Bob Day, March 1999
These notes accompany the presentation given at the UCISA Management Conference outlining proposed modifications to the scheme for charging for use of transatlantic bandwidth by HEIs and Research Council establishments connected to JANET. If accepted, these proposals would take effect from the beginning of AY 1999/2000 on 1 August 1999. A decision as to whether to do so is currently awaited from the ACN.
It should be noted that these proposals are only to alter the means by which the accounting data currently collected on each institution's use of the transatlantic bandwidth is used to calculate quarterly bills. It is not possible within the time available to alter the underlying accounting mechanisms for the coming year. However, the ACN is to review over the coming months the basis upon which JANET usage charging is implemented, in the light of a need which has become apparent for a charging basis that more accurately reflects the totality of an institution's use of JANET, rather than just this one aspect of it.
Since the inauguration in August 1998 of charging for an institution's use of transatlantic bandwidth, there has been considerable discussion within the community as to whether the method chosen to apply a fixed charge per Megabyte of traffic arriving from the transatlantic link and bound for an institution's network(s)—is the best means of raising the revenue required. A particular criticism has been the inherent unpredictability to an institution of the total annual charge, especially with regard to the effects of regular upgrades made by JANET(UK) to the total bandwidth available for use.
However, in determining any changes to the current scheme, a number of potentially conflicting requirements, expressed by the various stakeholders involved, must be taken into account. Besides the wish for predictability indicated above, there is also a wish expressed by the HEFCs that an individual institution's charges reflect its use of transatlantic bandwidth, and that those institutions which use bandwidth carefully should be rewarded financially. This wish has also been expressed by a number of institutions themselves.
An additional consideration, important both to JANET(UK) and the JISC Secretariat, is that the revenue raised by charging meets the target set in the overall JANET budget, and that it does not significantly exceed this target.
Finally, it is essential that any modified scheme allows an exit to any more general scheme that the ACN might wish to implement in AY 2000/2001, as a result of its review of the present scheme.
The essentials of the scheme being proposed for AY 1999/2000 is that the charges should be collected by first determining a fixed annual amount of revenue required, and then raising this by a shareout scheme based on the relative use of transatlantic bandwidth by institutions i.e. if an institution, over the year, was found to have used two percent of the total bandwidth used, it should pay two percent of the total revenue required.
The amount of revenue required would be determined as the difference between the total cost of providing JANET for the year (as expressed in the budget for JANET recommended by the ACN and agreed by the JISC and HEFCs), and the funds the JISC has available from the HEFCs with which to pay for JANET. This is in effect a "deficit funding" mechanism, rather than a specific charge raised to pay for the components needed to provide transatlantic bandwidth. There is some difference of opinion at present within the community as to whether deficit funding is the correct long-term approach, and this will need to be debated by the ACN as part of its review. However, de facto it is the approach that will be necessary for the forthcoming year, as a result of decisions already taken by the JISC.
The mechanism proposed to determine relative use by institutions is to use historical data to set charges for future quarter(s), in one of two possible ways described below. As a consequence, charging would move from quarterly in arrears to quarterly in advance, with the bill issued in August 1999 referring to the period August-October 1999, rather than May-July 1999. In order to avoid two bills at this time, the charge for the May-July 1999 period (the fourth quarter of the current charging year) would be waived.
In this variant of the scheme, the charges for each institution would be based on that institution's use of the transatlantic links two quarters previously. Thus the charges for the first quarter AY99/00 would be based on the use of transatlantic links during the third quarter of the current academic year.
At the beginning of each quarter an institution would receive a bill for the upcoming quarter plus a firm statement for the next quarter (in effect there woukld be a six month period of certainty of charges). Each statement (and therefore following quarter's bill) would be calculated by using the usage data collected for the quarter that has just been completed. This means that a firm statement for the first quarter of AY1999/00 could be issued in May 1999. (It is possible to issue an indicative statement now covering the charges for the full year 1999/00 based on usage during the first two quarters on AY1998/1999).
In this variant of the scheme, at the beginning of AY 1999/2000 a bill for the first quarter of the year, plus firm statements for the following three quarters, would be issued. These would be based on the accumulated historical data for all four quarters for AY 1998/1999. At the beginning of the following year (AY 2000/2001) an adjustment would be made based on the accumulated data for AY 1999/2000 (to account for the difference between actual usage during the year, the value actually billed for). This could result in either an additional charge being levied to an institution, or a refund being given in the form of a credit against a future charge, depending on the institution's usage during the year.
As with the quarterly-adjusted scheme, an indicative statement, suitable for budgetary purposes, can be issued now.
For both schemes, the variance in an individual institution's bills would depend only upon changes in that institution's use relative to that of the body of institutions as a whole (i.e. approximately 200 institution's use). It would not depend upon changes in absolute use as a result of external events such as the provision of more transatlantic bandwidth by JANET(UK), as these are likely to affect all institutions to a similar degree.
The quarterly-adjusted scheme has the effect of providing faster feedback of an institution's changes in usage compared to the norm, and splits any uncertainty in charges across four quarters. The annually-adjusted scheme on the other hand provides complete certainty of charges within the AY, with the possibility of a larger and short-notice additional charge at the beginning of the following AY.
JANET(UK) has a slight preference for the quarterly-adjusted scheme in terms of its own management of revenues, but would be happy to implement either according to the collective wishes of the community.
The JANET budget for FY 1999/2000, now agreed by the HEFCs, dictates a revenue of approximately £3.2 million including VAT.
In order both to avoid unnecessary shifting of funds within the ACN's internal budget lines, and to give greater predictability to the scheme, it is being proposed that the transatlantic bandwidth used by the JANET cacheing service is exempted. This would have the effect of making use of the cache free of charge during AY 1999/2000, and thus could be expected to encourage its use.
A calculation on a per-institution basis has been performed of indicative annual charges, applicable to either variant of the proposed scheme. These may be found at the URL: http://bill.ja.net/charges99.html.
To comment upon, or ask questions about these proposals please contact Kevin Hoadley, JANET(UK)'s Network Resource Manager:
e-mail: K.Hoadley@ja.net
JANET(UK) is particularly interested in receiving opinions as to which variant of the proposal (quarterly-adjusted or annually-adjusted bills) would be preferred by HEIs. It also is interested in receiving comments as to whether the current period of uncharged usage of bandwidth (from 01.00 to 06.00 each day) should be extended to cover evening use - perhaps by moving the start time forward to 20.00 or 21.00 in the evening. In the annually adjusted scheme the effect on charges of doing this will not be noticeable in AY 1999/2000, as these will have been fixed under the present charging regime, but in the quarterly-adjusted scheme there might be an effect on bills in AY 1999/2000.
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