The Office of Technology Assessment (OTA) of the U.S. Congress was asked to analyze various technological options for distance education, examine current developments, and identify how Federal, State, and local policies could encourage more efficient and effective use of technology in education. This report complements OTAs assessment of use of computers in elementary and secondary education; "Power On! New Tools for Teaching and Learning." Findings of the study include: (1) use of distance education in elementary and secondary education has increased dramatically over the past 5 years, but many students and teachers still do not have access to needed but distant experts and information; (2) rapid advances in technology are creating distance learning systems that are powerful, flexible, and increasingly affordable, but no one technology works for every application; (3) in most instances, distance learning appears to be as effective as face-to-face instruction in the classroom; (4) while reaching a small number of teachers today, distance learning will greatly affect the teaching force of tomorrow, requiring further training and institutional support; (5) state education agencies are both gatekeepers and catalysts for distance education; (6) federal and state regulations guiding the development of telecommunications infrastructure and services significantly affect distance education; and (7) federal funding for distance education has been important but modest. Four factors that will most affect the future of distance education are telecommunications policy; research, evaluation, and dissemination; support for teachers; and expansion of the infrastructure. Appendixes include a state-by-state profile of distance education activities across the nation; sample costs of transmission systems; a glossary of terms used in the report; information on obtaining contractor reports; and a list of participants at the Changing Telecommunications Technology and Policy Workshop held in February 1989. Photographs, diagrams, and project descriptions are provided throughout the report. (GL)