1. Network Funding Model Recommendation
May 2012

2. Our Situation 12,000 IP phones 23,500 network connections
2,100 wireless access points (and still growing!)
125 miles of fiber connecting all 3 campuses
10 gig connection to Internet2
500 meg connection to Internet
State-of-the-Art network for higher education 2

3. Our Situation (cont.)
Converged networking blurs distinctions between voice, data, video, and wireless networks and services
Funding models created over the past 30 years no longer support how technology is implemented today
Mobility technologies continue to evolve rapidly, requiring substantial ongoing funding 3

4. Our Challenge Create a sustainable network funding model to:
Maintain & replace communications infrastructure and equipment on a regular basis
Invest in new technologies such as mobility solutions
Provide adequate staffing to support the environment
Extend and integrate off-campus networking
Ensure affordable access to basic services for all and provide premium services to enable world-class research and instruction 4

5. Our Approach Formed team Analyzed current communications budget
Identified “base” communications costs
Examined core services
Considered trends and best practices
Researched university funding models
Investigated budget impact for units and schools 5

6. Our Findings
Communications
budget
and base costs 6

7. Our Findings (cont.) Core telecomm services identified:
Wired and wireless data networking
VoIP voice line
Voice mail
Basic VoIP telephone set
Long distance services 7

8. Our Findings (cont.)
Industry trend is to move away from per-port billing
University Funding Models:
Centrally Funded
Consumption
Headcount
Network access fee
Taxation
Per-port
Student technology fee 8

9. Conclusion
Benchmark survey results and higher education research shows institutions are moving to the headcount model
Advantages:
Eliminates incentive to save by removing services
Simplifies administration and delivery of services
Positions funding model for long-term stability 9

10. Initial Recommendation
Move to headcount model was presented to university administration Spring 2012
Implementation required budget reallocation to balance all general fund accounts
With current budget climate, this model is not feasible at this time
IT was asked to look for alternatives 10

11. Further Investigation
Requirements:
Maintain base infrastructure charges
Eliminate incentive to remove services
Alternative approaches, using hybrid FTE scenarios had significant flaws
Cumbersome tracking constraints
Annual FTE growth < 100
The flat fee approach, or base infrastructure charge, proved to be a viable alternative 11

12. Recommendation Implement flat fee funding model beginning July 2012
International long distance will continue to be usage based
Base infrastructure charge will increase annually by an inflationary percentage
Calling cards for international long distance
Current voice, voic , data and domestic long distance services become the unit/school base infrastructure charge
No credits for disconnect
No recurring charges for new service
One time cost will increase to $550 12

13. Impact on Departments and Auxiliaries
Base infrastructure charges for 2012/ remain fixed as of June 30, 2012
Will enable more accurate budget planning and forecasting
Annual billing calculations take into account the entire university’s base while looking at expenses and inflationary increases
New facilities will require needs analysis to determine one-time and initial base infrastructure costs 13

14. Third Party Services
External entities will continue to be billed on a per port basis using a higher rate structure comparable to market service rates
Third party services include:
Wired and wireless data networking
VoIP voice line, voice mail and long distance
Basic VoIP telephone set 14

15. Third Party (cont.) Recurring monthly costs:
High speed data Ethernet $45.61
Voice over IP telephone service $23.50
Voice mail $ 3.00
Wireless access point (Non-UofL bldg) $90.00
International long distance – usage based
One time costs:
Cable runs $100.00
Voice/data activation $150.00
In building moves $ 15

16. Benefits
Sustainable funding model for core communication infrastructure services
Supports move to wireless and mobile technologies
Provides a fair and equitable rate structure for all
Enables improved budget planning at the department level
Simplifies administration and service delivery
Positions us to revisit the headcount funding model 16

17. Next Steps Vet recommendation with appropriate stakeholders
Identify and complete any necessary changes to IT billing processes
Develop communication plan to inform the university community
Continue to investigate other revenue generating options 17

18. 18