School districts that apply for the equipment and incentives must send or receive the equivalent of two semester courses per year for four years. School districts and higher education entities that do not opt to connect to Network Nebraska can still exchange distance education courses through other means—the schools just wouldn’t be eligible for equipment reimbursement, course exchange incentives, or scheduling services.

How might this plan affect my college or university?
For those higher education entities that opt to upgrade and connect to Network Nebraska, it may reduce the overall infrastructure and Internet costs and increase the level of interconnectivity between schools and colleges and allow each college to reach all the K-12 entities within its respective service area.

How might this plan affect my school district?
First, it provides funding for equipment to high school districts affected by aging networking and video compression technology and enables them to upgrade and join the 100 other districts that have already migrated to IP-based, high bandwidth networking. The plan also incentivizes K-12 to participate in Network Nebraska, the statewide education network, by providing reimbursements for distance learning course exchange.

Secondly, the plan establishes a Distance Education Council, whose responsibility will be to coordinate K-12 distance education statewide, rather than having distance education course exchange isolated within separate distance learning consortia. Thirdly, the bill tasks the CIO with establishing a cost structure for the network based on actual costs plus administrative expenses and charging participants according to that cost structure. State aid would be changed to include a state-aid allowance for technology equal to 85% of the difference between the local costs and eRate reimbursement.

How will this plan affect my ESU? [further affected by LB 603—2007 session]
It may affect the amount of dollars distributed by the Infrastructure Fund (79-1243) (1) Funds appropriated for technology infrastructure shall be distributed proportionally to each educational service unit by the State Department of Education based on the fall membership of member districts in the preceding school fiscal year, except that no educational service unit shall receive less than the sum of (a) two and one-half percent of the funds appropriated for technology infrastructure plus (b) eighty-five percent of the difference of the costs for telecommunications services, for access to data transmission networks that transmit data to and from the educational service unit, and for the transmission of data on such networks paid by the educational service unit as reported on the annual financial report for the most recently available complete data year minus the receipts from the federal Universal Service Fund pursuant to section 254 of the Telecommunications Act of 1996, 47 U.S.C. 254, as such section existed on January 1, 2006, for the educational service unit as reported on the annual financial report for the most recently available complete data year and minus any receipts from school districts or other educational entities for payment of such costs as reported on the annual financial report of the educational service unit.

Would my district still be eligible for E-Rate, even if connected to Network Nebraska?
Yes, although some Network Nebraska costs will be E-Rate-eligible (backbone transport) whereas some will not (Network Nebraska participation fees). LB 1208 tasks the CIO to "Apply in aggregate for reimbursements from the federal Universal Service Fund …on behalf of school districts requesting to be included in such aggregated application.” Schools could still elect to apply for E-Rate on their own.

How soon will my education entity be needing to make a commitment?
The most prudent approach would be to begin budgetary, course exchange and equipment planning during the Fall before the summer upgrade affecting your entity. (i.e. October 2007 planning for a Summer 2008 upgrade).

How were the rates set for the Network Nebraska Participation Fee?

View the Full Report.

The Network Nebraska Cost Structure and Billing task group met six times between June and October, 2006, and prepared an estimated budget reflecting Network Nebraska’s projected costs for operating the statewide distance education network, pursuant to LB 1208 (2006). Costs include network equipment, network staff, and some administrative and indirect costs. The task group evaluated several options for allocating these cost to participants. The best approach was a flat participation fee of $200 per site per month. The Network Nebraska Participation fee is calculated by taking the estimated budget and dividing by the actual number of high schools currently participating in distance learning. The Network Nebraska participation fee must comply with the Federal Office of Management and Budget Circular A87, "Cost Principles for State, Local, and Indian Tribal Governments"
(http://www.whitehouse.gov/omb/circulars/a087/a087-all.html#atta). If actual costs are lower than estimated, then the fee will be reduced.

Factors affecting the projected rate setting:
Network Management. The cost model provides for a “hybrid” network management model with centralized equipment and regional responsibilities for network operation and support. The term “centralized” refers to the design of the network, rather than support options. A network topology with centralized equipment for network management will also support a confederated management model. Centralized equipment could be located anywhere on the network. The Network Nebraska cost model assumes a centralized network design, because it is expected to require less equipment expenses than a regional model. Help desk support would be provided primarily at the regional level.

Network Administration. The cost model provides for a “hybrid” approach to administration: central contracting with communications providers, ESU role for E-Rate assistance to school districts, and local filing for E-Rate reimbursements. The administrative model should take advantage of relative strengths of different entities and serve to maximize E-Rate eligibility of costs. State government has an advantage in the area of contract negotiation and pricing for data circuits. ESUs (and distance education consortia) have an advantage in expertise of E-Rate requirements and working relationships with school districts.

Participation Rates. The cost structure assumes that only those school districts that are members of regional distance education consortia will participate in Network Nebraska. Additional participation by school districts and other entities that do not have distance education today would expand content and provide a larger base for sharing costs. The rate structure is “flat” across all participating sites (school districts or charged based upon the number of participating high schools and colleges are charged based upon the number of participating campuses).

If actual costs are less than projected and/or the number of participating entities are greater than expected, then the Network Nebraska participation fee will be adjusted downward and any overpayment by participants will be refunded at six or twelve month intervals. Conversely, if the actual costs are greater than projected and/or the number of participating entities is fewer than expected, then the Network Nebraska participation fee will be adjusted upward and any underpayment will be spread over the remainder of the fiscal year payments. The Network Nebraska participation fee is NOT E-Rate eligible.

The cost model does not include any cost recovery by Network Nebraska for Educational Service Units (ESUs). ESUs have the option of using other funding sources, including Core Services Fund for Technology and Distance Learning, Infrastructure Fund, local levies, or additional charges to school districts.