K-20 Education Network FY 16 & FY 17 Budget

1 Tail Circuits to E-rate Eligible K-20 Endsites Aggregation Circuits to Node Sites Service Provider Trunks at Node Sites Tail Circuits to Ineligible K-20 Endsites 40 Gbps Backbone between Node Sites Data Transport Network Engineering Network Security Network Design Network Operations Network Maintenance Provisioning Network Administration Facilities Systems Administration Federal E-rate Help Desk Strategic Planning K-20 Operations Cooperative (KOCO) Cisco Edge Routers Juniper Edge Routers Juniper Core Routers Cisco MCUs Polycom MCUs Granite OSS Platforms Hardware Cisco Edge Routers Juniper Edge Routers Juniper Core Routers Cisco MCUs Polycom MCUs Granite OSS Platforms Maintenance FY 16 & FY17 Anticipated Expenses (Before E-rate) Data Transport $23.25M (65%) KOCO $7.9M (22%) Hardware $2.9M (8%) Maintenance $1.3M (4%) Other $0.3M (1%)

2 FY16 & FY17 Anticipated Expenses (Including E-rate Discounts) Tail Circuits to E-rate Eligible K-20 Endsites Aggregation Circuits to Node Sites (eligible %) Service Provider Trunks at Node Sites (eligible %) Tail Circuits to Ineligible K-20 Endsites 40 Gbps Backbone between Node Sites Data Transport Network Engineering Network Security Network Design Network Operations Network Maintenance Provisioning Network Administration Facilities Systems Administration Federal E-rate Help Desk Strategic Planning K-20 Operations Cooperative (KOCO) Cisco Edge Routers Juniper Edge Routers Juniper Core Routers Cisco MCUs Polycom MCUs Granite OSS Platforms Hardware Cisco Edge Routers Juniper Edge Routers Juniper Core Routers Cisco MCUs Polycom MCUs Granite OSS Platforms Maintenance Post-Erate Data Transport Expense $13.5M E-rate Discounts $9.75M K-20 ONLY applies for E-rate discounts on the items listed in BOLD above. The current statewide discount on these eligible services is 71%. Over 70% of all tail circuits are procured on behalf of E-rate eligible locations. KOCO $7.9M (22%) Maintenance $1.3M (4%) Hardware $2.9M (8%) Other $0.3M (1%)

3 FY16 & FY17 Budget (as submitted to Governor) General Fund $16.0M (62%) Co-Pay $7.4M (29%) Data Transport* $13.5M KOCO $7.9M Hardware $2.9M Other $0.3M Maintenance $1.3M Cash on Hand $2.5M (9%) EXPENSEREVENUE * Data Transport budget assumes $9.75M “reduction in expense” from Federal E-rate Funds. Pre-Erate Data Transport Total = $23.25M

4 Co-pay Revenue  No complex calculations  Costs are fixed through June 30, 2017  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

5 Biennial Total: $7.4M Biennial Total: $7.2M Biennial Total: $10.0M Biennial Total: $7.4M K-20 Co-Pay Revenue by Sector

6 State and Customer Contributions

7 Customer Tail Circuit Capacity