From the proposal:

Create a New Online Skills Laboratory: Online educational software has the potential to help students learn more in less time than they would with traditional classroom instruction alone. Interactive software can tailor instruction to individual students like human tutors do, while simulations and multimedia software offer experiential learning. Online instruction can also be a powerful tool for extending learning opportunities to rural areas or working adults who need to fit their coursework around families and jobs. New open online courses will create new routes for students to gain knowledge, skills and credentials. They will be developed by teams of experts in content knowledge, pedagogy, and technology and made available for modification, adaptation and sharing. The Departments of Defense, Education, and Labor will work together to make the courses freely available through one or more community colleges and the Defense Department's distributed learning network, explore ways to award academic credit based upon achievement rather than class hours, and rigorously evaluate the results.

From President Obama's speech: "Third, even as we repair brick and mortar buildings, we have an opportunity to build a new virtual infrastructure to complement the education and training community colleges can offer. We'll support the creation of a new online - and open-source - clearinghouse of courses so that community colleges across the country can offer more classes without building more classrooms. This will make a big difference for rural campuses that often struggle to attract students and faculty. This will make it possible for a professor to complement his lecture with an online exercise, or for a student who can't be away from her family to still keep up with her coursework. We do not know where this kind of an experiment will lead; but that is exactly why we ought to try it."

See the whole talk here.