Wall of Fame - Cape Girardeau

Funding Cut Strategies and FY11 MOREnet Fees

Thursday, July 1, 2010

On June 17, the governor’s office announced that the remaining $6.8 million in MOREnet’s FY11 House Bill 3 appropriation had been reduced to zero. This appropriation specifically funded the cost of the MOREnet network for all members and connectivity to the network for public K-12 school districts and public higher education institutions. On June 18, in response to the funding cut, the MOREnet Council agreed to continue operations for all MOREnet provided services and to preserve the MOREnet consortium by implementing member fee increases and an operating budget reduction of $1.5 million. Since then, MOREnet has moved quickly to shift from its traditional subsidized fee model to a cost-recovery model.

Sharing the Impact: With a funding reduction of this magnitude, MOREnet leadership chose to minimize the impact to member fees as much as possible and therefore recommended to sponsors a fee structure that included an additional $1.5 million budget reduction to be identified and implemented during FY11, leaving only $3.8 million of the $6.8 million to be recovered by member fee increases.

Buying Power: Because of MOREnet’s volume purchasing and centralized billing structure, many telecommunications providers throughout the state consider us a partner. Recall that more than 60 percent of our annual expenditures are for telecommunications. Many of these vendors have already expressed their concern over the funding loss and have actively offered their assistance to reduce costs on existing circuits where possible. With more than 1,000 active circuits, discussions and cost reductions will not happen overnight. However, as costs are reduced, MOREnet is committed to passing this buying power savings back to the individual member and the consortium, to help keep your costs as low as possible.

FY11 Fees Published: All FY11 fees have been approved by the applicable sponsor and are published on the MOREnet website. Individual fee letters will be sent via U.S. Mail to all Institutional Representatives in the next few days. To find your organization-specific FY11 fees online, please log in to MyMOREnet. For assistance in accessing the MyMOREnet application, please contact MOREnet Technical Support at help@more.net.

Increased Circuit Options: The MOREnet Council has approved a change to the MOREnet Service Policies. Upon the expiration of your existing MOREnet circuit, as a member you may elect to renew your circuit with MOREnet or you may choose to procure your network connection from a third-party vendor and, as applicable, to file for your own E-rate reimbursement. In order to continue access to the MOREnet member services, members procuring their own network connections must pay the appropriate program membership fee and any other service fees applicable to this connectivity selection. Please contact your Program Manager for fee specifics. MOREnet realizes some members have connectivity choices, and this policy change enables you to take advantage of those choices without impacting your access to the benefits of all the included member services or burdening the consortium with circuit early termination penalties. See MOREnet Service Policies for more.

In FY11, all MERC higher education institution members, both public and private, and all K-12 TNP members will be responsible for the full cost of their Internet connections, something state funding has historically subsidized. For members in the rural areas of the state, where connectivity costs are six to eight times those in metropolitan areas, this actual cost may surprise you.

Bandwidth fees displayed: The bandwidth fee information provided in the MyMOREnet application is based on what MOREnet is currently paying on behalf of your organization as of June 30, 2010. As existing circuits and/or vendor contracts expire and are renewed, circuit fees may change. MOREnet will work closely with each member to ensure actual circuit cost information is communicated.

Upgrade requests: For members who have submitted a bandwidth upgrade request for FY11, MOREnet is compiling the applicable fee information and will be providing this to your organization in the very near future. Please note, MOREnet will only proceed with a bandwidth upgrade following member approval of applicable fees.

Value add: For E-rate eligible members, MOREnet currently files as a consortium on your behalf. MOREnet is committed to extending your connectivity costs to you at the "net E-rate" amount, again keeping your costs as low as possible. Today, MOREnet’s consortium E-rate discount is approximately 71 percent — some members may find that their discounts vary from our consortium discount.

New circuit ordering policy: As circuits are renewed or upgraded, all members are responsible for any early termination penalties that may be incurred. See MOREnet Service Policies for more.

Multi-year fees for planning: Our goal for all programs is to stabilize your MOREnet fees for planning purposes. As an example, the FY11 K-12 TNP fees are intended to remain as-is for FY12 as well, barring any significant changes to the K-12 membership or the consortium as a whole. We hope this approach gives you some planning ability.

For nearly 20 years, MOREnet has provided its members with secure, reliable, high-speed Internet access and a set of essential support services. As we accelerate our intentional shift to a new business model, we look forward to continuing to support your technology service needs as we become a truly member-driven organization, maintaining your trust and confidence in our ability along the way.

We realize that changes in your budget at this late date are extremely challenging and that our fee structure is likely introducing new terms and costs that may be unfamiliar to some of you. Please allow us to actively address your concerns and your questions as you have them by contacting your Program Manager or me. Thank you for your support.

John Gillispie
Executive Director
gillispiej@more.net
(573) 884-2666

P.S. Have you completed your MOREnet Value Assessment? I encourage you to consider what it would cost to replace all the services your organization receives from MOREnet and I invite you to share your assessment with me.

For more information:

Reference materials about MOREnet and its funding sources.

MOREnet Council Members

Program Managers