UW faces return of $37M for broadband expansion in 11th hour bill

Will impact research and Wisconsin's ability to compete and educate

UW System support for a statewide high-speed network that supplies schools, hospitals and municipal governments across Wisconsin with necessary bandwidth would be severely curtailed under a proposal approved by the Republican controlled Joint Finance Committee.

The proposed legislation would prohibit the University of Wisconsin System from supporting WiscNet, a high-speed research and education cooperative network that was started in 1989 to serve the UW system, and which has expanded its outreach to include technical and two-year schools and private colleges over it's 22-year history.

If the proposed legislation is approved, the UW System would be forced to return $37.3 in federal stimulus funds to expand the broadband network, said Ed Meachen, Chief Information Officer for the UW System.

The Building Community Capacity through Broadband project is currently providing high-speed Internet to the Chippewa Valley region, Platteville, Superior and Wausau. The project would lay about 600 miles of fiber-optic cable across the state. The university has already spent about $1 million on equipment. Not only would the grant money have to be returned, but the UW Extension, which is the sponsor of the grant, would have to return over one million dollars, Meachen said. “So, we actually have to go into our pocketbooks and come up with a million dollars from the university to make good on this grant that we've already got people in the field for,” he said.

Maria Alvarez Stroud, director of the UW Extension Office of Broadband Sustainability, said the provision was inserted at the 11th hour into a bill designed to give the UW system more freedom. The telecom provision was inserted into a bill that would cut the UW System budget by $250 million over the two-year budget cycle.

“Putting this clause in there seems incongruent,” she said. “Its intentions are the exact opposite.”

Republican lawmakers and the Wisconsin Telecommunications Association say the university should not be in the business of providing telecommunications services, and are in favor of shifting reliance back to BadgerNet, a state-run network that consists of private telephone companies, small and large, including AT&T, that band together to offer services to the education community in the state.

Bill Esbeck, executive director of the Wisconsin Telecommunications Association, says existing state law already prohibits the UW system from offering, reselling or providing telecommunications services that are available from private telecom carriers.

“WiscNet as an entity can continue to operate, we just think it should operate without a taxpayer subsidy,” Esbeck said. “We firmly believe some of the other telecom ventures at the UW are contrary to the existing state statute.”

Esbeck says WiscNet currently receives staffing services of about $1.4 million annually from the UW System through the Division of Information Technology (DoIT). However, DoIT spokesman Brian Rust cpounters the claim that the UW System and UW-Madison subsidize WiscNet. While DoIT does perform $1.4 million in work for WiscNet, the consortium pays for those services, and does not represent a subsidy as the private telecommunications carriers claim, Rust says.

The bill containing the telecom provision must first be approved by both houses of the state legislature and signed into law by Gov. Scott Walker.

A spokesman for Senate Majority Leader Scott Fitzgerald (R-Juneau) said it is likely the telecommunications aspect of the bill will receive further consideration before it is passed into law. “I think it is fair to say this provision is one that our caucuses will take a look at based on a desire to get the final product right, and that moves Wisconsin forward,” said Fitzgerald spokesman Andrew Wellhouse.

High stakes

Meachen says the telecom provision means high stakes for both the State of Wisconsin and for the university. The provision calls for the UW System to completely disassociate with WiscNet by July 2012.

“We created WiscNet, which is now a member owned and operated cooperative with an independent board,” he said. “So, we are forbidden to work with them, and they are our network provider, so we would have to start over from scratch and completely recreate our network. I can't even estimate the cost of that.”

If the UW System used BadgerNet to meet its current bandwidth requirements, it would pay an estimated $8 million a year, Meachen said. It currently costs the UW System $2 million a year for WiscNet, which is provisioned so that the costs to the customers do not increase with increasing bandwidth. Instead, the fee is based on the size and type of institution.

Using what he calls a conservative estimate, Meachen says the UW System would spend $27 million for BadgerNet by 2016, based on an annual growth rate of 35 percent.

“I, for one, would not want to stand before the taxpayers having just spent $27 million of their money when I knew I could have done the same thing for $2 million,” Meachen said.

“With WiscNet, we'd still be paying just $2 million a year for those same services, and with higher bandwith.” Meachen said. “For that same amount of money we'll have a 100 gig backbone by then. If we lose WiscNet, we are not going to be able to accomplish that.”

WiscNet works with the private sector, and should not be viewed as competition for private telecommunications companies, Alvarez Stroud says, point to the fact that CCI Systems/Packerland Broadband is working on the current network buildout made possible by federal stimulus money.

“This isn't about competition, it's about bringing additional capacity across the state,” Alvarez Stroud said. “We have a tradition of helping communities deal with issues that are obstacles to becoming thriving communities. We see this [WiscNet]as an obvious ingredient for communities to survive and thrive. This is the road to the future, and if communities don't have this, they are going to be left behind.”

CCI Inc stands to lose 500 jobs if the federal stimulus money is returned, Meachen said.

Meachen says a main advantage of a cooperative is that it doesn't have to worry about making a profit, and it's easier for WiscNet members to buy network engineering services from the Division of Information Technology at UW-Madison.

Regarding the claim that taxpayers subsidize WiscNet, Meachen says the actual subsidy comes from the K-12 schools, which help the university system pay for the massive bandwith that it requires.

“We use way more bandwith than all of the other customers combined, but they pay a greater proportion of the cost of the network, and still save a lot of money,” Meachen said of the cooperative's 120 members.

Research threatened

One of features that differentiates WiscNet from a private broadband provider is allowing for “bursting,” so that during isolated periods when researchers send huge data sets, they greatly exceed the average data cap. UW-Madison currently uses seven gigabits on average, and would have to procure 14 gigabits under the new legislation, even though most of the extra seven gigabits would seldom be in use, Meachen said.

“We'd be paying for the fact that researchers have to send these huge data sets, and not have it take hours and hours to get to where it's going,” Meachen said. “You can't afford to pay for that extra 7 gigabits from the private sector because it's too costly. They increase your charges based on that.”

A private network would not have the necessary capacity for scientists on the UW-Madison campus, who are some of the leading researchers on next generation Internet. A previous recommendation to combine BadgerNet and WiscNet was deemed infeasible, as AT&T would own the network and would not be able to provide sufficient bandwidth at an affordable cost, Meachen said

UW-Madison officials were caught off guard by the provision inserted into the bill, and are still trying to determine the potential impact, said Darrell Bazzell, vice chancellor for administration at UW-Madison.

“Our present understanding is that we will be prohibited in participating in a number of research networks that we presently participate in across the campus,” Bazell said. “We are trying to understand what the impact is right now, and work with to make sure that our research is not interrupted.”

Meachen says one of the unintended consequences of the legislation is that the University of Wisconsin cannot join any association, collaborative or consortium that serves any institutions, public or private, outside of the UW system.

“The implications for this are so dire, as to be unbelievable,” he said. “We have to resign from Internet2, we can't be part of it, or Boreasnet. These are huge federal government research networks that are mandatory for many of our federal grants. We have a billion dollars in grants at UW-Madison. We don't know how many tens of millions of dollars we won't be able to get because we are not members of Internet2.”

The Wisconsin Telecommunication Association's Esbeck disputes the assertion that UW research will be curtailed.

“Nothing in this motion will change their ability to be partners in those national research networks,” Esbeck said. “It is certainly not intended to, and it clearly does not. From our perspective, we thing they are just misreading the motion that was adopted.

The telecom provision also specifies that all the K-12 school districts throughout the state will have to quit doing business with the UW system and WiscNet, which means the connectivity services they use for classroom video systems will come at a much higher cost, Meachen said.

Approximately 75 percent of public schools and 95 percent of public libraries get Internet access via WiscNet, said Tony Evers, state superintendent of the Wisconsin Department of Public Instruction. If schools and libraries must use other Internet providers, most will pay at least two to three times more than what WiscNet now charges, Evers said in an internal memorandum.

“With our schools and libraries facing substantial budget reductions, how can anyone justify making them pay more for less service?” Evers said.

“The telephone companies believe they will get the business if we go out of business,” Meachen said. “AT&T and the Wisconsin Telephone Association have been saying this for years. They would just like to have that non-profit business so they can charge private sector fees for it.”