he Board of Education is pushing ahead on a proposal to provide portable computers to most New York City students as well as Internet access over a new Web site that would include commercial advertising, all at a cost that has now been put at $900 million over the next 10 years.
The new cost estimates, which would make the proposal perhaps the most expensive non-construction project ever undertaken by the board, are included in a new analysis by Andersen Consulting that is being circulated this week to board members and officials.
The $900 million cost of the new technology could be entirely recouped, at no cost to the public, through advertising on one of two companion Board of Education Web sites that along with partnerships with technology companies would produce an estimated revenue of nearly $4 billion over 10 years, the Andersen report says.
The possible use of advertising to pay for a new technology initiative was intensely criticized by parents, legislators and educators in April when a school board task force first outlined its recommendations to build a revenue-generating computer network in partnership with private industry, a proposal that was unanimously approved by the board. The plan is thought to be the first of its kind by a public school system in the United States.
Under those recommendations, laptop computers would be distributed to all 750,000 students in grades 4 to 12. The board envisioned expanding the use of the Internet in the classroom by creating a central site, through which teachers could communicate with students, parents and school administrators. As originally recommended in April, students would be able to click on commercial logos on the school Web site to buy products. Part of each sale would go to the board.
In response to the April recommendations, the new report outlines a system that would keep all commercial content on a separate Web site, away from the educational site that would be used in class and at home by students. In addition, parents would be able to limit their children's access to the commercial site and to objectionable parts of the Internet.
The board will discuss the proposal next Wednesday, and education officials say that it is likely to agree to solicit proposals from technology companies on how to carry out parts of the proposal. One of the first requests, officials said, is likely to focus on providing inexpensive, Internet-ready computers to grades 4 through 12 over the next four years.
Ninfa Segarra, chairwoman of the board's technology committee, which would oversee development of the system, said in an interview yesterday that the purpose of the Andersen report was not to provide detailed financial predictions but rather to determine whether the technology proposal was feasible.
"We have a qualified entity saying this can be done," Ms. Segarra said. According to the Andersen report, the annual revenues generated from the proposal over the next 10 years could range from $12 million to more than $1 billion. Andersen said it was more likely that the system's revenues would average $380 million per year over the next decade.
The Andersen report outlines several potential ways of producing that revenue. The most lucrative and, therefore, most likely one includes selling banner advertisements or sponsorships on the commercial part of the Web site. Also contemplated are alliances with Internet retailers, which would pay a commission back to the Board of Education on any purchases made by users of the Board of Education network.
The system relies heavily on advertising for several reasons, not least because the average annual income of the system's estimated base of two million potential users — teachers, administrators, parents and other school system employees — is 33 percent to 67 percent below that of the average Internet user.
Some companies might therefore see the greater benefit in a longer- term approach to the network, reasoning that although the users spend less, they will be on the system for a longer time than the typical user.
Andrew Rasiej, a member of the task force that originated the technology proposal and the founder of Mouse, a nonprofit agency that provides technology support to schools, said he believed the cost of the system would be below that estimated by Andersen.
"Once the board commits to doing this, companies and ideas will start popping out of the woodwork, which will help to bring the costs down," Mr. Rasiej said.
Partnerships with vendors who agree to donate equipment, plus the sale of the systems developed by the board to other school systems, including private schools in New York City, could generate as much as $700 million more a year, according to the Andersen report.
The proposal also assumes that users of the system might be asked to contribute a monthly fee of $5 to $20 or more based on the user's household income.
The plan outlined by Anderson Consulting also recommends providing so-called Internet appliances, rather than the more familiar fully functional laptop computers, to students. The Internet appliances are far cheaper, costing as little as $200 each, but they work only when connected to a network, and cannot store or gain access to data when not hooked up to it.
Those computers would be provided to students in grades 4 and 12 the first year, followed by students in two or three additional grades each successive year, under the proposal. That would shorten to four years the time anticipated to provide all students from 4th through 12th grade with computers, thereby increasing revenues more quickly.
Teachers in each grade would receive their computers one year before their students, to allow teachers to be trained in how to integrate the technology into their lesson plans.
Some of the assumptions made in the consultant's report raise questions, however. It assumes that students would spend 4.6 to 7.8 hours online per day, but it is uncertain how much of that would be in revenue-producing sites, rather than the commercial-free education site.
State Senator Velmanette Montgomery, a Democrat from Brooklyn who voiced concerns this summer about the proposal to use advertising to help pay for the computers, said in an interview yesterday that schoolchildren would probably be able to easily find a way around safeguards intended to keep them away from commercials.
"The young people are going to be teaching the parents how to use the computer, so I'm not fully convinced that it will be possible to keep them from the commercial side of the system," she said.
