New CANARIE mandate includes cost recovery, stronger industry engagement

$62 million over three years

CANARIE is introducing an element of cost recovery into its programming as part of its new $62-million, three-year mandate that also significantly boosts industry engagement while maintaining its traditional focus on the needs of the research and education (R&E) communities. The new funding was announced earlier this month as CANARIE officials work on designing new programs and modifying existing ones in alignment with the forthcoming Digital Economy Strategy (DES).

The changes occur as CANARIE experiences some of the highest increases in network traffic in its history. In the last year alone, traffic on the national R&E network increased 60%, while the growth over the past five years is a whopping 587%. That will require significantly higher bandwidth, more dynamic middleware and greater access across the spectrum of users.

But CANARIE will have to fulfill its new mandate with fewer dollars. The new funding is $3.3 million, or 13.9%, less per year than its previous mandate which provided $120 over five years. Cost recovery will make up a portion of the shortfall. It's expected to generate $1 million starting in FY13-14.

"We think it's appropriate given the current fiscal environment so we're doing our share to reduce some pressure on the federal deficit … It's a modest reduction," says Jim Roche, CANARIE's president and CEO. "It's still a significant investment and we can deliver a very strong program and meet the growing needs of the research community."

The new mandate includes an expanded and permanent Digital Accelerator for Innovation and Research (DAIR) program. In its pilot phase, DAIR was aimed at offering a highly scalable cloud computing environment for small- and medium-sized companies to test and commercialize new products and services. Now it will also court larger users — multinational enterprises (MNEs) — that have expressed an interest in leveraging its cloud computing environment as well as the underlying network. DAIR is CANARIE's primary vehicle for stimulating the information and communications technology (ICT) sector, marking a return to industry engagement after several years in which it was exclusively focused on research and education organizations.

"We'll be adding more cores (compute and storage nodes) to the cloud computing facilities we have in Edmonton and Sherbrooke," says Roche. "We're also looking for a cloud computing partner where we can resell services in conjunction with our own cloud … When I talk about cloud computing, I'm referring to the network plus the cloud and a number of other elements that we've got in the DAIR program as a test bed. We hope to get some MNEs working with that."

Other so-called "over the top" services for enhancing the value and accessibility of the CANARIE network include a Content Delivery Service which provides access to content from approved providers for research and education institutions ranging from K-to-12 to colleges and universities, and a new access management service called the Canadian Access Federation (CAF). The latter was developed by the Canadian University Council of Chief Information Officers (CUCCIO) and officially transferred to CANARIE last April which will expand and evolve the service.

"As a national organization we are in the somewhat unique position of being able to aggregate demand for services from Canadian universities if they choose to participate. The CAF leverages the CANARIE network but its main value, as a national organization, we can represent all the Canadian universities nationally and internationally and provide a service that benefits from that network effect, from that aggregation effect," says Roche. "(It) also leverages the assets that we've built at CANARIE over the last 19 years such that we can provide significant benefit for the research, education and innovation communities."

More services will be added over the course of the mandate although Roche says it's premature to say what they will be. "We will be looking for real concrete and significant advantage that we can provide to the community," he says.

consulting the community

Since the announcement, CANARIE officials have been in discussions with CANARIE users across the country to explain the changes being made to the organization's program and service offerings. Roche says most are understanding of the changes being made and sensitive to the tight fiscal position the government is working within. Cost recovery is the most contentious of the changes being implemented by CANARIE and comes in three forms:

* users fees to access services and leveraging funds from other sources such as provincial governments;

* in-kind including deeper discounts from industrial partners for the products and services they are offering; and,

* cost avoidance, such as finding ways to increase the efficiency of the network. This could occur when users decide to stop using the network after being asked to pay user fees, thereby freeing up heavily subsidized resources for other purposes or users.

Further down the road, CANARIE will also begin to generate royalties and revenue from intellectual property as activities in which the organization has a stake start to mature.

Opinion appears to be divided on the wisdom of implementing cost recovery, which will be phased in over the life of the mandate. TRIUMF is the single largest user of the CANARIE network, largely due to its status as an Atlas Tier I Data Centre for the Large Hadron Collider project at CERN in Geneva. TRIUMF director Dr Nigel Lockyer says the initial amount CANARIE will be charging ($25,000) isn't the central issue.

"We don't consider the $25,000 onerous but our concern is that this is a slippery slope. It's also taking out of one pot and putting it another," says Lockyer, referring to TRIUMF's federal funding base. "I view it as a co-payment. It makes you think twice about spending recklessly and using excessive bandwidth."

Lockyer says CANARIE is an extremely high quality network and has helped TRIUMF's Atlas data centre to be ranked number one in availability and reliability compared to the other nine centres situated around the world.

cost recovery a "double-edged sword"

Other users such as the Dr Darin Graham, president and CEO of the Ontario Research and Innovation Optical Network (ORION), aren't convinced cost recovery and CANARIE's increased focus on industry engagement is the right way to go. Graham views CANARIE as a research and education organization and says cost recovery could "misdirect the goals and issues for them".

"It's a double-edged sword. Supporting connectivity is a huge challenge especially in the digital media space but that's a commercial enterprise ... CANARIE may or may not be the right tool. It's a great idea and a great experiment but should CANARIE be doing it?," says Graham. "The principle (of cost recovery) in this instance doesn't make sense. There's a concern with the willingness to pay ... CANARIE has introduced the concept to us but we have not had a chance to provide feedback as a collective at this point."

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