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Merit Advisory Council Meeting MinutesThursday, June 4, 1998, 9:30 a.m.-3:30 p.m.Location: MSU, Kellogg Center, East Lansing Attendees: Becky Cawley, Northland Library Cooperative; Rosemary Cary, Muskegon ISD; Paul Groll, Library of Michigan; Kevin Harrell, Starr Commonwealth; Don Shikoski, Northeastern Michigan College; Jim Lundberg, Bay de Noc College; Philip Warsop, Alma College; Lorn Olsen, mich.com, Inc.; Karl Brose, Greater Detroit Free-Net; John Grden, Lawrence Tech University; Matt McMahan, Gratiot-Isabella RESD; Michael Wahl, Kirtland Community College; Mark Vickers, Voyager; Mike Mosher, Merit Network; Eric Aupperle, Merit Network; Jeff Ogden, Merit Network; Karen Alberti, Merit Network (minutes taker) Meeting Minutes Open Discussion--What is the Purpose of MAC? This meeting spun out of the MARC group which was formed to include all of the regional hubs that came about during the Ameritech sharable earnings funding. Mike Wahl, Eileen Palmer, and a couple of other people were in this group. They addressed the Merit Board about dial-in issues. The Merit Board saw a need for affiliates to have a voice in the decision-making process. Last summer Mike Mosher asked for nominees and held an email election. Representatives were chosen from six groups:
Establishment of Voting Process for Chairperson The Council needs to elect a chairperson. The chairperson will be invited to Merit Board meetings, will take issues to the Board and share their experiences with the council. The Merit Board, according to the Bylaws, meets formally twice a year (around January and June). In addition, there is possible participation in retreats, informal meetings, and conference calls. The Council was set up to exist for two years. After two years the Merit Board will review whether MAC was useful and should continue. At this time the Board may consider giving MAC voting privileges on the Board. Council terms were set up to be for one year. It was suggested that the group determine some kind of staggered terms so there will be some continuity. Also there was a recommendation to have the same person represent MAC at the Board meetings on a regular basis. The main purpose of the MAC is to develop lines of communication between affiliates and the Merit Board. MOTION: Have two people from the Council act as representatives to the Board, a chairperson and a vice-chairperson to serve in a supporting role. SECOND. DISCUSSION: None VOTE: Passed unanimously (13). NOTE: Eric Aupperle will let the Board know that the Council voted to have two representatives and ask for Board approval. Other responsibilities of chairperson: chair the MAC meetings, assist the group in setting up their own meeting, make agendas for the meetings, help with conference calls, and mail lists. Merit suggested the MAC meet at least twice a year to correspond with Merit Board meetings. MOTION: Terms of service for chair and vice chairperson. Terms for each position will be one year. Both officers will be elected each year with the expectation that the vice chairperson will become the chairperson elect (although this is not a requirement). SECOND. DISCUSSION: Start each term in June, the first term starting June 1998. VOTE: Passed unanimously (13). Election of Chairperson The process was to ask for volunteers and nominees. NOMINATION: Mike Wahl, Kirtland Community College. SECOND. NOMINATION: Karl Brose, Greater Detroit Free-Net. SECOND. Both nominees gave a short speech about their platform. VOTE: Mike Wahl (9), Karl Brose (4). Mike Wahl elected chairperson. Vice-chairperson was elected next. NOMINATION: Karl Brose. SECOND VOTE: Karl Brose (13). Karl Brose elected vice-chairperson. MOTION: Meeting frequency and sequencing. Meet twice a year one month before the Merit Board meeting. Actively create agenda items for the Board meeting and react to proposed Board agenda items. DISCUSSION: Next Merit Board meeting is June 18. The summer meeting covers approval of the Merit budget. Other possible agenda items are adding new members, determining annual member fees, treasurers report, staff reports, actions on major proposals. The January date has not been set. Agenda items for the Board meetings should be sent to Eric Aupperle via email. The next MAC meeting is scheduled for Thursday, December 3, 1998, at the Kellogg Center at MSU. A tentative date for next summer's meeting was set for Thursday, May 13, 1999. The council will need to decide which Merit staff will attend their meetings. Merit will arrange to have one of the associate directors attend upon request. Mike Wahl will check with the Merit Board to see if networking directors from member institutions can attend the MAC meetings on a rotating basis. SECOND. VOTE: Passed unanimously (13). Conducting business on-line: there was a consensus and it was approved for the group to vote and conduct business on-line. MAC will approve meeting minutes. The minutes will be sent via email to the chairperson and vice-chairperson to go through the approval process. Merit will put the meeting minutes on the Merit web page. Mike Mosher will be the contact at Merit for MAC business such as creating the MAC email list, posting minutes and statement of purpose on the Merit web page, articles about MAC in the MichNet News, MAC meeting arrangements. Several items were brought up for further consideration by council members including:
Merit was founded in 1966. Originally there were three members--University of Michigan, Michigan State University, and Wayne State University. Members need to be approved by the Merit Board of Directors. Currently there are 13 members. Ferris is expected to become a member in the near future. At that time Merit membership will encompass all of the 14 public universities in Michigan. There is not much room for growth in the member ranks. In 1990 the notion of Merit affiliates came to light. At a retreat it was recommended that Merit provide service to organizations that did not require the process of being approved as a member. In the beginning there were approximately 15 affiliates. Now Merit has over 200 affiliates. Merit consists of two divisions, the state-wide network--MichNet (direct connections and dial-in) and national networking. At first the national networking piece was bigger and had more growth. It has included activities such as NSFNet, sponsored research, and routing arbiter. National networking projects account for a majority of the commercial revenue for Merit. Today the state-wide division accounts for the largest revenue and the most growth. Within MichNet, member activity used to generate the largest revenue, now affiliate revenue is higher. This shift occurred three or four years ago. About three years ago Merit was audited by the IRS. It is a nonprofit 501(c)(3) company. The IRS was looking at why Merit did not pay any federal withholding, since it reports salaries on form 990. Since Merit is hosted by the University of Michigan (UofM), all employees are paid by the UofM and UofM does handle federal withholding on behalf of Merit. Concurrently they were trying to determine if Merit owes any income tax on unrelated business tax. Specifically they were trying to determine whether Merit should pay taxes on affiliate revenues from commercial organizations. The regional IRS office has submitted a request for technical advice with the Federal IRS to determine whether Merit is subject to this tax. The Merit Board has said they want the main focus for services to be for educational institutions in Michigan. It is possible they will consider capping revenue from commercial sources, depending on the outcome of the submission to the IRS. One issue that was brought up was the difficulty some organizations have in convincing their community members and organizations that Merit is a nonprofit organization. Many local ISPs feel that Merit is providing unfair competition in offering commercial customers the same pricing as educational organizations. Another problematic area is when Merit dial-in sites are located in public schools and administrators resent having commercial business traveling over their dial-in lines. Merit charges the fully loaded cost of the services they offer to affiliates, particularly in the dial-in arena. Commercial customers increase the modem count at some dial-in sites, and by having more modems (whether supported by commercial or non-commercial organizations), the cost per line is reduced for everyone supporting modems at that dial-in site. If Merit dropped these commercial customers, other affiliates costs would increase. This is an area that Merit could consider changing policies if there is a great demand. Currently Merit is providing dial-in and direct connection Internet service to about 94% of the state. They have more infrastructure in Michigan than any other provider. The commitment to provide access in less populated areas is an advantage to many customers and helps to sell the service. Furthermore, the way Merit handles privacy and abuse issues is in alignment with how customers, in particular libraries, look at these issues. Two items for Merit staff to follow up on are:
Some other projects Merit staff are working on include peering with other networks for non-transit traffic (Merit already peers with IAG), planning for the Abilene Project for OC48 networking, and selecting Windstar Goodnet as a second provider for Internet service out of Chicago (to Lansing for network redundancy). Work is well underway for the creation of a GigaPoP in Michigan for the Internet 2 project; the exact form of the GigaPoP and who participates may change as new players step forward and as we understand how we can make use of the new Abilene backbone network. Run-Through of Merit Budget If MAC wants an in-depth explanation of the Merit budget it can be arranged. The Merit budget document is approximately 30 pages long. Jeff Ogden went through the basic budget categories for the MichNet and national divisions. Merit's Cost Pressures Faced Today Traditionally Merit has gotten a significant amount of funding from the NSF for its national networking work. This funding is now more readily available to more traditional academic and research institutions. Merit needs to find ways to bring in interesting projects that will help to retain its highly qualified technical staff. Merit staff have submitted about five proposals in the last couple of weeks and are taking an active role in seeking external funds. On the other hand, submitting proposals take time and attention away from the customers we serve. There needs to be a balance in this area. On the MichNet side, people are using more bandwidth and bandwidth is more expensive to deliver. The budget for backbone circuits is almost doubling on a yearly basis. This year the amount was 3.9 million dollars, with next year predicted to be 6.3 million, and then 8.1 million, and 9.2 million in consecutive years in projected expenses. Affiliate revenue has increased in fair proportion. However, the member revenue has not increased with the amount of bandwidth used. Usage on the member side has been doubling but Merit could not double the member fees. There will be a modest increase in member fees for the same about of bandwidth used. Additional bandwidth will be available to members at additional cost. The University of Michigan and Michigan State University are the biggest users of bandwidth. The basic class I membership fee is $112,000. Merit is working toward having reserves of 10-15% of revenues, which was requested by the Merit Board. There has been a freeze on hiring for some staff positions. As of today there are approximately 92 Merit staff people. These budgetary constraints are causing managers to consider whether an activity is necessary or extra, and whether there should be additional charges. It also raises the question as to whether Merit should have usage based charges for various levels of quality of service. How does the current budget impact affiliates? Merit will need to increase affiliate fees over the next few years. There will not be an across the board increase. The pending proposal is to increase fees for affiliates who use peak bandwidth between 9:00 a.m. and 5:00 p.m. Affiliates who use more than 80% of their bandwidth over a specified period will be charged more. If affiliates are going to be charged more, they can take various actions, such as reduce traffic, use web caching, upgrade their bandwidth, or pay the increases. This is the first time affiliate fees will be raised since 1990. Another suggestion is to charge affiliates more if they do not manage their network efficiently. If the prices to obtain bandwidth decrease, there will not be as great of an increase in what Merit has to charge affiliates. Council members brought up a billing system issue. ISPs and organizations would like Merit to be able to bill their customers or provide reports so they can easily bill customers themselves. RADBNR is a billing software system included in the MichNet version of RADIUS. This software can be used by any organization that runs its own LAS. Another possibility is that Merit could look into a third party billing service. There was also an inquiry as to why Merit chose to cancel the MJUS meetings. Merit staff felt there were too many activities requiring conflicting commitments from affiliates and members and has taken some steps to reduce this load. MJTS will be reduced from four to three meetings per year. In addition, there will be a larger annual meeting for MJUS and MJTS types of participants, which could last for more than one day. MJUS meetings will be replaced with meetings held in conjunction with various larger meetings around the state, such as MACUL and MLA. These meetings will attract specialized groups that will provide more focused discussion, and all affiliates will be invited to attend the Merit activities. Seminars will become for-fee to the general public. Members and affiliates will get free coupons to attend these seminars. Instead of the New Affiliate Orientation, individual Internet consultants will work closely with new affiliates during the installation process to cover all the necessary topics. Merit is planning to put out a calendar for one year so people can plan ahead of time to attend these events. MOTION: Close the meeting. |
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