Internet access and interactive video networks in North Dakota schools are in jeopardy after the federal government changed how money is dispursed to states to fund the programming.

Funding from the federal program called E-Rate has been withheld since early July, while the program figures out how to deal with the new rules handed down by the Federal Communications Commission. Providers the state and schools contract with for the service haven't received payments for almost four months, and officials don't know when they will resume.

"Right now everyone is in a holding pattern," said Dan Pullen, director of the North Dakota Educational Techonlogy Council. "I don't think many schools understand it has any implication for their major connection to the Internet at this point."

The state networks all North Dakota high schools and some K-8 schools, supplying them with high-speed Internet connections. About $2.2 million - or 60 percent - of the annual cost for that service is covered with E-Rate money. The program contributes an additional $2.3 million a year to school districts for interactive video networks and extra Internet connections in buildings. In schools with high poverty rates, the money also can be used to buy computers.

Interactive video networks allow students to take classes being taught in classrooms miles away. It has become a popular way to deliver education in rural districts that can't offer the courses themselves.

The state and schools submit annual E-Rate funding requests in January and the federal government approves the requests in July, although it doesn't receive money to cover them until later in the year. This summer, the FCC said money couldn't be promised to states unless there were sufficient funds to cover the commitments at the time they were made.

E-Rate is funded through phone service taxes.

The Universal Service Administrative Co., a nonprofit group that runs the E-Rate program under the FCC's oversight, is working with the commission to create guidelines for who receives priority for funding. Company spokesman Mel Blackwell said they expect those to be done by the end of November, and then the money can be distributed.

Even if money starts flowing to states in November, there is no guarantee North Dakota schools will receive funding right away if they don't qualify as being high priority.

Currently, the state contracts with businesses to provide the services. They haven't complained about not being paid, but eventually they won't be able to provide the services without reimbursement, said Curt Wolfe, chief information officer for the state Information Technology Department. There isn't enough money to cover the additional expenses, he said.

"If the funding block is removed within the next month or so, things should be OK," Pullen said. "But if E-Rate funds do not begin to flow very soon decisions will have to be made about whether or not services can continue."

The state will have to come up with a backup plan in November in case funding doesn't come through.

"We are going to do everything we can to make sure that network connectivity is not interrupted for any school," Pullen said.

The Great Western Network, an interactive video consortium including 40 districts in central North Dakota, relies on E-Rate for 60 percent of the $340,000 it spends to provide distance learning to students. The director of the network, Bill Strasser, said he became concerned this summer when he didn't receive a commitment letter. They were not told until late August about the funding freeze.

Without money from the program, Strasser said the schools in the consortium will have to come up with additional dollars to cover the loss.

"Everyone is on thin ice hoping this will get taken care of," Strasser said. "The hard part is sitting and not knowing whether schools will get this money or not. If there was a guarantee I wouldn't have a problem, but there is no guarantee because it's so late in the year."

(Reach reporter Sheena Dooley at 250-8225 or sheenadooley@ndonline.com.)