e.g.,
Mosaic and CU-SeeMe), available in models four and five, add
educational value to the text-based applications available in the
lower-end models. However, there has not yet been a quantitative
analysis of the educational benefits associated with each
particular model. This paper is concerned exclusively with the
costs for the various network models. Study to determine the
educational benefits of various K-12 network models is also needed.
When the educational benefits are quantified, they should be
compared to the costs outlined in this paper. The synthesis of
these studies will generate a cost-benefit curve for connecting
schools to the network. That information is vital for determining
national policy on connecting schools to the NII.
School Characteristics
The models described are based on a "typical" school and school
district, as defined by the U.S. Department of Education (1993),
and represent the average costs of all U.S. schools and school
districts. Many schools will differ in significant ways from the
"typical" school and will therefore face somewhat different costs
from those presented in the models.
Size of School. The average school has about 518 students
and twenty classrooms. It employs 27 teachers and 25 other school
staff. The average number of schools in a school district is about
six. (These numbers are based on a national enrollment of
approximately 44 million students in 85,000 public schools in
15,000 school districts.)
Existing Equipment. According to Anderson (1993), as of
1992 there was an average of 23 computers per school at the
elementary and middle school levels, and 47 computers per school at
the secondary school level. About 15 percent of these machines, or
three to seven machines per school, are capable of running the
network protocol (TCP/IP) to access the Internet. During the 3
years from 1989 until 1992, the number of computers in schools grew
by 50 percent. Given the increasing growth rate of computers in the
market, it is safe to assume that the growth rate of computers in
these schools has exceeded 50 percent over the past 2 years. Given
these assumptions, in an average school there are at least seven
PCs capable of running graphical Internet applications (e.g.,
Mosaic). This number of PCs is sufficient for the first two models,
but it is not sufficient for establishing multiple connections in
every classroom throughout the school. Therefore, for models three,
four, and five, there is a line-item cost for purchasing additional
PCs.
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Cost Models
Single-PC Dial-up (Model One)
The single-PC dial-up model (Figure 2) represents the most basic
connectivity option for a school. The school has no internal LAN.
There is a single connection to the district office over a modem
and standard phone line. Only one user may use the connection at
any time. Since the system is limited, only a few teachers in the
school require training. Users of the system will be able to use
text-based applications over the Internet (e.g., e-mail, Telnet,
Gopher), but will have no real-time access to video or
graphics.
Model one is the lowest-cost option for schools. Many of the
services and benefits envisioned for the NII will not be widely
accessible in schools using this model of connectivity. Table 1
lists the cost items associated with the single-PC dial-up
model.
LAN with Shared Modem (Model Two)
The primary difference between model two (Figure 3) and model
one is the existence of a LAN within the school. By connecting the
modem to the LAN, every computer on the network has access to the
Internet. However, this model supports only a few users at a time,
since it is limited by the number of phone lines going out of the
school. As in model one, users of the system can use text-based
applications over the Internet (e.g., e-mail, Telnet, Gopher) but
have no real-time access to video or graphics.
In model two, there is the added cost for a LAN. This model
assumes the use of copper wire (category 5) as the medium for the
network since it is the most affordable and scaleable option for
schools in 1994. The costs for the wiring and network cards run
$100 to $150 per PC connected. Including the costs for the
accompanying hardware and labor, the costs per PC are $400 to $500.
Therefore, for a school with 60 to 100 connected PCs (3 to 5 PCs
per classroom @ 20 classrooms), the total LAN costs are $20,000 to
$55,000.
Model two is another low-cost option for schools. However, many
of the services and benefits envisioned for the NII are still not
widely accessible in this model. Table 2 lists the cost items
associated with this model.
Figure 2
Single-PC dial-up model. SOURCE: Rothstein (1994).
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Figure 3
LAN with shared modem model. SOURCE: Rothstein (1994).
Lan with Router (Model Three)
The primary difference between model three (Figure 4) and model
two is a router in place of the modem. With the router, multiple
users of the LAN may access the Internet concurrently. Just as in
the first two models, users of the system are able to use
text-based applications over the Internet (e.g., e-mail, Telnet,
Gopher) but have no real-time access to video or graphics.
Since the router allows multiple users of the system, there is
an opportunity to expand the entire network infrastructure. With
this infrastructure, it is reasonable to support one PC in every
classroom. Therefore, there is a requirement to purchase 15
additional PCs for the average school to use in addition to its
small initial stock of TCP/IP-compatible machines. It is assumed
that the purchasing of these PCs is done at the district level to
negotiate better rates ($1,000 to $2,000 per PC). Support and
training costs are higher since there are additional users of the
system. There are additional dial-up lines required to accommodate
remote access, as well as significant retrofitting costs for the
electrical system, climate control system, and enhanced security.
Table 3 gives a line item summary of the costs associated with
model three.
Figure 4
LAN with router model. SOURCE: Rothstein (1994).
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LAN with Local Server and Dedicated
Line (Model Four)
The primary difference between model four (Figure 5) and model
three is the existence of a file server at the school. The on-site
server allows much of the information to reside locally at the
school instead of at the district office. This feature provides
better performance since much of the information does not need to
be fetched over the network. Additionally, the local server allows
school administrators to exercise greater control over the
information that flows in and out of the school. Higher-speed links
from the school enable the use of limited video, graphical, and
text-based network applications.
In model four, virtually the entire school is supported on the
network. As a result, the training program is extensive and the
support team is well staffed. The costs of the connection to the
Internet are also higher due to the larger bandwidth connection.
There are significant retrofitting costs for the electrical system,
climate control system, and better security. Table 4 lists the cost
items associated with this model.
The costs associated with using model four are indicative of the
costs of connecting K-12 schools across the country to the NII.
These numbers indicate that there will be $9.4 billion to $22.0
billion in one-time costs, with annual maintenance costs of $1.8
billion to $4.6 billion. At the per-pupil level, this is equivalent
to $212 to $501 in onetime installation costs and an ongoing annual
cost of $40 to $105.
In this model, hardware is the most significant cost item for
schools. However, most of this cost item is allocated for the
purchase of PCs in the schools. The value of the PCs goes well
beyond their use as networking devices. Therefore, the real costs
for PC purchases should be allocated across other parts of the
technology budget, and not only to the networking component. If
this is done, then the hardware costs for connecting to the NII
drop considerably.
If the high start-up costs are amortized equally over a 5-year
period, then the breakdown of costs during the first 5 years,
excluding PC purchases, is as shown in Figure 6.
Costs for support of the network represent about one-third of
all networking costs in model four. Support is a vital part of the
successful implementation of a school network and its costs must be
factored into the budget. Support and training together account for
46 percent of the total costs of networking schools.
Finally, it is important to note that the costs for
telecommunications lines and services represent only 11 percent of
the total costs. This amount is lower than the costs assumed by
much of the technology community, including the telecommunications
service and equipment providers.
Ubiquitous LAN with Local Server and
High-Speed Line
Model five (Figure 7) represents a full, ubiquitous connection
to the NII. In this model, there is a PC on the desktop of every
student and teacher. There is a high-bandwidth connection to the
school to support large numbers of concurrent users of the system.
This model supports the full suite of text, audio, graphical, and
video applications available over the Internet.
In model five, the entire school is supported on the network. A
large portion of the costs for this model is the expenditure for
PCs on every desktop. Assuming 500 students, there is a need to
purchase 450 new PCs. Since the network is ubiquitous, the training
program is extensive and the support team is well staffed. The
costs of the connection to the Internet are also higher because of
the high-speed line going into the school. The file server is
larger than model four's server to accommodate the large number of
networked PCs. The dial-up system is larger in order to allow many
students, teachers, and parents to access the system remotely. The
retrofitting costs are substantial because extensive electrical
work must be performed in the average school to accommodate the
hundreds of new PCs. In addition, the school in model five must
make expenditures on air conditioners and security locks to protect
the new equipment. Table 5 lists the cost items associated with
this model.
Cost Comparison of Models
U.S. expenditures on K-12 education in 1992–93 totaled
$280 billion. Total onetime costs for model four represent 3 to 7
percent of total national educational expenditures. The ongoing
annual costs represent between
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0.6 and 1.6 percent of total national educational expenditures.
For model five, the costs are more significant, with one-time costs
representing 18 to 41 percent of total national educational
expenditures.
Figure 5
LAN with local server and dedicated line model. SOURCE: Rothstein
(1994).
Figure 6
Breakdown of costs for model four. SOURCE: Massachusetts Institute
of
Technology, Research Program on Communications Policy (1994).
The models with advanced connectivity include significant
equipment and training costs, which may be beneficial for
educational purposes other than network uses. If these costs are
accounted for separately, the difference in costs between models
four and five will not be as significant as those presented
here.
Table 6 summarizes the associated range of costs for the various
technology models.
Potential Impact of Cost-Reduction
Initiatives
Much more can be done by the government and the private sector
to significantly mitigate costs schools face to connect to the NII.
This section examines some possible programs and their impact on
costs to schools.
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Figure 7
Ubiquitous LAN with local server and high-speed line model. SOURCE:
Rothstein (1994).
TABLE 1 Single-PC Dial-up Model Costs
(dollars)
Low
High
SCHOOL COSTS
>Onetime Installation Costs
Telephone line
100
250
Modem
150
250
Total
250
500
Annual Operating Costs
Replacement of equipment
50
150
Telephone line (10 hr/month)
300
1,500
Total
350
1,650
DISTRICT OFFICE COSTS
Onetime Installation Costs
File server
2,000
10,000
Data line to WAN/Internet (56 kbps)
500
2,000
Training (2 to 4 teachers per school)
1,000
10,000
Total
3,500
22,000
Annual Operating Costs
Internet service (56 kbps)
5,000
10,000
Support
2,000
10,000
Training
1,000
5,000
Total
8,000
25,000
U.S. ONETIME COST
Onetime cost per student
1.68
$8.47
Total
70,000,000
370,000,000
U.S. ANNUAL COSTS
Annual cost per student
3.40
11.71
Total
150,000,000
520,000,000
SOURCE: Rothstein (1994).
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TABLE 2 LAN with Shared Modem Model Costs
(dollars)
Low
High
SCHOOL COSTS
Onetime Installation Costs
Local area network
20,000
55,000
LAN modem
500
1,200
Retrofitting (minor)
2,000
10,000
Total
22,500
66,200
Annual Operating Costs
Replacement of equipment
3,000
8,250
Shared telephone line (40 hr/month)
1,200
6,000
Total
4,200
14,250
DISTRICT OFFICE COSTS
Onetime Installation Costs
File server
2,000
10,000
District local area network
2,000
5,000
Data line to WAN/Internet (56 kbps)
500
2,000
Dial-up capabilities (2 lines)
2,000
4,000
Training (5 to 20 staff per school)
1,000
10,000
Total
7,500
31,000
Annual Operating Costs
Internet service (56 kbps)
5,000
10,000
Dial-up lines
300
500
Support (1 to 2 staff per district)
45,000
90,000
Training
10,000
20,000
Total
60,300
120,500
U.S. ONETIME COST
Onetime cost per student
46.02
138.45
Total
2,030,000,000
6,090,000,000
U.S. ANNUAL COST
Annual cost per student
28.67
68.61
Total
1,260,000,000
3,020,000,000
SOURCE: Rothstein (1994).
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TABLE 3 LAN with Router Model Costs (dollars)
Low
High
SCHOOL COSTS
Onetime Installation Costs
Local area network
20,000
55,000
Personal computers (15 machines)
15,000
30,000
Router
2,000
3,000
Connection to hub (14.4 kbps or 56 kbps)
50
1,000
Retrofitting (major)
10,000
25,000
Total
47,050
114,000
Annual Operating Costs
Replacement of equipment
3,000
8,250
Connection to hub (14.4 kbps or 56 kbps)
500
10,000
Total
3,500
18,250
DISTRICT OFFICE COSTS
Onetime Installation Costs
File server
2,000
15,000
Router
2,000
5,000
District local area network
2,000
5,000
Data line to WAN/Internet (56 kbps)
500
2,000
Dial-up capabilities (8 lines)
8,000
16,000
Training (10 to 20 staff per school)
1,000
10,000
Total
15,500
53,000
Annual Operating Costs
Internet service (56 kbps)
5,000
10,000
Dial-up lines
1,200
2,000
Support (1 to 2 staff per district)
45,000
90,000
Training
10,000
20,000
Total
61,200
122,000
U.S. ONETIME COST
Onetime cost per student
96.18
238.30
Total
4,230,000,000
10,490,000,000
U.S. ANNUAL COST
Annual cost per student
27.63
76.85
Total
1,220,000,000
3,380,000,000
SOURCE: Rothstein (1994).
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TABLE 4 LAN with Local Server and Dedicated Line
Model Costs (dollars)
Low
High
SCHOOL COSTS
Onetime Installation Costs
Local area network
20,000
55,000
Personal computers (60 machines)
60,000
120,000
File server
4,000
15,000
Connection to hub/district office (56 kbps)
500
2,000
Router and CSU/DSU
2,600
5,000
Retrofitting (major)
10,000
25,000
Total
97,100
222,000
Annual Operating Costs
Replacement of equipment
3,000
8,250
Connection to hub/district office (56 kbps)
1,000
5,000
Total
4,000
13,250
DISTRICT OFFICE COSTS
Onetime Installation Costs
File server
2,000
15,000
Router
2,000
5,000
District local area network
2,000
5,000
Data line to WAN/Internet (1.5 Mbps)
1,000
5,000
Dial-up capabilities (20 lines)
16,000
32,000
Training (40 to 50 staff per school)
50,000
150,000
Total
73,000
212,000
Annual Operating Costs
Internet service (1.5 Mbps)
10,000
42,000
Dial-up lines
3,000
5,000
Support (2 to 3 staff per district)
66,000
150,000
Training
15,000
35,000
Total
94,000
232,000
U.S. ONETIME COST
Onetime cost per student
212.47
501.14
Total
9,350,000,000
22,050,000,000
U.S. ANNUAL COST
Annual cost per student
39.77
104.69
Total
1,750,000,000
4,610,000,000
SOURCE: Rothstein (1994).
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TABLE 5 Ubiquitous LAN with Local Server and
High-Speed Line Model Costs (dollars)
Low
High
SCHOOL COSTS
Onetime Installation Costs
Local area network
50,000
100,000
File server
10,000
25,000
Connection to hub/district office (1.5 Mbps)
1,200
5,000
Router and CSU/DSU
4,000
7,000
PC on every desk (450 new machines)
450,000
900,000
Retrofitting (major, including electrical)
70,000
250,000
Total
585,200
1,287,000
Annual Operating Costs
Replacement of equipment
7,500
15,000
Connection to hub/district office (1.5 Mbps)
10,000
35,000
Total
17,500
50,000
DISTRICT OFFICE COSTS
Onetime Installation Costs
File server
5,000
15,000
Router
2,000
5,000
District local area network
2,000
5,000
Data line to WAN/Internet (1.5 Mbps)
1,000
5,000
Dial-up capabilities (50 lines)
32,000
80,000
Training (all teachers in school)
55,000
165,000
Total
97,000
275,000
Annual Operating Costs
Internet service (1.5 Mbps)
10,000
42,000
Dial-up lines
30,000
50,000
Support (4 to 5 staff per district)
112,200
255,000
Training
16,500
38,500
Total
168,700
385,500
U.S. ONETIME COST
Onetime cost per student
1,163.57
2,580.00
Total
51,200,000,000
113,520,000,000
TOTAL U.S. ANNUAL COST
Annual cost per student
91.32
228.01
Total
4,020,000,000
10,030,000,000
SOURCE: Rothstein (1994).
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TABLE 6 Total Onetime and Ongoing Costs for
Associated Models (billions of dollars)
Onetime Costs
Ongoing Costs
Model
Low
High
Low
High
Single-PC dial-up
0.07
0.37
0.15
0.52
LAN w/shared modem
2.03
6.09
1.26
3.02
LAN w/router
4.23
10.49
1.22
3.38
LAN w/local server and dedicated line
9.35
22.05
1.75
4.61
Ubiquitous LAN w/high-speed connection
51.20
113.52
4.02
10.03
SOURCE: Rothstein (1994).
In determining the costs savings from programs supporting
connection to the NII, it is imperative to define the model of the
NII. In this paper, the baseline model for NII access is a school
with a LAN, a local server, and a dedicated line to the district
hub. This is the fourth model as described above. The costs for
this model are summarized in Table 7.
Based on the costs listed in Table 7, we have estimated the
potential total cost savings for U.S. schools from various
programs.
1.
Preferential telecommunications tariff rates
are instituted for schools. Some state utility commissions have
instituted preferential telecommunications rates for educational
institutions. These rates are applicable only for intrastate
traffic. For interstate traffic, the tariffs set by the Federal
Communications Commission are in effect. Currently, these tariffs
have no preferential rates for educational institutions. The amount
of money that schools will save will depend on the amount of
discount if preferential rates are adopted. The following numbers
represent the estimated savings with educational discounts of 30
percent and 60 percent.
•
30 percent reduction—$39 million to $150
million (annual)
Estimated savings: $89 million to $218 million
(onetime)
•
60 percent reduction—$78 million to $300
million (annual)
Estimated savings: $179 million to $435 million
(onetime)
TABLE 7 Total U.S. Costs for Baseline Connection
to the NII (as in Model Four) (millions of dollars)
Onetime Costs
Ongoing Costs
Component
Low
High
Low
High
Local area network
1,730
4,750
0
0
Personal computers
5,100
10,200
0
0
File server
370
1,500
0
0
Telecommunications lines
298
725
130
500
Router and CSU/DSU
221
425
0
0
Retrofitting
850
2,125
0
0
Training
750
2,250
225
525
Internet service
0
0
150
630
Support
0
0
990
2,250
Replacement of equipment
0
0
255
701
Total
9,319
21,975
1,750
4,606
SOURCE: Rothstein (1994).
2.
All information technology purchasing is done
at the state level. When states are involved in purchasing
information technology, schools may secure better prices due to
volume discounts. Schools in North
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Carolina, for example, have enjoyed discounts of
20 to 50 percent for hardware and labor costs. The following
figures indicate the possible cost savings across all 50 states,
based on an average 30 percent discount.
•
Estimated savings: $1.9 billion to $4.1 billion
(onetime); $45 million to $189 million (annual)
3.
Universities or other institutions provide
technical support to schools. Universities can also play a role
in providing technical support to K-12 schools. Many universities
have already undertaken such a project and have provided network
support to a number of K-12 schools in their area. With such a
program, schools will still require some dedicated support staff.
However, it is assumed that schools will be able to function with
80 percent less technical support staff than would be required
without university support.
•
Estimated savings: $790 million to $1.8 billion
(onetime)
4.
Teachers are trained on their own time. In
the models, a large portion of the training costs are dedicated
either to paying substitute teachers to cover for teachers in
training, or to paying teachers to be trained after school hours.
If teachers agree to attend classes on their own time, there will
be costs only for the trainer.
•
Estimated savings: $0 to $1.5 billion (onetime);
$0 t0 $300 million (annual)
5.
The LAN is installed by volunteers. In the
models, 65 percent of the costs for installing the LAN are
dedicated to labor. If schools can do this work with volunteers,
then the cost savings are significant. As an example, Val Verde
Unified School District in California laid its wires with
volunteers from parents and community members. If such groups
provide labor at no cost to schools, schools will reap significant
savings.
•
Estimated savings: $1.1 billion to $3.1 billion
(onetime)
6.
Personal computers are donated to schools.
In the models, there is a need to purchase a significant number of
PCs to provide four to five connections to the network in every
classroom. The costs for these PCs can be offset by donations of
new machines from PC manufacturers. It is also possible for large
corporations to donate these computers to schools. However, the
schools will need fairly modern machines to run networking
software. The success of a donation program is dependent on the
quality of the equipment donated. Donations of obsolete or
incompatible equipment may be costly to schools.
•
Estimated savings: $5.1 billion to $10.2 billion
(onetime)
7.
Network routing equipment is donated to
schools. This program is similar to the PC donation program.
The savings are lower since the routing equipment is less
expensive.
•
Estimated savings: $221 million to $425 million
(onetime)
8.
Network servers are donated to schools.
This program is similar to the PC donation and router donation
programs.
•
Estimated savings: $370 million to $1.5 billion
(onetime)
9.
Internet connectivity is made free to
schools. There are great potential cost savings if schools are
given Internet access at no cost. This plan could be arranged
either by provision from an Internet service provider or from a
local university or community college that has its own Internet
connection.
•
Estimated savings: $150 million to $630 million
(annual)
Table 8 summarizes the potential savings for U.S. schools
nationwide from each of the possible programs.
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TABLE 8 Total Estimated Savings for U.S. Schools
Benefiting from Various Possible Cost-savings Programs for Network
Connectivity (millions of dollars)
Onetime Savings
Ongoing Savings
Type of Program
Low
High
Low
High
Reduced telecom rates (30 percent reduction)
89
218
39
150
Reduced telecom rates (60 percent reduction)
179
435
78
300
Purchasing by states (30 percent reduction)
1,889
4,136
45
189
Support from universities
0
0
790
1,800
Teachers trained on own time
0
1,500
0
300
Free labor for installing network
1,125
3,088
0
0
Donation of PCs
5,100
10,200
0
0
Donation of routers and CSU/DSUs
221
425
0
0
Donation of servers
370
1,500
0
0
Free Internet connectivity
0
0
150
630
SOURCE: Rothstein (1994).
Conclusions
With a clearer picture of the costs for connecting schools to
the NII, a number of conclusions may be drawn:
•
The costs to network a school are complex.
It is not simple to estimate the costs for connecting a particular
school to the network. The costs for most schools will fall into a
bounded range, but each particular school will vary greatly,
depending on its individual needs and characteristics. Although
this analysis puts bounds on the cost figures, the numbers are
rough estimates at best.
•
The cost of the network hardware is only a
small fraction of the overall costs for connecting to the NII.
Initial training and retrofitting are the largest onetime costs for
starting connectivity to the network. The costs for the wiring and
equipment are typically not as high. Support of the network is the
largest ongoing annual cost that schools must face.
•
There are two major jumps in the costs to
network a school. The jumps occur in the transitions from model
1 to model 2 and from model 4 to model 5, as illustrated in Figure
8. The first jump in cost occurs when the school installs a LAN. At
that point the school and district must pay to have the network
installed ($20,000 to $55,000 per school) and employ full-time
network support staff ($60,000 to $150,000 per school district).
The second jump occurs if and when the school decides to purchase
computers for all students to use. The number of networkable PCs in
1994 is inadequate for most schools; hundreds of thousands of
dollars would be needed to provide multiple PCs in every classroom.
Also, many schools will need major electrical work (possibly
exceeding $100,000 each) to support the increased number of PCs in
the school. In the intermediate stages between these jumps, the
costs are incremental and relatively small.
•
The start-up costs for connection to the
network increase at a faster rate than the annual ongoing costs as
the complexity of network connection increases. In the less
complex models, the onetime start-up costs are 2 to 3 times the
annual ongoing costs of the network. However, for the more complex
models (models four and five,) the onetime costs are 5 to 15 times
the costs to start connecting to the network. The differences are
illustrated in Figure 9. The divergence indicates that the most
significant cost hurdle that a school will face is the initial
investment in the network and computers. Dispensers of educational
funding should be aware of this circumstance, so that they can help
schools overcome the initial barrier. Schools should be given
flexibility to amortize initial costs, to spread out the burden
over a number of years.
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Figure 8
Ongoing costs per student with increasing complexity of
network
connectivity. SOURCE: Massachusetts Institute of Technology,
Research Program on Communications Policy (1994).
Figure 9
Start-up and ongoing costs per student with increasing
complexity of network connectivity. SOURCE: Massachusetts
Institute of Technology, Research Program on
Communications Policy (1994).
•
Costs are significantly reduced when aggregated
at the district and state levels. Schools stand to save a lot
of money by pooling resources and purchasing power with other
schools at the district and state levels. When schools share a
high-speed data link, or support staff, the per-school costs drop
considerably. Schools in North Carolina and Kentucky have saved 20
to 50 percent by purchasing services and equipment at the state
level.
Further research on the costs of wireless and cable Internet
access methods for schools is recommended to elucidate the costs
and benefits of these approaches. In addition, the issue of
software and equipment cost accounting requires further analysis.
This preliminary assessment of the costs of connecting schools to
the NII is intended as a point of departure for analysis of these
and other more detailed models of NII connectivity.
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Representative terms from entire chapter:
installation costs