***UNAPPROVED DRAFT***

IHETS Management Committee
January 18, 2005 – 10:00am
Boardroom

PRESENT:
Patrick Alles, Independent Colleges of Indiana; Cindy Brinker, University of Southern Indiana; William Kramer, Ivy Tech State College; Robert Long, Purdue University; Fred Nay, Ball State University; Dick Tully, Ivy Tech State College; Phyllis Usher, Department of Education; Brian Voss, Indiana University; IHETS Staff: Tim Fisher, Justin Kamm, David Kaufman, Rauf Khalid, Dave King, Susan Scott, Kevin Siminski, Ed Stockey, Susan Sullivan, Lynn Ward, Julie Wheeler

Chairman Kramer called the meeting to order at 10:05am.

Approval of Minutes
Voss moved that the minutes of the September 21, 2004 meeting be approved as distributed. Alles seconded the motion as it was unanimously approved.

Review Board Action
King reported that on Feb. 6, the Board approved acquisition of outside legal counsel. Three names were submitted for consideration to a subcommittee of McRobbie, Benjamin and Kramer. That group narrowed it to two and the Board then decided to ask Dave Hensel from Sommer Barnard to be legal counsel. Staff and Benjamin met with Hensel yesterday and he has begun reviewing the situation, related documents and accumulating answers in order to be our interface between the legal structure and/or the press if necessary. Benjamin asked Hensel to assist us with the search for an outside auditor. Staff are assembling a list of potential certified forensic or fraud examiners and a draft RFP-type letter that would go out to the individuals asking them to propose how they would provide this audit service. King asked that anyone who has worked with or knows of someone that they would like to add to this list, get it to us as soon as possible. Hensel will review the letter and send it to Benjamin for final approval before it goes out. The same subcommittee will go through the responses and narrow it down with the final selection by the Board.

Hensel will prepare a proposal for Benjamin which outlines how he will work with IHETS Board of Directors. The issue of how to pay for legal counsel and the audit was discussed at the Board meeting and they referred that decision to the Management Committee.

King reported that on December 9 the Intelenet Commission voted to reduce circuit prices as of January 1, 2005, to $900/month for the primary ITN T1 connections, with pricing for additional circuits remaining the same. IHETS funds reallocated from the reduction in satellite channels were used to offset the cost of ITN connections for all of higher education for the last five years. IHETS spends about $1.1M/yr to help offset member T1 connections. So IHETS members only pay $600/mo already. Out of the $1.1M IHETS uses every year to offset member fees to Intelenet, IHETS can capture about $150,000 in savings over the next six months from this reduction in circuit fee. The funds could then be used to cover legal and audit fees.

Following discussion Nay moved that the group approved using subsidy savings through this fiscal year to cover legal and audit fees. Voss seconded the motion and it passed unanimously.

Kramer noted that the Board suggested that the forensic auditor should also look at the current management structure. Benjamin is the primary contact for legal counsel and the audit and the final report will go to the Board of Directors. Kramer commended King and the IHETS staff for their outstanding work to provide information and keep everything on track during this difficult time.

Contract for Network Operation with Intelenet
King gave a brief background on the relationship with Intelenet, which began in 1999 when IHETS started INDnet, connecting all of the institutions that needed internet access together. Intelenet asked us to expand the network to include schools and libraries. At that time we negotiated a Memorandum of Understanding for five years ending in June 2004. That MOU was not renewed as expected due to problems at Intelenet and other issues. Since that time, we have been in negotiations with Intelenet on this operational contract. After the contract had been endorsed by IHETS and IU, it went to the Department of Administration for final signature, and was rejected.

At about that same time, the Governor signed executive order 5-17 establishing the CIO and the Department of Information Technology that is now being supported and endorsed by House Bill 1137. During this lengthy process Intelenet has not paid IHETS for network operations and are now in excess of $1.5M behind in payments. We went through a similar situation in 2000-2001 when we ran out of start up funds from the legislature and accrued a deficit of $4.8M. The Budget Director at IU has said that IU administration has not approved a deficit level of $1.5M or more on our ITN account.

Staff met with Karl Browning, new State CIO, last week and made him aware of the situation. Browning is considering options.

E-Rate/USF Filing Options
King reported that the Intelenet Commission has in the past filed a consortium application for federal funds under the Universal Service Fund. The USF is used to provide universal internet access for schools and libraries. King noted that filing is a very complicated process and a can create serious problems if not done correctly. The DOE and State Library have taken the role of filing a 470, which is an RFP requesting Internet service for the schools and libraries. Someone needs to respond to that 470 and negotiate a contract with DOE and State Library to be the official service provider under the federal regulations. The 470 was filed in December and can be open until Feb. 17. On that date, the schools, DOE and libraries must have a fully signed binding contract with a service provider to provide internet service at a negotiated price.

King reported that IHETS has considered taking on that role. ENA, Inc. is a commercial company that serves as service provider in Tennessee and is negotiating with Idaho and Louisiana to be the service provider. We invited ENA here to talk about whether they could serve as the service provider here and do all the things that Intelenet used to do, but as a commercial entity would be completely separate. The ENA option would be, they file as the service provider, and they have a contract with DOE and state library and then contract with IHETS for network services. IHETS expects to see a proposal from ENA soon that will tell us more about the costs, but there is concern that the expense that would ENA bring might not allow us to lower circuit costs. Another option would be to do nothing.

King expects that as discussions about this continue the options on how to proceed will narrow and we can bring something back to this group for approval.

IPSE Course and Module Development Grant Program
Tully reported that we have been doing course module development grants for the last seven years, with $250,000 to be dedicated this year. This year we received 39 proposals and 13 are recommended for funding. A two-round process was implemented this year to make sure that all proposals got a complete and thorough review. The 39 proposals were reduced to about 20 by a large number of reviewers. Those 20 were then reduced down to 13 by the Program Development Team. At the January 7th IPSE meeting the group recommend the 13 proposals for funding totaling just over $249,000 with $266,000 of matching institution funds. The recommendations along with abstracts were mailed to this group. With thanks to the reviewers, the Program Development team and IHETS staff, particularly Ward, IPSE recommends those 13 proposals for funding.

Voss moved that the 13 Course and Module Development Grants recommended by the IPSE be approved for funding. Long seconded the motion. The motion was unanimously approved.

Legislative Action Update
King reported on IT-related legislation. The first is HB1137 which creates a “cabinet-level” CIO and Department of Information Technology for the State of Indiana. The bill and executive order 5-17 filed last week consolidates all Intelenet functions into the new Dept. of IT. The bill basically scratches out Intelenet in every reference and inserts “the department.” It also attempts to amend IHETS enabling legislation to 1) insert the new CIO on the IHETS Board of Directors and 2) prevent “IHETS” from competing with local Internet or telecom providers

House Bill 1148, introduced by Jack Lutz, uses the language from Missouri and Philadelphia cases where the telecos fought the development of wired and wireless telecom services by municipalities or any other public sector entity. It would dismantle the ITN and I-Light2, except for the possible limited provision of service to higher education only. The impact on I-Light as a completely separate entity not serving anyone but Purdue and IU is unclear, but we assume it was not designed to impact I-Light. However, the language could later be interpreted differently.

Joe Micon introduced a house bill (which is not yet numbered) with language that is designed to force whoever provides e-rate funded federal Universal Service Fund money to schools and libraries (to buy high-speed Internet access) to allow the schools to choose whatever ISP they wish.

Senator Ford’s companion bill to HB1137, is SB184. It aggregates all of Intelenet and other state groups like Indiana Technology Oversight Committee (ITOC) into the new Dept. of IT under the new CIO and it doesn’t mention IHETS enabling legislation at all.

Senator Ford and Rep. Matt Pierce (Bloomington) have introduced SB381. It provides for a wireless (802.16/WiMax) statewide test bed built out from each of the new I-Light2 nodes. It also provides for Ethernet port access at each I-Light2 node for commercial entities to use excess bandwidth to provide competitive ISP services in the I-Light2 node communities. The statewide wireless test bed will be built using revenue generated by the users’ fees from the commercial users of excess capacity.

At IHETS, our legislative philosophy is to try to provide technical input on legislation as to whether it is technically feasible, and we try not to weigh in on policy unless it is directly designed to amend our enabling legislation or reduce our ability to provide service and support specifically for our higher education members.

I-Light2 Status and Update
King reported that I-Light2 now has about 9/10th of the fiber under contract and the State Budget Agency has paid Indiana Fiber Works for that. Level 3 may provide fiber to Evansville, Richmond and possibly Vincennes. Mike Landwer had been our point of contact at the State Budget Agency when negotiating contracts that have come out of the RFP. Since Landwer is gone, getting a signed contract has taken much longer. King expressed concern that if we don’t get the contract signed soon, we could see a 20% increase. We are now working with Tony Armstrong at the Budget Agency and we hope to have a contract signed by the end of the month.

King reported that the next step for I-Light2 is the RFP for equipment that lights the fiber and pulls the network together. There were two separate RFP’s and the first one came in over budget. We are working with the Budget Agency to recast the RFP with altered requirements to see if we can get it to come back in budget. King stated that we have told them that if it comes back slightly over budget, we are looking for ways to finance the remaining amount because we need to move ahead. We would use the revenue generated by bringing the I-Light2 nodes up to carry it for the first three years.

IHETS Interactive Status and Update
Ward reported that the proof of concept testing went well in the Fall semester, with only a few problems that need to be rectified. Reception to the technology was generally positive. The pilot began last week and includes two, 16-week courses and will be delivered to sites on the ITN which we were unable to do during the proof of concept phase.

The policy development aspect of the project is proceeding well and a policy development group is working through details of a significantly revised video policy. Ward announced that we have learned that First Virtual, the company that is providing the foundation product, might be on the verge of bankruptcy. We have not been able to come to an agreement with First Virtual, so we’re not quite sure what would happen if that were to take place. We are looking at how to proceed and possible contingency plans. The original timeline had built in some buffer in the event we encountered any unexpected problems. However, if we need to look at a technology change, we may need to shift from a fall to spring implementation. We are still confident that we will have a service that our satellite users can rely on in ample time.

Committee Reports
ITC—Nay reported that the ITC will meet next on January 25 and he encouraged institutional participation as there will be major discussions regarding I-Light2 and IHETS Interactive.

IPSE—Tully reported that at the last meeting the group discussed IDEAS! and the possibility of providing a library model rather than full broadcasting. There was a substantial increase in enrollments (34%) over those in 2002-03 and, with the addition of independent institution reports, a combined increase of 52% for a total of nearly 104,000 credit hours.

The group has begun looking at taking some of the grant money for modules and putting it toward learning objects. This would involve a new RFP for use of part of the funds going toward learning objects and training. We would concentrate on high need areas of learning that can best be addressed by learning objects

With no further business to discuss, the meeting adjourned at 12:05pm