In its statement Thursday, the state said it had demanded payment from the escrow account.

The contract also required M/A-COM to replenish that account with another $50 million for the state to recoup additional costs. In addition to the $54 million already spent, the state may find that it made additional expenditures, such as the cost to police who participated in testing the system, said Liotta.

The state still hopes to build the network. "By canceling the contract it doesn't mean we're canceling our commitment," Liotta said.

But that will take more time. Issuing a new request for proposal to find another vendor could take up to 18 months, she said.

The issue in New York might point to larger problems with the way the state handled the building of a statewide system, said Craig Settles, an independent consultant. States would have better luck building such large networks by outlining standards for the network and than offering funding to cities and counties that can contract to get the networks built. The standards would ensure interoperability and set quality-of-service levels. The smaller communities could move faster than the state and might award the contracts to companies with local ties, he said.