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I am sure that they could really do some cool things with the iphone.....group distribution and what not, especially with SDK coming out soon...maybe.

Directly or indirectly, the students are paying for this service. Probably just a "fine print" item on their semesterly bill...between parking and student recreation center fees
 
They said it was for a study or something so the bill may be covered. They'll probably hand out more iPods than iPhones.
 
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