Fiscal Year 2010/11 Proposed Rate Changes

May 24, 2010
Posted by Vince Sefcik

The following is a summary of the changes to Communications Services' recharge rates for fiscal year 2010/2011 that were recently proposed to the Income & Recharge Committee. The proposed implementation date for the above changes is July 1, 2010, but is subject to review by the Income & Recharge Committee. A summary of the current and proposed rates is available.

1. Payment of the lease for the campus telephone switch and voice mail server is complete, enabling us to eliminate or reduce some telephone and voice mail recharges, including the following.

1. Some departments use Authorization Codes to cause individual telephone calls to be recharged to a University Account Number that is different from the Account Number to which the telephone line is charged. These codes are often used by academic department members to charge individual long distance calls to specific grant funds. Communications Services proposed changing the monthly recharge rate for telephone Authorization Codes from $1.00/month to $0.00/month (no charge).

2. Approximately twenty-eight percent (28%) of the telephone lines use Feature Package 2000, which provides four additional dialing features. Communications Services proposed changing the monthly recharge rate for telephone line Feature Package 2000 from $1.00/month to $0.00/month (no charge).

3. Five departments use a service called Automatic Call Distribution (ACD) that distributes incoming telephone calls to one of several telephone lines in the department and maintains a queue on callers waiting to speak with someone. Since the equipment that provides the ACD service is fully amortized, Communications Services proposed changing the monthly recharge rate for telephone Automatic Call Distribution (ACD) service from $27.00/month to $0.00/month (no charge).

4. Communications Services proposed reducing all voice mail service rates by fifty percent (50%).

5. Since 1984, we have recharged local calls at the rate of $0.09 for the first five minutes of each local area call and $0.018 per minute thereafter. The average call duration is 1.97 minutes, so customers have been charged approximately $0.045 per minute or $0.09 per average call. Communications Services proposed reducing the charge for local area telephone calls to a flat $0.01 (one cent) per minute. The cost of the average local call would drop from $0.09 per call to $0.02 per call, or 78%.

6. US domestic long distance rates are currently $0.15 per minute between 8am-5pm and $0.11 per minute at other times. Calls to Canada are $0.469 per minute. Communications Services proposed changing the recharge rate for both US domestic and Canada toll calls to $0.05 per minute, 24 hours per day. The cost of the average US and Canada toll call would drop approximately 75%.

7. The standard Business Telephone Line rate is currently $17.50/month (plus a Data/Networking Surcharge of $6.50/month). Communications Services proposed reducing the Telephone Line rate to $11.00/month (plus the current Data/Networking Surcharge of $6.50/month).

2. Since fiscal year 2005/06, we have seen a decline in new communications wiring installations and project management services, reducing the number of recharged hours of labor, while the expenses for salaries and benefits have increased. Communications Services proposed increasing the hourly labor rate for our technicians and project managers from the current $75.00 per hour to $90.00 per hour. This is the first increase in this rate since fiscal year 2005/06 and only the second increase since fiscal year 1997/98. While the increase is large, departments are not required to obtain these services from our department; Facilities Management can perform this work.

3. In most fiscal years, Communications Services has proposed that the recharge rate for Cox Communications cable television services be set to match the rate charged by Cox for cable television services provided to residents in Santa Barbara County. However, since fiscal year 2005/06, we have not matched Cox's rate increases to the community. Communications Services proposed to increase the current rate for cable television single outlets from $48.61 per month to $55.68 per month, the current Cox rate for residential service. We also proposed to decrease the installation rate for new cable television outlets from $52.99 to $32.00 to match the rate charged by Cox Communications. There are only thirty-two (32) single outlet customers who would be affected by this rate increase.

4. Since fiscal year 1998/99, Communications Services has managed and maintained the 800 MHz two-way radio system. Communications Services incurs expenses from Motorola, the company that services the equipment, and departmental staff salaries and benefits to operate and manage the system. Charges from Motorola have declined, but the amount of staff time used to resolve problems with this aging system has increased. The net of Motorola's reductions and our staff expense increases is an overall reduction in expenses. I proposed a decrease in the recharge rate for radio maintenance from the current $16.30/month/radio to $15.50/month/radio.

5. A few departments have installed Voice over Internet Protocol (VoIP) systems that provide some telephone services between the faculty and staff in their departments. However, these systems rely on the campus telephone system to place and receive calls with other campus departments and with off-campus telephones, and use essentially the same central resources as a standard voice telephone line. When these systems were being implemented, we did not have a recharge rate in place that would cause these departments to pay their "fair share" of the use of the campus telephone system. We did not want to hinder the development of this technology on campus, so we applied an artificial "virtual telephone number" rate to the telephone numbers used by these VoIP systems, identical to the rate we use for temporarily disconnected telephone lines. Prior to implementation, we told the departments (multiple times) that this rate would be subject to future adjustment. Communications Services is proposing that the VoIP telephone numbers be recharged at a rate consistent with other telephone numbers and be subject to the Data/Networking Surcharge. This is a complicated topic, so our page Normalization of Telephone Number Recharge Rates explains it in more detail. Communications Services is proposing that the VoIP telephone numbers be recharged at a rate consistent with other telephone numbers ($8.00/month) and be subject to the Data/Networking Surcharge ($6.50/month).

Using the past three months of recharges, our staff has calculated the impact of the proposed recharge rate changes on each campus department. Work Order recharges (labor and materials for installations) were excluded from the calculations due to the variability of this work (a department that submitted large Work Orders this fiscal year is not likely to do the same next fiscal year). Assuming that departments do not change the quantity of services obtained from our department, all departments except the three using VoIP telephone numbers will receive an average decrease in monthly recharges of thirty-one percent (31%). We plan to send each department a report of the changes in their recharges to solicit their comments on this proposal.

If you have questions about the proposed changes, send email to Vince Sefcik, Director of Communications Services. Comments about the proposed rate can be sent to Income & Recharge Committee Chair Todd Lee.

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