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Following the example of and taking into account
the lessons learned from TEN-34 and TEN-155, a simplified shared-funding
model is proposed to which the Member States contribute through
their National Research and Education Networks (NREN) 60% and the
EC 40% of the total costs. In the same way as the NRENs other European
research institutions should also be able to participate in this
infrastructure.
The 60:40 cost-sharing model should be managed in the way laid out below:
 a) Management organisation
The National Research and Education Networks employ the services of a management organisation for organising an interconnection scheme and managing a pan-European backbone network for them.
b) Rules of Procedure
All parties (national funding bodies, European Commission, National Research and Education Networks, and Management Organisation) shall agree on the procedures and structures to be adopted for planning, procurement and management.
c) Planning
The management organisation is required to draw up a 4-year concept (parallel to the Framework Programmes) which should detail and give a clear indication how networking on the European level should develop in that period according to the requirements of the national networks.
This 4-year concept not only has to include the planned technical development but also budget estimates for each of the four years. Naturally this concept has to be a rolling one, taking into account developments in technology, market trends, pricing structures, the emergence of new services etc. but also the special needs of the research and education community. Yearly revisions and adaptations of the concept will therefore be necessary.
Both 4-year concept and annual adjustments are established in close co-operation with the National Research and Education Networks. They are adopted according to the rules and structures established by all partners (see item b)
d) Funding Principles
- The managing organisation establishes annual budget plans based on the 4-year concept.
- The budget plan is presented to the National Research and Education Networks who have to secure their total of 60 % share from their respective funding organisations.
- Calculation of individual national contributions is based on a pricing model that takes into account and compensates for geographical disadvantages, but not for other differences.
- Co-funding (40 % of the total) is allocated by the EC on approval of the budget.
e) Funds Necessary and their Allocation
- Estimation of necessary funds:
Based on market observations in 1997 and assuming price reductions due to the liberalisation of the telecommunications market an amount of 200 MEURO as EC contribution was deemed necessary for a pervasive network at 155 Mbps between all Member States (with two lines each for resilience) assuming a 40%:60% cost-sharing model.
Assuming that a 1Mbps line would cost 50 KEURO per annum on average (irrespective of length and geographical location etc.) 155 Mbps would cost 7,75 MEURO/yr. A pervasive network at 155 Mbps between all Member States (with two lines each for resilience) would therefore cost 116,25 MEURO/yr. According to the 40%:60% cost-sharing model proposed this would mean that the EC contribution would come up to 46,5 MEURO/yr. ≈ 50MEURO/yr. Over the four year running time of the FWP this would amount to 200 MEURO.
The Council of Ministers in adopting the 5th FWP has decided to allocate a total sum of 161 MEURO for support of network infrastructure. Assuming that this sum will be available in full this would result in an EC contribution of ≅ 40 MEURO/yr.; i.e. 20% less than previously deemed necessary. It can only be hoped that further price reductions from telecom operators will help to make ends meet.
However, it has to be stressed that the physical network infrastructure is not only to the benefit of the specific IST programmes but that all research activities under any of the other thematic programmes will equally benefit from it. Therefore, it is felt that asking for contributions from other FWP action lines in support of research networking infrastructure would be appropriate.
- Required funds for advanced networking.
From the TEN-155 invitation to tender it was learned that liberalisation has indeed brought about the emergence of competitive pricing in telecommunications. In some parts of Europe it is therefore possible in mid 1999 to acquire a 155 Mbps international connection for just less than 2MEURO per year. There is, however, currently still a factor of 5 difference on average between the cheapest and the most expensive offers.
Taking a three year view it seems realistic to consider TEN-155 evolving to provide access at 622 Mbps for some countries and at 155 Mbps for all other countries. Expecting that 622 Mbps links to cost no more than twice the most competitive cost for 155 Mbps today and allowing for a more fully resilient network than the present one, a total budget of about 85 MEURO per annum for European connectivity is estimated.
On the basis of a 40%:60% cost-sharing model that would imply that NRENs have to contribute 51 MEURO and the EC the remaining 34 MEURO per year. Since it seems to be unrealistic to expect NRENs to be able to raise nearly twice the amount of money they pay for TEN-155 from national sources the EC will have to be asked to contribute more than the originally envisioned 40%.
Taking into account that the NRENs contribute to TEN-155 presently a sum of about 26.6 MEURO per annum and considering a three year funding period from mid 2000 to mid 2003 (i.e. well into the timeframe of the 6FP) and putting all the money together from national sources as well as the 161 MEURO designated in 5FP for support for network infrastructure it would just be possible to raise the required 85 MEURO for an advanced European backbone network for the research and education communities.
Considering examples of co-operation with industry as they are executed in other parts of the world, it should be possible to even create a Gigabit core network in Europe.
f) Procurement
Given that the research and education communities working at the forefront of development require facilities and services which are usually not or only partly available as market commodities a dual approach is seen as the most effective method of procurement. This is based on a model combining competition with collaboration.
In general competitive procurement is the most cost effective way of organising the supply of international telecommunications services. However, it is recognised that this only works effectively if there are a number of suppliers each capable of fulfilling at least 80 % of the requirement.
At present a number of suppliers seems capable of offering only significant parts of a pan-European network. A single unified procurement, however, would not succeed since there are locations which would be difficult to serve for any one supplier.
For this reason competitive procurements have to be organised on the basis that awards might be made to more than one supplier and that a successful supplier would be expected to co-operate with other suppliers who may or may not have responded to a tender.
g) Status and Progress Report
The managing organisation has to prepare an annual Status and Progress Report to be presented to the national funding organisations, the European Union and to the National Research and Education Networks, detailing clearly the actions undertaken, the achievements made and the use of the funds.
h) Auditing
The management organisation has to employ the services of independent chartered accountants whose task it is to check the proper and efficient use of funds. The certified findings have to be included in the annual Status and Progress Report. |
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