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Policy Committee Meeting. Fiscal Year 2004 Budget Considerations: Dark Fiber November 13, 2002. Economics in One Lesson by Henry Hazlitt. What are the long-term effects versus the short-term effects? What are the unintended consequences versus the intended consequences?

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Policy committee meeting

Policy Committee Meeting

Fiscal Year 2004 Budget Considerations: Dark Fiber

November 13, 2002


Economics in one lesson by henry hazlitt

Economics in One Lesson by Henry Hazlitt

  • What are the long-term effects versus the short-term effects?

  • What are the unintended consequences versus the intended consequences?

  • What is the impact on the many versus the few?


Long term vs short term effects

Long term vs. Short term Effects

  • Short term effects

    • Internet2 Access for all Illinois Education

    • Lower cost connectivity

    • Lower cost equipment

    • Higher reliability/more robust network

    • Lower cost filtering solutions


Long term vs short term effects1

Long term vs. Short term Effects

  • Long term effects

    • I2: Exposure and adoption of cutting edge pedagogy tools and learning models that allow Illinois education to be more effective and compete globally.

    • Lower cost connectivity: Allows the purchase of more bandwidth and the provision of connectivity and services that will prepare students to compete with their peers across the state and the nation.

    • Lower cost equipment: Allows reallocation of funds for training and modernization of internal networks and equipment.


Long term vs short term effects2

Long term vs. Short term Effects

  • Long term effects

    • Higher reliability/More robust network: Fosters reliance by education and use by other entities such as healthcare and law enforcement ultimately driving costs lower for everyone.

    • Low cost filtering solutions: Opens the door for K-12 schools without technical or economic resources to “turn on filtering” instantaneously and become eligible for federal e-rate funds bringing more federal dollars into the state.

      • Approximately 44% of private and 56% of public schools received e-rate funding totaling almost $170 million in fiscal year 2000.


Unintended consequences vs intended consequences

Unintended Consequences vs. Intended Consequences

  • Intended Consequences

    • Greater access for education

    • Increased opportunities for educational delivery

    • Aggregate benefits of participation in a singular, large scale network


Unintended consequences vs intended consequences1

Unintended Consequences vs. Intended Consequences

  • Unintended Consequences

    • Dramatic changes in telecommunications price structures in Illinois

    • Access to cutting edge applications and methods

    • An advocacy role

    • An expertise role

    • Maintaining an environment that invites opportunity

    • National leadership and recognition


The impact on the many vs the few

The Impact on the Many vs. the Few

  • Educational use and bandwidth demand continues to grow at rates of 30% to 433% on individual links.

  • Aggregate growth in utilization network-wide is approximately 150%.

  • For the price of one 16 ounce soft drink per student, per month, the state has built the nation’s premier education network.

  • Truly a case where the ICN expenditure is a win-win and the aggregate network reduces overall expenses statewide.


Policy committee meeting

Estimated Constituent Expenditures

$11.15 million

Estimate of costs for constituent-paid equipment

$30.03 million

Estimate of costs for constituent-paid access circuits

Internet

Higher

Education

K-12 Schools

$4.9 million

Internet & Internet2

-Transit

-Transport

$18.0 million

Backbone Network:

ICN POP Facility

& Equipment:

($6.8 million)

Backbone Circuits:

($11.2 million)

$3.0 million

Access Circuits:

Grooming / Last

Mile:

($1.4 million)

CT3 Local Loops: ($1.6 million)

Utilized primarily by K-12 schools (80-89%) to decrease access costs.

transport

transport

Constituent

Sites

Other Costs

$6.0 million

Central and regional staff and all other operating costs 

Administrative Expenses

NETWORK

Libraries

transit

local loop

Total Cost of Network (All Sources) $74.6 million

Museums

Benefit

Bandwidth Provided For Primary Constituents

Does not include bandwidth purchased above

baseline allocation

Fiscal Year 2003, Based on current utilization

4,352 Connections

7,080 Mbps Provided

216 Connections

1,216 Mbps Provided

467 Connections

726 Mbps Provided

24 Connections

48 Mbps Provided

Summary

Direct ICN Expenditures: $31.9 million

Cost Recovery: $ 1.2 million

Estimated Constituent Expenditures: $41.5 million

(Access and equipment costs)


Policy committee meeting

4,223 K-12 Schools and Administrative Offices


Policy committee meeting

277 Higher Education Institutions

A recent study revealed that the 55 private institutions save approximately $1,319,000 per year including bandwidth, connections, and equipment.


Policy committee meeting

477 Libraries


Policy committee meeting

25 Museums (some with multiple locations)


Policy committee meeting

K-12

Higher Ed

Libraries

Museums


Policy committee meeting

214 Municipal Governments ranging in size from Benton to Chicago


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45 Hospitals


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235 Other Institutions


Policy committee meeting

K-12 Schools

Higher Ed.

Libraries

Museums

Mun. Gov’t

Hospitals

Other

Almost 6,000 connected institutions!


Dark fiber implementation

Dark Fiber Implementation

  • With level funding and internal reallocations, the ICN can “light up” the primary ring (Chicago-Peoria-Springfield-Collinsville-Champaign-Chicago).

  • We estimate that we will need an additional $1-2 million to implement the Northwestern and Western legs in fiscal year 2004 (Chicago-DeKalb and Peoria-Macomb).

  • As the circuits are turned up, staff estimates that continued cost recovery and other opportunities will allow implementation of other routes with minimal additional funding, if any.

  • Dark fiber does not save today’s dollars.

  • Dark fiber provides increased capacity for the same money.


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