Financial Model Discussions Chair’s attempt to summarise positions David Williams TERENA General Assembly, Limerick June 2002

Activity-based financial data General welcome for the idea that we should investigate what the TERENA financial data would look like in an activity-based form Needs a light touch. Not too many activities. No heavy-handed reporting mechanisms To me this seems like a required step before NRENs could participate meaningfully in “baseline plus options” scheme

Priorities of the Technical Programme There seems to be an undercurrent of concern that we are not setting the Technical Programme priorities as well as we should? I don’t really understand what is wrong with (TTC) and TAC and GA mechanisms? MC suggested that we need more “refereeing”

Today’s reality The membership fees do not fully cover a reasonable “core programme” The majority of “extra” projects are funded by EC, and their synergy helps to reduce this “core deficit”. “Dynamic” vs “Static” The 2002 financial numbers that we have used do not include several recently approved FP5 projects ?? – that would tend to improve the overall balance of the 2003 budget We must not forget that “core programme” costs are subject to inflationary pressures.

Tomorrow’s reality (1 of 2) Everyone is looking for efficiency and cost-containment Everyone wants good ways to influence the direction of the Technical Programme If we are to introduce significant flexibility in the amount that an NREN can pay to TERENA (more flexibility than with today’s “Minor Projects” where we have one of 50kEUR paid by TERENA plus 4 NRENs) then we need a well-defined set of rules about the way that that would operate. Consensus that lists and results have to be open – if NRENs don’t want that then they have to operate outside the TERENA umbrella

Tomorrow’s reality (2 of 2) The mechanism for implementing a flexible (core plus options) TERENA membership fee would need considerable work (writing new rules etc) before members could understand if it were legally and financially acceptable for their authorities. Several NRENs are likely to have problems to pay one membership fee which covers “core plus options” Many NRENs have a rather strong preference for a well understood membership fee whose level stays rather stable and which can be budgeted in advance TERENA and NRENs need to show agility and move fast to secure funding opportunities as they become available. For that it is advantageous to have a solid core programme funded by uniform membership fee.

FP6 Network of Excellence IMO could be useful way to increase agility of the NRENs Would (potentially) allow very rapid creation of new Task Forces via funding for meeting/travel. Could especially help campus (and NREN) staff

Unclear to me What granularity we are talking about –20 kEUR internal TERENA projects –200 kEUR externally funded projects Which sources of finance we are talking about –NREN membership fees –NREN funds available for new technical work –EC funds –Other funds (industry or national government) What is the real objective –[Reduce NREN contributions to TERENA. Explicitly declared to NOT be a goal] –Better control of activities? –Possibility to attract more resources?

Summary No clear consensus has yet emerged People do not want the membership fee to rise (faster than inflation) A general wish for (more) flexibility

Next steps TEC should should investigate what the TERENA financial data would look like in an activity-based form and report back TEC/TTC should review the priority setting mechanisms for the Technical Programme Should we prepare a detailed set of principles for a “core plus options” membership fee structure for review by the GA? This will be a lot of work. I am afraid that it could well be wasted effort. How do we clarify NREN’s objectives for new financing model – written questionnaire to members?

Personal warnings We are spending a lot of time on this discussion. It is not obvious that we are converging We do attract significant external funds today, which in some sense gives a “core + options” approach What more are we looking for? At the present rate of progress we are very likely to be forced to present the 2003 budget (largely) on the present basis TERENA – especially the GA - has other important issues to address –for example –Relations with academia and others for AAA –More generally interactions with campuses –Technology transfer out of TTP