-oOo- CALIFORNIA STATE UNIVERSITY/FRESNO INFORMATIONAL PRESENTATION RE: SYSTEM-WIDE INTERNAL PARTNERSHIP (SIP) -oOo- Fresno, California, Thursday, October 9, 1997 -oOo- REPORTER'S TRANSCRIPT -oOo- Reported by: Tina Hoke, C.S.R. Certificate No. 8114 RAY EGGEBRAATEN, C.S.R., INC. RAY EGGE(209)E441-1681., INC. 1 -oOo- 2 The following proceedings in the 3 within-entitled matter were presented on October 9, 4 1997, commencing at the hour of 9:05 a.m. at the 5 California State University/Fresno Satellite Student 6 Union, 5201 North Maple Avenue, California, and were 7 reported by Tina Hoke, C.S.R., a Certified Shorthand 8 Reporter of the State of California, having offices 9 located at Fresno, California. 10 -oOo- 11 PARTICIPANTS: 12 BENJAMIN F. QUILLIAN, Ph.D. Vice President for Administration, CSUF 13 TOM WEST 14 Assistant Vice Chancellor for Information Resources and Technology, CSUF 15 SPENCER BRYANT 16 Associate Provost for Academic Affairs and Telecommunications, CSUS 17 BILL BRADFIELD 18 Chief Administrative Officer/ Advantage Communication, Inc. 19 JOHN WARRY 20 General Manager/Strategic Partnerships and Higher Education, Fujitsu Corporation 21 ITEC COMMITTE MEMBERS 22 AUDIENCE -oOo- 23 24 The following proceedings were had, to wit: 25 2 RAY EGGEBRAATEN, C.S.R., INC. RAY EGGE(209)E441-1681., INC. 1 MR. QUILLIAN: Good morning, my name is Ben 2 Quillian, and for the past 12 months now, seems like 3 longer than that, Jim Morris and I have been 4 representing this university in the System-wide Internal 5 Partnership, commonly known as SIP. And this morning 6 the purpose of this meeting is to give our university 7 community an understanding of the SIP and the 8 Telecommunications Infrastructure initiative, and to 9 provide us an opportunity to raise concerns, ask 10 questions, and hopefully get answers. 11 I think I speak for the university when I say 12 that we recognize fully the importance of building out 13 our telecommunications infrastructure. However, we also 14 have numerous concerns and questions, not the least of 15 which being the length of time being devoted to our 16 opportunity to have full consultation. So this will be 17 an opportunity for us to learn and to raise questions. 18 I think that because of schedules, members of 19 our university community will be coming in and out, and 20 so I ask that our guests bear with us. 21 I should mention that this meeting is being 22 audiotaped, and also we have a certified shorthand 23 recorder, or reporter, here this morning so that we will 24 have a record of our questions and concerns so that we 25 can keep track of them and make sure that the team that 3 RAY EGGEBRAATEN, C.S.R., INC. RAY EGGE(209)E441-1681., INC. 1 is negotiating the deal that will be discussed in just a 2 few minutes is aware of the concerns here at California 3 State University Fresno. 4 I would just also like to mention that Joanne 5 Collins, a member of my staff and administrative 6 services, is going to be responsible as a point person, 7 if you will, to collect our concerns, our issues, our 8 questions, and to make sure that those get to the 9 negotiating team, and also as information comes to our 10 campus, Joanne will be the person that will be 11 responsible for distributing that information to the 12 campus and to interested constituency groups. 13 So with that, I would like to introduce Tom 14 West. Tom West is here from the chancellor's office, 15 and I'm going to turn it over to Tom at this point. And 16 I should mention that the format will be, after the 17 presentation, the members of ITEC will engage the 18 presenters in questions and answers, and then you notice 19 we have a microphone down front, and after that 20 questioning by ITEC, members of the community are 21 perfectly welcome to come forward and ask any questions 22 that you may have on your mind. Tom. 23 MR. WEST: Thank you, Ben. As Ben indicated, 24 I'm Tom West, I'm the assistant vice chancellor for 25 Information Resources and Technology based at the 4 RAY EGGEBRAATEN, C.S.R., INC. RAY EGGE(209)E441-1681., INC. 1 chancellor's office. I would like to introduce my 2 colleagues on the panel this morning. To my immediate 3 left is Spencer Bryant, who is the associate vice -- the 4 associate provost for Academic Affairs and 5 Telecommunications at CSU Sacramento and an active 6 participant in the system-wide internal partnership 7 team. 8 To his immediate left is Bill Bradfield, who 9 is the chief executive officer of Advantage 10 Communication, Inc., the firm that we have -- that we 11 engaged at the beginning of this year to provide the 12 overall project management for this endeavor. And he, 13 too, along with another consultant, Harry Wallacy, 14 represent us in a -- in the deal making and the 15 negotiation. 16 To his immediate left is John Warry, who is 17 the general manager for strategic partnerships and 18 higher education for Fujitsu Corporation, one of the 19 firms that's part of the CETI organization; CETI 20 standing for the California Education Technology 21 Initiatives. And I would like to indicate that that is 22 a working, a working title at the moment. 23 It is indeed a pleasure to be here to try -- 24 to give you an overview of where we've come from and 25 where we are going in the next several months and over 5 RAY EGGEBRAATEN, C.S.R., INC. RAY EGGE(209)E441-1681., INC. 1 the next several years. 2 I hope that all of you are familiar with the 3 integrated technology strategy and this pyramid as an 4 icon. What we're going to be talking about is an 5 integral part of the integrated technology strategy of 6 the CSU. 7 Several years ago the Commission for Learning 8 Resources and then subsequently Barry Nunez made this 9 statement with regard to what is our vision for the 10 future. Our hope is to, in fact, achieve a goal of 11 improving the educational environment for our students, 12 faculty, and staff. Recognizing that in the information 13 world, connectivity, access to information resources 14 within -- within the campus and across the campuses and 15 externally is very vital to our success as an 16 educational enterprise. 17 This morning we're going to cover several 18 topics. We're working remotely with the slides, and so 19 if you'll just bear with us. I'm going to try to cover 20 the background and scope and alternatives, and outcomes 21 will be covered -- outcomes and principles will be 22 covered by John Warry, Spencer Bryant is going to talk 23 about the CETI plan, and ultimately Bill Bradfield will 24 cover the consultation process and schedule that is 25 before us. 6 RAY EGGEBRAATEN, C.S.R., INC. RAY EGGE(209)E441-1681., INC. 1 To try to lay the context, give you a little 2 background. I've already articulated what the vision is 3 and what the goal is. The goal is to enhance the 4 educational environment in which we operate as a system 5 and as individual campuses and as individuals, faculty, 6 students, and staff within the educational enterprise. 7 What we are endeavoring to do in one major part is to 8 understand that we can't do that given the normal means 9 of financial resources that we have. 10 If you look at this slide, you'll see that, in 11 fact, our annual financial gap in the CSU, when you take 12 into account faculty salaries, deferred maintenance, 13 ongoing maintenance, instructional equipment, and then 14 the integrated technology strategy in terms of 15 technology needs, not only for networking access, for 16 hardware and software, our total gap on an annual basis 17 is somewhere in the neighborhood of 300,000 -- $300 18 million. And as we approach this partnership, the 19 objective is to try to not only eliminate the technology 20 gap financial needs, but also to try to help in some of 21 those other areas, but at minimum to take that issue off 22 the table as we look to the state and other resource 23 supplies for our financial support. 24 The technology infrastructure initiative in 25 the CETI partnership is about the base of this pyramid. 7 RAY EGGEBRAATEN, C.S.R., INC. RAY EGGE(209)E441-1681., INC. 1 The goals I think are clearly set. We're trying to 2 achieve increased personal productivity on the part of 3 our students, faculty, and staff; we're attempting to 4 enhance the excellence of the learning and teaching 5 environment, we want to improve the quality of the 6 student experience outside the classroom, if you will, 7 as consumers of our services and participants in our 8 environment, and finally we want to achieve 9 administrative productivity and quality, so this is not 10 so much a technology plan, it is a plan of how to use 11 technology to achieve some specific outcomes. 12 Within the integrated technology strategy 13 we've articulated a number of initiatives, and I'm not 14 going to belabor those today, but we came to the 15 realization that in order to achieve success with those 16 initiatives, that we had to have some fundamental 17 technology prerequisites, we had to have access, access 18 to networks, access to hardware, access to software, and 19 most importantly training and support. 20 Now, we didn't think this up in some small 21 group centrally, that part of this pyramid really came 22 as a result of dialogue, focus groups, surveys with 23 students and faculty and staff of the CSU. And, in 24 fact, when we started the ITS, the issues of training 25 and support were not central on the radar screen of 8 RAY EGGEBRAATEN, C.S.R., INC. RAY EGGE(209)E441-1681., INC. 1 those that were facilitating the planning, but it was 2 through the focus groups with faculty and students that 3 it become paramount that we wouldn't do any good to have 4 access to networks, hardware, and software if we didn't 5 also have the quality and quantity of training and 6 support to facilitate us doing an excellent job in our 7 respective rolls. Taking that in mind, we then 8 articulated those needs as best we could. 9 Also, we got out of those focus groups some 10 suggestions in terms of strategy how to accomplish that. 11 And it was through the focus groups with faculty and 12 students that the idea of a partnership was first 13 introduced. And we'll come back to that in a few 14 minutes. 15 What are we talking about? Just to reiterate, 16 the scope of this initiative deals with building out the 17 intracampus infrastructure, not only behind the walls, 18 but all the way to the desktop, including the hardware 19 and software that is needed by faculty and staff, and 20 access to hardware and software by our student 21 population. 22 Intercampus connectivity, robustness of voice, 23 video, and data to be able to carry out the educational 24 enterprise. Hardware and software at the desktop, user 25 training and support, and then we also recognize that in 9 RAY EGGEBRAATEN, C.S.R., INC. RAY EGGE(209)E441-1681., INC. 1 order to do all of this, that we need to have the over 2 arching kinds of operations and management and 3 administration to insure quality and performance that is 4 demanded on the part of our students and faculty. 5 That's the scope. 6 What was excluded? Excluded from this 7 initiative are the data centers of the campuses. We are 8 not dealing with administrative, student or library 9 applications, and this does not encompass 10 discipline-specific instructional applications. Those 11 are perceived to be beyond the scope of this endeavor. 12 They are absolutely essential, they are integral to the 13 initiatives in the middle part of that pyramid, we are 14 not ignoring those, but what we have to do in the 15 discussion today, I hope, will focus on the basic 16 activities of the base of the pyramid. 17 Our challenge is pretty straightforward. We 18 need to build the infrastructure capacity and we need to 19 do it soon. In Sacramento the question came, well, why 20 do we have to do it soon. We're in a very competitive 21 world. And we have had the feedback from our students 22 continuously that they're very, very concerned about are 23 they going to be prepared to become contributing 24 citizens and professionals in the work force, and they 25 see and believe that it is absolutely essential to have 10 RAY EGGEBRAATEN, C.S.R., INC. RAY EGGE(209)E441-1681., INC. 1 this kind of infrastructure capability. 2 Our goal is to try to achieve that within the 3 next three years. But in order to do that we need both 4 a funding and implementation capability. And how are we 5 going to do that? We think that we have to look at 6 different and have looked at different alternatives for 7 the best pairing of funding and implementation options. 8 The problem that we're trying to solve is a 9 $300 million problem one time, but it's an ongoing 10 problem, as I articulated, of somewhere between 70 and 11 $120 million a year. So what this -- that is what this 12 is about, to build out our infrastructure, to sustain 13 it, to refresh it, and to manage it effectively in order 14 to achieve the goals that are in the ITS. 15 We didn't come to this point in time without a 16 lot of effort and a lot of time. We looked at a number 17 of options in terms of funding. One was to look at 18 direct funding, to look at the allocation of funding 19 resources, and clearly those two, you know, I think it's 20 very obvious we don't have the kinds of resources, we 21 don't have the financial discretion, we don't have the 22 financial slack within the CSU to re-direct or to direct 23 funds that are not currently directed to this initiative 24 to accomplish that end. We seriously looked at state 25 capital outlay, and, in fact, we're on a track to try to 11 RAY EGGEBRAATEN, C.S.R., INC. RAY EGGE(209)E441-1681., INC. 1 do state capital outlay to build out the infrastructure 2 once. It certainly wasn't going to solve the problem of 3 refresh and renew. But we soon came to realize that if 4 you're only going to get $150 million a year for capital 5 outlay and you're going to compete with other needs that 6 campuses have, to build new buildings, to refresh old 7 buildings, to remodel old buildings, that it was going 8 to take an inordinate amount of time. 9 We've had two campuses that have been 10 successful in getting capital outlay for infrastructure 11 up to the wall. Fullerton is just completing, and, in 12 fact, they're in the process of installing a work 13 station at every faculty and staff desk this fall, and 14 they're very excited about their new capabilities. That 15 capital outlay took place five years ago. 16 The second campus to be successful is San 17 Jose, and they are just now beginning to launch that. 18 Well, if you multiply that over 20 campuses, my 19 colleague, David Ernst, would say, it will take eight to 20 ten years. Well, my calculus says that will take 100 21 years, one every five years. So state capital outlay 22 became not a viable alternative to accomplish our goal. 23 Financing is certainly an option, but it's dependent 24 upon the availability of money, and that option may, in 25 fact, be used within the context, so we finally arrived 12 RAY EGGEBRAATEN, C.S.R., INC. RAY EGGE(209)E441-1681., INC. 1 at the notion of a partnership. 2 Likewise, implementation and operations. CSU 3 can do it in-house, we certainly could contract for 4 services, we could outsource and outtask and probably 5 would do all of those things. But if it -- we did also 6 arrive at the point of decision that we needed to 7 consider matching our core competencies with those firms 8 that have core competencies in this area. Our core 9 competencies being education, and that led us to 10 launching the system-wide internal partnership effort, 11 actually a year ago Tuesday is when that all came about. 12 So that's in a sense the framework, the goals, what the 13 scope of what we're trying to do, and the strategy for 14 doing it. 15 Now, I'd like to turn to John and have him 16 outline from his perspective as one of the corporate 17 partners in the California Education Technology 18 Initiative what we see as outcomes and the principles 19 that have undergirded the whole process. 20 MR. WARRY: Thank you, Tom. I'd like to walk 21 us through the outcomes -- thank you. 22 This morning I'm very honored to have the 23 opportunity to walk you through the outcomes. As 24 representing the partners, the industry partners in this 25 initiative, I would like to focus first on the 13 RAY EGGEBRAATEN, C.S.R., INC. RAY EGGE(209)E441-1681., INC. 1 individual, and I have to tell you that that was the 2 most important thing that we had to focus on as we 3 developed our business plan back to the SIP committee. 4 It was our trips to the campus, our focus groups with 5 you, the faculty, the staff, the students at the very 6 core of the proposal that we submitted. This proposal 7 could not be put together without focusing on the 8 individuals first, and when we came out to the campuses 9 we learned a lot. And we had to do that, and we were 10 instructed to do so, that we had to get our mindset in 11 the academia. Individuals were very important to that. 12 What we heard from the field were issues of 13 access. Access was the most important thing that was 14 expressed. We needed anytime, anywhere, time and place, 15 independent access. Faculty needs to be able to walk 16 into a classroom, plug in a laptop, and go. Students 17 need access to information on the fly. They need access 18 to the libraries and so on and so forth, so it was very 19 important that we focus in on the access. 20 But what was important about that, that we 21 kept it flexible. We kept it flexible and we kept it 22 open, open to grow. You have done a lot on the 23 campuses. We saw 23 different structures and 23 24 different sets of entrepreneurialship to accomplish 25 these things over time, but what we had to come up with 14 RAY EGGEBRAATEN, C.S.R., INC. RAY EGGE(209)E441-1681., INC. 1 was a program to refresh that and provide the training. 2 When we talked to faculty and students, 3 training was important to them. The staff mentioned to 4 us that training was monumentous. How could we move to 5 new applications when we haven't learned the old 6 applications. That we had to deliver some type of 7 training that you could have access to anytime, 8 anywhere, 24 hours a day. 9 Support was very, very important to the user 10 community as we came out and talked with the 11 constituency. Support is very strong on the campus, 12 it's a home grown support, and we only wish to raise 13 that to a higher level to provide enhanced support, but 14 in no way, shape, or form did we ever want to move the 15 support from this campus. It's important that the 16 support stay close to the users. We in industry have 17 learned that the closer you stay to the user, the 18 greater your knowledge of the user's needs become. 19 Now, let me move to the campus issues and then 20 CSU as a whole on the outcomes. Campus outcomes were 21 important to us. Campuses needed to build out their 22 infrastructure, and we talked to the campuses on how 23 they wished to build out those infrastructures. A lot 24 of work has been done in this area over the last five 25 years. And we looked at what had been accomplished, and 15 RAY EGGEBRAATEN, C.S.R., INC. RAY EGGE(209)E441-1681., INC. 1 we only wish to partake in what you have already begun. 2 We looked at the temp guidelines, we looked at 3 everything that had been developed on the campuses, and 4 our proposal calls for taking what you have begun to do 5 out here and provide you the wherewithal and the 6 resources to move it to higher levels. And then and 7 only then can we look at CSU as a whole. 8 So a lot of times we have throughout this 9 process talked about the infrastructure buildup, and I'd 10 like to say to you today that in my opinion that's 22, 11 23 separate buildouts, it's not one buildout. 12 The commercial partners. What did we need 13 from this, and this was very important. Where else 14 could we get access to tomorrow's customers today. This 15 was important to us, and this was important for us to 16 sell to our board members of the importance of taking an 17 honest and sincere role in helping build tomorrow's 18 leaders. How else could we do that but to be involved 19 in the educational community. 20 We have seen technology firms do this in the 21 past, it works. When we looked at the CSU system, the 22 largest university system in the world, what better 23 place for us to get involved and take an honest role in. 24 Additionally, when we began to meet with the 25 SIP committee, it was important that we had a strong 16 RAY EGGEBRAATEN, C.S.R., INC. RAY EGGE(209)E441-1681., INC. 1 presence in California, and we are very proud to have a 2 very strong presence. These are our children, we turn 3 them over to the system and we wait to get them back and 4 see them into our industry later on in life. We have a 5 very strong role in the community, and we want to stand 6 up and take part in that role. 7 We've seen a change in industry's opinion in 8 that lately, everything from Ted Turner's donations to 9 the United Nations, it's a different role out there. 10 It's not one of handing something over, but taking an 11 active role in where we're going, and that is what 12 industry will get out of it. 13 The partnership will gain a lot for the 14 system. The partnership is to put in place a system 15 that will be self-reliant. What we heard in the 16 campuses, that there were a lot of successful 17 initiatives, there were a lot of successful grants and 18 funding that have filled the gaps of technology over the 19 years, but there is nothing in place to sustain that 20 refresh, that refresh that is growing at an increasing 21 speed in technology. It was important that our outcomes 22 address a program that would provide a constant refresh 23 so that we are not here tomorrow looking for this or 24 that as we -- as our new students come in with bigger 25 and grander ideas of technology. 17 RAY EGGEBRAATEN, C.S.R., INC. RAY EGGE(209)E441-1681., INC. 1 Let me spend some time on the principles, as 2 principles were very important to the success once we 3 had uncovered what the outcomes were and what we had set 4 out to do. The principles were important that we 5 understand the customer. And the customer is the 6 constituency. 7 CSU staff must be retained. This was an easy 8 one for us as we spent time on the campuses. I have to 9 tell you, with the downsizing that happened in the early 10 '90's, with 20 percent cuts in resources, retaining 11 staff was not an issue. Quite frankly, there wasn't 12 enough staff currently. I can tell you, I can stand 13 here today and tell you that 100 percent of the campuses 14 that we visited, the first thing that they mentioned to 15 us was a shortage in staff in the technology 16 organization, that they did not have enough bodies to do 17 what they needed to do, that they had a constituency out 18 there that had needs, the students, faculty, and staff 19 had needs in training and support, and they were 20 overwhelming, so retaining staff was not an issue, to 21 say the least. 22 The initial buildout. As I mentioned, the 23 initial buildout is 22 buildouts. It is building out 24 from what you had begun. You have done a lot of ground 25 work in this area. We have 22 temp plants to look at. 18 RAY EGGEBRAATEN, C.S.R., INC. RAY EGGE(209)E441-1681., INC. 1 Your technology organizations built these, they built 2 these from the ground floor, they built them here in 3 Fresno. 4 Partnership. Partnership would gain the 5 provider role in the base line buildout, and it should 6 be stated clearly that the base line buildout, as Tom 7 indicated, the base of the pyramid, that is a major 8 investment from industry, and we are looking forward to 9 participating in that. 10 And then to my last bullet is, that would help 11 position us closer to you, the constituency, the 12 customer, to understand your other needs and possibly 13 allow us an opportunity to participate in these projects 14 which are not part of the scope, that we may work 15 together with you, that you may help bring us up along 16 the way to better understand your needs, and, therefore, 17 we would play in a higher role when it came to those 18 non-scope projects in the future. 19 Next slide, please. When looking at a project 20 of this magnitude and a project that is solely sustained 21 by the constituency, it is most important, and this is 22 back to my Econ-101 days, it is most important that that 23 be driven from within. With that being said, it was 24 important to us that CSU play the major role in this 25 organization. That, in that, would we find success, 19 RAY EGGEBRAATEN, C.S.R., INC. RAY EGGE(209)E441-1681., INC. 1 without that, we would fail. 2 Corporate partnerships would utilize CSU's 3 education. Our partnership team, as we choose our 4 partners, and we chose them for a lot of reasons and we 5 chose a captain of our team for a lot of reasons, and 6 that being GTE Data Services as an integrated role, this 7 project was to be a solution. This was not a system 8 deliverable but a solution deliverable. 9 The corporate partners, when we began to look 10 at them, were exhausting huge amounts of funds in 11 education and training. We know the direction of 12 corporate America is to focus on training. We may be in 13 the information age, but tomorrow is the education age. 14 And if you don't believe me, all you have to do is pick 15 up a paper. Education is the number one item on 16 corporate America's list out there, and you see them all 17 positioning for it. What a better opportunity for us to 18 get close to education, to exchange information, to join 19 in a partnership where we could deliver something to you 20 and you could help us achieve what we need to achieve, 21 which is to constantly regularly educate and certify our 22 employees. So that was monumentous to us. 23 Partnership program revenue programs needed to 24 be approved by CSU, and I think I stated that thoroughly 25 earlier. This is constituency driven, all you have to 20 RAY EGGEBRAATEN, C.S.R., INC. RAY EGGE(209)E441-1681., INC. 1 do is look at the numbers. Those programs need to be 2 driven by CSU, tainted to CSU, but tainted to CSU campus 3 by campus. 4 What we noted out there is each campus is an 5 individual community. One of the phrases that we said 6 is each one is like a city unto itself. And they must 7 stay that way. They have relationships in the local 8 communication, they have needs, different needs in 9 different communities. It had to be driven by CSU but 10 it had to be driven by campus. Campuses have a name and 11 a presence in the community, and the campuses have taken 12 on that solid role to be the information provider in the 13 community as we, industry, have kind of backed down. 14 The CSU system has taken on that role, and I think you 15 saw it clearly in Barry Nunez's message, is that we are 16 the information provider. We are becoming the center in 17 the community to provide that information and access to 18 that information. 19 I participate in a lot of other organizations 20 in the community college, and I'm telling you here today 21 that they do look to you for direction, the K through 12 22 looks to you for direction. The role there is growing 23 on a daily basis. So it was easy to see that this had 24 to be driven by CSU, and any programs must be driven by 25 CSU or they'll fail. They will fail. 21 RAY EGGEBRAATEN, C.S.R., INC. RAY EGGE(209)E441-1681., INC. 1 The partnership will honor intellectual 2 property. This is an absolute must. The partnership 3 comes to the faculty, the faculty has the knowledge, the 4 faculty says I have the knowledge, I have the means to 5 put something out, how do I get that out. 6 What we saw on some campuses was phenomenal, 7 what you're doing, and what we'd like to do is take 8 that, a CSU-borne program, and let the other campuses 9 have access to it. I witnessed faculty going down to a 10 lab and saying I don't understand how to turn this into 11 a C.D. device that can be marketed but I have the 12 knowledge. I have the information. And there was a 13 team there ready to help that faculty person put that 14 program together and take it where it needed to go. The 15 faculty did not have to stop from what they were doing, 16 overload themselves with a whole other set of workload 17 to accomplish those kind of things. So that is very 18 important to us and that would come from within CSU. 19 The governing structure is one of shared 20 economics, again, and I cannot say this enough, this is 21 a constituency-driven program, supply and demand, simple 22 supply and demand. The goods and services must meet the 23 needs of the constituency or those goods and services 24 will not be accepted. And it's important to the 25 business model that these goods and services be driven 22 RAY EGGEBRAATEN, C.S.R., INC. RAY EGGE(209)E441-1681., INC. 1 from within and be updated on a regular basis from 2 within. 3 If anything that we have said since 4 notification of the award is we don't have all the 5 answers, and that's good. Because we need the answers 6 to continue to come from groups like this. It's great 7 to see turnouts that are interested in giving us the 8 information. All we have done through this entire 9 initiative is come for information. What do we need to 10 do, how do we need to do it, you'll give us the model 11 for success. 12 The partnership success obviously will be 13 judged by its ability to maintain. We are going to 14 begin to build the infrastructure, as you heard Tom 15 discuss, but it is most important that we sustain 16 currency with those programs as we roll them out. And 17 we believe with the business proposal that we have 18 submitted that we have developed a plan that can do 19 that, a workable plan with your help and your guidance 20 that will continue to keep us current and keep us fresh 21 and keep us successful in the marketplace here on 22 campus. 23 Responsiveness in meeting campus and system 24 needs. I can't overemphasize. We continue to talk 25 about the buildout, and to me it is individual campus. 23 RAY EGGEBRAATEN, C.S.R., INC. RAY EGGE(209)E441-1681., INC. 1 Responsiveness to the campus need. As I indicated, each 2 one of them are different, each one of them had 3 different arrangements in the community, and we need to 4 be very close to that. 5 Everything that we will do will involve the 6 campus community, that is why our business plan involved 7 maintaining the structure that was in place today, 8 springboarding from what you have done until now 9 further, not to come in and start anew, but to build on 10 what you have to deal with Legacy systems which are out 11 there to migrate in the proper direction. So we need to 12 require -- remain responsive to meeting the needs. 13 Contribution to new modes of learning and 14 delivery and education. You do a great job at it today. 15 You do a great job. But we had a lot of questions out 16 there to us as how can I do more, how can I go further, 17 how can I take this beyond the state, and the next 18 campus we went to was already in Malaysia. You're doing 19 a great job. We have some tools, but probably tools 20 that you haven't seen. We have access to things, and 21 all we would do would be to provide these to you, the 22 opportunity to take advantage of those if they were 23 appropriate, but there has been some monumentous efforts 24 undertaken in this area in the extended ed areas, and we 25 would continue that. 24 RAY EGGEBRAATEN, C.S.R., INC. RAY EGGE(209)E441-1681., INC. 1 We would offer you exposure to possible 2 avenues which hadn't been considered, some campuses 3 have, some haven't, the Net, the Web, courseware on 4 line, these kind of things, if it's appropriate. 5 Creation of new tools and opportunities, 6 faculty, staff, and students. This was huge, this was 7 huge for us, that we focus on this, because without the 8 tools, the hardware was going to sit on a shelf. We 9 heard that from staff and faculty. As I mentioned, 10 faculty saying you didn't teach us on the last product, 11 and here we're going to upgrade it. Training is so 12 important. But training is important when it's 13 delivered, and I'm preaching to the choir here, just in 14 time training. Access to training when you want it, 15 when you want it, when you need it. Not taking a word 16 program training course that you may not use for six 17 months and then going in and trying to find your way 18 through it, but being able to pick up that phone and 19 dial a, you know, a 1-800 number or an extension on 20 campus that would walk you through, that would assist 21 the student, a new student, a faculty, a new faculty, an 22 older faculty that is trying a new program, but provide 23 that information when they need it, where they need it. 24 Not a class held once every quarter. That was important 25 to us. Therein lies the success of the tools which we 25 RAY EGGEBRAATEN, C.S.R., INC. RAY EGGE(209)E441-1681., INC. 1 are going to roll out. If the tools are not used, we 2 failed again. 3 Contribution to personal productivity. That 4 goes without saying. We in the industry have learned, 5 and I think that's why the industry is making a shift to 6 education as we approach the next millennium. Education 7 is important, we can throw technology at things, but it 8 will not increase productivity. But if we teach someone 9 how to use that technology and work with it on a daily 10 basis or develop that technology with their needs in 11 mind. 12 Several Fortune 500 companies have shifted 13 their thinking. No longer is an IS will -- the business 14 side of the house will tell IS in IS language what they 15 need. It's changed out there today. IS is required now 16 to listen in business needs, and that's what I see 17 happening here. But the faculty needs to come down to a 18 lab and say this is what I need, not in high tech 19 jargon, but this is what I need, this is what my 20 students need, I need this information for them, there, 21 you tell me how to get it there, but don't talk to me 22 LAN's lance and management and that kind of language, 23 that's not my life. My life is getting information in 24 the heads of students. And the students' world is 25 getting the information from the faculty. And we are 26 RAY EGGEBRAATEN, C.S.R., INC. RAY EGGE(209)E441-1681., INC. 1 here merely to support that and transport that in a 2 seamless effortless fashion therein, with the 3 productivity improved. 4 Attributes of the CETI partnership. Boy, this 5 one came from you. And speaking for the business 6 partners, we did have to do a mindset on this one. We 7 had to continually remind the people who entered the 8 team that this was monumentous if we would be successful 9 in this initiative. Cultural fit was a must. There was 10 a cultural abash, if you will. There's a difference. 11 Your world was different than our world. We needed to 12 understand your world, and we needed to introduce you to 13 our world and some of the things that may be of benefit 14 in your world. And that was important, and we only 15 accomplished that through focus groups, through trips to 16 the campus, spending time with the system as a whole, 17 not down in Seal Beach, Long Beach area, but out in the 18 campuses. 19 Shared vision of future of education. That 20 was a must. We had it. As I said, we in industry 21 understand our role in education. I think we, the 22 industry partners being in California had a clear 23 understanding of that role and CSU's fit in that role. 24 Executive commitment. You cannot understand 25 the importance of this one. This was monumentous for us 27 RAY EGGEBRAATEN, C.S.R., INC. RAY EGGE(209)E441-1681., INC. 1 to be able to walk into the board room and say we have 2 an idea for you. CSU needs a new infrastructure and we 3 think we can build it. It required commitment from the 4 very top. This is a long-term initiative, and if we did 5 not have executive commitment and if things turned and 6 changed, we would be endangered. So it was a must that 7 we have executive buying from the highest level, 8 presidential level, like many of the partners. 9 Quality of the corporate team. The partners 10 we sought out, those that fit the bill. This initiative 11 is a first ever. The things that the campuses are 12 looking for are first ever. But if we were to build 13 something, it had to be built thinking of tomorrow, 14 because tomorrow will be here before we get it built. 15 It was important to us that we think beyond, that's why 16 you noticed one of our partners, Dean Hughes, we needed 17 to think of satellite transmission, wireless. Remember, 18 our goal is anytime, anywhere access. And we needed to 19 think what possibly could be available tomorrow, what's 20 in the labs today, so involved everyone from a wireless, 21 the GTE telephone organization, remember as I mentioned 22 earlier, GT Data Services, which basically is our team 23 captain, the leader in my organization, Fujitsu and 24 Microsoft. Together that team we felt could bring to 25 the campuses the greatest depth and breadth of what this 28 RAY EGGEBRAATEN, C.S.R., INC. RAY EGGE(209)E441-1681., INC. 1 project was all about. It is not an all-encompassing 2 team, though. There are many, many players that are not 3 team members that will still be providers. 4 There were partners in the team and there were 5 these who were to be considered providers that did not 6 want to or did not have the wherewithal to take a 7 full-on partnership role, but there are a lot of 8 technologies below this core team member that would be 9 providers, many of which you're doing business with 10 today. This is not an all-encompassing technology 11 group, and that's why I say we are fortunate to have GT 12 Data System, a solutions integrator, as our team 13 captain. 14 Mesh of departments was a must, we had to work 15 well together. Most of us had relationships in the 16 past, we've competed against each other and we've worked 17 together on projects, so that was a must in the natural 18 and we in industry had understood that. 19 Creative innovations. Proposed solutions, we 20 tried to do our best. Most of what we got came from 21 you, so hopefully we got it right, that we listened 22 well. Hopefully our team members will continue to 23 listen well. 24 Financial stability. I think that goes 25 without saying. A project and initiative of this 29 RAY EGGEBRAATEN, C.S.R., INC. RAY EGGE(209)E441-1681., INC. 1 magnitude required that you have the financial stability 2 to sustain it from the beginning all the way to the end. 3 That there were not going to be any rocky roads or 4 partners that were not going to sustain it. 5 Technologies represented. That goes without 6 saying, that the technologies had to be strong. 7 California presence, as I pointed out, that was major to 8 your organization, we agreed with it. And we're proud 9 to say that we are a very strong organization. Several 10 of us are headquartered in California, so.... 11 Stability of the corporate team. That was a 12 must in our operational style. I must say again, and I 13 can't say it enough, that your organization helped us 14 mold our operational style as it pertained to this 15 initiative. The team members that started this project 16 with myself are still part of this project, will 17 continue with this project all the way through its life. 18 That was important in corporate, and therein as you 19 molded us we continued to change daily, and we have 20 become hopefully as close as possible to you in your 21 organizations. And with that, I will turn it over to 22 Spencer. 23 MR. BRYANT: Demonstrates that Bob has good, 24 high skills in being able to go forward and backwards. 25 Everybody still up? No comment. Okay. I thought it 30 RAY EGGEBRAATEN, C.S.R., INC. RAY EGGE(209)E441-1681., INC. 1 would be interesting to give you the flip side of some 2 of these, and we'll hit yellow once if you don't mind. 3 The cultural fit. Let me suggest to you that 4 at this point we're engaged and we courted for quite 5 some time. It was interesting to see two different 6 groups of individuals come to the table who were so 7 different and diverse, but after a while we learned that 8 we had a lot in common. And on the continuum we moved 9 from one side to the other. And I'm happy to say that 10 certainly we have a lot to learn from one another, but 11 we're getting closer and closer to understanding one 12 another's culture. That's a lot to say, considering we 13 come from two different worlds. 14 In terms of the shared vision, what was 15 exciting to us was that we were able to look at things 16 beyond one dimension. We had the opportunity to spend a 17 lot of time with all the partners, each of the three 18 groups, to cultivate, and wherever possible, fertilize 19 them with some new seeds of ideas. 20 What was exciting to us in terms of the GTE 21 partnership, the CETI partnership as we now know it, was 22 that we shared many of the same visional thoughts. We 23 didn't have to prime the pump. Certainly we 24 occasionally had to provide a little help here and 25 there. But what was exciting to us is that we saw a 31 RAY EGGEBRAATEN, C.S.R., INC. RAY EGGE(209)E441-1681., INC. 1 vision that matched ours, and I think that's really what 2 was key. 3 The executive commitment is not only from the 4 partnership's side, but certainly is also from the CSU 5 side. The presidents, associate vice presidents, many 6 of you in this audience in some way have been involved, 7 and that commitment has been crucial to working with a 8 corporate team that has brought to the table the cream 9 of their crop. And I think that's something to say 10 about that. 11 The creative aspect, I think, are the most 12 exciting to me as the technologist. We just didn't 13 think of one technology, we didn't think of one 14 application. Certainly we realize that in the academic 15 environment we need to look at all. We have a diversity 16 of needs in terms of our students and faculty and staff, 17 we have a diversity of needs in terms of our management 18 operational and academic programs, and we just couldn't 19 look at one technology or one solution. And it was to 20 me very inspiring to see that we would look at 21 solutions, not technologies, as ways of solving our 22 problems. 23 And last, the operational style. What was 24 exciting I think from my point of view is that we asked 25 the corporate folks to think out of the box. Some could 32 RAY EGGEBRAATEN, C.S.R., INC. RAY EGGE(209)E441-1681., INC. 1 do that quite well, some did it better. I'm also happy 2 to say that we at CSU are starting to think a little 3 more out of the box. It will take us perhaps a little 4 more time, but I think we're moving in that direction. 5 Bob, please, move on to the next. We're going 6 to be talking about implementing the CETI approach, and 7 CETI stands for the California Educational Technology 8 Initiative, which is the project that involves our 9 partners, and you can see them up there very proudly. 10 These are small companies, as you might 11 notice. You're supposed to laugh at that. Good, thank 12 you. GTE, hope some of you have stock if you listened 13 to the radio this morning. Some AT&T, that other small 14 company, might be interested in purchasing it. But GTE, 15 a $22 billion company, world wide known, certainly a 16 company that's been involved in technology and 17 telecommunications for many years. 18 Even as an easterner, you notice I have this 19 speech impediment, my wife has blonde hair and blue 20 eyes, and I'm trying to go towards that, maybe someday. 21 My son, he lives in Orangevale, I live in Orangevale, 22 that's the way it's going to be. But GTE is a 23 well-known corporation, known throughout the world, 24 known throughout the United States as a very fine 25 company. 33 RAY EGGEBRAATEN, C.S.R., INC. RAY EGGE(209)E441-1681., INC. 1 We're also lucky to have Fujitsu, a huge 2 corporation that perhaps it's not as well known as it 3 could be or should be, but one of the largest providers 4 of telecommunications, electronics, and computing 5 mainframe services anywhere. 6 Hughes; Hughes is the supplier of space 7 services near satellites. We do not receive programming 8 today on cable or through direct broadcast or even on 9 your commercial television stations without Hughes. 10 They also provide access for both voice and data. 11 And many of you who go to your nearest food or 12 gasoline station may find that on their roofs there are 13 little VSAT, Very Small Aperture Terminal, looks like a 14 small satellite dish, and that dish actually does 15 point-of-purchase activities and transactions. Those 16 same type of dishes hopefully will someday appear on 17 each one of your homes or at each one our student's 18 homes so that you can have direct connectivity to CSU in 19 ways that we cannot do through some of the wire 20 technology, especially for those of you who are truly 21 remote from some of the more high tech areas. 22 As an example, in Sacramento we have two small 23 telephone companies. When I moved to Orangevale and I 24 called up our phone company, which was Pacific Bell, I 25 thought, they said no, I'm sorry, you live on the wrong 34 RAY EGGEBRAATEN, C.S.R., INC. RAY EGGE(209)E441-1681., INC. 1 side of the street, which I thought that was a problem, 2 and said that you need to call Roseville Telephone. And 3 I called up Roseville Telephone and they said sure, 4 Mr. Bryant, no problem, we will turn on your phone. 5 Well, I got home and plugged in my phone and picked up 6 the phone and heard battery, if anyone knows what 7 battery means. It means you blow into the phone, you 8 hear yourself, but I didn't get dial tone, and went back 9 to my neighbor's house who was obviously on the right 10 side of the street and called Roseville Telephone. They 11 said no, your phone is working. And the woman said, 12 kind of little bit afterwards, did you wait for the dial 13 tone? That's a joke, ladies and gentlemen. Because 14 that's some of the reality of what it is like in 15 California in terms of telecommunications, waiting for a 16 dial tone can be a problem. We're used to picking up 17 that phone and getting dial tone. As we will be in 18 terms of getting access to the Internet or access to 19 programming, those of us who are challenged by getting 20 into the modem pools at our campuses know how difficult 21 that can be and how frustrating that can be when you're 22 a faculty, staff, or student. So Hughes provides us, as 23 does GTE and Fujitsu, with outstanding methods by which 24 we can gain new access to those resources. 25 Another small company is Microsoft. Everyone 35 RAY EGGEBRAATEN, C.S.R., INC. RAY EGGE(209)E441-1681., INC. 1 knows about Microsoft. I'm surprised they haven't 2 started the Microsoft University yet, but I think 3 they're interested in working with us, and I think 4 that's a good sign. They are the largest supplier of 5 application software and upgrading systems, and I think 6 we will profit well by working with them. 7 But notice who the last partner is, it's the 8 CSU. We are a full partner in what will be the CETI 9 Corporation. And that's key to our development. 10 Bob. Our mission is to meld the technology 11 and the intellect and certainly comes from many of you 12 in this audience and through the knowledge resources 13 that are available to us through this technology to 14 provide ubiquitous telecomp services. 15 As I mentioned to you, it wasn't a pleasure 16 living in Roseville. I now live in Pacific Valley by 17 the way. And to improve education to help you do your 18 job, and certainly that's a need that all of you, I 19 think, believe in, that you want to support those 20 students as best you can and are looking for a variety 21 of methods and opportunities to do that with. We can't 22 do it alone any longer, it's become too complicated, and 23 to do so with a reasonable rate of return both in terms 24 of the quality of services we provide to our students as 25 well in terms of that we do it at a cost that all of us 36 RAY EGGEBRAATEN, C.S.R., INC. RAY EGGE(209)E441-1681., INC. 1 can well afford. 2 So what are the highlights of our program? 3 Well, we will be building an infrastructure, we'll get 4 to that in a second. We will be building and operating 5 new operational program structure, there will be 6 exciting new business opportunities, revenue-generated 7 programs and opportunities, and we'll discuss some 8 financial issues that I think are important to 9 understanding this total program. 10 The technology or the infrastructure buildout 11 is truly integrated. At my desk at home, this is not to 12 impress you, it's just one of the benefits of being a 13 techie is having all the toys. But at my desk at home I 14 have a truly integrated voice data video terminal. I 15 can make a 112/384 phone call from my home, which is the 16 speed that I'm operating at, 112/128/384. I can at the 17 same time share files with my file server by making that 18 same call and connecting to -- through ISDN, to the CSU 19 backbone network if I so desire. At the same time I can 20 actually talk to somebody, and, in fact, conference both 21 the video and audio people together using one 22 instrument, and the future suggests that all of us will 23 have that at some point in time. 24 We're not relying on just one cable 25 technology. Years ago there was this thing called 37 RAY EGGEBRAATEN, C.S.R., INC. RAY EGGE(209)E441-1681., INC. 1 twisted pair or bell wire. Some of the campuses 2 basically had bell wire. That is, they will ring bells 3 but that's about it. And we are moving towards a higher 4 level of capacity of wire which are called category 5 five, that allows us to now send data at very high 6 speeds. Well, a few years ago that was not possible. 7 Well, we're not just limited to copper or 8 twisted pair, we're moving into fiber and even some 9 cases coaxial cable still, and last but not least the 10 entire wireless environment, and that includes both 11 microwave, satellite, and as you know it as PCS, 12 Personal Communication Services, or systems and 13 cellular. Would also include micro cellular, depending 14 on the nature of the environment, so we're not limited 15 to just the physical wire, we're suggesting that 16 wherever you might be, wherever we need to reach you, we 17 can and will do so. 18 As a New Yorker, probably notice that from the 19 speech pattern, I used to teach a course every day going 20 from Orange -- New Jersey to New York on the rail 21 lukawana, and the telecommunity world, if I can use that 22 expression, we rented a car and every morning you would 23 take a course in public relations and public affairs by 24 sitting in that area of lukawana train. Not too high 25 tech, but it was kind of unique, and by the time I left 38 RAY EGGEBRAATEN, C.S.R., INC. RAY EGGE(209)E441-1681., INC. 1 City University there were probably about seven courses 2 running that way between New York and Long Island and 3 New York City and New Jersey and Manhattan. 4 The electronics are being designed for the 5 idea that they will be obsolete. We realize that 6 technology changes. Five years ago a router was capable 7 of ten megabytes, a router is now capable of 150 8 megabytes or higher, depending on the router that one 9 buys. The cable which you have in this facility is 10 limited in some respects, but it is high tech in others. 11 The problem is it is not universal throughout this 12 campus or any other CSU campus. Some of the electronics 13 will support the old cable, and that will be very 14 helpful for us to get as much service out to the 15 community as possible, but the plan is eventually to 16 replace as much as we can, in fact, all if possible 17 throughout all campuses. 18 The architecture we're going to be using will 19 exceed the base line. Our base line really was ten 20 megabyte, 100 megabyte, the backbone, and we hope to 21 increase that to 155 on the backbone, 100 megabytes to 22 the desk, and we will continually upgrade as necessary. 23 Band widths are just part it of, however, the 24 system has to be designed so it is scalable so we can 25 add new locations as we put people on board, and we will 39 RAY EGGEBRAATEN, C.S.R., INC. RAY EGGE(209)E441-1681., INC. 1 design a system with that kind of architecture so that 2 there is very little impact on the user population as, 3 in fact, more and more of you download heavy areas of 4 data, of voice, or video. 5 The idea in the future is that you could 6 actually pick up your data terminal and actually make a 7 LAN phone call or a video phone call on your LAN, 8 sometimes we may have to unload you so that we can send 9 it someplace else, depending on the traffic patterns, 10 but this is all part of the design future. 11 We hope to refresh these environments as 12 quickly as we possibly can based on the revenue return, 13 but it is something that will be plugged into our system 14 as a normal part of our program, and our system is 15 designed to be flexible wherever possible. Certainly 16 we will build on a standard, but that does not suggest 17 that the standard is in concrete, the standards do 18 change. 19 And, yes, we will support Legacy systems so 20 those of you who have Apple or Apple slices, that was 21 another joke. You're not laughing this morning, too 22 serious. All right. I feel better. I feel better. 23 Those of you who have Apple, please consider us to be 24 part of the friendly group. I'm bilingual, I use Apple 25 and I also use Mac. Excuse me, Mac and PC, and feel 40 RAY EGGEBRAATEN, C.S.R., INC. RAY EGGE(209)E441-1681., INC. 1 comfortable with both. 2 If you could, thank you, Bob. Great director. 3 Implementation schedule suggests a three-year buildout. 4 We certainly want to key on those areas that you have 5 the most concern with first. And each year we expect to 6 give you a report in August as to the accomplishments, 7 the impact that's been made. And it's not that we put 8 in wire or we have a satellite service, but more so that 9 there has been a change in our academic programs that 10 support our teaching and learning and productivity 11 issues that you see before several times. We're looking 12 to get high speed access to the home. If you cannot get 13 high speed access to one's home, you cannot carry out 14 the business that you so easily do on campus. 15 I'm spoiled, I have ISDN, wide band ISDN in my 16 house. When I happen to go across the street to my 17 neighbor who happens to be an elementary and secondary 18 school teacher and I have to dial on to their modem 19 pool, I sit there usually and bring an Apple so I can 20 wait for them to load up and do. But having access, and 21 quick access means that you can navigate the Internet, 22 download materials in much the same way you're able to 23 do hopefully in some cases on your campus now. 24 We will refresh starting in the fourth year in 25 terms of the infrastructure. And we realize that may 41 RAY EGGEBRAATEN, C.S.R., INC. RAY EGGE(209)E441-1681., INC. 1 have to occur a little earlier depending on the nature 2 of the technology, but we are planning to refresh the 3 terminal resources, which is all the hardware, in the 4 middle during the fourth year. And we are building the 5 system so that, in fact, we believe it will take us to 6 that point in time without any difficulty. 7 Operations and support will begin year one, 8 and we will build that out in the years two and three, 9 there is a lot of management and administrative and 10 organizational issues that will have to take place. 11 Certainly we have very successful people on our campuses 12 doing much of this now, but they are all overworked, and 13 I can speak for my people. 14 Most of the folks who work for me, who are 15 exempt of course, work 60 or more hours per week, they 16 are very dedicated people. That is another joke. One 17 of them is about to get married. When he joined us five 18 years ago he didn't own a very fancy car. When he 19 bought his fancy car he dropped down a couple hours. 20 When he bought his home he dropped down a couple of 21 hours. I'm really worried now that he's getting 22 married. So you can see that -- you know, he's still 23 committed, and his wife said she will probably commit 24 him if he continues to work at that level. We do have 25 outstanding people there, but we need help, as you heard 42 RAY EGGEBRAATEN, C.S.R., INC. RAY EGGE(209)E441-1681., INC. 1 from John. And this program will hopefully provide us 2 with some of the assistance that's so necessary. 3 The way it will occur is through the revenue 4 generation programs, and we will begin those as quickly 5 as we possibly can. We will hopefully have some very 6 successful rollouts in year one, and we'll talk about 7 that in a few minutes, but there will also be a series 8 of rollouts that will occur year after year after year 9 as, in fact, the market changes. If we cannot, if we 10 are not competitive, if we cannot serve the needs of the 11 constituency, if we are not responsive to you as 12 faculty, students, and staff, we are not going to be 13 successful. So it's a very simple issue here. Either 14 it's going to work or it's not. If it's going to work, 15 we're going to do well. So we're going to be watching 16 and listening and paying attention to what you say, 17 because you're the drivers. 18 If you'll turn the page. We will operate this 19 under a corporation mode. This is something that we 20 think is quite exciting. Some might say well, gee, Ken, 21 the CSU entering into a corporate model, it's something 22 that still will be looked by our legal counsel, but it's 23 something that we believe is quite possible. And there 24 are some advantages to that, as you can see from the 25 slide. 43 RAY EGGEBRAATEN, C.S.R., INC. RAY EGGE(209)E441-1681., INC. 1 There is there a consensus of shares that 2 equal a percentage of ownership which you've also heard 3 John say, that certainly the governance and the 4 organizational issues will give authority to CSU to kind 5 of operate this in a way that protects us as an 6 educational institution. But at the same time as we 7 grow and as we diversify, shares can be bought and sold 8 in ways that can expand our operation, so it's no 9 different than any business does. And it gives us the 10 power to do this quite quickly in a way that perhaps 11 we're not able to do now, since it takes perhaps an act 12 of God to make some of the things occur that we are able 13 to do. 14 Now, people complain about the procurement 15 system at CSU. While coming from the City University of 16 New York, State University of New York when I came here, 17 I thought it was a blessed event, so it's a matter of 18 where you come from. That may be shocking to you, but 19 believe me, it was a bitch. Did you write that down? 20 By the way, Ben, you didn't have me sign anything, so 21 anything I say cannot be used. I want you to know that. 22 And that's intellectual property, right? 23 There will be very significant input by you as 24 our participants. It will occur in both formal and 25 informal ways. Certainly we're going to look at you as 44 RAY EGGEBRAATEN, C.S.R., INC. RAY EGGE(209)E441-1681., INC. 1 buyers, the students, faculty, and staff, as external 2 buyers and as internal buyers. You buy right now 3 through your departments, through your schools to 4 acquire equipment through outside resource third 5 parties, which are also hopefully going to be buying 6 directly through us, but as John and Mary America, as 7 individual private citizens, you're also buying 8 equipment, as my faculty are. And a year ago they came 9 to me and said could you supply us with the same 10 equipment that you provide the campus with, which really 11 excited the heck out of us, so, you know, we had built 12 our own PC's for ten years. We're happy to say we're 13 getting out of that business, but we built them for ten 14 years and they wanted to buy our PC's, not because they 15 were the greatest thing since chicken soup, but more so 16 because they had the load of the campus on it, that they 17 were configured for the need of the campus, and they 18 worked the same way that the computer worked in their 19 office. More importantly, if they had a problem, they 20 knew who to bring it to and had it taken care of. So 21 certainly we're interested in learning more about what 22 you want, and you will provide great input to us as both 23 internal and external constituencies. 24 But, likewise, the students and our alumni and 25 other folks in the future that we hope to partner with, 45 RAY EGGEBRAATEN, C.S.R., INC. RAY EGGE(209)E441-1681., INC. 1 we will be listening. If we don't listen and we don't 2 market our merchandise well, we will not succeed in the 3 revenue generation program. 4 Revenue components. Certainly we're going to 5 have to deal with the ongoing CSU infrastructure 6 budgets. That's going to be a challenge, but it's 7 something I think we can handle. There will always be a 8 need to expand our services, and the revenue program 9 will help do that. 10 The program plan for your campus, the 11 preliminary program plan for your campus touches some 12 very important areas of CSU Fresno but doesn't impact 13 every single location as much as you would like, the 14 same with Sacramento. So as we move towards what we 15 call the minimum base line requirements, we hope to move 16 to minimum plus, and of course the advanced environments 17 that will get it to those locations that won't make 18 potentially the first round of installation. 19 But at the conclusion of this program if we 20 are successful, and I know we will be, we will be wired 21 and equipped in ways that we could never do through the 22 normal processes. Again, the revenue suggests that we 23 will develop relationships with our faculty, students, 24 staff and affinity groups themselves, and provide 25 services. These services will be value added services 46 RAY EGGEBRAATEN, C.S.R., INC. RAY EGGE(209)E441-1681., INC. 1 beyond the scope of perhaps what you can get from 2 Circuit City or whomever you buy your program services 3 from now. 4 Some of us don't buy that. I'm an example of 5 that. I have an '86 TransAm that has 120,000 miles on 6 it, and I'm happy to say that I didn't buy the wonderful 7 program that they wanted $900 for, and here it is 1997 8 and it's still running quite well. In fact, got me down 9 here today. 10 But when you have a computer and you load some 11 foreign software and it corrupts your resource, some of 12 us don't know how to deal with it. And we hope to 13 provide you with a vehicle once and for all to solve 14 these problems. One-stop shopping is the way I'd like 15 to approach it. 16 And there will be other business opportunities 17 certainly with other affinity organizations such as our 18 alumni, our community college, which some of you are 19 quite aware of already, elementary and secondary 20 schools, and certainly as we expand our educational 21 programs, both nationally and internationally. This 22 campus is known for some of that already, and you should 23 take pride in the development of your extended learning 24 regional continuing education programs. 25 As we move on, the revenue-generated component 47 RAY EGGEBRAATEN, C.S.R., INC. RAY EGGE(209)E441-1681., INC. 1 includes an educational content element. And this is 2 something that really involves you as faculty. This is 3 something that we're not going to force on you, this is 4 something that many of you are already doing and would 5 like to have greater opportunities. In other words, I'd 6 like to expand my ability, as John said, to produce 7 programming and to distribute and deliver that 8 programming locally, nationally, and internationally. 9 It's something that you have the opportunity to say yeah 10 or nay to. It's nothing that we're going to force you 11 to do. And we will utilize the existing structures that 12 are in place, such as your extended learning regional 13 continuing education group to work with us on this. 14 But having the ability to disseminate 15 programming on a national basis, on an international 16 basis, takes merchandising and marketing skills and a 17 building that we do not have. 18 My own campus has a great dear old 19 relationship with about four or five major publishers. 20 Yesterday we educated 9,000 people by satellite on 21 taxes, but I would have rather educated 90,000 at the 22 same time. And that would have made me very happy 23 financially and made our school a business, which is, in 24 fact, a producer of this program even happier. And we 25 have little minor partners working with us on that 48 RAY EGGEBRAATEN, C.S.R., INC. RAY EGGE(209)E441-1681., INC. 1 program. They are the Internal Revenue, a minor group 2 of people; Franchise Tax Board, another minor group of 3 people, as our partners in that. And that's why we turn 4 out 9,000 practitioners in California. 5 Student development could be such things as 6 helping students write resumes, develop relationship for 7 video conferencing for students, for example, to be 8 interviewed, and some of this is going on already. 9 Telecomp services. I mentioned the issue of 10 Roseville Telephone, that you might have a GTE phone in 11 your home rather than a Pacific Bell phone at a rate 12 beyond that or below that of your Pacific Bell service 13 and with a speed that passes that of your present 14 instrument, and a variety of commercial products that 15 you will be able to buy. 16 I happen to have a cellular phone, a PCS 17 phone, two or three different pagers, which one is 18 international, one which is national, one which is 19 state. It would be nice to have that as one package and 20 certainly would like to have my computer plugged into 21 all of that. 22 So when you look the breadth and depth of the 23 revenue generation programs, we came up with a $2 24 billion plus number, which some folks say is liberal, 25 some folks say is conservative, but it's a heck of a 49 RAY EGGEBRAATEN, C.S.R., INC. RAY EGGE(209)E441-1681., INC. 1 number to think about. And the best way to move forward 2 in this is to, as Peter Drukes says, is to create our 3 future. Best way to predict the future is to create it. 4 And I think that we have the opportunity to do that with 5 your help. 6 Some of the CETI financials, we will begin 7 with $36 million worth of operational funds, that will 8 come directly from the partnership, and expect to raise 9 $120 million through lease infrastructure, $100 million 10 through bonds. And what's really exciting is we're 11 getting phone calls from Wall Street. I didn't think 12 they knew where the west coast was, being a person who 13 used to work for Merrill-Lynch, but it's exciting that 14 we're getting these phone calls already, and $122 15 million will come from services that we are already 16 spending at CSU and will be re-distributed into the CETI 17 partnership program. 18 CETI is committed to acquiring the necessary 19 funds to keep our operation going successfully. And the 20 partnership guarantees that should this not be 21 successful, and it will be successful, God willing or 22 whatever, that if, in fact, we do have a serious 23 problem, that the infrastructure will be something that 24 will resort back to CSU and there will be no debt to CSU 25 on that infrastructure. 50 RAY EGGEBRAATEN, C.S.R., INC. RAY EGGE(209)E441-1681., INC. 1 We expect this program to be above a $350 2 million cost. And it's exciting that one can imagine 3 the annual costs of this program considering the size 4 and breadth and depth of the university system. 5 Let's look at the next slide. Those of you 6 who are mechanical engineers will notice this is the 7 inside of my TransAm. A lot of piping, but it tries to 8 show graphically how this program will work. And I 9 think of it, if I can, as a circle, there is money 10 coming in and money going out. Look at the bottom where 11 it says "concepts of operations," there is a revenue 12 product. And revenue goes into the pipeline that 13 eventually goes into the partnership. And the 14 partnership is, of course, is controlled through a 15 series of agreements that we are working on and 16 certainly want your input on. 17 There will be an organization, a governance 18 organization that suggests nine directors and three 19 outside individuals with CSU playing a major role in 20 that governance as you heard several times before. 21 There will be performance and subcontract 22 relationships and a series of matrix that we'll operate 23 under. To make sure that we're fulfilling your needs 24 and the partnership's needs, and we hope to, through the 25 revenue and through the income streams, refresh and 51 RAY EGGEBRAATEN, C.S.R., INC. RAY EGGE(209)E441-1681., INC. 1 buildout the infrastructure and repay the debt that, of 2 course, is out there for that infrastructure, and 3 through contracts and relationships with other third 4 parties, be them elementary, secondary, government, or 5 through the help and assistance of our alumni and 6 others, there'll be enough revenue in turn to underwrite 7 these investments. And I turn this over to Bill, I 8 believe; is that right? Thank you. 9 MR. BRADFIELD: Thanks, Spencer, and thanks 10 everybody for having us here today. I will be very 11 brief because I know we want to get to the question and 12 answer period. My focus today will be on consultation, 13 and the first thing I want to mention is that I do 14 dislike this slide that's up here because it implies 15 that consultation begins October and ends in November. 16 And of course the reality is that it is not true. This 17 process has been underway for several years, both before 18 my arrival at the CSU, and after scores of focus groups 19 and thousands of surveys and meetings, a direction was 20 formulated, and in that direction principles and 21 guidelines and criteria for successful partnership were 22 developed and agreed upon. There was involvement from 23 all of the campuses through the SIP partnership team 24 that have driven us to this day when we are out on the 25 campuses reviewing the proposed business plans with each 52 RAY EGGEBRAATEN, C.S.R., INC. RAY EGGE(209)E441-1681., INC. 1 of the different campuses. 2 It, from the same standpoint, it also implies, 3 that this slide implies that this process ends at the 4 end of November, which it clearly does not. 5 We recognize that there are areas for which 6 ongoing work needs to be done, will continue to be done 7 to June of next year, through all of next year in some 8 instances, and in the areas of defining reopeners in 9 contracts and the like, it will be going on for the 10 entire life of this relationship. 11 This slide does show what's taking place in 12 the near term. You'll see that the business plans were 13 submitted to us back in early August, we've spent a lot 14 of time going through those business plans. We had a 15 tremendous amount of campus review of these plans that 16 drove us to the selection of the business partner, and 17 took us into phase four of what the technology 18 infrastructure initiatives were all about. And phase 19 four really implies the development of initial 20 implementation plans and consultation and campus visits 21 that we're currently underway with, and it also includes 22 the partnership agreement negotiation, the actual 23 development of what the partnership will be all about. 24 It doesn't have all the tentacles associated with, it 25 doesn't have all the agreements in place, but we're at 53 RAY EGGEBRAATEN, C.S.R., INC. RAY EGGE(209)E441-1681., INC. 1 the point now where we need to drive to an agreement so 2 we can lock the partnership together and then move 3 forward in places like the venture marketplace, the VC. 4 marketplaces, and find out just how attractive we are 5 from a funding standpoint. 6 Through the month of November there will be 7 continued detailed implementation planning and extensive 8 negotiation on the partnership agreement. What I want 9 to say about these two things is that there are six 10 subgroups that are working under the implementation 11 process right now with over 100 representatives, 12 virtually all of them from the campuses who are deeply 13 involved in the process representing virtually every 14 discipline within the university, driving toward getting 15 an agreement together and to begin to flush out what 16 that implementation plan is all about. 17 In December we plan to have those, both of 18 those documents in a condition where they can be 19 generalized into the university community, to all of the 20 campuses for people to take a look at, get their 21 information to back to us. We hope to have the 22 partnership agreement signed by the 15th of December. 23 That will include an overview of the implementation plan 24 and some of the detail, but the implementation plan, 25 particularly on campus specific basis, will take place 54 RAY EGGEBRAATEN, C.S.R., INC. RAY EGGE(209)E441-1681., INC. 1 through the first half of 1998. 2 Next slide. When we look at the campus focus 3 and the kinds of things that we're looking for, what 4 we're asking the campuses to particularly focus on is 5 what works from your perspective within the CETI 6 business plan. And as you read it, what do you believe 7 should be improved within that plan. And then how will 8 the individual campuses prepare to make that plan work 9 for their campus. 10 Some of the areas that we've identified, and 11 clearly this is not an inclusive list nor meant to be 12 strained in any way, but it's some ideas of things that 13 we've heard from the campuses and that we need input on 14 as we drive toward the goals of implementation plans and 15 agreement. What impact do you see this having on status 16 quo on the campus, what issues do those raise, and then 17 what resolution do you see. How about people issues. 18 What kind of matrix for success would you include as 19 part of the program. And then operation issues, how do 20 we handle the ongoing day-to-day operations. And as I 21 mentioned, there are subcommittees that are addressing 22 each of those topics and would welcome your input. 23 How do you get your input to us? Pretty 24 straightforward. The first way is this way. We're 25 visiting every campus doing one of these types of 55 RAY EGGEBRAATEN, C.S.R., INC. RAY EGGE(209)E441-1681., INC. 1 sessions, and we're gathering all of the issues, all of 2 the input, and all of the suggestions for resolution, 3 and kind of weaving that into the fabric of what it is 4 that we're working on. 5 There's a Web page, which I'll give you the 6 address for in a couple of minutes, you can get up and 7 find out the current status of where anything is at any 8 given time. There is also a list serve for questions 9 and are guaranteed getting back to you from those. 10 There are numbers of campus forums taking place, there 11 is communications with your SIP representative, who is 12 Ben Quillian. Right, Ben? 13 MR. QUILLIAN: Right. 14 MR. BRADFIELD: Ben's the man. And Ben 15 participates in a every-Thursday-afternoon conference 16 call with the staff on the implementation team back in 17 Los Alamitos to review issues on specific topics and 18 begin to crystallize what our response will be and what 19 our negotiating position will be, both in the agreement 20 and in the implementation plan, and then normal campus 21 channels of passing information along. 22 Where you can find out more is on the Web 23 page, and there is the address. I suspect that many of 24 you have already been there, have seen and done much 25 with that. In addition, there is the list serve, and 56 RAY EGGEBRAATEN, C.S.R., INC. RAY EGGE(209)E441-1681., INC. 1 I'll let that sit here for a couple minutes. Everybody 2 got that? I'll hang these two slides up on the door as 3 I leave. Okay? 4 This will be trickier. In terms of a list 5 serve, here are instructions as to how to get to us. 6 The idea here is kind of an open forum for you to get 7 your stuff to us, and we have an organization that is 8 doing nothing but addressing these and the issues that 9 come up in the conference calls and through these campus 10 visits. And with that, I'll leave that up for you for a 11 couple more seconds. With that, what we'll do is open 12 up the floor to questions and get some light in here and 13 we'll get underway. 14 MR. QUILLIAN: Thank you, Bill. 15 MR. BRADFIELD: Thanks, Ben. 16 MR. QUILLIAN: We will now turn the 17 questioning over to the information educational 18 technology coordinating committee which sits in front of 19 you. 20 MR. WEST: I'm going to ask Professor Cagle 21 if he would ask to get us started. 22 ITEC COMMITTEE MEMBER: I'm sure we all have 23 many feelings about this. I have some very positive 24 things about it and I have some things that I think are 25 serious concerns to be addressed. So I'm not going to 57 RAY EGGEBRAATEN, C.S.R., INC. RAY EGGE(209)E441-1681., INC. 1 talk about all of them now, but I want to raise one 2 question to ask you to please comment on that relates to 3 the revenue flow of the CETI proposals as I've read 4 about it in the large proposal and a couple of these 5 forums. 6 One of the things that one of your charts on 7 the financials mentioned is that $122 million of 8 existing instructional technology resources that are now 9 being spent on the campuses will be part of building out 10 this infrastructure and so forth within the limits of 11 what it is proposing. And I have a couple of huge 12 concerns about that. 13 As a professor in the system for about 27 14 years and as a department chair for 12 years, the 15 concerns have to do with the fact that money isn't that 16 discretely seen in the system, and in particular in the 17 area of the computers. The way in which the campuses 18 have in the face of the state's lack of explicit 19 provision for buying computing resources has forced us 20 to be very inventive and creative in how to meet these 21 needs and to buildout the infrastructure on our 22 individual campuses. And so one of the things I'm very 23 concerned about is the fact that this proposal, as 24 particularly even in the early slides that we were 25 shown, this is limited in its scope, that it doesn't go 58 RAY EGGEBRAATEN, C.S.R., INC. RAY EGGE(209)E441-1681., INC. 1 much beyond the face plate, I think is the term that is 2 often used, that it's not going to include buying the 3 faculty work stations. 4 MR. WEST: That's wrong. 5 ITEC COMMITTEE MEMBER: Well, but that's what 6 the documentation, in fact, says, and that's what the 7 slides say, that it doesn't. Then another thing that it 8 doesn't include is specialized labs and other kinds of 9 resources that go beyond the kind of base line 10 hardware/software need, and what concerns me is that the 11 moneys that are now on the campuses, ours included, that 12 provide the specialized resources, which is I think 13 actually the predominance of what we're expending our 14 moneys on in the school, are inextricably tied into 15 these other moneys. 16 So it seems to me that if CETI pulls up all 17 this money into the corporation, we're not going to have 18 any money left to continue to operate the programs as 19 they have evolved. It's sort of like they're going to 20 take all of this money that departments and schools and 21 university has used to buy work stations and to equip 22 the labs, and pull it all up to the top and say well, 23 now we're going to sell you some work stations with the 24 money you have left, and it just, superficially it kind 25 of seems that way. 59 RAY EGGEBRAATEN, C.S.R., INC. RAY EGGE(209)E441-1681., INC. 1 And so I'd like to hear what the current 2 thinking is, you know, in this evolutionary planning, 3 and I have heard that a lot of these things are under 4 serious discussion and there have been some changes in 5 the positions of the CSU and of the corporate partners. 6 How are you kind of dealing with this? 7 And part of the concern also has to do with 8 the diversity of academic programs, the differences in 9 the program needs across the university results in 10 diverse solutions. And the way that we've tried to meet 11 these and provide these solutions is very, very 12 complicated. And I'm pretty well convinced that nobody 13 can produce a spreadsheet in the short run that shows 14 exactly where the moneys are and how they have been 15 expended, so that's the general topic. Thank you. 16 MR. WEST: Thank you very much. I think 17 that's an excellent question, and I'm going to ask both 18 Spencer and Bill to help answer that question. With 19 regard to faculty and staff work stations, I think that 20 is an accurate observation of what was submitted. But 21 the intent within scope was, is, and will be to go 22 through the desktop for faculty and staff hardware and 23 software. With regard to the specialized labs, you're 24 absolutely correct, that's outside of the scope. 25 Now, going back to the $122 million, we are 60 RAY EGGEBRAATEN, C.S.R., INC. RAY EGGE(209)E441-1681., INC. 1 attempting to grow down and understand the piece parts 2 of that. Those are the numbers that were reported to us 3 by the campuses, and the report -- the reported 4 information was to be for those expenditures that were 5 within the scope and not outside of the scope. So 6 you're probably very accurate that, you know, in some 7 cases people were able to ferret out those things, in 8 other cases they were not. People may have gotten it 9 incorrect, and so we definitely have to verify 10 those -- that number. But that's a working number that 11 we go into. 12 For example, I think one of the things that 13 was purposely excluded was the funds that campuses were 14 using for one-time purchase of equipment, because we 15 didn't see that as a permanent viable source of funds. 16 Is that correct, Bill? 17 MR. BRADFIELD: True. 18 MR. WEST: That would be my observations on 19 that. I think it's a very pertinent question, one that 20 we're very, very concerned about and you've really 21 helped crystallize a lot of parts of that. Bill and 22 Spencer, do you want to add anything to that? 23 MR. BRADFIELD: Yeah, let me just add one 24 thing. One of the misconceptions that has been around 25 is that, in fact, I've heard even in the chancellor's 61 RAY EGGEBRAATEN, C.S.R., INC. RAY EGGE(209)E441-1681., INC. 1 office as recently as a week ago, as of January 1st 2 we're going to have to write a check to GTE and the CETI 3 team for $122 million, and that's not true. This is not 4 about taking your money and re-directing it and spending 5 it in other places. 6 If you're buying things today, you're buying 7 work stations, you're buying communications services, 8 help desk services and the like, the idea with CETI is 9 that they are the sales agent for providing these kinds 10 of services, so the intent would be if you want to buy 11 work stations with your existing funds, you buy the work 12 stations through the CETI organization, which would 13 establish relationships with other organizations, 14 hardware and software providers and the like, and you 15 would reap the benefit of the discounts that one would 16 be able to get from not just the purchasing power of the 17 CSU but the purchasing power of all of the CETI 18 partners. 19 We spend $40 million in work stations in a 20 given year, and the CETI partners spend about three and 21 a half billion, and that gives them tremendously more, 22 much more purchasing power than we could ever hope to 23 generate. So the idea is not to take your money, it's 24 to give you better options of places to spend that money 25 through -- by buying things through CETI. 62 RAY EGGEBRAATEN, C.S.R., INC. RAY EGGE(209)E441-1681., INC. 1 MR. SPENCER BRYANT: Those are examples. Let 2 me give you a couple of others. This campus happens to 3 be equipped with a Fujitsu switch. I happen to have a 4 Communist brand called Lucent, better known as AT&T. 5 Certainly what we're looking for value added in any 6 resource that we bought for our campus, we want to have 7 newer and better, and if the Fujitsu switch could 8 replace our Lucent switch, then we can save some money 9 that goes into now the CETI pot. 10 In our case, that's a $900,000 investment, 11 plus about $400,000 a year for maintenance and support, 12 plus approximately $950,000 for long distance services. 13 That's part of the 122 million. 14 So if you look at Bill's number of $40 million 15 for terminals, last year my campus spent 500,000 on what 16 I would call standard work stations, not advanced, 17 standard work stations to go into faculty/student 18 environments, and you multiply that out at some number, 19 and you can certainly get very quickly from 30 to $50 20 million, depending on what the campus abilities might 21 be. 22 If you throw in those campuses that do not 23 have switches, as you were lucky enough and I am lucky 24 enough to have, there are 12 campuses out there. That 25 alone would raise $12 million. So there are a lot of 63 RAY EGGEBRAATEN, C.S.R., INC. RAY EGGE(209)E441-1681., INC. 1 internal dollars that could easily be moved into this in 2 many ways that would help us all in meeting the 122 3 number, but at the same time would bring value added at 4 lower costs, and that's my bottom line. If I can save 5 50,000 to $100,000 on my switch and have value added, 6 that's more money than I could then put into buying work 7 stations for my faculty and staff and my student 8 laboratories or to underwrite the further development of 9 our infrastructure or development of professional 10 development activities for our faculty and staff. 11 That's what the partnership is about. 12 MR. WEST: John, you would like to make a 13 comment? 14 MR. WARRY: If I can hopefully shed a little 15 more light. It's a very good question and would like to 16 clear it up as best as possible and put it in the proper 17 perspective. Being involved in somewhat the financial 18 spreadsheets that were submitted originally with our 19 proposal, I can assure you that we've looked at the $122 20 million as it's being spent currently is in an operating 21 budget side. We have requested further information on 22 what that entailed, and most of what that entails are 23 services that are being provided. 24 So it is my understanding that there is no lab 25 equipment, all those were outside of what we had 64 RAY EGGEBRAATEN, C.S.R., INC. RAY EGGE(209)E441-1681., INC. 1 requested, this was the operating budget. When we 2 looked at that, it was our understanding in the 3 beginning years what that operating budget would cost us 4 now, that we would be running it in excess of the 122 5 million. So the first years we will take a loss on it 6 because we will increase the services. So the program 7 was not to take the 122 million that you're spending for 8 AT&T, PacBell, GTE, Cellular One and the like, these 9 were service contracts. We were to assume those service 10 contracts, add more money to those service contracts, so 11 in actuality to the partners we were going to take that 12 operating budget well beyond 122, we were going to lose 13 on it because we need to provide you 24-hour access to 14 help us in training, which is not part of the current 15 budget. Then over time we would hopefully benefit from 16 the sharing of better pricing with those contracts. 17 See, some of those contracts as you submitted 18 them back to us are long term and you're committed to 19 them and we have to sustain the obligations there. But 20 through time we could better utilize that money if we 21 had it all in one pool, that being is you've done very 22 good at negotiating your PacBell rates, your long 23 distance rates and so on, on campus. Some other 24 campuses may have done a little better, some a little 25 worse. We've seen everything up and down the coast. 65 RAY EGGEBRAATEN, C.S.R., INC. RAY EGGE(209)E441-1681., INC. 1 You put it all together and hopefully we can drive that 2 down. 3 So if there is one thing I can say, it was our 4 opinion that the operating budget would go beyond the 5 122, nothing really would change. Those services and 6 contracts still need to be provided, but in time that 7 could be improved. 8 MR. WEST: How, Ben, do you want to 9 point -- you have this structured that -- 10 MR. QUILLIAN: No, no, we do not have a formal 11 structure, and I'm going to throw it open to the ITEC 12 members here. 13 MR. WEST: Okay. We'll just work our way down 14 the -- okay. 15 ITEC COMMITTEE MEMBER: I'm Bob Threlkeld, and 16 I have two different kinds of questions. One of them, 17 first of all, I am very supportive of this idea. I 18 think it is -- many of us in the technology field have 19 seen this as an insoluble problem in the CSU, and I 20 think you point toward a solution, but I have some real 21 questions. 22 One of them is the financing related to what 23 the partners think they are getting from the CSU as it 24 relates to what we really have the most of, and that's 25 intellectual capital. And let me give you a for 66 RAY EGGEBRAATEN, C.S.R., INC. RAY EGGE(209)E441-1681., INC. 1 instance, and you can sort of explain how it works for 2 me. 3 Let's say GTE says what we need is 3,000 4 people trained with an MBA. And will the partnership or 5 will GTE look to the CSU to provide that, and will 6 the -- will GTE look to the CSU to provide that at no 7 cost to them? Because clearly we have faculty, we have 8 expertise, but we don't have -- but they're sort of all 9 busy right now. So will there be additional 10 compensation for this partnership-related education? 11 That's my first question. You want to deal with that 12 one? 13 MR. WEST: Yeah, let's not get too many. I 14 wish I had a visual. Think of CETI as being -- having 15 three business lines. One and foremost it is going to 16 provide a technology -- it's going to have a 17 telecommunications technology utilities services 18 function. The primary consumer of that service will be 19 the CSU. But it would not necessarily be the only 20 consumer. 21 For example, we already have another consumer, 22 namely the community colleges, by virtue of the 23 community colleges in the CSU partnering, foreseeing 24 that, and we have some high schools as well in that. So 25 one business of CETI is, in fact, and the primary 67 RAY EGGEBRAATEN, C.S.R., INC. RAY EGGE(209)E441-1681., INC. 1 business, is the technology utilities services business 2 as defined by the scope of this project. 3 The second business, let's call it, we've 4 termed it education, training and broker -- education, 5 training, brokering. The intent was not to have CETI be 6 a 24th campus, virtual university, or any of that. What 7 it would be, in essence, is a broker between the CSU 8 campuses, whether it be through the existing schools on 9 respective campuses or a combination of them or extended 10 ed, and clearly extended ed is a vehicle that would 11 become a provider. So you think of CETI as the broker, 12 marketer to new markets. 13 You need to start from the premise that 14 education is a growth industry. They're projecting that 15 one out of every seven people in the work force needs to 16 be in some sort of professional, ongoing professional 17 growth and development. That is 21 million FTE. 18 Specifically the answer, CETI has no intent of 19 saying you need to provide that free. So that when you 20 look at the projection of the costs, there is a cost of 21 doing business. The cost of doing business if we come 22 to a school of business at Fresno, or four or five of 23 them, there would be a -- we would -- CETI would pay for 24 that service. It would then become the broker to new 25 markets. 68 RAY EGGEBRAATEN, C.S.R., INC. RAY EGGE(209)E441-1681., INC. 1 ITEC COMMITTEE MEMBER: Okay. 2 MR. WEST: Now, have I answered all parts of 3 the question or -- 4 ITEC COMMITTEE MEMBER: Yes, you have. The 5 second question for me is a more personal one within my 6 own organization, the academic innovation center. We 7 have a number of good, well-running units, and let's 8 take, for example, one of them. We're responsible for 9 all the technology training for faculty and staff on the 10 campus. 11 Under the plan as envisioned, would 12 ultimately -- what would be the relationship between the 13 campus training and CETI, and what sort of the worst 14 case scenario for one of our campus trainers? 15 MR. TOM WEST: Let me, before I answer that, 16 before I point to somebody to answer that question, I 17 didn't fully complete the other part. There is a third 18 part of the business, I want to go back, and that is the 19 commodities distribution. And clearly you've heard the 20 notion of the commodities of the commercial partners 21 coming to groups within the CSU and external, but it is 22 conceivable that there are things in terms of 23 informational resources and things of this nature that 24 are of a commodity nature that would be distributed to 25 their clientele as well, so, you know, all three of 69 RAY EGGEBRAATEN, C.S.R., INC. RAY EGGE(209)E441-1681., INC. 1 those areas. I think the clearest one we have a clear 2 picture on is the technology utilities services, because 3 we've scoped that out. 4 Certainly we understand the rudiments of 5 education, training, and brokering education and 6 training, but clearly we see building on the 7 capabilities of our existing campuses. The commodities 8 we're looking to our partners to have a whole better 9 understanding of how to do that business and being able 10 to understand our culture and see what we can actually 11 bring to the table. So, Bill wants to make a comment on 12 that, and then we'll come to your new question. 13 MR. BRADFIELD: Just quickly, Bob. The worst 14 case would be that your existing trainers would have no 15 change at all in terms of any more resources, any more 16 capabilities, any more training to keep them up to 17 speed. 18 Best case from my viewpoint would be that they 19 would be provided with more resources, with more 20 professional training to keep their skills refreshed so 21 they could bring added value to their constituency, and 22 could be supplementing in those cases when they need it 23 with resources from within the CETI organization or 24 within other campus to assist in peak times. 25 So, you know, I think it's a real, for the 70 RAY EGGEBRAATEN, C.S.R., INC. RAY EGGE(209)E441-1681., INC. 1 individuals in the IT organization, this whole process 2 is a real win, because one of the things that comes from 3 it is access to more resources and a very definitive 4 commitment to improving and increasing the ongoing 5 information, technology, and training so that our people 6 can be that much more professional and have their skill 7 sets where they need to be on a regular basis. 8 CETI COMMITTEE MEMBER: I think a shorthand 9 answer to that solution as part of -- will be a process 10 issue which would involve you and your counterparts to 11 figure out how to optimize the limited resources we 12 currently have within the CSU, within respective 13 campuses within the CSU and how to complement that with 14 resources of the corporate partners to, in fact, provide 15 better, more services to our end user but also to keep 16 our technical expertise on the growing edge. 17 ITEC COMMITTEE MEMBER: Let me just follow 18 that up with just a couple of real brief specifics. Do 19 you see IT people working for someone not on the Fresno 20 campus, and do you see ultimately the necessity for them 21 to move from one location to another? 22 MR. WEST: The answer to the latter question 23 is very unlikely, I want to say never. The answer to 24 the former question, the first question is probably not 25 initially, but it depends on how it evolves. 71 RAY EGGEBRAATEN, C.S.R., INC. RAY EGGE(209)E441-1681., INC. 1 ITEC COMMITTEE MEMBER: Okay. 2 MR. QUILLIAN: Just a brief comment before the 3 next question. It is approaching 11:00 o'clock. This 4 meeting is scheduled to go until 12:00. I want to 5 assure the people sitting behind us that you will indeed 6 get an opportunity to ask questions, and so I ask the 7 members of the ITEC, to the extent possible, if we could 8 move right along to insure that the audience gets a 9 chance to ask their questions. 10 MR. WEST: And we'll make an effort to be 11 briefer in response. 12 ITEC COMMITTEE MEMBER: Sir, I apologize for 13 going back over an issue that has already been covered, 14 but I feel very uncomfortable with regard to the $122 15 million that has been discussed, and listened very 16 carefully to the answer to John Cagle's questions, so I 17 guess I'll try to phrase this so that the answer will be 18 very short, but I submit that the $122 million figure 19 was arrived at based upon a faulty understanding in the 20 field of the baseline and level of proposed services 21 that CETI will be delivering, and I further submit that 22 this survey should be done again now that there is a 23 better understanding of those parameters. Is there 24 agreement with that or is there another point of view on 25 that? 72 RAY EGGEBRAATEN, C.S.R., INC. RAY EGGE(209)E441-1681., INC. 1 MR. WEST: The intent, I don't think, would be 2 to do another survey, but to, in fact, use that part of 3 it, so I think to really try to understand what those 4 numbers really mean, I don't know what the -- I don't 5 know what percentage or what the amount was from Fresno, 6 but certainly we can dissect that and work on that on 7 each campus. So the answer I guess is yes, but not in 8 the -- we want to be a much more precise about it than 9 perhaps we were able to be the first time. Is that 10 fair, Bill? 11 MR. BRADFIELD: It's fair. There is an 12 organization in the chancellor's office under Lenore 13 Roster who processes drilling down into those numbers, 14 and the extent that you've got some specific issues, you 15 and I should probably talk to make sure we get those 16 into her hands. She goes on a campus-by-campus basis. 17 She can get that under control. 18 ITEC COMMITTEE MEMBER: And, for the record, 19 my name is Carl Lumly, I didn't say that at the 20 beginning, but since we're taking a record. 21 My second question is, there's, and it's in a 22 different vein, the intellectual property rights that 23 were discussed today, but there is also this great 24 emphasis on marketing for profit, and I see a great 25 problem here as to who owns what. And I would 73 RAY EGGEBRAATEN, C.S.R., INC. RAY EGGE(209)E441-1681., INC. 1 appreciate it if we could delve into that a bit further. 2 Apparently software would be used that is part 3 of the CETI, and what, would there be some claims that 4 then this belongs to CETI, or CETI has a share in the 5 intellectual property rights? I think there is a number 6 of issues that have to be looked at, and I just wondered 7 how far you're going in that at this point today. 8 MR. WEST: Spencer. 9 CETI COMMITTEE MEMBER: Why don't we have Bill 10 start and I'll pick up from there. 11 CETI COMMITTEE MEMBER: The issue of property 12 rights for things that are developed by and/or for CETI 13 is an issue that we're in the process of negotiating 14 right now as one of the items that we identified in our 15 initial session yesterday afternoon, who would own 16 property to operating systems, to building and 17 collecting systems, if those kinds of things were, in 18 fact, developed. 19 Clearly our going-in stance on all of those 20 things is that we own that. That's our initial 21 position. My suspicion is that the partner's initial 22 position will be they own that, and they'll be some 23 level in between that will settle that. 24 Relative to the educational -- education and 25 training of intellectual property, I don't think there 74 RAY EGGEBRAATEN, C.S.R., INC. RAY EGGE(209)E441-1681., INC. 1 is any doubt in anybody's mind that the intent is that 2 that resides with the campuses, with the faculty. 3 CETI COMMITTEE MEMBER: We will follow the 4 same format that has been used throughout CSU and their 5 many campuses that already have in place copyright, 6 intellectual property right, and patent agreements. 7 Certainly some of those may have to be improved to 8 support a variety of royalty issues that are not in 9 place now. 10 Some campuses have been very outgoing and 11 enterprising in terms of providing vehicles by which 12 faculty, now at least at my campus, I write significant 13 checks to faculty for productions and programs and 14 services that they have provided for us. 15 The work, though, content, the work is in 16 their name. There may be joint ownership, there may be 17 partial ownership, it depends on the relationship that 18 was established with the faculty member, but the content 19 itself is always owned by the faculty member. And that 20 is something that's very important to us in terms of 21 their ability to take their content and move it from 22 place to place. 23 ITEC COMMITTEE MEMBER: I have a question 24 related to the same thing. 25 MR. WEST: If -- could you identify yourself 75 RAY EGGEBRAATEN, C.S.R., INC. RAY EGGE(209)E441-1681., INC. 1 for the -- 2 ITEC COMMITTEE MEMBER: For the record, I'm 3 Mike Ortiz, the interim provost, and my question relates 4 to if the CSU's do not develop a product that the 5 partnership feels is important to put out there, is 6 there the potential that this product could be developed 7 by the partnership and go out there with the CSU seal on 8 it when it's not really related to the CSU system and 9 that it wasn't created by any of the faculty on any of 10 the campuses? 11 MR. WEST: I think that's a good question and 12 one that we do not have an answer for at the moment. 13 CETI COMMITTEE MEMBER: There's a whole issue 14 of branding that's associated with everything that CETI 15 would be doing, and I really don't believe that CETI 16 would create something under a CSU brand that was not 17 CSU generated. The potential, and, again, one of the 18 things you need to recognize, the document, that's a 19 going-in position on the part of the CETI team of that 20 partnership. 21 I think as we get to the issue of branding, 22 and that really gets to be a critical one, that's got a 23 lot of issues that are associated with it relative to 24 what would go out with whose name on what. And I, as 25 Tom says, I don't think we have all the answers at this 76 RAY EGGEBRAATEN, C.S.R., INC. RAY EGGE(209)E441-1681., INC. 1 point, but part of the process of these sessions is to 2 get the feedback. And we've heard loud and clear, at 3 least here, what your stance is on that. 4 ITEC COMMITTEE MEMBER: That changes a little 5 bit the concept of the second leg of the brokering 6 piece, at least. Another question I have related to a 7 slide that was presented when it says that the CSU will 8 play the majority role in the partnership governance. 9 Could you explain that a little bit more in terms of 10 what the majority role is? I think we understand what 11 majority means, but is it majority, is it major, was the 12 term properly used when it said majority and what that 13 means? 14 MR. WEST: Do you want to try to respond to 15 that, Bill? 16 CETI COMMITTEE MEMBER: Yeah, I can take a 17 shot at that. The issue of majority means that we 18 actually control the decisions that are being made. 19 There's a proposal in the CETI proposal that identifies 20 a board of directors that would imply something 21 different than that. Our position and their subsequent 22 position through discussion so far is that we do -- we 23 will have the majority issue, majority control issue 24 from a business and financial standpoint in that 25 organization. 77 RAY EGGEBRAATEN, C.S.R., INC. RAY EGGE(209)E441-1681., INC. 1 ITEC COMMITTEE MEMBER: And I have one last 2 question, and that is, since currently California State 3 University Fresno, our campus, is in phase three of the 4 buildout, if you will, and we look at the educational 5 products, et cetera, are those first out of the box 6 going to have a leg up on this in terms of delivering 7 products? Are we going to be in competition with each 8 other as opposed to going into this as a system, is 9 that -- are there controls for that? 10 CETI COMMITTEE MEMBER: One of the things to 11 keep in mind is we need to separate infrastructure build 12 up from revenue generation, two separate items. The 13 issue of phase three relative to Fresno and the other 14 campuses, the issue of phase three really deals with 15 infrastructure buildout and the implementation plan 16 which is where phase three is referred to identifies the 17 first phase as being libraries and faculty offices as 18 being -- and that's system wide, that's all the 19 campuses, and then the completion of the intranetworking 20 and the administrative offices in the third phase for 21 Fresno. Again, that was one groups look at how that 22 might roll out, and it may roll out completely 23 differently as we get further down the path. 24 Relative to revenue generation, we're in the 25 process right now of looking for little hanging fruit, 78 RAY EGGEBRAATEN, C.S.R., INC. RAY EGGE(209)E441-1681., INC. 1 fast items, quick start, early successes that we might 2 be able to get, and the process of identifying what 3 those might be in getting them a jump start. Again, 4 there's a group that is in the process of putting that 5 together right now. The plan is not to have you in 6 competition with each other. 7 CETI COMMITTEE MEMBER: I would like to add 8 that I think phase one is set. I mean, we're committed 9 to what we're articulating in phase one. I think phase 10 two and three are subject to discussion, consultation 11 within, and I do believe there is perhaps some linkage 12 with, a lot of linkage with those campuses that are 13 prepared to provide courses and things of this nature. 14 The positioning of phase two or three buildout would be 15 dependent upon and should be dependent upon it. 16 The other thing, Michael, that I would like to 17 go back, got a little chuckle about, you know, not 18 answering the question about your first question. And 19 the reason I said, you know, we don't have a solution to 20 that, frankly I just can't imagine that within our 22 21 campuses, anything that we want to -- any opportunity 22 that we have to create a new market to deliver a program 23 that we don't have the wherewithal and that there will 24 not be the incentive for at least one or more campuses 25 to step up to it. I guess we just never thought of the 79 RAY EGGEBRAATEN, C.S.R., INC. RAY EGGE(209)E441-1681., INC. 1 down side issue, just never dawned on us that we would 2 have to go somewhere like the University of Maine when 3 they had their educational network of Maine when none of 4 the campuses stepped up to a specific program, they went 5 and bought the program out of the University of South 6 Carolina. I couldn't imagine that happening here, just 7 couldn't, so you're catching us short. We'll have to 8 give that some thought now. Other questions? Yes. 9 ITEC COMMITTEE MEMBER: Yes, I would like to 10 address the issue of, the issue of the user side of the 11 face plate and the involvement with the contract with 12 that, because it seems to me that while there are a lot 13 of potential benefits, not the least for the faculty the 14 notion of a nice new machine on their desk every year or 15 two, that there -- it is also an area that is fraught 16 with some serious potential problems because of its 17 interface with personnel on the campus. 18 This campus has been in the last few years 19 through three different modes of servicing, one of them 20 a centralized process through ITS, one of them by means 21 of contract with an outside provider, and both of those 22 I think it's fair to say were inadequate, the second one 23 very expensive and inadequate, and we're now in a mode 24 where individual components of the university schools 25 and administrative departments have their own -- the 80 RAY EGGEBRAATEN, C.S.R., INC. RAY EGGE(209)E441-1681., INC. 1 individual schools have their own technical support, and 2 they choose those technical support on the basis of the 3 kinds of technical equipment and the kinds of problems 4 that they see as most important, and I think for the 5 most part that's worked very well. 6 I am concerned about the notion that CETI 7 would be administering on campus service, even using on 8 campus staff. I have some concern about what I see as 9 an effort to make software and hardware uniform across 10 the campus. There are commitments for a variety of 11 reasons by a variety of programs to different platforms, 12 and making that uniform does not seem to me to be, while 13 it may engender some efficiencies, it does not seem to 14 be -- to meet the kinds of range of flexibility required 15 of good academic programs. 16 And I wonder if you could comment on what you 17 see, one, could the service portion of what is proposed 18 be basically a separate item which is settled on campus 19 by campus. In other words, there are various modes of 20 handling that from not having a service contract with 21 CETI at all and handling it locally, to having CETI take 22 over the whole thing. What do you see as the 23 possibilities? 24 CETI COMMITTEE MEMBER: Okay. You want to 25 try that, Spencer? 81 RAY EGGEBRAATEN, C.S.R., INC. RAY EGGE(209)E441-1681., INC. 1 CETI COMMITTEE MEMBER: You've asked a series 2 of questions. Try to quickly note some of them, so 3 forgive me if I miss one or two. Let me get into the 4 issue of centralized versus contracted and distributed 5 mode, since I lived through that myself, I know how 6 challenging that can be. In fact, I'm responsible, like 7 Jim Morris, for some of that on my campus. 8 First of all, what we're attempting to do in 9 our thinking is that we cannot handle the vast 10 development of these resources with the present staffing 11 environment, and well, what we'd like to do is to, as 12 you have indicated, standardize as much as possible, 13 that does not mean lack of flexibility in terms of the 14 platform or how that platform will be configured. It 15 means that it will have a variety of different flavors 16 that one could purchase, but it will have a standard 17 package and load, but that does not mean that you could 18 not add to that load, so that should support some of the 19 uniqueness of specialized programs. But we will 20 hopefully be able to collaborate, chat, and send E-mail 21 in a way that we cannot do now between campuses, and, in 22 fact, some campuses can't do it between one department 23 and another. 24 In terms of the maintenance program, I think 25 the difference is that we have never really used good 82 RAY EGGEBRAATEN, C.S.R., INC. RAY EGGE(209)E441-1681., INC. 1 performance matrix to insure success or at least 2 identify accountability in success or failure. And one 3 of the requirements for this program is that we develop 4 good matrix and that we monitor those in terms of 5 performance, both the performance of the corporation, 6 the performance of the campus, and the performance of 7 the CETI organization. 8 It's our job, your job to help us make sure 9 that we are providing successful service. If we're not, 10 we need to get our act together. The standard platform 11 is one that I'd like to get some help with from any of 12 you who would like to participate in that as to what are 13 the challenges that you feel prevents you from having 14 the flexibility you want. I'm not suggesting that every 15 piece of hardware must be procured through the 16 partnership, certainly there will be a baseline of 17 products that we will offer, and as I said, they will be 18 flexible enough that you can order more than one brand 19 or potentially more than one type. But if you so desire 20 and there are enough silicon graphics in the mix, in 21 fact, my campus does buy these, perhaps yours does, 22 throughout the system you should also take on option and 23 try to acquire that through the partnership because we 24 may be able to buy it at a price, again, less than you 25 can. Now, it may not be configured the way you want it, 83 RAY EGGEBRAATEN, C.S.R., INC. RAY EGGE(209)E441-1681., INC. 1 and that's okay, but you'll buy the hardware and we'll 2 work out the configuration later. 3 So we're trying to provide flexibility and 4 provide a standard base with enough in that standard 5 base that it's not concrete, and if you have any 6 thoughts as to what would limit your ability, please let 7 us know. We are really greatly interested in that. I 8 can assure you, I'm going to have to face my faculty as 9 I'm facing yours in the same issue, and having sold them 10 computers for the last ten years, I have a reasonably 11 good idea of the challenge, but we want to provide as 12 much flexibility and capability without limiting the 13 scope of the program. 14 ITEC COMMITTEE MEMBER: Can you describe the 15 relationship of the technical support personnel on 16 campus to the campus and to CETI? 17 CETI COMMITTEE MEMBER: That is something that 18 is still, I suppose, in the conceptual stage, but if you 19 want me to give you some thoughts, because I think 20 that's why you're here, I have discussed it with my 21 staff, and basically what we view it as that we would 22 begin our program after baseline activities are being 23 resolved by the contract relationship. 24 And in another way of speaking as to how to 25 describe it, is that the baseline activities would be 84 RAY EGGEBRAATEN, C.S.R., INC. RAY EGGE(209)E441-1681., INC. 1 handled through CETI, with, although specialized 2 applications, that this is to specific needs, now are 3 being served by those of you who have those expertise in 4 your departments, and those of you who do not, you can 5 use the CT net staff, is that what you call yourself, or 6 ITS, is it, Jim? We have the same nomenclature. You 7 stole 278 from us, by the way, I want you to know that. 8 Or I stole it from you, I'm not sure, but in any case, I 9 think what we're suggesting is there is so much work 10 that has to be done, by providing baseline we can get 11 the more unique problems solved which right now we're 12 having a hell of a time trying to deal with, so my staff 13 would work under performance matrix that they're 14 presently working under. 15 Let me give you an example of that, because I 16 think that's important. We have a contract with AT&T, 17 with Pacific Bell, with Sprint, which we use. We are 18 responsible for exit demarcation points, they are 19 responsible for X. If we don't perform, they charge us. 20 If they don't perform, we charge them. Well, we know 21 where the cutoff point is and it's very helpful. 22 I think the challenge is going to be, not in 23 this campus, perhaps in some others where they may not 24 have the talent or skill sets, but what CETI brings to 25 the program are other campuses may support that campus, 85 RAY EGGEBRAATEN, C.S.R., INC. RAY EGGE(209)E441-1681., INC. 1 and certainly the professional development that some of 2 our individuals need, and have the capability after they 3 get that professional development to meet the needs of 4 that particular performance criteria. So I see it as a 5 natural progression of things that we're presently 6 doing, all of us who are in IBM environments know that 7 we have certain responsibilities, and, again, the 8 demarcations start and end at certain points, and that 9 works quite well. 10 MR. QUILLIAN: One more question, then I want 11 to open it to the floor. 12 ITEC COMMITTEE MEMBER: We have certain staff 13 that's responsible for servicing the specialized labs. 14 How would these be configured under your new order of 15 things? 16 CETI COMMITTEE MEMBER: Just the way they are 17 now. 18 ITEC COMMITTEE MEMBER: So they will continue 19 to report to the schools? 20 CETI COMMITTEE MEMBER: Right. 21 ITEC COMMITTEE MEMBER: Deans and -- 22 CETI COMMITTEE MEMBER: Well, yes. And let me 23 go on and say that it may be conceivable in the long run 24 that you might want to, as the dean, change that 25 relationship and ask the local campus service that is 86 RAY EGGEBRAATEN, C.S.R., INC. RAY EGGE(209)E441-1681., INC. 1 here to do that for you, but the intent is that that is 2 out of scope at the moment, that is out of scope; is 3 that right? 4 CETI COMMITTEE MEMBER: Yes. However, that 5 doesn't mean that you could not acquire that work 6 station if, in fact, we were providing one that met your 7 needs. 8 CETI COMMITTEE MEMBER: He's talking about 9 service. 10 CETI COMMITTEE MEMBER: The people, we don't 11 expect any change, none at all. 12 ITEC COMMITTEE MEMBER: So nobody's going to 13 cut our staff. 14 CETI COMMITTEE MEMBER: No. 15 CETI COMMITTEE MEMBER: Thank you. John. 16 CETI COMMITTEE MEMBER: We can say hello to 17 them, can't we, however? 18 ITEC COMMITTEE MEMBER: But you can't touch 19 them. 20 CETI COMMITTEE MEMBER: Okay. 21 CETI COMMITTEE MEMBER: If I may elaborate a 22 little bit on that. As we discussed, the service 23 personnel on campus, and as I stated in my presentation, 24 our number one issue was all CSU people would be 25 retained. The issue for us was, there is no way that we 87 RAY EGGEBRAATEN, C.S.R., INC. RAY EGGE(209)E441-1681., INC. 1 could conceivably come in here to your departments and 2 understand the intricacies that you have developed over 3 the years. 4 What we learned as we came out to the campuses 5 is you have phenomenal technical staff, and I reported 6 this back to the SIP committee, that we found experience 7 out there that is beyond the norm. And with the 8 dedication to the campus and a dedication to the 9 community, it's to be commended, to say the least. So 10 the service structure which we have discussed from day 11 one and are continuing to discuss today includes that 12 all service would be maintained on campus close to the 13 customer. 14 What we hope to do and what we hope to bring 15 to the table is an enhancement, a national control 16 center that could possibly provide some backup, our 17 laboratories and research departments, that could be a 18 higher level of information to the local staff. Putting 19 the campuses together, if you will, from a service 20 mindset only, that they will have opened doors to people 21 like silicon graphics at greater exposure to the various 22 providers in enhanced level of service, but by no means 23 was there ever intent or is there any intent going on in 24 the discussions right now as it pertains to service to 25 change anything from what is existing today. We 88 RAY EGGEBRAATEN, C.S.R., INC. RAY EGGE(209)E441-1681., INC. 1 couldn't match it. 2 CETI COMMITTEE MEMBER: One final point, and 3 then we're going to open it to the floor. On that 4 point, I can't recall precisely the chronicle of our 5 educational issue, but it was in the first two weeks of 6 September which pointed out the crisis that higher 7 education is in with regard to the kind of technical 8 support that people are -- that people need in terms of 9 not only the numbers but the availability of those 10 resources. And they -- there are a couple articles 11 there that I think are worth reading if you're a dean of 12 a college or a vice president or a provider. 13 It's -- there's a real challenge here for us. 14 MR. QUILLIAN: The floor is now open. 15 Professor Pinky. 16 AUDIENCE MEMBER: Okay. I'll stand way back 17 here. I have three questions, they're short. My first 18 one is probably the most important for me and I think 19 for many of the faculty. When I've looked and asked 20 specific questions from the book, has to do with G.E. or 21 with continuing ed or with the organization or who's 22 controlling what at what points and all that, the kind 23 of answer I've been getting is well, this is just a 24 proposal. The details are being worked out. We're in 25 the process of negotiating the details. 89 RAY EGGEBRAATEN, C.S.R., INC. RAY EGGE(209)E441-1681., INC. 1 And so I'm getting oh, that's not what we 2 meant. Yes, that's what it said, but that was our first 3 shot at it. I mean, I've heard a number of you say 4 things like that, and I agree, but now we take a look at 5 the time line that you had out there, and presumably by 6 the end of December a contract will be signed. The 7 devil is in the details. 8 Do we, and I would like a yes or no answer to 9 this, do we get to see the final contract before it's 10 signed in some kind of a way that there can be some 11 input, some consultation that's reasonable? I'm not 12 seeing it in any of this and I have not been able to get 13 a direct answer to that question. 14 CETI COMMITTEE MEMBER: The answer is yes. 15 CETI COMMITTEE MEMBER: Absolutely. 16 Absolutely. 17 AUDIENCE MEMBER: How will that be done? How 18 will we get the contract? What will the time line be? 19 When will it be signed? 20 CETI COMMITTEE MEMBER: Well, let's -- having 21 said yes, there are three products that we're striving 22 to achieve, three outcomes we're trying to -- striving 23 to achieve by the end of December. One is the construct 24 of the formation of the corporation and what that 25 entails. 90 RAY EGGEBRAATEN, C.S.R., INC. RAY EGGE(209)E441-1681., INC. 1 And just to elaborate a bit, the direction 2 that it is taking will be along the lines that we're 3 very familiar with, we've created 70 of them already, or 4 more, along the lines in what we've done in terms of 5 creating auxiliary enterprises. 6 Product two. Is a master contract agreement 7 between CSU and CETI for the services that are 8 associated within the scope of the project, the 9 baseline. Master contract agreement. Lots of 10 subcontracts. Some of them will be achieved, we hope, 11 for example, specifically something associated with the 12 intercampus networking capability of the 4C net. That 13 would be something we would hope to have in place by 14 December 15th. There will be other things perhaps in 15 terms of technical services to the desktop and things 16 that will not be achieved at that time. So what I'm 17 trying to say, in terms of a contract, there will be a 18 master agreement, and then there will be a series of 19 contracts. 20 The third product is to have in place an 21 internal system wide advisory mechanism to insure that, 22 in fact, that the campus, each of the campuses and the 23 stakeholder groups, faculty, unions, students, have a 24 vehicle for input into the process on an ongoing basis. 25 AUDIENCE MEMBER: Advisory to whom and whom 91 RAY EGGEBRAATEN, C.S.R., INC. RAY EGGE(209)E441-1681., INC. 1 makes the final decision? 2 CETI COMMITTEE MEMBER: The advisory mechanism 3 will be to the -- it will be -- it will be to the 4 chancellor, through the technology steering committee 5 and the executive council, which is primarily made up of 6 presidents. 7 Now, the details of that, for example, let's 8 just go to that piece. That piece, we have a very rough 9 draft of that, that has been handed over today to Jim 10 Highsmith, the chair of the academic senate at CSU, who 11 we will consult with for input, do another draft, and 12 then broadly distribute it. You know, hopefully next 13 week, that people will start looking at that. 14 When we get the shell of the corporation, as 15 soon as we get the shell of that, in fact, we left 16 people at home working on that activity, and I can't 17 tell you that that will be out next week, but hopefully 18 within ten days, the intent is to share that for input. 19 When we get the ingredients of a master agreement, the 20 intent is to share that. So unless it doesn't come up 21 to one final thing, that in a sense this is an open 22 process, there will be a series of contracts that will 23 follow. 24 The issue of -- let's talk about specifically 25 the issue of the education, training and brokering. We 92 RAY EGGEBRAATEN, C.S.R., INC. RAY EGGE(209)E441-1681., INC. 1 recognize that that's going to take a lot more time and 2 consultation. And clearly through the vehicles that are 3 well established, no end runs, so, you know, we're not 4 going to rush to -- this is not a procurement, this is 5 not -- 6 AUDIENCE MEMBER: I understand. 7 CETI COMMITTEE MEMBER: This is not in cement, 8 all the details will not be accomplished, all the piece 9 parts will not be accomplished. And whatever we do, 10 it's not going to be behind closed doors. 11 AUDIENCE MEMBER: Second. 12 CETI COMMITTEE MEMBER: One other addition to 13 that. Feels so good. What can I say. In dealing with 14 the academic senate and dealing with Jim Highsmith, Jim 15 has asked us to include two representatives of the 16 senate on each of the subcommittees, and we have done 17 that. The process for the agreement subcommittee 18 actually begins on Tuesday morning, the first session of 19 our detailed planning, then a meeting with the partners, 20 and then a detailed negotiation session which will be 21 the negotiating team's responsibility, that begins on 22 Tuesday, and there are representatives of the senate. 23 CETI COMMITTEE MEMBER: You had two other 24 questions? 25 AUDIENCE MEMBER: Yeah, second is a quickie. 93 RAY EGGEBRAATEN, C.S.R., INC. RAY EGGE(209)E441-1681., INC. 1 On the very back page of the handout that was out there, 2 clearly it shows that Fresno is in phase three. This is 3 just a followup of our interim provost's question. 4 Whereas you have Long Beach, Pomoma, San Bernardino, 5 Sacramento, all of the large metropolitan campuses in 6 the first. So suppose they're going to be on line a 7 year before we will, suppose somebody wants to give in 8 phase one an MBA, public administration, something of 9 that kind, distributed, satellite, they will have it in 10 place, one of the things that the proposal says is that 11 you're going to be avoiding redundancy. 12 How can we be assured, and I still haven't 13 heard assurance other than well, we're thinking about 14 it, how can we be assured that we, Fresno, is not going 15 to be locked out of some of these more lucrative 16 programs? 17 CETI COMMITTEE MEMBER: The answer to that is 18 lean on Ben and get the two. Get it done. 19 AUDIENCE MEMBER: Where in writing? 20 CETI COMMITTEE MEMBER: No, seriously. 21 AUDIENCE MEMBER: I'm sorry. 22 CETI COMMITTEE MEMBER: And I agree, I 23 understand. I agree with the issue. My point would be, 24 let me turn the question around. What assurances can we 25 give you and how can you get involved in the process to 94 RAY EGGEBRAATEN, C.S.R., INC. RAY EGGE(209)E441-1681., INC. 1 make sure that you -- that those concerns are addressed? 2 And, you know, the point of us being here is to hear 3 them and to invite you to the table with us to go after 4 those kinds of things. 5 CETI COMMITTEE MEMBER: There's another 6 element, if I may. If you have all these revenue ideas, 7 believe me, we'll come running to you. 8 CETI COMMITTEE MEMBER: You bet. 9 CETI COMMITTEE MEMBER: So let me suggest to 10 you, if you wanted to do satellite right now, certainly 11 you could do that as we speak. And the C4 net 12 environment or 4C net, excuse me, environment is already 13 in place or will be, so you can get up today, tomorrow, 14 or the next day. On the other hand, I can assure you if 15 you have revenues activities in mind, we'll come running 16 to you. 17 Let me just also outline one other thing. The 18 proposal suggests that there are some campuses that may 19 begin a little earlier than others, but we're going to 20 certainly look at the academic plans of all the 21 campuses, and there may be some movement left to right 22 based on where the impact is. Some campuses certainly 23 could profit very well by just putting in some 24 additional fiber of a small amount and all of a sudden 25 things would change dramatically, and if we can do that 95 RAY EGGEBRAATEN, C.S.R., INC. RAY EGGE(209)E441-1681., INC. 1 based on some pilot activities, we are going to do so, 2 because that's all revenue that eventually comes back 3 through the program, and we're going to be talking with 4 each of your campuses, each of your campuses about that. 5 AUDIENCE MEMBER: I don't argue about number 6 two, but when you said you'd come to us if we had things 7 in place, we don't -- I think you as well as I am very 8 much aware of the real problems with the down links and 9 with the satellites and with the problems that are 10 occurring. We need the infrastructure before we can 11 deliver that kind of a program. 12 CETI COMMITTEE MEMBER: Well, one of the 13 exciting things about Hughes is that they only have a 14 small audience of about three million watching DirecTV, 15 so getting out to three million homes with CSU 16 programming I think has quite an audience potential. 17 AUDIENCE MEMBER: Third question, and that is, 18 that we saw CSU as one of five partners, you had an 19 equal sign there, you know, on the chart I was watching. 20 I would like to know what percent of the shares or 21 ownership of the partnership does CSU get? That was 22 very much obfuscated on the diagram. I have not heard 23 anything. I have not read anything about it. I keep 24 being told that we have some kind of controlling 25 interest, but then when I read about shares and 96 RAY EGGEBRAATEN, C.S.R., INC. RAY EGGE(209)E441-1681., INC. 1 partnership, it sounds like we're only one of five, so 2 that worries me. I would like to -- 3 CETI COMMITTEE MEMBER: I think that's a good 4 question, and the answer is the percentage will be 5 dependent upon the value of the asset we bring. We 6 intend to bring 51 percent at minimum. 7 AUDIENCE MEMBER: Thank you. 8 CETI COMMITTEE MEMBER: Now, I'm going to ask 9 my colleagues, we've got to be as concise and to the 10 point as we can. We have a number of people who want to 11 ask questions, so.... 12 AUDIENCE MEMBER: My name is Otto Benevides, 13 and I am an associate professor and director of 14 instructional technologies, so centered in the School of 15 Education. I have three questions, and I will try to be 16 as succinct as possible. 17 The first one, I know those of the people in 18 the audience who know me expect me to ask this question, 19 so I'm not going to disappoint them. It's related to 20 the Apple question. In the school of education we are 21 MacIntosh based. And the way that we have seen these 22 documents stated, that MacIntosh would be an acceptable 23 but not recommended platform. And that there will be no 24 support, and also that if we wanted to buy MacIntoshes 25 we would have to come up with the difference in the cost 97 RAY EGGEBRAATEN, C.S.R., INC. RAY EGGE(209)E441-1681., INC. 1 on the baseline that CETI would provide. That was a 2 serious concern, because if we looked at that two years 3 from now, and CETI is going to go on bid for PC's for 22 4 campuses, obviously that places the MacIntosh user at a 5 large disadvantage, because we could not compete with 6 the price that would be offered in this purchasing power 7 for PC's, so basically what that's telling us is that 8 there will be no MacIntoshes on campus. 9 Statistics that we recently received from ATE, 10 which is the Association of Technological Education, 11 says that about 60 percent of all educational 12 institutions in the United States use MacIntosh 13 computers. And in California it's as high as 85 14 percent. 15 As a school of education we present a role 16 model for the use of technology in computers in the K 17 through 12 market. If two years from now we were faced 18 with the obsolescence of MacIntoshes on campus, we could 19 not provide that role model. That would unnecessarily 20 impact the market in the K through 12 community. I 21 don't know that we're in the position to change or shift 22 the way that friends in education use MacIntoshes. But 23 if that happened in 22 campus in the largest system, 24 educational university system in the world, then 25 obviously that would have an impact on the market 98 RAY EGGEBRAATEN, C.S.R., INC. RAY EGGE(209)E441-1681., INC. 1 throughout. That's a concern to us. 2 The concern that we wouldn't have support even 3 if we came up with the money from donations or any other 4 sources is also a large concern to us, because even if 5 we could afford to buy the MacIntoshes, it's very 6 clearly stated in your document that there would be no 7 support. If the people that are working for us right 8 now would be working for CETI, although they still 9 remain in place, what kind of support could we expect 10 from these people that are working only for the PC 11 platform environment? So those are the major concerns 12 related to my first question. 13 The second question is related to intellectual 14 property. Some of you have referred in your slides and 15 I have seen that in the document as well, but one 16 specific question that I would have is, if a faculty 17 member obtained a grant to work on a particular project 18 and that grant allowed them to have freedom to select 19 whatever platform they wanted or to pursue the research 20 that they wanted, given the fact that CETI would own the 21 hardware and the software that they're going to be 22 working on, would that be a conflict in terms of the 23 goals of the grant and the goals of CETI? 24 And the last question, I understand that there 25 is a national program sponsored by the White House that 99 RAY EGGEBRAATEN, C.S.R., INC. RAY EGGE(209)E441-1681., INC. 1 is going to provide funding at the billion dollar level 2 that would provide the integration of educational 3 institutions K through 21, and I am just wondering if 4 there is any relationship at all in what CETI's goals 5 are in terms of funding and what this billion dollar 6 program or billions of dollars program for the country 7 have and if that funding would have any bearings in the 8 support and funding for CETI? Thank you. 9 CETI COMMITTEE MEMBER: Let's -- going to try 10 to be concise. But, you know, and I don't want it to be 11 interpreted as being flip. The issue on Mac and Mac 12 support, message received. It's an issue that 13 we'll -- that is real and we cannot overlook it, and the 14 point that the proposal made was based on, in that 15 instance the partners' best take of what they thought, 16 what they think is a viable solution given the work 17 world. 18 We spend -- we spent $12 million last year in 19 the CSU with Apple. We know the penetration that it 20 currently has. That issue I would point to one of the 21 slides there, supporting of Legacy systems. I think 22 that it's fair to say we have not made -- we have not 23 discussed it, but I don't -- I think it's fair to say 24 support for Mac will not go away. I mean, that's what I 25 brought. 100 RAY EGGEBRAATEN, C.S.R., INC. RAY EGGE(209)E441-1681., INC. 1 Second point, grants. The idea we would hope 2 to foster, we would hope that by putting into place CETI 3 that's concentrating on baseline, that we would, in 4 fact, stimulate the ability of faculty and departments 5 to seek grants for unique applications and to have the 6 freedom to do that. 7 I mean, there is no intent to stifle that, to 8 divert that. The intent is that your grant proposals 9 ought to be for applications above and beyond the 10 baseline and not to fill the baseline. So we would 11 encourage you to continue to pursue that, and we hope 12 that by solving the baseline needs that it will really 13 enhance your capability, because people like to give 14 grants and gifts to entities that have demonstrated that 15 they have, in fact, put the base capabilities together, 16 and that they are committed to this kind of 17 technological infrastructure. 18 Fully cognizant of the national program, and I 19 think it's fair to say we have not done a lot of 20 promoting of what we are doing. I can tell you that 21 I've had conversations with key people in Washington 22 about our approach and getting lots of encouragement, 23 because they do see the problem, systemic K through G, 24 where people have given resources, the state, the 25 federal government, and industry, but we have not 101 RAY EGGEBRAATEN, C.S.R., INC. RAY EGGE(209)E441-1681., INC. 1 figured out a way to sustain and refresh that 2 capability. So when we talk about what we're trying to 3 do, and, again, I want to say we have not been out 4 heavily promoting that, because our first and foremost 5 concern is having our internal constituencies and 6 stakeholders understand and be a part of it, but the 7 response is pretty positive. They're thinking that what 8 we're on is an interesting course. We do intend to tap 9 and hope to position ourselves for a major part of that 10 one billion dollars plus other kinds of moneys. 11 In fact, I think this campus is part of a 12 grant proposal that went to the NSF right at the moment 13 and hopefully and eagerly awaiting some answers to that 14 to enhance our networking capability with very high 15 speed capabilities. I hope that answered your question. 16 MR. QUILLIAN: I'm going to ask that the 17 questioners limit themselves to one question, if you 18 can. We're trying to get as much from the floor as we 19 possibly can. If we each ask three or four questions, 20 we'll have others who will not get an opportunity, so if 21 you can, limit your questions, please. 22 AUDIENCE MEMBER: I'm Roger Tucker, I'm the 23 vice president of the Fresno Chapter of CSEA. And I 24 have one short question based on your statement about 25 academic senate representation on the team. What plans 102 RAY EGGEBRAATEN, C.S.R., INC. RAY EGGE(209)E441-1681., INC. 1 have you made to include CSEA representation in your 2 teams for this project? 3 CETI COMMITTEE MEMBER: Very good question. 4 Glad you asked that. Yesterday I talked to Jay Jimenez, 5 who is at the Fullerton campus, is a CSEA system-wide 6 representative, and asked him if he and his colleagues 7 on the system-wide CSEA could identify two individuals 8 to be on the, what we call the information technology 9 professional development team, you know, the issues that 10 are associating with that. And we have established a 11 regular meeting with the CSEA leadership, we're meeting 12 them about once every three weeks to have an ongoing 13 dialogue. And as far as the other teams, we'll welcome 14 any individual, faculty member, staff member who wants 15 to help lift on any of those teams. 16 AUDIENCE MEMBER: Thank you. Now, my actual 17 question on performance matrix. A Fujitsu dual mode 18 fault tolerant switch was installed in our education 19 building over three years ago at a total cost of over 20 $300,000. Since the installation, the switch has not 21 functioned in the fault tolerant mode. CSU Fresno 22 signed it off on a payment after receiving assurances 23 that the problem would be quickly resolved. 24 Over two years have passed and only in the 25 last three months has Fujitsu been willing to talk about 103 RAY EGGEBRAATEN, C.S.R., INC. RAY EGGE(209)E441-1681., INC. 1 resolution of the problem. What assurances can Fujitsu 2 and the negotiating team give us that these sorts of 3 problems will not be repeated system wide? 4 CETI COMMITTEE MEMBER: Fujitsu has enjoyed a 5 very long-term relationship here at Fresno. And we have 6 worked very closely-and we have worked very closely with 7 upper management, our upper management is very closely 8 tied to Dr. Welty, and we have spent a lot of time 9 working with CSU Fresno. I know we have had some issues 10 in the past. I know our organizations have dealt with 11 them. It is my understanding that those are in the 12 past, and those have been dealt with. But I would be 13 more than happy to get you an audience with the proper 14 upper management, as we are very close to Fresno. 15 Fresno has done a lot for Fujitsu, Fresno has done a lot 16 for distance learning and education, Fresno has done a 17 lot in taking on its role as a regional provider in 18 education, and Fujitsu has enjoyed participating with 19 you on that, and it is my understanding that we have an 20 extremely healthy relationship, and as I said, I would 21 be more than happy to make the appropriate audience if 22 there are certain particular issues that you feel have 23 gone unattended. 24 AUDIENCE MEMBER: With all due respect, sir, 25 the problem with the education switch is three years in 104 RAY EGGEBRAATEN, C.S.R., INC. RAY EGGE(209)E441-1681., INC. 1 waiting and has yet to be resolved. Thank you. 2 CETI COMMITTEE MEMBER: I appreciate your 3 raising the question. I would like to suggest that from 4 the perspective of CETI, we would like to hear from this 5 campus, and in terms of your vendor relationship with 6 Fujitsu, I think you need to pursue that, but you've 7 made your point twice, and what we want to hear is from 8 Ben and Jim Morris and have an understanding of that, 9 and we'll try to assess whether or not that has any 10 impact on the overall long-term relationship. I assume, 11 I mean, I want, you know, I don't want to ignore it, but 12 I don't think this is the forum to try to resolve that 13 specific issue. 14 MR. QUILLIAN: If I may just comment. Roger, 15 they do have the memorandum that you sent to me. Also, 16 I'm working with the president on this very issue to get 17 some additional information to this team. 18 AUDIENCE MEMBER: Thank you. 19 AUDIENCE MEMBER: Jacinta Amaral, Department 20 of Foreign Languages and State Wide Academic Senate. I 21 have many questions. They've been touched upon. Will a 22 transcript of this meeting be available in 23 Dr. Quillian's office, yes or no? 24 MR. QUILLIAN: Yes. I am the one that's 25 responsible for that. And yes. They are not 105 RAY EGGEBRAATEN, C.S.R., INC. RAY EGGE(209)E441-1681., INC. 1 responsible for the transcript. 2 AUDIENCE MEMBER: Thank you. 3 AUDIENCE MEMBER: Spencer Blank from the 4 School of Business and Special Projects and Academic 5 Resources, and I have a question on staffing as well. I 6 was really happy to hear the comment that all staff will 7 remain in place and just receive supplemental training 8 and support. However, the all two pages of the GTE 9 people's proposal really didn't clearly outline that, 10 and there were some inherent contradictions within those 11 two pages. 12 On one hand, there were statements that CSU 13 employees would be retained, but on the other hand they 14 were going to be managed, and they would be evaluated 15 and bonuses would be set by CETI Corporation. There 16 appears to be a conflict of interest between that 17 relationship, between a CSU employee being managed by a 18 private agency, and I want that clarified, and I want to 19 know what steps are ongoing in negotiations about that 20 issue. 21 CETI COMMITTEE MEMBER: The specifics of that 22 have not been settled, but let me try to paint the 23 conceptual framework. You talked about having a 24 corporation, you talked about the corporation having a 25 master agreement with CSU. The corpora -- so to provide 106 RAY EGGEBRAATEN, C.S.R., INC. RAY EGGE(209)E441-1681., INC. 1 services at the baseline. 2 The corporation in turn does not have 3 employees, say, maybe one or two or three, you know, in 4 terms of just overall management. The corporation, 5 then, would subcontract back to initially the partners, 6 one of the five, or if we could not provide those 7 services, elsewhere. And so a major part of that 8 subcontract would be back to the CSU. 9 AUDIENCE MEMBER: But my question 10 relies -- has to do with the status of the employee. I 11 mean, I agree, I understand the subcontracting 12 relationship, but there is an issue of who manages these 13 people, who evaluates these people, not just where the 14 paycheck is coming from, and also other issues such as 15 relationship in PERS, benefits. 16 CETI COMMITTEE MEMBER: PERS does not change. 17 AUDIENCE MEMBER: And all of those. Well, 18 then, what about the management evaluation issues? That 19 hasn't been addressed yet adequately. 20 CETI COMMITTEE MEMBER: The -- as we 21 submitted -- your point's well taken, and I want to 22 assure you that that is the reason that the slide 23 indicated the bullet up there. As we came out to the 24 campus to discuss this, we wanted to make sure that that 25 was boldly stated. 107 RAY EGGEBRAATEN, C.S.R., INC. RAY EGGE(209)E441-1681., INC. 1 When we submitted our business proposal to the 2 SIP committee, we indicated that our discovery process 3 preferred that method, and we did not get into details. 4 So once that was accepted and understood, we made sure 5 it was a bullet point in the slide. But the intent is 6 that there will be no change, that their process of 7 reporting, and their methods, their human resource 8 issues would all remain the same, that CETI would offer 9 to them a level or someone to go to at a higher level, 10 so their reporting process, their evaluations, and all 11 that should remain intact, the way it is today. They 12 would have an open door to the CETI service organization 13 if they chose to pursue higher service level 14 information. 15 CETI COMMITTEE MEMBER: Let me give you a 16 practical experience, because I think that's what you're 17 looking for. My institution has a responsibility to 18 provide telecommunication services to our foundation. 19 We have a performance contract with that foundation. I 20 am the manager responsible for that. The contract with 21 CETI would be very much the same, and my staff supports 22 both university and foundation responsibilities or 23 obligations. CETI would be another example of an 24 organization that it would support no different than the 25 residence hall, in our case, or other auxiliaries. 108 RAY EGGEBRAATEN, C.S.R., INC. RAY EGGE(209)E441-1681., INC. 1 AUDIENCE MEMBER: So, then, CETI will not 2 manage individual staff; is that -- 3 CETI COMMITTEE MEMBER: I -- that is a 4 correct -- I think that is a correct answer. But let's 5 be very clear. CSU will have a master agreement and 6 some specific performance within that performance 7 contracts with CETI. Things that we as an assistant 8 will say we want these things to be done and we want 9 them to be done this way at these standards. Well, 10 then, it's going to be CETI's obligation to turn around 11 and subcontract, in some instances they're going to come 12 back and subcontract with CSU and say, okay, we're 13 subcontracting to you to perform these duties at these 14 standards and under these performance criteria. 15 And what Spencer is saying is that since the 16 management unit and the personnel within the CSU who are 17 currently there would have that responsibility to 18 fulfill that obligation, so this group fulfills that 19 obligation to CETI, CETI in turn fulfills it back to the 20 CSU. 21 AUDIENCE MEMBER: Thank you. 22 CETI COMMITTEE MEMBER: Okay. 23 AUDIENCE MEMBER: Good morning, I'm Jim 24 Michael, I am the manager of IBM operating systems for 25 ITS and project manager for the MBS outsource project 109 RAY EGGEBRAATEN, C.S.R., INC. RAY EGGE(209)E441-1681., INC. 1 we're currently doing with the chancellor's office. 2 The one question I'll bring to you today, the 3 one question I'll bring to you today, I'll send the 4 others to you, Ben, through E-mail, has to do with the 5 fact that the people that work for me are working on a 6 project that is outside the scope of CETI. We are 7 supporting mainframe type applications, administrative 8 applications, student applications, all things that are 9 identified as being outside the scope. As such, when we 10 talk about support and training, I mean, we are staffed, 11 we have work stations, we may need training, we talk 12 about support and training, we talked about the 13 relationship of those individuals to CETI for all these 14 other issues, management, et cetera, where does that 15 kind of a staff person fit in? 16 And I'm sure there are other staff on campus 17 who are not technical staff who would not probably be 18 directly subcontracting with CETI to provide services, 19 and so what's the relationship of those CSU staff, then? 20 Are we simply consumers that service, or do we have a 21 more complex relationship that I don't fully understand 22 yet? And that's the nature of my question. 23 CETI COMMITTEE MEMBER: Let me turn it around 24 and say that remember, we purposefully excluded data 25 center consolidation as part of this. And frankly some 110 RAY EGGEBRAATEN, C.S.R., INC. RAY EGGE(209)E441-1681., INC. 1 of the teams, the three teams would have proposed to 2 bring that in. And there were people within the CSU who 3 would propose to do that, too. We did not. And as you 4 know, we have already taken a first step in terms of 5 consolidations, frankly the chancellor's office, I don't 6 know how many of you know, but the chancellor's office 7 has, in effect, contracted with CSU Fresno to provide 8 our mainframe service which went, in terms of the 9 conversion it was last week, weekend, without a bump. I 10 mean, our people in the chancellor's office didn't even 11 know other than the speed of response that they were 12 actually computing at CSU Fresno. I just want to get 13 that little plug in. So we have established a 14 relationship with this campus from one other entity in 15 the CSU that we think is going to be a very healthy, is 16 a very healthy, going to be fantastic, and it, in fact, 17 is saving us money in the CSU. 18 The answer to your question, Jim, I think we 19 don't have. And so I would put it back and say give us 20 some ideas about that, because we arbitrarily cut that 21 off, and I will be very frank, we did that for lots of 22 political reasons. 23 AUDIENCE MEMBER: Okay. I'll put some more 24 detail into that and send it to you E-mail. Thank you. 25 CETI COMMITTEE MEMBER: Not only raise the 111 RAY EGGEBRAATEN, C.S.R., INC. RAY EGGE(209)E441-1681., INC. 1 concern, but give us some ideas. 2 AUDIENCE MEMBER: Right, right. 3 AUDIENCE MEMBER: My name is Ron Hunt, I am a 4 technical support services for School of Engineering, 5 I'm also the local CSU chapter -- or CSEA chapter 6 president. My question is, as a support person for a 7 union on this campus, I am routinely involved with 8 supporting hardware and/or software specific to teaching 9 our discipline. CSU representatives have repeatedly 10 said that specialized leads of our units would be 11 preserved, yet CETI proposes the explicitly -- yet the 12 CETI proposal explicitly discourages such diversity to 13 economize on our support costs. My question is, what is 14 being done at the contract level to insure the baseline 15 support of our unique needs such as we would have in the 16 School of Engineering? 17 CETI COMMITTEE MEMBER: I'm meeting with 18 eight engineering, the deans of eight engineering 19 schools on, what's the month, October 30th, and that's 20 part of that dialogue, to address the unique needs of 21 engineering and computer science. And I would -- if 22 Bill Blosser, who is the vice president and general 23 manager from GTE were here, his statement is no, the 24 intent here is not to do you -- to do no harm. 25 So, you know, concerns of the deans are are we 112 RAY EGGEBRAATEN, C.S.R., INC. RAY EGGE(209)E441-1681., INC. 1 going to, you know, be forced into something other than 2 Unix operating system environment, and the answer is no, 3 we're not going to do that. 4 Your question is one which is a matter of 5 resolving what you mean and what CETI means by baseline, 6 and I think that can only be resolved by having some 7 intense dialogue so that we can get a clear agreement 8 that we can see the issue through the same frame wave, 9 so you're perceiving one thing and we may be perceiving 10 another, and, you know, I think the only way that's 11 going to be worked out is having some interaction, and 12 we're going to start that with the deans, but I would 13 assume that it would go down to the people that are 14 really on the front line. 15 AUDIENCE MEMBER: Thank you. 16 MR. BENJAMIN QUILLIAN: I was just going to 17 add, too, that Dean Longly isn't one of those eight 18 deans that will be at that meeting, and he and I have 19 already begun discussions about the spearheading. 20 AUDIENCE MEMBER: Thank you. 21 AUDIENCE MEMBER: Good morning, Joe Sanders, 22 Procurement and Support Services. I've got two areas, 23 briefly. We have been given notice that all substantial 24 technology projects have to be reviewed now by CETI 25 before they can be completed through the procurement 113 RAY EGGEBRAATEN, C.S.R., INC. RAY EGGE(209)E441-1681., INC. 1 process. 2 Does this imply that we have a pre-arrangement 3 in our negotiations, that it's a 48-hour turnaround, but 4 we have to get CETI blessing to do the process, to do 5 the procurement? And, two -- I'll let you answer that. 6 CETI COMMITTEE MEMBER: When the chancellor 7 met with the presidents on the 15th of September and 8 made the decision that we should enter into negotiations 9 with the CETI team, a concern that was expressed by him 10 was that those people, not only those people who are on 11 the other teams, they may be at everybody's door trying 12 to provide a better deal the next day, but others may be 13 as well. And so his admonition to the presidents was no 14 side deals, no -- let's hang together, be cohesive, 15 let's do no major procurements that, in fact, could -- 16 that could, in fact, become a part of the launch of the 17 partnership. 18 There is no -- what was your first point? 19 Your first point in answer to that is no, there is no 20 preconceived straight line, you know, there is nothing 21 in writing at this point that says that we're -- that 22 there's a -- okay. What other part of your question? 23 AUDIENCE MEMBER: The concerns -- this 24 concerns the establishment of time line for signing the 25 CETI contract. The FCC will be accepting applications 114 RAY EGGEBRAATEN, C.S.R., INC. RAY EGGE(209)E441-1681., INC. 1 January 1st for over $2.5 billion a year for the next 2 five years in the same type of services that CETI's 3 proposing to provide. 4 Does the fast track time line assigned to CETI 5 reflect the application opening for the FCC? Do you 6 need CETI Corporation intact before January 1st to apply 7 for those federal moneys? Do you need CETI intact as a 8 corporation to apply for those federal moneys, the $2.25 9 billion that's out there waiting January 1st? Is that 10 why we are doing the fast track? 11 CETI COMMITTEE MEMBER: No. 12 AUDIENCE MEMBER: Then why are we doing the 13 fast track? 14 CETI COMMITTEE MEMBER: One of the main 15 reasons we're going fast track right now is that we have 16 gotten, the CETI team to the point has committed over $3 17 million of their funds to follow through on this 18 process, we have not provided them any information other 19 than a handshake that we're ready to go forward with 20 them. 21 The real intent of driving to a December 15th 22 date, end-of-the-year-type date for this is to get some 23 documentation in the hands of the senior managers at 24 GTE, Fujitsu, and the other partners who have in many 25 cases put their careers on the line at this point and 115 RAY EGGEBRAATEN, C.S.R., INC. RAY EGGE(209)E441-1681., INC. 1 have committed tremendous amounts of resources to the 2 business of getting -- of -- to the CETI process. 3 In addition to that, in order to ramp up the 4 kinds of infrastructure build up that we're looking for, 5 we need to get to the capital market relatively quickly, 6 and that process needs to start right after the turn of 7 the year in order to secure the funding to make these 8 things happen, so what we're really trying to do is 9 drive to the formation of the corporation so that we can 10 begin to engage the capital markets so we can address 11 the infrastructure issues and the initial deadlines for 12 build up that are established for August of 1998. 13 That's the real purpose. 14 CETI COMMITTEE MEMBER: Equally important, the 15 time lines were not established by our corporate 16 partners, the time lines have been established by the 17 CSU. We are marching to our own time line. 18 AUDIENCE MEMBER: I'm Ron Zastovnik from the 19 Department of Psychology, computer support. And in my 20 systems analysis classes it was really driven home that 21 we are to involve the users in designing the new system. 22 And this results in the users accepting the new system 23 as it comes on line. 24 Now, you've said you have conducted focus 25 groups on the various campuses, but none of my 116 RAY EGGEBRAATEN, C.S.R., INC. RAY EGGE(209)E441-1681., INC. 1 colleagues in the computer support area remember or know 2 of any focus groups that have been held or any contact 3 by the SIP team. And it is imperative I think for the 4 existing computer support people to have relationships 5 and contact with the members of the corporations in the 6 CETI team so that we can do our jobs in unison and not 7 be in conflict, and I could see where there could be 8 some conflicts involved. And I was wondering what sort 9 of plans do you have to establish, to involve us, the 10 support people, in establishing this relationship with 11 CETI and the corporations involved? 12 CETI COMMITTEE MEMBER: Let me respond to your 13 first point. The focus groups were conducted under the 14 integrated technology strategy in 1995 and '96. And 15 if -- and not all of them were campus based, in fact, 16 they were regionally based, so just to put that. 17 I think your point's well made. I will tell 18 you that we're, in terms of the consultation with the 19 staff that are involved, and we don't anticipate, as 20 people have said, there's a cut over on January 1 or 21 March 1 or something of this nature. There is built 22 into the plan conceptually the details. There will be a 23 heavy amount of consultation before anything in terms of 24 direct impact on the people will take place. 25 Right now we're overwhelmed with a number of 117 RAY EGGEBRAATEN, C.S.R., INC. RAY EGGE(209)E441-1681., INC. 1 other things, consultation, these meetings, developing 2 out the framework so that we can get those out for 3 people to look at so they can get a better feel for the 4 frameworks and things of that going on. We haven't 5 forgotten that it's just not -- it's not in this 6 particular window right now in terms of time to have 7 that conversation and so on. 8 AUDIENCE MEMBER: I'm Bonnie Dutton from the 9 School of Education. I have a request, one, and then a 10 question. I really had 15 or 20 questions, but I'll 11 restrict myself to one. The request is that on our 12 site, and this is to our SIP representative, that we 13 have an E-mail site where we can address questions 14 specifically to our campus, our people here, and that 15 those can be forwarded and the answers posted so that we 16 can access those answers to our specific questions. I 17 think there is a lot of concern on our campus and a lot 18 of feelings of unrest and lack of consultation and I 19 think that this would be a way to address it. That's my 20 request. 21 My question, because I'm in education, I see 22 that one of the revenue streams is course work, and I 23 asked this in Sacramento and I did not feel that I 24 really had an answer. And G.E. has identified, and 25 certification of teachers is identified as a revenue 118 RAY EGGEBRAATEN, C.S.R., INC. RAY EGGE(209)E441-1681., INC. 1 stream with an anticipated pool of about 29,000 a year, 2 people, not money, and that's a great number of, sort of 3 by teachers, when you consider that all off our campuses 4 presently, I couldn't give you an exact number, but I 5 would say probably ten to 12,000 are certified by our 6 campuses right now. If a person is enrolled and they're 7 taking course work through this CETI, and they pay for 8 their course work, are the funds for the FTE going to 9 CETI, are they shared with the individual campus, is the 10 course tied to that campus? It's a massive plan, but I 11 guess the FTE and the money generation, how is that 12 shared back to the campus, because we have faculty, 13 staff, and infrastructure to keep up? And if some of 14 the FTE is siphoned off and it goes into this 15 corporation, where do we stand on the money issue? 16 CETI COMMITTEE MEMBER: No FTE is siphoned 17 off, there isn't a 24th campus. Again, it's a transport 18 brokering kind and new market kind of activity. The FTE 19 would be with the campus, the cost of doing business 20 that the School of Education plus whatever margins would 21 come to the campus. 22 In terms of reaching new publics, it's not a 23 matter of diverting your FTE on campus. Thinking, 24 again, we have a 300,000 teacher certification problem 25 in California that the CSU people are looking to us to 119 RAY EGGEBRAATEN, C.S.R., INC. RAY EGGE(209)E441-1681., INC. 1 solve. And so frankly I think the private partners 2 here, we identify that as an issue that we had to 3 attack, and so a lot of that feedback coming back from 4 them is to say that we can use the delivery capabilities 5 of our campuses, and, in fact, there is a system wide 6 effort going on now among the deans of education, and 7 guess what, it seems to me that through CETI, through 4C 8 net, and so forth, is a transport of at least part of 9 that activity. So the intent is not to take away, the 10 intent is to meet a need that we can't meet by everybody 11 coming here. 12 MR. QUILLIAN: Bonnie, in response to your 13 request, this morning ITEC, the matter of communications 14 point person was addressed, and we will be setting up 15 something early next week. 16 AUDIENCE MEMBER: Great, thanks. 17 AUDIENCE MEMBER: Good afternoon. My name is 18 Bill Fasi, I'm a member of the university budget 19 committee. I want to follow up on what Bonnie was 20 asking because all of this is sort of nebulous and I 21 need a concrete example to look at. 22 If CETI brokered a 15-unit block of general 23 education to offer, and none of those 15 units 24 originated from this campus, and we had, you know, pick 25 a number, 500 students who would have under the present 120 RAY EGGEBRAATEN, C.S.R., INC. RAY EGGE(209)E441-1681., INC. 1 system come to this campus, instead they take those 15 2 units through the semi CETI-brokered operation, does any 3 of that money come to this campus? 4 CETI COMMITTEE MEMBER: We've given a little 5 thought to this, and certainly we're going to be working 6 with you on this in great length. I think there are 7 going to be originators or providers of instruction, and 8 you want to give your honest impression, and those 9 institutions certainly will work with other institutions 10 as centers so that the providers and receivers, if you 11 can use that expression, affiliates. It is my belief 12 that an education is more than just sitting at a 13 computer and looking at a television. And, therefore, 14 it involves a human interaction, which means, I believe, 15 you know, you can do a great deal of this stuff through 16 technology, and eventually you need to meet in some kind 17 of formal educational collective manner, whether it's 18 traditional didactic or (unintelligible) teaching, 19 whatever. 20 So in this case we may, we, whoever the we is, 21 may offer some courses to you, and certainly you're 22 going to be offering some courses to us, but the us in 23 this case could be not only Sacramento but other 24 institutions nationwide or internationally, and I think 25 that's really what we're looking for, these audiences. 121 RAY EGGEBRAATEN, C.S.R., INC. RAY EGGE(209)E441-1681., INC. 1 That will have to be worked out, and certainly 2 if a student is taking a course at Sac State and is in 3 residence at Fresno, we need to pay you for your 4 computer time, your library use, a faculty member is 5 going to act as a facilitator or coordinator or manager 6 of the instructional program and process, to make sure 7 the financial aid programs are transferable. This is 8 not a simplistic issue, and it's one that we're going to 9 have to work out. 10 Do I believe, however, that we're going to 11 lose students? No, we'll be able to gain larger groups 12 of students that will serve, and that's part of this 13 whole process. 14 AUDIENCE MEMBER: My scenario wasn't meant to 15 imply we were going to lose students, but these will be 16 students who wouldn't normally come here. Your 17 involvement with the budget at Sac State, I assume, you 18 have the same kinds of numbers that we have. The impact 19 of that is, assuming for a moment that you're talking 20 about something like $6,000 a student, 15 units, 500 21 students, we're talking about $3 million. The cost for 22 us, and I assume that what CETI would get involved with 23 would be the high margin courses, those will be the ones 24 that would be useful to do this with, the cost is 25 something around 60 percent of that. The 40 percent 122 RAY EGGEBRAATEN, C.S.R., INC. RAY EGGE(209)E441-1681., INC. 1 left over which would be about a million two, that 2 million two we use on this campus to support high cost 3 courses, laboratories, supervision courses, those 4 courses that make a university community a university 5 community. 6 CETI COMMITTEE MEMBER: Correct. 7 AUDIENCE MEMBER: And to the degree that in 8 the future we will have to -- we will have to 9 accommodate those 500 students who eventually will come 10 here, enroll here, but they take this block of courses 11 brokered by CETI, that million two, if that doesn't come 12 to this campus, then the average cost of our courses go 13 up. And that can only be made up by either raising 14 student fees or somehow getting the legislature to 15 provide us with more money because the average cost of 16 our courses have gone up. 17 This isn't -- I'm not suggesting CETI's taking 18 any students from us, in fact, they may gather in more 19 students for us, but unless we get those margins, unless 20 we have those moneys to work with on the campus, our 21 average cost of courses are going to go up. 22 CETI COMMITTEE MEMBER: I suppose you could 23 demonstrate that model, but I also could demonstrate the 24 model that suggests the costs would go down and you 25 would be able to serve larger groups of students at a 123 RAY EGGEBRAATEN, C.S.R., INC. RAY EGGE(209)E441-1681., INC. 1 low cost, hopefully with the quality of education that's 2 equal to if not better than we're providing now. 3 The other question you have to ask yourself 4 is, and I mentioned this to an individual I happened to 5 see in the hall is, we're not just competing with 6 ourselves, certainly we should be working with one 7 another as a group to support initiatives in California, 8 but how are we going to deal with the Phoenix and the 9 Nationals and USF and the UCS's or the Moscow 10 Institutes, which by the way offer courses in my town 11 now, or the Soblong (phonetically), who are now offering 12 courses in Sacramento. Those students used to take 13 French or French programs at CSU Sacramento are now 14 taking them from France, so I think the question is we 15 need to work together as a conglomerate and then the 16 partnership hopefully will be able to compete in a very 17 competitive world. 18 We're no longer confined by this moat of 19 Fresno in one hour's distance. The technology is pretty 20 transparent to anywhere in the world that a person can 21 connect to. 22 MR. QUILLIAN: I'm going to ask that we take 23 the last two people in line, and then limit to that for 24 the day. However, I want to make it very clear that 25 this is not the end of our opportunity to ask questions. 124 RAY EGGEBRAATEN, C.S.R., INC. RAY EGGE(209)E441-1681., INC. 1 There will be something going out to the community early 2 next week that will explain exactly how we will work the 3 communications process, but all of you will have an 4 opportunity to provide your input as you deem 5 appropriate. John, I think you have a quick statement? 6 ITEC COMMITTEE MEMBER: Yes, I do. One of the 7 speakers used a metaphor that we were engaged now, and 8 some of the slides and other things, even with 9 Dr. West's clarification of the kinds of decisions that 10 are going to be made suggests that the agreement in 11 December is very, very important, and as I think we're 12 all aware, divorces can be extremely expensive if the 13 relationship doesn't work out and so forth. 14 One of the things that strikes me as a source 15 of tremendous anxiety among the academics has to do with 16 one of your initial principles, and that is that there 17 is a compatibility of culture here. And there are some 18 principal guidelines that define academic culture in 19 some ways, and I'm thinking in particular of the -- 20 these two documents were not developed only by AAUP, but 21 they generally disseminate them. The AAUP statement on 22 academic freedom and tenure and the statement on the 23 government colleges and universities, and our system 24 historically has embraced those principles. Title V is 25 built upon them, and mechanisms such as academic senate, 125 RAY EGGEBRAATEN, C.S.R., INC. RAY EGGE(209)E441-1681., INC. 1 governments, and so on implement them. 2 As you know, the statement on government 3 colleges and universities identified clear roles for the 4 faculty and having privacy on personnel and on 5 curriculum kinds of concerns, but at the same time it 6 gives clear responsibility and roles for the 7 presidential administrative functions, for the board of 8 trustees, and so forth, although it doesn't envision 9 corporate partners in that model. 10 So, anyway, to summarize where I'm getting, 11 there's an enormous vagueness about what that government 12 structure is going to be, and the implication that that 13 resultant CETI government structure will have for the 14 historic relationships, not only in our university 15 system, but in universities around the United States, 16 and by that model many other countries around the world 17 embrace some of those same kind of principles. And I 18 think it would be in terms of a helpful suggestion is 19 that as you define these governing structure, some 20 reference to these kinds of principles should be quite 21 clearly made. 22 And secondly, that the relationship of CETI 23 to -- as an auxiliary enterprise, to some of the 24 existing things that we are familiar with is extremely 25 important. Aristotle said 2300 years ago, the only way 126 RAY EGGEBRAATEN, C.S.R., INC. RAY EGGE(209)E441-1681., INC. 1 people can learn something new is to relate it to 2 something they already know, and I think he was right 3 then and still right. So thank you. 4 AUDIENCE MEMBER: My name is Robert Heck, 5 associate professor of Electrical and Computer 6 Engineering. The question that I have is similar to the 7 one that Ron Hunt presented a few moments ago concerning 8 the special needs of engineering. And I think that it 9 just can't be overemphasized, so let me give a specific 10 example as to what our real concerns are in engineering. 11 It's not myself but another professor in our 12 department had been teaching the design of integrated 13 circuits, and this was a true state of the art approach. 14 So he had been using top end sun work stations along 15 with the mentor graphic software. 16 Now, what our concern is is that money that 17 had been available to the school of engineering for like 18 the purchase of the top end sun work stations, that 19 money we're concerned is going to go to CETI for the 20 generalized needs and then we won't have these funds for 21 these top end applications. 22 CETI COMMITTEE MEMBER: No, that is not the 23 case. Nothing would change, unless you wanted to buy 24 the sun work station or the silicon graphic station or 25 any other advanced station that might be available 127 RAY EGGEBRAATEN, C.S.R., INC. RAY EGGE(209)E441-1681., INC. 1 through the -- through CETI at a better price, but you 2 would still be able to buy those resources much the way 3 you are able to buy them now, assuming you want to go 4 through that hell of a procurement process. No better 5 than (unintelligible). So we're not going to prevent 6 you from doing that, nor would we. 7 AUDIENCE MEMBER: It was our impression, maybe 8 we're wrong on this, but we thought that money that had 9 been spent on technology, that that money would no 10 longer be available to us but would go to CETI. Is that 11 incorrect? 12 CETI COMMITTEE MEMBER: Well, we tried to 13 address that earlier. I think you have a very valid 14 concern. And we need to get under the covers of that 15 share of the $122 million that Fresno, whatever number 16 they put on the table, we have to understand that so 17 that your question can be answered forthrightly, and we 18 can't give you an answer today. We hear your concern 19 and we understand your perception, and it may be right, 20 and it may be wrong, what we need to do is give you an 21 answer and we would intend to do that through the 22 campus, working with the campus people to get that 23 answer for you. 24 AUDIENCE MEMBER: Hi, my name's Aleta Wolfe, 25 and I'm a job developer and career counselor in Career 128 RAY EGGEBRAATEN, C.S.R., INC. RAY EGGE(209)E441-1681., INC. 1 Development and Employment Services. And under the 2 marketing plan here for revenue generation were 3 mentioned career and student development, resume and 4 career services for students as a revenue. We don't 5 charge for these services now, it's included in the 6 student fees. Are you -- you know, so I have a question 7 and concern about that. 8 CETI COMMITTEE MEMBER: I hear your question, 9 and just point back to the fact that the flagship 50 10 ideas that were generated, the corporate partners would 11 say that, you know, they generated a lot, they put those 12 50 there, they have a lot on the floor, none of those 13 are in concrete, we have to go back through and do the 14 in-depth market kind of analysis of those. You know, 15 your point that those are free services, they're really 16 not free. 17 AUDIENCE MEMBER: Right, they're paying for 18 them. 19 CETI COMMITTEE MEMBER: I mean, someone's 20 paying for them. It's either cost of doing business of 21 the institution or whatever. So that may or may not be 22 something that is even a viable alternative, but I think 23 raising the issue is very important for us to 24 understand. 25 CETI COMMITTEE MEMBER: Interestingly enough, 129 RAY EGGEBRAATEN, C.S.R., INC. RAY EGGE(209)E441-1681., INC. 1 our campus charges students for that, and was extremely 2 excited by the opportunity of doing it at a larger 3 level, so it comes from both sides of the coin. 4 Also there are many students who buy these 5 services on the outside and certainly we would like to 6 invite them to buy it from CETI rather than buying it 7 from the outside area, and every campus looks at things 8 differently, and I'm not suggesting you're wrong, I'm 9 suggesting that there are alternatives. 10 AUDIENCE MEMBER: They don't charge for career 11 counseling or to see a counselor, they just charge for 12 maybe a disk or a resume, that type of thing. Exactly. 13 CETI COMMITTEE MEMBER: That's correct. 14 MR. QUILLIAN: On behalf of our campus I would 15 like to say thank you very much to all of our 16 presenters, and I would like to say thank you very much 17 for the interest that is being shown in this very 18 important project. And as I mentioned earlier, we will 19 get out information to you early next week on how you 20 can continue to provide your input to me and then to the 21 chancellor's office and the corporate team, and also we 22 will be disseminating an ongoing stream of information 23 to you to insure that you are kept abreast of this 24 project. Thank you very much for coming. 25 130 RAY EGGEBRAATEN, C.S.R., INC. RAY EGGE(209)E441-1681., INC. 1 State of California ) ) ss. 2 County of Fresno ) 3 I, TINA HOKE, a Certified Shorthand Reporter 4 of the State of California, do hereby certify that the 5 foregoing pages numbered 1 through 131, inclusive, 6 comprise a full, true and correct transcript of the 7 proceedings taken in the within-entitled action at: 8 California State University/Fresno Satellite Student 9 Union 10 5201 North Maple Avenue 11 Fresno, California 12 on October 9, 1997. 13 In Witness Whereof, I have hereunto set my 14 hand and affixed my signature at my office in Fresno, 15 California, this October 13, 1997. 16 17 18 19 20 ________________________________ 21 TINA HOKE, C.S.R. 8114 22 23 24 25 131 RAY EGGEBRAATEN, C.S.R., INC. RAY EGGE(209)E441-1681., INC.