'I' is not a command line command. It works as you expect only in
Visual Block mode. To do what you intended press
3G<Ctrl-v>39GI
in Normal mode (<Ctrl-v> is one unit). Now write "sed ^". It only
appears at the beginning of the 3rd line. When you press <ESC> now, it
will appear everywhere at the beginning of the lines in the given range.
Cheers,
Bastian
I is Normal mode command, to use range in Ed mode:
:3,39s/^/sed s^/
m.