Meeting minutes, September 5, 2006
3 p.m., IHETS boardroom
****APPROVED 11.16.06****

Present:
Jeff Pittman, Chair, Ivy Tech Community College
Laurie Antolovic, Indiana University
Keith Fowlkes, Saint Mary’s College
Robert Holmes, Ivy Tech Community College
Phillip Jankowski, Purdue North Central
Diann McKee, Indiana State University
Jeff Russell, University of Indianapolis

IHETS staff:  Virginia Beyer, Tim Fisher, Rauf Khalid, Bill Kramer, Kevin Siminski, Betty Hart

Network connection rate change by IOT

Chairman Pittman called the meeting to order at 3:05 p.m. and thanked everyone that could join today’s meeting. Fisher stated the primary topic for today’s meeting is addressing the recent rate change by the Indiana Office of Technology. Currently we have a $700,000 line item in the 2006-07 fiscal year budget to subsidize higher education network connection costs. This was approved by the board based upon the premise that there would be a slight reduction in connection costs after July 1. That anticipated reduction would lower the subsidy amount (to the $700,000 total) with the net cost to member institutions staying at the same rates as in the 2005-06 fiscal year. In August it was determined that IOT unexpectedly increased some of its pricing. Fisher referenced a spreadsheet distributed earlier which reflected the new IOT pricing in which a DS3 connection increased from the 2006-07 rate of $5,000 to $5,821 effective retroactively to July 1. The IOT pricing did show some reductions in T’s and unmanaged T1s for customers inside the SBC lata.

Recommendations to the committee for consideration: 1) Pass on the cost of  $l021.28 per month to the institutions that have DS3s and 2) by December 06 these circuits will be moved off the ITN network and on to the higher ed network and the price should decrease. IHETS was informed of the rate increase on August 17 when its staff received the IOT billing and found the DS3 rate increased retroactive to July 1, 2006.

Siminski stated that it should take the next two months for IU to obtain contracts for new circuit pricing for the higher ed network before beginning the process of moving members off of the IOT network to the new network.

Chairman Pittman referred to the pricing spreadsheet sent out to the committee members and that the 2006-07 budget reflected a subsidy budget amount based upon an estimated reduction in the amount subsidized ($1,800 for DS3s) and the institutions’ cost ($3,000) would remain the same. Instead the DS3 price increased to $5,821.28. With the IHETS subsidy at $1,800/mth and the total cost increasing to $5,821.28, the net cost to the higher ed customers would be $4,021.28/mth  ($5,821.28 less $1,800). Our goal is to move this network from the IOT by December, 2006. Antolovic asked if there would be any penalties charged for the transitioning of circuits. Siminski replied that there would be no penalties charged and added that these are IOT circuit contracts .

Kramer reiterated the issue and stated that we have 40 higher education member institutions and three or four affiliate members which are made up of K-12, public broadcasting, and libraries. Twenty of these have DS3 lines and two of these institutions are likely to connect to the fiber optic network within the next 30 days. So we have about 18 institutions that will carry this additional charge of $1,021.28 per month per DS3 line until we can get the circuit base network switched from IOT to another network. An update will be presented by a member of the transition team committee later in the meeting.

In summary, he noted about 20 of our institutions, less three DS3s that move to the fiber optic network in 30 days, incur the additional $1,021.28/mth for a total additional amount incurred of $120,000 for the July thru December period.

Chairman Pittman asked for a recommendation from the finance committee today 1) passing on the $1,021.28/mth increase of the DS3 cost for this short term period on to the higher ed sites and 2) no subsidy will be provided for any new circuits for this fiscal year. If the finance committee approves these recommendations they will be passed on to the executive committee for approval.

Kramer stated that the circuit cost is approximately $1.9M a year for our members and we rely on the fees to be paid by the universities. He stressed the importance of getting the bills out to our members since August is our normal annual billing month and then payment can be processed to IOT.

Kramer shared that the board approved the $700,000 subsidy in June based on an assumption that circuit rates would go down we could have picked up new subscribers and extended to them the subsidy. But we are unable to do that now that the price has increased. We need your support with the executive committee that the DS3 costs are picked up for the remaining time on the IOT network and any new subscribers will not be extended the subsidy. Fisher added that he recommends a six-month billing that extends from July through the end of December by which time all members should be moved off the IOT network. Any credits would be given if the transition comes sooner.

Fowlkes asked once all the circuits are on the new network how sure is everyone that we will return to the old rate for the DS3 customers. Siminski stated he is confident that the rates will go back down. He went on to say that he has been in negotiations with the carriers locally and there was a target rate that we were at. He indicated that he has been sensitive in developing the financial models and keeping the circuit price in line. Siminski is confident that we will be able to return to the previous threshold after moving from the IOT (ITN) network. Fowlkes asked if any agreements had been negotiated with the last mile providers. Siminski stated that he and IU have worked with AT&T and SBC for a statewide price which is how that lower price point can be achieved. He is open to other options that are available and feels confident that AT&T can hit 95 to 98 percent of the users with DS3s.

McKee asked once the move to the new network is completed will the T1 and DS3 lines that are currently being subsidized continue to be subsidized at the same rate? Pittman responded that would continue.

Pittman asked if we could move by consensus to adopt these recommendations and then go forth to the executive committee that meets this Friday, September 8, 2006. Pittman asked if there were any opposition and hearing no opposition it was decided 1) The DS3 cost increase will be passed on to members, 2) for new connections no subsidy will be provided, and 3) and we will bill for six months.

Mckee asked if the institutions would be contacted and informed as to what the impact would be to their institutions. Fisher responded that a notification would be sent out prior to the upcoming billing.

Kramer added that before moving on to the next item there is a part two. When folks move off of the circuit based network on to the fiber optic network certain charges may apply. This process may begin in a few weeks through January and beyond. Circuit leases will be negotiated either by Indiana University or by IHETS. Further details have not been worked out to give you any additional information or have a meaningful conversation at this time. Kramer cautioned everyone to be aware that in the future there could be a cost to terminate your lease but as long as we meet the minimum number of circuits there may not be any early out charges. This is all the information that he had to share at this time.

Siminski said there are two contracts today, one is the contract with IOT and the other is the contract IU will hold for the higher ed network that will be entered into with AT&T and SBC. Since we have been utilizing IOT services for the ITN for several years, moving from that network to this new network there are no penalties. For example, Keith Fowlkes at St. Mary’s has a DS3 and enters in to a new contract and 30 days later he decides to disconnect his DS3 and connect to I-Light. These are the liabilities that we are talking about and enough information does not exist at this point. We know there will be a minimum circuit commitment and we should be above that. We do have the line of communications open to each campus and will work with each one as the need exist.

Biennium budget discussion

Copies have been distributed to the Indiana Commission for Higher Education, appropriate agencies, members of the finance committee. Questions or comments should be directed to Fisher, Pittman, or Kramer. Kramer presented the IHETS request during the ICHE meeting on October 13 at Purdue. Left open in the IHETS budget submission is an option for additional funding for the network. If you should have a suggestion to contribute, please contact Fisher.

Update on I-Light transition

Pittman shared that a transition team (approved by the IHETS board to study the network transition) has been appointed. Siminski stated the team has met five or six times over the past four months on addressing issues related to assigning responsibility of I-Light to Indiana University and Purdue University. The team was charged with deciding whether to maintain two separate networks (i.e., fiber optic and circuit). Network governance concerning was discussed, including whether to establish a new I-Light Board of Directors or whether the existing IHETS Board of Directors should manage and be responsible for the network. A proposal for the board is nearly complete.

I-Light is partly operational in northern Indiana. The ring is functional and passing light, with 10 gig circuits. In the next two or three weeks some validation testing will take place.

Kramer stated IU has done a great job moving the I-Light project forward, but more money is needed. Fowlkes complimented IHETS for doing an excellent job for the Independent Colleges of Indiana (ICI), adding he feels very comfortable with IHETS an advocate for the ICI.. He noted IHETS has served ICI well over the last 20 years and he would like to see that continue. He added he is willing to share this sentiment with ICI's president and the governor, if necessary.

Kramer is pleased with the decision to have the IHETS board be responsible for oversight of the network. He believes IHETS' reputation has derived from network operations, which have evolved over the years from satellite, ITFS, ATM, two-way video, and others.

Through the Memorandum of Understanding assigned by the State Budget Agency and the trustees of  both IU and Purdue, the operational responsibility has now gone to Indiana University and Purdue University. The memorandum also calls for all higher ed institutions to play an advisory role. The resolution will ensure Indiana's independent colleges and universities are represented and have a voice in network operations.

Pittman asked when the draft resolution would be presented to the board. Siminski expects the draft to be finalized this week.

Space options

Pittman stated that IHETS has 22,000 gross square feet of space at the current location. Options to utilize or sublet the excess space as a result of staffing reductions effective July 1 are being explored. A three-year lease extension was activated in January effective March 1, 2006. Fisher wanted the committee to be aware of this issue and anticipates proposing some options to the committee in the coming months. Options could include creating conference rooms and making them available to members, sub-leasing, reorganization of current space, etc.

The meeting adjourned at 3:45 p.m.