Builders question need for expensive data network replacement [The Leader-Telegram, Eau Claire, Wis.]
(Leader-Telegram (Eau Claire, WI) Via Acquire Media NewsEdge) Nov. 03--The UW System is taking the first steps toward building a new $33 million data network that even some university backers believe is a waste of taxpayer money.
It's not that the system's 26 campuses and affiliates don't need the high-speed, state-of-the-art network for research and communication purposes. On that point there is no argument.
The problem, according to UW-Eau Claire chief information officer Chip Eckardt, is that the system already had access to a perfectly fine network operated by WiscNet, the nonprofit cooperative that provided connectivity to all UW campuses for the past 23 years.
But when the Republican-controlled Legislature mandated the divorce between the system and WiscNet over concerns that WiscNet uses public subsidies to compete unfairly with the private sector, the UW was left with no choice but to build its own network, said Eckardt, who represents the comprehensive campuses on the team planning the separation.
"We definitely didn't want to go down that road, but we're doing it because state law requires it," Eckardt said, explaining that no other existing state network could meet the UW's speed and volume requirements.
The UW System reported the $33 million it expects to spend to procure, manage and maintain the new network over the next five years is $13 million more than the expected cost of remaining with WiscNet over the same period.
"This is a decision that the Legislature made, and the UW System is working hard on a replacement system for WiscNet that meets the requirement of the law," said UW-Stout spokesman Doug Mell.
Ross Wilson, WiscNet chairman and education technology director for Cooperative Educational Service Agency 10 in Chippewa Falls, labeled the new network a costly duplication that he blamed on a major lobbying effort by the state's telecommunications industry.
"We're building two backbones when we used to have one," Wilson said. "We've been forced by legislation to build two, and it's going to cost the taxpayers of the state more money, bottom line."
Free market fuss
But critics contended the separation was necessary to avoid giving a tax-exempt cooperative such as WiscNet, which they claim benefits from public subsidies and a cozy relationship with the UW, an unfair competitive advantage over commercial providers.
"Fundamentally, whether it's telecommunications or grocery stores or hardware stores, any business that can and should be provided by the private sector shouldn't be subjected to taxpayer-subsidized competition in the way we were seeing it play out between the university and WiscNet," said Bill Esbeck, executive director of the Wisconsin State Telecommunications Association, an industry trade group.
State Sen. Sheila Harsdorf, R-River Falls, who is chairwoman of the Senate's Universities and Technical Colleges Committee, acknowledged part of the reason for the change was to provide an opportunity for the private sector to grow.
"When you look at the investments that will be required as we move forward with technology, we need the private sector to be willing to make that investment," Harsdorf said.
WiscNet advocates, however, equated the data network with such core public services as interstate highways, sewer service and municipal water systems they insisted are provided more efficiently -- and at a much better price -- with the help of the public sector not driven by profit motive.
In this case, a cooperative was able to provide the service to its public sector clients at a much lower price than commercial providers, said state Sen. Kathleen Vinehout, D-Alma. That's why WiscNet provides Internet services to about 75 percent of state public school districts and 90 percent of public libraries.
Esbeck predicted that will change -- and already has begun to -- as commercial vendors gain confidence the playing field will be leveled. In July, the WSTA trumpeted the development that its members had secured contracts with eight school districts previously served by WiscNet.
"When a private-sector industry, in this case telecommunications, is subjected to a taxpayer-subsidized competitor, that has a chilling effect on private-sector investment," Esbeck said. "It provides them less opportunity and incentive to continue the reinvestment necessary to maintain a robust telecommunications infrastructure.
"Moving forward, I anticipate that my members will be more aggressive ... and more successful in winning back school district business because they are able to offer a price that meets or beats the WiscNet price."
Vinehout argued the change was the result of a knee-jerk reaction by lawmakers to political pressure from the telecommunications industry.
"This is a waste of taxpayer dollars, and it was done to placate the telecoms and the people who listen to the telecoms, but it's certainly not necessary," she said. "There are certain public needs that cannot be met by the private sector."
Harsdorf, by contrast, said she believes the state is moving toward a pretty good solution that will continue to provide access to affordable, state-of-the-art technology, although she admitted having reservations about the plan initially.
"The word I've gotten is this is going to be something that will be very beneficial to the university," Harsdorf said, "and hopefully there will be other opportunities to collaborate where it's appropriate and there will be a cost benefit."
Regarding the extra millions of dollars the UW is spending to build its own network, Esbeck said, "If that financial outlay is required for them to be in compliance with state statutes, then that's the answer."
Yet Esbeck added that he doesn't think people should get hung up on the amount of money it will cost for the UW to build a separate network.
"That's a choice that is being made, not something they're doing with a gun to their head," he said.
Esbeck suggested university officials are going beyond merely replacement costs, equating it with replacing a Chevy network with a Cadillac network.
Not so, countered Eckardt.
"While we will be purchasing newer hardware, it will run at the speeds we currently have," he said. "There are no other benefits to building our own network compared to what we have today."
To make matters worse, Wilson said, the prices WiscNet charges the public schools, libraries, local governments and nonprofit health care providers that link to its network will have to go up next year to account for the increased costs associated with not having the UW involved but still maintaining the same level of service. Those costs, including a 20 percent network access fee hike, presumably will be passed on to local taxpayers.
"We won't have to saddle anybody with an assessment, but our ongoing costs will go up," he said. "Our cost increase is really due to the duplication of the network and that's it. Nothing else changes."
The same likely will be true for UW campuses, said Eckardt, estimating the Internet service bill for UW-Eau Claire will rise by about 30 percent as a result of the changeover.
In general, the separation of the UW and WiscNet will involve the university system retaining all of its contracts for fiber assets and WiscNet keeping the operating equipment, with both acquiring the network components for which they no longer have access.
"They get the network; we get the gear," Wilson said.
Esbeck said he couldn't predict whether WiscNet would maintain its position in the marketplace without the benefit of taxpayer subsidies.
Regardless, he said, "If WiscNet left this marketplace, I have member companies ready, willing and able to match a WiscNet price at any school district anywhere in the state. ... Nobody needs to be concerned that a school district in Wisconsin will be left without an Internet service provider because my members are ready to step up."
Still, Wilson said he is confident WiscNet will survive the transition, including the loss of about a quarter of its volume through the UW, and continue to serve a large share of the state's public sector market by offering network access at prices "astronomically better" than commercial providers. WiscNet gained 55 new members in the past two years, he noted.
Looking ahead, the UW System is anticipating that it will complete its separation from WiscNet no later than January 2015 and possibly before the start of the 2014-15 academic year, said UW System spokesman David Giroux.
"We're dealing with the legislative requirements we have in front of us, and we are doing our best to comply," Giroux said.
Eckardt agreed, adding, "We are buying equipment as we speak; this isn't a stall tactic."
The important thing at this point, he said, is to move beyond the political fight over WiscNet and focus on getting the new network up and running so it can start benefiting students.
"That why we're here -- to serve the students," Eckardt said.
Lindquist can be reached at 715-833-9209, 800-236-7077 or firstname.lastname@example.org.
WiscNet is a nonprofit cooperative that provides low-cost, high-speed Internet services to a majority of public schools, libraries, local governments and nonprofit health care providers in Wisconsin.
The UW System, which had contracted with WiscNet for Internet services for 23 years, will be transitioning to its own network over the next 14 months or so after the Legislature mandated the system sever the relationship over concerns WiscNet uses public subsidies to compete unfairly with the private sector. UW's new network is expected to cost about $33 million over the next five years, $13 million more than the projected cost of staying with WiscNet for the same period.
(c)2013 the Leader-Telegram (Eau Claire, Wis.)
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