2009 Internet2 Budget Overview

Working with staff and the Advisory Councils, the Internet2 Board of Trustees developed and approved a financial plan for 2009 that continues progress towards implementing the new Strategic Plan and achieves a cash-balanced budget for the coming year. The 2009 budget provides a solid financial foundation for operations, and also allows for incremental investment in areas such as network infrastructure to meet emerging member requirements. This document [pdf] provides information regarding Internet2's financial position and 2009 Budget expectations.

As we enter extremely challenging economic times, Internet2 is especially focused on providing value to its members. Staff will be working with the Board and Advisory Councils to leverage past investments by members in advanced networking to provide new and more cost-effective services and capabilities. In addition, Internet2 staff are also working carefully to conserve member resources in anticipation of continued challenges in the coming years. Questions and comments from Internet2 members are welcome and should be directed to: info@internet2.edu.

Frequently Asked Questions

A: No. Internet2 dues and fees for service will remain at 2009 rates for 2010. Fees for separate services like InCommon are under review by member-led Councils.

Q: The graphic showing historical trends in revenues, expense, and net assets shows an ever-decreasing level of net assets. Is Internet2 soon going to run out of money?

A: No. Internet2 is maintaining a conservative reserve of cash equal to about six months of operating expense, not including the pass-through expenses of the network. That cash reserve is between $9M and $10M. The decreasing net assets reflects the depreciation of network assets.

Q: What is meant by "recapturing depreciation" to fund future capital investment?

A: Cash is usually paid, up front, for the purchase of equipment or other capital assets. Recapturing depreciation means setting aside cash, in a reserve fund, for the replacement of that equipment at the end of the useful life of the equipment. (If you have additional questions regarding this issue, please contact J. Pflasterer, CFO)

Q: What does the recapture of depreciation have to do with Internet2 and future decisions?

A: In the past, Internet2 has "recaptured depreciation" and built up a reserve fund for the purchase of assets for the "new network." As a result of the current financial climate, revenues are flat. Internet2 doesn't have the resources to both pursue the level of the activity mandated by the Community and fund the recapture of depreciation. The Internet2 Community must determine the priorities of continuing current projects at the current level of funding, cutting back projects and funding depreciation, or some combination of the two.

Q: Will the stimulus funding currently being provided by Congress have an impact on Internet2 and the organization's approach to funding a new network?

A: The answer to this question is currently unknown and requires speculation. Stimulus monies will be spent on Internet technologies and broadband infrastructure but the avenues for those expenditures is still under review by the funded government agencies. It is possible that members of the Internet2 R&D community will receive funds to expand the R&E network capacity, and/or for Internet2, on behalf of its member community, to receive stimulus funds that would instantly create the cash reserves necessary to build the next iteration of the network.