K-20 Education Network Update for the Network Advisory Committee (NAC) February 21, 2014

K-20 Governance

2 Office of the Chief Information Officer (OCIO) General operational and technical oversight to the K-20 Educational Network Consortium Office of the Chief Information Officer (OCIO) General operational and technical oversight to the K-20 Educational Network Consortium General K-20 Operational and Technical Oversight K-20 Educational Network Consortium General K-20 Operational and Technical Oversight K-20 Operations Cooperative (KOCO) K-20 Engineering & Day-to-Day Operations K-20 Operations Cooperative (KOCO) K-20 Engineering & Day-to-Day Operations Engineering Operations Administration Maintenance Provisioning Current Governance

3 K-20 Operations Cooperative  UW KOCO –Monitor Network & Server Status –Troubleshoot Network Problems –Coordinate Problem Resolution –Provide and Analyze Network Performance Data –Provide Technical Support  SBCTC KOCO –Manage Video Switched Network and MCUs –Schedule Multipoint Video Resources –Provide Technical Support

Network Architecture Upgrade

5 450 Sites Connected Independent College/ University (7) Tribal Education Center/ Tribal College (11) Telemedicine Site (5) Public Library (24) Public College/ University (33) Community/Technical College (65) K-12 District/ESD (302) TVW Olympia Washington State Historical Society Over 300 K-12 districts and Educational Service Districts More than 2,000 K-12 schools and 57,000 classrooms Over 1.5 million students KCTS 9 Seattle

6 Statewide Fiber Optic Backbone (2005) Olympia Seattle Spokane YakimaPullman Vancouver School District University or College Library 10 Gbps

7 K Gbps Network: Gen 3 (2013)

Internet Service Provider (ISP) Fees

9  K-20 is statewide INTRA-net  K-20 Network does not directly procure INTER-net access for customers  OSPI contracts for ISP on behalf of connected K-12 sites  No state subsidy for ISP  No legislatively set rate structure –Estimates provided by OSPI at beginning of year –Actual cost determined at end of year, based on actual, total cost of service –Includes E-rate discounts

10 ISP Usage and Cost History for K-12

11 ISP Cost per Megabit Billed to Endsites

K-20 Connectivity Costs

13 K-20 Co-pay Principles  Established by K-20 Network Consortium  All sites must pay the same amount per unit of transport – regardless of institution size, location, or connectivity methodology  Co-pay is amount needed from connected institutions after state subsidy and E-rate reimbursements  Must be in line with options available in competitive marketplace  Much lower than actual cost to provide service

14 Concerns Regarding Co-pay  FY14 & FY15 co-pay structure lowered costs for highest-bandwidth users, but did not address many other concerns: –Calculation difficult to understand –Costs variable throughout year; difficult to plan and budget appropriately –Increased cost for increased use can lead entities to throttle or discourage network use –Doesn’t match the manner in which most vendors charge for services; ripe for misrepresentation and/or unfair comparisons

15 E-rate-Specific Concerns  Concerns were voiced by E-rate eligible sectors (K-12 and libraries) –Currently, all K-20 connected institutions pay the same rates, regardless of E-rate eligibility –Some high-discount sites leaving K-20 for cheaper options that allow for full use of e-rate discount  For co-pay to stay in line with competitive marketplace and meet legislative intent, additional changes to co-pay must be made

16 Co-pay Approach  Total co-pay requirement reduced by $2.5M (from $9.75M to $7.25M)  Allocate the majority of reduction to K-12  Eliminate utilization-based co-pay (95 th percentile)  Freeze all customer co-pay costs at or below FY13 totals  Ensure that costs for highest-bandwidth users are reduced to align with marketplace  Invoice annually, rather than quarterly

17 K-12 Approach for & OSPI proposed to:  Move to a flat-fee model  Lock in rates through June 30, 2015  Guarantee that endsite rates will not increase over FY13 totals  Apply individual district e-rate discount percentages to endsite invoices to more fairly allocate reductions to neediest sites

18 Co-Pay Revenue by Sector

19 New Co-pay Benefits & Summary  No more complex calculations  Costs are fixed through June 30, 2015  Since usage is no longer a factor in total cost, no incentive to throttle or limit usage  Allows for easy comparison with vendor offers  Allows each sector to determine the best way to allocate costs to their institutions –OSPI and WSL can apply individual endsite e-rate discounts to more fairly allocate reductions to neediest sites