E-Memo: New Connectivity Model

In Fiscal Year 2008, network charges were restructured, moving away from the pay-per-port model towards a mostly common good model (Auxiliary departments paid by headcount). This model had significant limitations:

• It lacked clarity and equity across departments.
• Additional charges existed for setting up or moving jacks, phone sets, etc. creating a nickel-and-dimed feeling for departments to manage.
• Solely grant-funded programs were not included in the model.

Given these issues and ongoing campus concerns, a study was done by the Office of Information Technology (formerly Information Technology Services) and the Office of Planning, Budget and Analysis to assess the current funding model of network and telecommunication services and its future viability. The study revealed that telecommunication fees are priced higher than their average cost of operation while network fees are underpriced.

Data from the study drove the following change: effective FY2012, the telecommunication and network services charges will be combined and recalibrated to an overall lower rate for users.  In this new model, users are defined completely on a headcount basis.

The primary reasons why the rates will be lower are because of a fund plant balance that existed within OIT that will be leveraged, and a one-time investment by the campus.

The OIT Budget and Finance Office and PBA are currently meeting with finance groups across campus to explain the new model and answer any questions regarding this change. An FAQ is included below. If you have any questions regarding the model, you can contact Erika Smith at erika.smith@colorado.edu or David Chittenden at david.chittenden@colorado.edu.

FAQ:

Q: What are the additional costs?
A: There are no additional costs. Previously there were 45 separately chargeable services that fell into six categories: Set + Line Voice Charges; Other Voice Services; Long Distance; One-Time Installation Charges; One-Time Move Charges; and One-Time Programming Changes. Please note this means that domestic and international long-distance will no longer be charged; however, individuals will still be required to enter their access code to use long distance. The costs paid by CU to outside contractors for phone and network jacks will be recovered from the unit requesting the work.

Q: How can you lower the rates? Where is the money coming from?
A: The primary reasons why the FY2012 connectivity rates will be less than prior years is the calculated use of an OIT fund plant balance that can be leveraged and the campus one-time investment of $3M.

Q: Are the rates going to rise sharply/dramatically in the coming years?
A: No, the ten-year rate projection has the monthly connectivity rate growing steadily from $33 per month to roughly $45 per month by the fifth year and then stabilizing.

Q: How will headcounts be determined?
A: Accountability will be provided through rate review since this connectivity will be set-up as an internal service center and the headcounts used for the charging algorithm will be provided annually by PBA Institutional Analysis.

Q: Wat about Grants and Other Fund Types? How will they be charged?
A: Grants and other fund types not identified above will continue to be (direct) charged as applicable.

Q: Can I get GigE at no charge if I need it for my research or academic needs?
A: Fees recovered for various services performed by OIT will no longer be charged, including “gig-e” (1 gigabit) ports and activating new jacks in existing or new buildings. The costs paid by CU to outside contractors for phone and network jacks will be recovered from the unit requesting the work. The current network standard is 100 mbits (or 0.1 GigE). In approximately two years, the campus-wide standard will be GigE. In the meantime, GigE will be provided to those whose work would be impeded without GigE. This typically affects those conducting research computing.