[2057] in Commercialization & Privatization of the Internet
Re: NREN and the Economics of Mainframes Versus Workstations
daemon@ATHENA.MIT.EDU (sean mclinden)
Thu Jan 23 08:56:45 1992
Date: Thu, 23 Jan 92 08:40:33 -0500
From: sean@dsl.pitt.edu (sean mclinden)
To: com-priv@psi.com, cook@tmn.com
Part of the problem with reasoning from costs to researchers/faculty
to real costs of connection lie in the way that Universities are
structured. It is too complex to summarize all of the features, here,
but in many Universities the Computing Center is a cost center and
operating budget comes from revenues generated from the sale of
services. Most of this money is "paper" money. The user account is
typically associated with a departmental or other account which, in
turn, receives a budget from the University so it is simply paying
itself. The reason for the cost is accountability; if I bill NSF
for computing time I'd better show that I bill everyone in the same
manner.
In fact, in our University, the Computing and Information Services
Division received a large budget which, due to falling hardware costs
coupled with increased performance, led to them having a surplus. To
get around this, the Division "awarded" monies to individual departments
which could be used to buy services back from them. No real money
changed hands, i.e., the move was budget neutral since the transfered
money was typically used to buy the equipment needed to connect to the
service.
The other thing to remember is that indirect cost overcharges by a
number of Universities has led to much stricter (and much lower)
indirect cost allowances for grant recipients. Since indirect costs
were frequently used to pay for support services such as computing,
these have now been unbundled and put into the direct cost budget
so they are sure to be funded.
The trouble with all of this is, as you alluded to, that it does not
account for what are the *real* costs. The same is true for health
care, by the way. Current Federal health care accounting schemes don't
get at what are real costs.
Sean
