APPROVED

IHETS Management Committee
November 19, 2002

PRESENT
Erv Boschmann, Indiana University
Greg Fawcett, Independent Colleges of Indiana
Michael Gay, Purdue University
Vernon Houchins, Vincennes University
Lou Jensen, Indiana State University
William Kramer, Ivy Tech State College
Michael Lucas, Indiana University
Joe Misciewicz, Ball State University
Fred Nay, Ball State University
Robert Ruble, University of Southern Indiana
O’Neal Smitherman, Ball State University

STAFF
Carol Brunty
Carrie Dixon
Tim Fisher
George Jensen
Tim Ping
Susan Scott
Kevin Siminski
Ed Stockey
Ed Tully
Lynn Ward

Chairman Kramer called the meeting to order at 10:05 and introductions were made.

APPROVAL OF MINUTES
Jensen moved that the minutes of the September 17 meeting be approved as distributed. Fawcett seconded the motion and it was unanimously approved.

EXECUTIVE DIRECTOR CONTRACT
Kramer reported that IHETS acquires the services of Dave King in cooperation with Purdue through an annual agreement. Dean Lechtenburg (Purdue) has agreed to extend King’s contract for another year through September 30, 2003 if IHETS concurs. Jensen moved that Dave King’s contract be renewed to extend Dave King’s appointment through September 30, 2003. Boschmann seconded the motion and it was unanimously approved.

PENDING ISSUES
King reported through the Commission for Higher Education, we are requesting that the IHETS budget be restored back to 2002-03 appropriation, before the $501,000 was cut. King noted that these are the same funds that we requested, they are just being re-categorized. This assumes no inflationary increases for S&E and salaries.

King added that on October 2nd he was invited to make a presentation to the Senate Finance Committee. King represented IHETS in a joint presentation with Laura Larimer and Ray Ewick about our involvement with the ITN process. King addressed questions about the future of networking in the state, whether we have a strategic plan, and how appropriated funds affect the future growth of the network. He noted that the network doesn’t require any appropriated funds at this point; however the support they give to the K12 school grant program is critical to the success and viability of the network. The support they give us, and we pass on to the member institutions, is critical. He noted that IHETS support for network connections is not a line item; rather, it is internal allocations that we create here so it is not nearly as directly involved. The outcome of the session will be continued discussions about these issues because there seems to be some interest and may help set a foundation for future efforts.

INTEGRATED VIDEO TASK FORCE
Jensen is chairing the Task Force and members include Joetta Burrous (PU), Fred Nay (BSU), Karen Bonnell (USI), Michael Gay (PU), Bob Jefferson (ISU), and Melissa Hughes (ISU). The group is looking at video in an integrated fashion. They are exploring and analyzing the current costs, utilization and technical capabilities of satellite, two-way video on the network, and the potential for the Lifelong Learning Service that is proposed for March. The group has seen a number of demonstrations to compare the video from different sources. Jensen added that discussions are based on two basic foundations: what are the needs of the providers and the needs of the students. The group discussed the utilization of existing technology and the sites around the state; economic and fiscal concerns; age of the satellite system; user fees and potential site costs. Nay added that that we might be providing too many delivery platforms each of which has pros and cons.

Stockey and Dixon led a presentation of Virage, a Digital Asset Management software package for storing, organizing, search and retrieval of video and rich media. Automated processing takes content from a variety of file formats, indexes according to a range of choices (e.g., audio to text, closed captioning, facial features), and places the material online quickly. The real-time digitizing significantly reduces encoding time and costs. Customized templates configure identity, navigation buttons, video frames, and various search fields that users access with their web browsers. Dixon demonstrated a class session from Dr. Gilberti of ISU pulled from the IHETS TV feed to illustrate different approaches to synchronizing video and PowerPoint slides as well as use of thumbnails for visual searches.

Jensen stated that the Task Force will be preparing a report to be presented to the Management Committee in January.

USER FEE REPORT
King noted that at the last meeting the group requested a comprehensive breakdown of current user fees. He reviewed institutional costs to participate in IHETS and ITN Services. For IHETS Television the institutional cost will be $25/hr starting July 1, 2003. Based on 2003-04 requests, the projected revenue will be $130,000. Dave added that related expenses are $758,400 for transponder lease only; and $189,600 per channel. The comparable market value for satellite usage is at least $250/hr.

Institutional cost for SUVON service is $480 per trunk/per year making projected revenue of $220,800. A related expense is $283,283 to cover the current contract with Qwest LEC/LD. The average usage cost per minutes is $.025 versus the market cost of $.045.

The ICN Business Plan drafted by the IPSE Working Group indicates a new fee of $1,000/yr for originating campuses, $500/yr for home institutions only, with projected revenue of $31,000 to be earmarked for ICN business development support. There is approximately $700,000 in related expenses. The Plan and related fees will be up for approval later during the meeting.

ITN Services - King noted that in the past ITN services have been established at approximately $16,500/yr for a T1. For network members prior to July 2001, IHETS defrayed that cost down to $11,000. Network connection support is provided to IHETS members from an internal fund which was created by the reduction in satellite channels and from additional relocation of funds to reach about $1.15M fund. As of July 1, 2001, that fund was capped.

King added that currently IHETS pays Intelenet for 1- DS3 – 155 T1’s @ $5,500 and 87 56K’s @ $2,500/ea for approximately one third of the total ITN cost for higher education. He added that under ITN Services, there is a continuing usage fee – $3,600/yr for expenses to have an ATM switch at the sites that use ATM video.

King stated that the initial goal was to create recommendations that could be passed on to the Board, however there are so many open issues as it stands today, that is not likely to occur until at least January.

INDnet and ITN
King reported that higher education, with IHETS providing leadership, have been active participants in the development of the Indiana Telecommunications Network. In January 2000 there were discussions about the possibility of raising prices. At that time we were seeing a rapid increase in the circuit ordering from the network and a rapid increase in the use of funds that we had created to offset the circuit costs – forcing an increase in the price for members from $7,500 to $9,000 and it went up again to $11,000 and eventually capped in July 2001. He added that we had considerable pressure to bring prices down during which time, we were running a deficit and for a period of time, so the process of lowering prices was not realistic. A year ago turned a positive cash flow and have ever since. In general revenue has been fairly robust on the network. At the same time, many users have complained that circuit prices were not matched to market value, and some were forced to drop off the network due to the cost. This had a negative impact on consortium relations.

IHETS Operations staff proposed that one way to deal with this would be to segregate the higher education connections to the network on a single router, this would not reduce revenue and would allow us to reconfigure the product that we provide to members. King stressed that the viability of the network is the main goal, cash flow will not change and we are just reconfiguring in a way that would be more advantageous to members. In relatively quick period of time the Intelenet staff brought back to steering committee a new set of prices. King distributed and reviewed new ITN pricing. These new network prices have been approved and will go into effect January 1, 2003. However, the ITC will be looking at the $1.5M fund to see how that should be applied now that we have the flexibility of price reduction. Therefore, these are not necessarily the prices that the member institutions will be paying. A T1 was $1,375/month now will be $1,250/month. This provides full access and quality of service. However, the real change is that the second T1 will be priced at $600/month. In addition the prices for DS3’s have come down to a greater extent. A DS3(45mb) has dropped from $15,000 to $12,000/month, and will be full bandwidth on the intranet. Tully added that the most important thing to remember is that T1 and DS3 service is no longer restricted allowing for burst able internet usage up to 45mb, although not on a constant basis.

King stated that we are holding the recommendation that INDnet be reconstituted by aggregating all higher education circuits onto a single router. He added that we have already done this with state government connections. Even with the lower prices, the January and July payments will pay off all network debts. It will create a $60,000/mo network refresh fund which has been seeded with $1M to start with so after the first year the fund will be about $1.7M. This will also allow for $300,000 worth of routers to make upgrades and give quality of service across the network.

King noted that Stan Jones is concerned that projections are accurate and therefore does not want to lower prices further. He added that if the projections are even close, he expects we will be able to look at lowering prices again in July. This process will be closely monitored and reevaluated after six months. King reported that the Commission asked that the reconstitution of INDnet be taken off the table. He has not responded to the request but plans to respond that we will not and that we are going to stretch the potential time out to July 1, proceed with rerouting circuits to a single router and reserve the right to reconstruct this however we want.

King reported that about a year ago, the IP Video Task Force drafted a report on IP Video and the outcome of that report was a recommendation to ITN that the network buy an IP Video bridge, to not only test but promote its use and value. At that time, the ITN Steering Committee was concerned about resources and the value of buying the bridge. Stockey and Tully negotiated with various bridge manufacturers and negotiated a purchase agreement for the bridge. They decided if the network would not buy the bridge, IHETS would as it could be used for higher education bridging service for testing and begin to use as a production device. Currently, there are 15 courses running on the bridge.

That reallocation of funds a year ago, to purchase the bridge, did not figure in the unexpected budget cuts so a user fee was proposed to recover that cost. The proposal was met with mixed feelings; should we promote IP video use or try to recoup our return on this in one year or in subsequent years. It was decided that there would be no fee for the first year so that as many IP codecs could be certified and begin planning how to use it. During that process we got signals back that perhaps the network should buy the bridge and make it a core network service. At the same time we were considering reconstituting INDnet and the bridge could become part of that structure. Reconstituting INDnet might return enough to eliminate the need for user fees. We are still considering how to proceed. Instructional use of the bridge will get priority and if at some point there are conflicts, we will consider adding ports. King noted that there is not consensus among the IHETS as to whether this is the right thing to do. Tully added that financially it makes sense but the downside is control and profile.

IHETS Operating Budget Update
King distributed and reviewed the current operating budget. He noted that the expended funds for the first quarter are approx 18%.

BOARD MEETING
King proposed that we look at scheduling a Board of Directors meeting in coordination with the May Commission for Higher Education meeting.

COMMITTEE REPORTS
Integrated Technologies Committee – Nay reported that the group has been discussing INDnet, the Virage Digital Asset Management System, and IP Telephony. He noted that three vendors Nortel, Cisco and Aviya have provided equipment for testing and evaluation. The group will draft a report on their findings. He expects that the ITC will meet again before December 20 to discuss and develop a recommendation for the $1.5M fund and present to this group at the January meeting.

Working Group – Boschmann reported that the ICN Business Plan came out of discussions about the large and growing E-learning environment. Funding has been a major topic of discussion and the plan proposes token fees of $1,000 for originating institutions and $500 for institutions that serve as home institutions but do not offer courses. The proposed fees would go into effect in July 2003. Fawcett added that the Plan and subsequent fees have the support of the Independent Colleges. Following a brief discussion, Jensen moved that the ICN Business Plan, and related fees, be endorsed by the Management Committee. Fawcett seconded the motion and it was unanimously approved.

The meeting adjourned at 12:10 pm.