FUNDING MODELS

1. FUNDING MODELS Jan Gruntorád CESNET, Czech Republic jg@cesnet.cz NATO ANW:The Third CEENet Workshop on Network Management Zagreb, SEPTEMBER 22-25,2002

2. CONTENT • FUNDING CONCEPTS • CENTRAL FUNDING • USER FUNDING • POSSIBLE MODELS OF USER FUNDING • CESNET EXAMPLE • CONCLUSIONS - RECCOMENDATIONS NATO ANW:The Third CEENet Workshop on Network Management Zagreb, SEPTEMBER 22-25,2002

3. FUNDING CONCEPS: • EXTERNAL SOURCES • CENTRAL • USER BASED • COMBINATION NATO ANW:The Third CEENet Workshop on Network Management Zagreb, SEPTEMBER 22-25,2002

4. EXTERNAL SOURCES • INFRASTRUCTURE ESTABLISHEMENT • SEED MONEY ONLY (TO START THE EVOLUTION) • POSSIBLE SOURCES (NATO, OSI, EU,..) NATO ANW:The Third CEENet Workshop on Network Management Zagreb, SEPTEMBER 22-25,2002

5. CENTRAL FUNDING ADVANTAGES • A GOOD OVERVIEW OF TOTAL COST • AWARNES AND RESPONSIBILITY OF THE GOVERNMENT TOWARDS RESEARCH NETWORKING • AVOIDS COMPLICATED ADMINISTRATION NATO ANW:The Third CEENet Workshop on Network Management Zagreb, SEPTEMBER 22-25,2002

6. CENTRAL FUNDING DISADVANTAGES • END USERS WILL BE WASTEFUL SINCE SERVICE IS FREE-OF-CHARGE • NO GUARANTEE THAT SERVICES ARE MATCHING USER NEEDS • CONTINUITY OF NETWORKING SERVICES DEPENDS ON POLITIC SITUATION NATO ANW:The Third CEENet Workshop on Network Management Zagreb, SEPTEMBER 22-25,2002

7. USER FUNDING ADVANTAGES • AWARNESS OF THE REAL COSTS BY THE INSTITUTIONS • STRONGER INFLUENCE ON THE SERVICES • COMPETITIVE SITUATION FOR THE NRENS • INSTITUTIONS CAN SET PRIORITIES ON NETWORKING AND OTHER EXPENDITURE NATO ANW:The Third CEENet Workshop on Network Management Zagreb, SEPTEMBER 22-25,2002

8. USER FUNDING DISADVANTAGES • DIFFICULT TO DEVELOP A FAIR MODEL FOR COST SHARING • NO MONEY AVAILABLE FOR INNOVATION • SHORT-TERM THINKING AND RISC OF UNDERSPENDING ON NETWORKING NATO ANW:The Third CEENet Workshop on Network Management Zagreb, SEPTEMBER 22-25,2002

9. EXAMPLES OF FUNDING MODELS • PORTUGAL: 50% GOVERNMENT, 50% INSTITUTIONS • AUSTRIA: cca 90% GOVERNMENT, 10% INSTITUTIONS • DENMARK: cca 80% GOVERNMENT,20% INSTITUTIONS • CZECH REP.: 73% GOVERNMENT, 27% INSTITUTIONS NATO ANW:The Third CEENet Workshop on Network Management Zagreb, SEPTEMBER 22-25,2002

10. USER CHARGING • BASED ON ACCESS SPEED (C) • INCOMMING TRAFFIC (VOLUME) (B) • BUDGET OF ORGANIZATION (A) CESNET IN 2002 90% (A), 5% (B), 5% ( C) NATO ANW:The Third CEENet Workshop on Network Management Zagreb, SEPTEMBER 22-25,2002

11. EVOLUTION OF CESNET 1990 – EARN INTRODUCED TO CZECHOSLOVAKIA AND RUN BY CZECH TECHNICAL UNIVERSITY IN PRAGUE 1991 – INTERNET CONNECTION OVER 9,6 KBPS LINKS TO UNIVERSITY OF LINZ, AUSTRIA 1992 – GRANT FOR BUILDING COUNTRY-WIDE IP NETWORK FOR CZECH UNIVERSITIES (20 mil. KČ – CZECH MINISTRY OF EDUCATION) 1993 – CESNET NETWORK (64 KBPS BACKBONE) IN 9 CITIES OPERATIONAL (RUN BY CZECH TECHNICAL UNIVERSITY IN PRAGUE) - CESNET ADVISORY BOARD NOMINATED BY THE CZECH MINISTRY OF EDUCATION NATO ANW:The Third CEENet Workshop on Network Management Zagreb, SEPTEMBER 22-25,2002

12. 1994 – SERVICES PROVIDED ALSO TO OTHER ORGANIZATIONS THAN R&E COMMERCIAL ACTIVITIES WHY WERE STARTED? - DEMAND FOR SERVICES FROM OUTSIDE ACADEMIC COMMUNITY - NO „STABILE“ FUNDING AVAILABLE - HAVE „REASONABLE“ SALARY LEVEL TO KEEP SKILLED STAFF NEGATIVE IMPACT - BANDWIDTH PROVIDERS CONSIDER NRN AS COMPETITOR NATO ANW:The Third CEENet Workshop on Network Management Zagreb, SEPTEMBER 22-25,2002

13. 1995 – CZECH MINISTRY OF EDUCATION TERMINATES FUNDING OF THE CESNET NETWORK 1996 – CREATION OF CESNET, ASSOCIATION OF LEGAL ENTITIES - TENDER FOR IMPLEMENTATION OF THE TEN-34 CZ NETWORK AND PILOT APPLICATIONS - START OF THE TEN-34 CZ PROGRAMME (1996-1998) - 550 MIL. KČ (GOVERNMENT BOARD FOR RESEARCH AND DEVELOPMENT, CZECH MINISTRY OF EDUCATION) REASONS: - END OF CENTRAL (MINISTRY) FUNDING, UNIVERSITIES HAD TO PAY FOR SERVICES - DECISION MAKING PROCES - PROJECT TEN-34 CZ NATO ANW:The Third CEENet Workshop on Network Management Zagreb, SEPTEMBER 22-25,2002

14. 1997 – TEN-34 CZ NETWORK (34 MBPS BACKBONE) IN 9 CITIES OPERATIONAL - START OF MIGRATION OF THE R&E USERS FROM CESNET NETWORK TO TEN-34 CZ 1998 – PART OF BACKBONE UPGRADED TO 155 MBPS - MIGRATION OF THE R&E USERS TO TEN-34 CZ COMPLETED - CESNET NETWORK COMMERCIAL ISP 1999 – CONTRACT WITH CZECH MINISTRY OF EDUCATION (GOVERNMENT BOARD FOR RESEARCH AND DEVELOPMENT) FOR 5 YEARS (1999-2003) SUPPORT OF „HIGH SPEED NETWORK FOR NATIONAL RESEARCH AND ITS NEW APPLICATIONS“ - PREPARATION OF STRATEGIC PARTNERSHIP (SELLING) OF THE CESNET NETWORK NATO ANW:The Third CEENet Workshop on Network Management Zagreb, SEPTEMBER 22-25,2002

15. 2000 – CESNET NETWORK SOLD TO CONTACTEL ONLY INTEREST FROM THE MONEY EARNED IS USED FOR NEW PROJECTS – OPEN FUND CESNET ASSOCIATION JOIN GÉANT START OF ESTABLISHMENT OF CESNET2 GIGABIT NATIONAL BACKBONE 2001 – CESNET2 GIGABIT NETWORK IN OPERATION GÉANT INTERNATIONAL CIRCUITS DELIVERED IN NOVEMBER CZECH REPUBLIC IS INCLUDED IN THE 10Gb/s CORE NATO ANW:The Third CEENet Workshop on Network Management Zagreb, SEPTEMBER 22-25,2002

16. NATO ANW:The Third CEENet Workshop on Network Management Zagreb, SEPTEMBER 22-25,2002

17. CESNET FUNDING SOURCES • GOVERNMENT BOARD FOR RESEARCH AND DEVELOPMENT • CESNET MEMBERS (UNIVERSITIES AND ACADEMY OF SCIENCES) • CONNECTED ORGANIZATIONS • OPEN FUND • SINGLE-PURPOSE FUND • BUSINESS FUND • EU (GÉANT,…..) NATO ANW:The Third CEENet Workshop on Network Management Zagreb, SEPTEMBER 22-25,2002

18. CONCLUSIONS BEST APPROACH TO SUSTAINABILITY IS DIVERSIFICATION OF FUNDING RESOURCES (MULTI – SOURCES FUNDING) NATO ANW:The Third CEENet Workshop on Network Management Zagreb, SEPTEMBER 22-25,2002

19. RECCOMENDATIONS • EVERY COUNTRY HAS SPECIFIC SITUATION • AIM FOR MULTY-SOURCE FUNDING • INTRODUCE SOME FORM OF USER CHARGING • PUT GREAT EFFORT TO P.R. ACTIVITIES • CONVINCE SUPPLYER TO GIVE YOU „SPECIAL“ CONDITIONS • ACTIVELY LOOK FOR EXTERNAL SUPPORT NATO ANW:The Third CEENet Workshop on Network Management Zagreb, SEPTEMBER 22-25,2002

20. THANK YOU FOR ATTENTION NATO ANW:The Third CEENet Workshop on Network Management Zagreb, SEPTEMBER 22-25,2002