State of Connecticut Nutmeg Network Statement of Direction 9/10/2012 1

Background The Nutmeg Network is a newly formed entity that is defined as a combination of: ▫Public Safety Data Network (PSDN)  Closed, secure network that serves the first responder and public safety community ▫Connecticut Education Network (CEN)  Open (by nomination) network that serves the education and library community ▫Connecticut Open Access Network (CTOAN)  Requirement of BTOP award to provide fair and open access to the network constructed with federal funds, These networks are managed together as the staff, equipment and fiber that support these networks have multiple overlap points. 2

Governance and Coordination Education and Non-Public Safety Related The Commission for Educational Technology (CET) is the governing body for use of the Educational and Non-Public Safety related portions of the Nutmeg network. Members include stakeholders from various groups representing all interested parties Initial meeting regarding BTOP scheduled for September 10, Public Safety Related The E911 Commission, in consultation with the DESPP Coordinating Advisory Board, is the governing body for use of the Public Safety related portions of the Nutmeg Network. Members include stakeholders from various groups representing all interested parties Initial meeting regarding BTOP scheduled for September 6, 2012 The Nutmeg Network Technical Review Subcommittee

CET Oversight of CEN The CET has oversight authority for CEN Previously access had been limited to education and research community (mostly due to eRate restrictions) eRate restrictions have been removed Open Access has been added as a condition of the federal ARRA grant. CET has additional responsibilities to oversee Open Access until such time as another group is given this responsibility. 4

Nutmeg Network Economics Over $120M in recent capital addition to acquire equipment and fiber Combined network costs of $10M annually ▫$4M in annual fiber maintenance costs ▫$3.1M in annual equipment maintenance cost ▫$1.8 M in support staff costs ▫$1M in Internet, Internet2 and other provider fees Revenue Sources ▫$4M from Public Safety E911 fund for PSDN ▫$4M from State General Fund and Capital Equipment Fund ▫$1.3 M from current paying customers ▫$0.8M from new uses of network (Municipalities, Private Industry, State Agencies, etc.) 5

Rate Statement Allocate network costs and revenue in a balanced approach that: ▫Preserves the security of PSDN ▫Preserves the vibrancy of the CEN ▫Allocates state funding to preserve equitable access for schools across the state ▫Collects revenue to sustain current investments and enable incremental growth as needs increase ▫Remains competitive with commercial providers 6

Rate Process Identify Costs Collect all current and future expected network costs Includes Fiber Maint., Equipment Maint., Staff, ISP, etc Future growth of core needs to be accounted for in costs for sustainability of the network Map to Services Map costs into pools based on services Separate core network costs from optional services costs (e.g. Transport versus Internet 2) Draft Rates Develop rate set that allocates costs to consumption of services. Likely will require identification of costs to previously bundled services (on-net usage) Allocate State Funding Determine which services and which users will receive offsets based on state funding Will include E911 surcharge and general fund CEN appropriation Develop Draft Bills Generate set of bills that reflect the new pricing structure Discuss bills with appropriate usage community for sustainability Iterate Steps as Required Final rate set may require adjustments initially and per year 7

Allocation Units Mandatory Allocation Units ▫Transport Units  Capacity in MB available to a customer for either on-net or off-net traffic  Captures fiber maintenance costs and ½ of staff operation costs ▫Connection Units  Number of Handoffs to customers  Captures hardware maintenance, refresh and ½ of staff operation costs Optional Allocation Units ▫Internet Usage (MB) ▫Internet 2 Usage (MB) ▫Web Filtering Units (MB) ▫Safe Harbor Units (Number of connections) 8

FY 2013 Rate Structure 9

High Level Request Process 10 Collect and Screen Common intake point for requests Review for completeness All requests visible via dashboard Categorize and Estimate Determine which areas of network are involved Develop high level estimate of costs to connect and provide services Authorize Assess by Network (PSDN, CEN) If “Core Service” allow If new service bring to governance for approval Provide Obtain Service Agreements Provide authorized services Update Rates