In 1986, Paducah Community College (PCC), a small rural college in western Kentucky, signed an agreement with Murray State University (MSU) to have MSU teach junior- and senior-level courses on the PCC campus. As costs became prohibitive for MSU, the two institutions began examining distance learning possibilities. At the same time, the seven area high schools were experiencing difficulty providing classes due to high costs. Together with the area high schools, PCC and MSU formed the West Kentucky Education Technology Cooperative. A feasibility study for distance learning approaches was conducted; it recommended a combination of microwave point-to-point locations and fiber optic systems. The T-1 multi-line telecommunications tool, provided by South Central Bell, brought the entire system into operation. In fall 1990, the first set of MSU courses was offered at PCC in math, nursing, business, education, and environmental health. To identify problem areas, student and instructor attitude surveys were completed at the end of the first year of operation. As a result of PCC's experience with distance learning technology, the University of Kentucky initiated a graduate center remote delivery system at PCC, offering graduate programs to support economic growth in the local community. In addition, PCC expanded its own interactive system to two other community colleges and activated programs at three of the original seven high school sites. All sites in the network are able to fully interact with any other site. On the PCC campus, a student can now earn a bachelor's degree, a master's degree, and a doctoral degree. A detailed cost analysis and a discussion of further applications of the telecommunications technology are provided. (PAA)