iTunes U is the current online educational behemoth, with 1 billion downloads and partners that include Oxford, Berkeley and MIT.

Nearly half a century ago, Intel co-founder Gordon Moore famously predicted that chip performance would double every other year. This breathtaking pace of change, unheard of in old-school industries, has characterized not only computer chips but high tech more generally. Such has been the case with MOOCs, the massive open online courses that have become topic number one in higher education.

While online courses have been around for years [see Jon Wiener, in this issue], until recently they’ve been the exclusive province of universities: such courses carry credit, charge tuition and are small enough to enable students to connect with their professors. MOOCs were promoted as the disruptive innovation that would make higher education better, cheaper and more widely available. Not only would they be free and disconnected from a university, but instead of enrolling 100 students, like a typical lecture course, they would enroll hundreds of thousands of students.

MOOC mania hit hard and fast, and hyperbole was the order of the day. Though the phrase itself was coined only in 2008, last year The New York Times  proclaimed 2012 “the year of the MOOC,” and MIT Technology Review described MOOCs in a headline as “The Most Important Education Technology in 200 Years.” And the acronym made its debut this year as an entry in the Oxford Dictionaries Online.

The free MOOCs, with their hundreds of thousands of students, are still going strong. But by 2013 the MOOC experiment had morphed into a business model—fee-based courses, far less massive and no longer open, that students could take for college credit.

California, the epicenter of high tech, is the locus of the action. The biggest for-profit start-ups, Coursera and Udacity, are located in Silicon Valley, and Governor Jerry Brown has been a vocal supporter. The ten-campus University of California was early on the scene; Berkeley has partnered with MIT and Harvard to create MOOCs for a worldwide audience; and San Jose State has made itself the test case for delivering MOOCs within the confines of a university.

Enthusiasts see MOOCs as presaging a utopia of affordable higher education for all; critics envision a brave new world in which robotic drills replace intellectual engagement; and skeptics dismiss MOOCs as merely a fad. Across the country, lawmakers and educators are eyeing the paradigm-changing story in California, seeking clues to the future of higher education.

The Lawmakers vs. the Professors

California used to be the world leader in public higher education, but no longer—the state has been defunding its universities for years. Sacramento, which contributed 27 percent of the University of California’s higher education budget in 2000, now provides just over 10 percent; and there have been comparable cutbacks in funding to the California State University and community college systems. Consequently, universities have been forced to sharply raise tuition, admit fewer students and slash courses. Many students, frozen out of the classes they need to graduate, must spend an extra year or more in college, and many drop out.

A year ago, Jerry Brown reached out to Sebastian Thrun, an ex–Stanford University professor turned entrepreneur, as well as the engineer who invented the driverless car and the co-founder of Udacity. “We need your help” was Brown’s message.

As a member of the University of California (UC) Board of Regents, Brown has pushed MOOCs with a messianic fervor. “What we’re talking about here is disruption—make no mistake about it,” he has said. For politicians who believe in silver bullets, MOOCs promise a cheap and effective way out of what Thrun labels the “crisis” in higher education. They are “a key part of the solution,” Brown asserted last January, unveiling a budget that earmarked $20 million for online university courses, split between the University of California and the California State University systems.

In February, Darrell Steinberg, president pro tem of the State Senate, weighed in with a bill requiring colleges and universities to award credit for MOOCs in the fifty most overbooked introductory courses. “We want to be the first state in the nation to make this promise: No college student in California will be denied the right to move through their education because they couldn’t get a seat in the course they needed,” he told The New York Times. Thrun was present for the announcement, and Steinberg made it clear that he wanted companies like Udacity to be MOOC providers.

In California, a bill introduced by the Senate’s most powerful figure is typically a cinch to become law, and with the governor on board, the state seemed poised to transform the landscape of higher education. But the politicians hadn’t reckoned with the anger of the academics.

With rare speed, University of California professors mobilized in opposition. “The faculty went ballistic,” recalls UC president Mark Yudof. Professors saw the measure as a triple threat: an unprecedented political encroachment, a challenge to academic standards, and a step toward privatizing higher education. Within forty-eight hours, the leaders of the system-wide faculty senate published a letter assailing the bill. “This was a shot heard round the world,” says Bob Powell, a UC Davis chemical engineering professor who chairs the faculty senate. Days later, the faculty of the massive California State University system joined the opposition chorus, as did the community college professors.

Steinberg later softened his bill to give professors outright approval of the courses, but the faculty weren’t appeased; and although the senator is regarded as a friend to labor, the faculty unions were also adamantly opposed. Confronted with such opposition, Steinberg surrendered. In June, a defanged version of the measure, which merely offers incentives to professors who design MOOCs, limped through the Senate and now languishes in the Assembly.

“I didn’t think things would become so ideological,” Steinberg told me, “but sometimes starting a conversation matters more than passing a bill.” In June, Brown vetoed his own budget proposal, because he’d become convinced that his plan had prompted soul-searching on campus. The $20 million would go to the universities, but without strings attached, since they now seemed inclined to develop online classes on their own.

The Failure of ‘Virtual UC’

Online fever is nothing new in California. In 2009, Christopher Edley, dean of the Berkeley Law School and confidant of UC president Mark Yudof, wrote a Los Angeles Times op-ed pitching “a cyber-campus devoted to awarding online degrees to UC-eligible students.” Edley envisioned the virtual campus as a classic case of doing well by doing good, expanding opportunities while raising boatloads of money, but UC professors disdained it as a power grab.

“The dream of the eleventh campus is dead,” Edley acknowledged. In response, the university shifted gears. Instead of dictating from the top, it’s now relying on the faculty for bottom-up, campus-by-campus innovation, and that strategy is working. This summer, University of California faculty were invited to compete for a chunk of UC’s $10 million share in state funding for online initiatives, and now they’re off and running.

Berkeley couldn’t wait for the lumbering UC system to settle on an online strategy. As the home of one of the world’s highest-ranked computer science programs, “we had to do something with MOOCs,” says computer science professor Armando Fox, who heads the campus’s online initiative. “We couldn’t be left out of the game.”

Courted by several MOOC-makers, Berkeley opted to partner with MIT and Harvard in edX, a nonprofit, rather than one of the for-profit companies. “Our philosophies are more closely aligned,” says Fox. “We didn’t want to choose between making money for the university and what’s right for our students. As a nonprofit, we just have to be successful enough.” While Berkeley currently offers only computer science and statistics MOOCs, a campus-wide competition has drawn extensive interest.

The edX contract was negotiated by a handful of administrators and engineering professors, bypassing the faculty senate, which usually reviews deals of this magnitude. “The chancellor kept the cards close to his vest,” observes English professor Colleen Lye, a MOOC skeptic, “and that worries professors.”

“MOOCs were sold as just a way to save money,” Fox responds, “and that’s the wrong way to think about them—they’re really twenty-first-century textbooks.”

No one anticipated what may be the most consequential—and positive—impact of the new technology: professors are discussing how they teach, something that seldom happens at research universities like Berkeley. “These conversations are highlighting the importance of having an effective instructor; all of a sudden we’re thinking about ‘quality control’ to weed out lousy teaching,” says Fox. Lye puts it differently: “I hope that the MOOC frenzy can focus faculty attention on teaching and learning, rather than being something that’s foisted on us.”

Learning From Walmart

While the media fixate on world-class universities like Berkeley and Stanford, the overwhelming majority of America’s undergraduates attend schools like San Jose State (SJSU). Designated by the California Master Plan for Higher Education as a second-tier university, focused more on teaching than research, SJSU admits three-quarters of its applicants. More than half the freshmen cannot handle college-level writing or math and must take remedial classes. Fewer than 10 percent of all freshmen earn a degree within four years.

This is a nationwide problem—and there’s a cost-effective, low-tech answer. In a recent study, Columbia Teachers College economist Henry Levin concluded that giving vulnerable students lots of hand-holding and ample financial aid—the same kind of “high-touch” support that undergraduates in top-ranked colleges expect—nearly doubled graduation rates. It’s a smart investment: because the program prepares more students for decent jobs, it generates a three- to fourfold return for taxpayers. But most states, including California, are too shortsighted to foot the bill.

Mohammad Qayoumi, SJSU’s president and an electrical engineer by training, is predisposed to technological solutions. In the 2013 white paper “Are We Innovation-Ready?”, Qayoumi envisions universities like SJSU delivering a high-quality, affordable education that leads to a good job. In Qayoumi’s model university, freshmen and sophomores would have a heavy diet of online courses. In the more advanced “flipped” courses, students would come to class having completed the online assignment and prepared for problem-based learning. Juniors and seniors would spend considerable time tackling community-based fieldwork projects. What’s more, because students would be off-campus or online much of the time, the university could increase its enrollment without embarking on a building binge.

San Jose State has made itself the petri dish for new technologies, eager to experiment with online offerings. A fall 2012 edX circuits and electronics course showcased the potential of MOOCs. This was a flipped course and not a classic MOOC—students completed the MOOC assignments at home, devoting class time to group projects. The results were remarkable. More than 90 percent passed, compared with fewer than 60 percent in the traditional course. Skeptics pointed out that students in the flipped course may have done better because they spent more time overall on the course than their classroom counterparts. But in an era when undergraduates devote ever-fewer hours to their studies, whatever engages them should be reckoned a good thing.

This past January, three Udacity introductory math MOOCs—a key feature of Qayoumi’s “innovation-ready” university—were announced to great fanfare. At a press conference attended by Jerry Brown, Sebastian Thrun contended that the initiative could “change the life of Californians” by making higher education cheaper and more widely available. These were true MOOCs—students had only Udacity-trained online tutors, not professors, to rely on—and the results proved calamitous. Just 29 percent passed the Udacity remedial math course, compared with 80 percent in the face-to-face class, and the gap was nearly as wide in the algebra course. Udacity had pinned its highest hopes on the statistics course, but only 51 percent passed, versus 74 percent who passed the in-class version. In July, the university decided to put the experiment on hold. “My job is to test new ideas, not run with the hype,” says SJSU’s provost, Ellen Junn.

Psychology professor Ron Rogers, who had been eager to combine his statistics materials with Udacity’s much-touted pedagogy, learned that clever technology cannot substitute for educational maturity. It takes discipline to sit for hours in front of a computer, and among a subset of ill-prepared undergraduates, this discipline is often in short supply. “These students need the structure of going to school as part of their motivation,” Rogers told me. That’s no surprise: two years earlier, an analysis of community college students concluded that those taking online courses fail and drop out more often than those in classroom-based courses. Although Udacity’s MOOCs were doubtless more sophisticated than the earlier generation of online offerings, the critical factor—“high touch”—was still missing.

This past spring, when SJSU invited the philosophy department to teach JusticeX, an edX MOOC in social justice featuring Harvard celebrity professor Michael Sandel, a public relations nightmare ensued. The philosophy professors, believing that they were being pushed to offer a prepackaged class, circulated an angry letter to Sandel. MOOCs delivered by “elite” academics, the professors fumed, are part of the push to “replace professors, dismantle departments, and provide a diminished education for students in public universities.” Peter Hadreas, chair of the philosophy department, resented the fact that “while Sandel was talking, live, to students at Harvard, San Jose State students would be watching Harvard students, getting the sense that they are second class.” This was class warfare, elite versus mass universities, and the professors were fighting back.

Junn felt blindsided. “There was never any pressure,” she insists. “I just told the faculty that these courses were available, and that they could use as much or as little of the material as they liked.” Quickly, tempers cooled. At a July meeting with the top administrators, says Hadreas, the conversation was “genial. We never meant to embarrass the university.”

But as the protest, fanned by an article in The New York Times, gathered steam nationwide, the facts came to matter less than the symbolism. The professors’ furious letter resonated with a widespread faculty fear that MOOCs represent the ultimate triumph of the corporate university, a destructive innovation that will undermine real education and render them obsolete.

The Shakedown-Cruise Moment

This is the shakedown-cruise moment for MOOCs,” says Dan Greenstein, who runs the higher education program at the Gates Foundation. In a July column on the website Inside Higher Ed, Greenstein—who had previously promoted the University of California’s online initiatives—described MOOCs as “a perfect storm of hype, hyperbole, and hysteria” and wondered whether they are “a viable thing or are just a passing fad.” That’s a remarkable observation from a senior officer at a foundation that has invested heavily in initiatives like the San Jose State MOOCs.

The MOOC movement is in the midst of what’s become known as the technology “hype cycle.” According to Gartner, the IT consulting firm that developed the model, a “technology trigger” leads to the “peak of inflated expectations,” followed in short order by the “trough of disillusionment.” Today, MOOCs are oscillating between those two poles. In recent months, the Amherst College faculty voted not to join edX, and Duke University’s faculty forced it to back out of a deal to create a pool of for-credit MOOCs. At the same time, Udacity announced a partnership with Georgia Tech to deliver a $6,600 MOOC-based master’s degree in computer science, while Coursera, the biggest MOOC, has attracted millions in new venture capital. Meanwhile, students have been voting with their feet: at Colorado State, the nation’s very first for-credit MOOC class, also designed by Udacity, didn’t attract a single student. Although the tuition was higher, the undergraduates chose the live alternative.

It’s time to push the pause button, not just on the San Jose State experiment but on MOOC mania generally. While modified MOOCs like the flipped classroom hold great promise, the pure MOOC model looks like a failure.  New technologies have indeed made it possible to reach more students—MIT’s OpenCourseWare materials, free to all, have been visited by 125 million people the world over—and, sensibly used, can improve teaching as well. But there’s no cheap solution to higher education’s woes, no alternative to making a serious public investment, no substitute for the professor who provokes students into confronting their most cherished beliefs, changing their lives in the process.

Low-paid adjunct faculty, who are mostly female, have started unionizing for better pay—and winning, writes Kay Steiger (July 11).