A state organization that was originally created in 2000 under a temporary status, but was extended two years ago, has used up its original $30 million allocation and now wants $2 million more from the state to stay afloat.

The E-NC Authority, formerly the Rural Internet Access Authority, is running low on operating funds and wants to extend its life beyond the current requirement that it cease activity on Dec. 31, 2006. Jane Smith Patterson, executive director of E-NC, supports a new bill that would fund $1 million more over the next two years for operations, and another $1 million to create two new regional “telecenter” projects. Four such facilities operate now in Martin County, Duplin County, Alleghany County, and Cherokee County.

The bill passed the House Science and Technology Committee unanimously last Wednesday, which also extended the authority’s “sunset” provision to June 30, 2007. The Appropriations Committee must also approve the measure before the full House considers it.

“I believe the agency has done some good things,” said Science and Technology committee member Rep. Trudi Walend, a Brevard Republican.

The Rural Internet Access Authority was launched with the $30 million from the Microelectronics Center of North Carolina (MCNC), a technology research organization created in 1980 by Gov. Jim Hunt that was subsidized with up to a quarter-billion dollars from taxpayers through the late 1990s. The purpose of RIAA was to serve as a temporary state authority to facilitate the extension of high-speed Internet service to the state’s rural areas.

“What we don’t want is to create a whole new bureaucracy that lasts forever,” said then-bill sponsor for the RIAA, former state Sen. Eric Reeves of Raleigh, to the The News & Observer in June 2000.

But in 2003 the RIAA, which was converted to E-NC, had its authority expanded to help extend broadband Internet access to “distressed urban areas.” Then-state Sen. Virginia Foxx, now a Republican U.S. Congresswoman, said at the time that the RIAA only had “some loose ends” left to complete its original mission.

“What they’re creating is a bureaucracy that doesn’t need to be created,” Foxx told CJ in June 2003.

Patterson says E-NC “is a state authority, not a permanent state agency,” but that the needs to help extend high-speed Internet service to all areas in North Carolina are ongoing. In its January 2005 presentation to the Joint Legislative Commission on Governmental Operations, E-NC reported that “there is much more that must be accomplished for information technology infrastructure in North Carolina.”

The authority, however, implied that its own existence may need to be permanent to keep technology up-to-date in rural areas.

“Technology turns over at a minimum every two years,” the E-NC report said, “and the rural areas must keep up with these technology turns in order to create and maintain competitive rural economies.”

Patterson said leaving the job to the private sector would leave holes in the state’s broadband Internet service.

“The research we conduct,” Patterson told CJ in an e-mail, “which identifies the gaps, and our ability to bring all players to the table in a technology-neutral, let’s-just-work-together-to-find-a-solution-to-this way, makes us unique.

“With help from E-NC, entities pool their cash and resources together. With this money and manpower, they are able to mend gaps in our high-speed infrastructure by laying cable none of them could afford to lay on their own.”

She said that E-NC owns none of the infrastructure at the ends of the projects.

E-NC, together with the state’s Rural Economic Development Center, received almost $2 million last year from the General Assembly, in part for the development of four more “TeleCenters.” It has also received funding from the U.S. Department of Commerce, Golden LEAF, and the Z. Smith Reynolds Foundation. As for the MCNC money, Patterson said E-NC received the last $6.1 million of the money last year, which was “awarded to more than a dozen areas across the state for the completion of infrastructure projects.”

Almost two years ago Patterson told CJ that she expected E-NC would need no further state funding for three years, which would have coincided with the timing of the authority’s 2006 ending. She said the need for more resources now is attributed largely to the success of the TeleCenter program. She said the four existing centers have created 488 jobs in the state, and their incubator spaces housed 33 companies.

Rep. Walend said she had been concerned about the rapid usage of the MCNC money and that the E-NC’s administrative costs seemed high, but told CJ those concerns have been alleviated. She also said she pressed for the sunset date for the authority to remain in place, despite committee discussions about removing it. She believes extending high-speed Internet service to rural areas is a worthwhile project for the state.

“I believe in the private sector doing everything,” Walend said, “but clearly that’s not going to happen in this case.”

Paul Chesser is associate editor of Carolina Journal. Contact him at [email protected].