A plan by the Rhode Island Economic Development Corporation to build a statewide wireless computer network is now in question after the General Assembly chose not to back a $28.5-million loan that the EDC said it needed to finance the project.

The loan guarantee was contained in Governor Carcieri’s budget proposal, and would have allowed the EDC to borrow the money needed to build the Rhode Island Wireless Innovation Networks, or RI-WINs.

Legislators took out the loan-guarantee language when they passed the budget last week. The provision would have put state taxpayers on the hook for loan payments if the initiative failed to produce the revenue expected by the EDC.

Saul Kaplan, executive director of the EDC, said the agency was disappointed, but undeterred. His agency will continue to pursue the initiative based on feedback from the General Assembly, he said.

The lawmakers told him they wanted to see more private-sector participation in the program and suggested that other financing mechanisms be found, Kaplan said in an interview yesterday.

“So that’s exactly what we’re going to do. We’re having conversations with several private-sector players,” he said.

The EDC is looking at two potential ways to finance the project, he said. One is to work with one or more private-sector companies that are already planning or building network infrastructure in the state, and convince them to build their network border-to-border. These could be large national or global companies that have an interest in helping Rhode Island become the first state in the country with a statewide wireless broadband network, he said. The other financing option would be to form a nonprofit entity that gets its financing from the public sector.

The idea behind the RI-WINs initiative was to build a secure, high-speed computer network that could be accessed anywhere in Rhode Island, including outlying rural areas that do not have cell phone coverage. Potential clients could be public safety agencies, emergency response workers, or companies that have a need to communicate with field representatives. It could also be used by companies that have some type of application they want to test on a statewide wireless network. RI-WINs was not envisioned to be a Wi-Fi network for consumer use, such as those being developed in Philadelphia and San Francisco.

The RI-WINs project began on a pilot basis in 2005 with test sites in Providence and Newport. Among the test programs was a port security demonstration, financed by the U.S. Department of Homeland Security. It was designed to allow government agencies and emergency personnel to share and distribute real-time information about activity in Narragansett Bay.

The EDC wanted to roll out the network statewide, and formed a nonprofit business plan with the help of Altman & Vilandrie, a Boston telecommunications firm. The plan demonstrates, according to RI-WINs proponents, that the project can be financially self-sustaining in its fourth year of operation. The $28.5 million that RI-WINs would have borrowed was for the initial construction of the network, financing costs and expenses through three years of operations.

Carcieri’s budget proposal called for the state to make up any debt payments beyond the revenues taken in by RI-WINs.

Kaplan said he continues to believe that the RI-WINs project is important to the state. While several companies, such as Verizon and Cox, have already invested millions of dollars in communications infrastructure within Rhode Island, Kaplan said those companies are focused on serving densely populated areas.

Private-sector companies don’t serve the “enterprise market” very well, he said.

“The key tomorrow is going to be that broadband connection that travels with you, on your laptop, your PDA,” he said. “It’s a small market today. … Remember, this is an economic development platform we want to be out in front on.”

tbarmann@projo.com