The cost allocation model sets forth the methodology used to determine the charges assessed to the units. These charges represent each unit's share of the University network costs based on their share of the university's users of the core network and utilization of the Internet.
The basis for this model is:
- Costs should be allocated to units based upon the factors that drive those costs.
- The architecture of the network should not be negatively influenced by the cost allocation model. That is, decisions on architecture should be made based on an overall assessment of relevant factors of what is best for U-M units and our community members in aggregate. The model should encourage good architecture.
- The model and mechanisms should be as simple as practicable.
- The base charge should recover the full cost of operations, including capital improvements.
- Substantial changes in a unit's fees should be predictable based on knowledge of the cost drivers and the units' own changes in behaviors and use.
The primary drivers for the model change in FY26:
- A transition to the standard FTE snapshot counts published by University HR in November, instead of headcount, will align the service with other ITS services that use user counts for billing, including MiWorkspace, UMich ITAM, and the Microsoft Enterprise License allocation. It will also align with the standard counts used across the university for various reasons, e.g. external survey responses.
- Increased simplification of the model, using standard counts and fewer data sources.
- Reflects usage changes since the original model was developed, such as fully online students.
The model applies to two services:
| Component | Frequency | Fee Based On: |
|---|---|---|
| 1) U-M Net Backbone Core rate | Annual | FTE count of people in the unit |
| 2) U-M Net Internet rate | Annual | FTE count of people in the unit |
The model change will not impact other core network fees such as one-time installation fees and on-going fees for off-campus circuits.
U-M Net Backbone Core Rate Model
The U-M Net Backbone Core rate covers operational and maintenance costs including capital improvements. It covers the core routers, core sites, and first distribution layer switch in each building and fiber to interconnect them. It also covers core services such as DHCP, DNS, and the WiFi backend including authentication. Redundancy of the distribution switch hardware is largely at the building owner's discretion and is therefore funded directly by the local unit.
U-M Net Backbone Core costs are primarily driven by the number of buildings, the geographic distribution of the buildings, the number of local networks and the number of people using the network. Historically, only a small portion of the core cost was due to network utilization, though that portion is increasing.
The basis for this model:
- Encourages effective network architecture since it is based on FTE which is not something a unit will manipulate to change their recharges.
- Allocates cost based on the number of network users vs. utilization thereby not discouraging use.
- Remains independent of the number of locations a unit occupies which is frequently not controlled by the unit.
- Enables everyone to take full advantage of the U-M Net Backbone Core network.
| Population | Weight |
|---|---|
| Unit Faculty and Staff FTE | 1 |
| Michigan Medicine Hospital | n/a |
| Non Med Student – Full Time | 0.16 |
| Non Med Student – Part Time | 0.08 |
| Med Student – Full Time | 0.05 |
| Med Student – Part Time | 0.025 |
| Fully Online Student | 0 |
| Student in Residence Halls | 0.55 |
| Northwood Housing Apt. | 1 |
The cost allocation model incorporates weighted counts of regular faculty and staff who may access the network, occupants of the residence halls, and all registered students.
- Faculty and staff are assigned to units based on funding department
- Students are assigned to units based on registration
- Residence hall occupants are assigned to University Housing
- Counts for individuals with more than one funding department are split among the units based on FTE effort
- Counts for students with more than one unit of registration are split among those units
Faculty and Staff
Faculty and staff counts are based on the November 1 snapshot FTE counts provided by University HR. Counts are determined as follows:
- FTE counts are based on effort, so someone working half time would count as 0.5 FTE.
- Temporary staff are not included.
- Unfunded appointments are not included.
- Students who are employed by the University are excluded so as not to double count them with the student counts.
- Faculty and staff who are funded in more than one unit are split based on FTE effort.
Students
Students benefit from the network in many on-campus locations:
- Computing Sites: ITS provides computing sites across campus in study lounges, dining areas, and collaboration and study spaces for students.
- U-M Net WiFi Everywhere: ITS provides wall to wall, basement to penthouse WiFi access in most campus indoor locations.
- Computer Classrooms: Some schools have computerized classrooms which are distinct from computing labs.
Student counts are determined as follows and attributed to units:
- Student counts are assigned a fractional weight since their access is assumed to be more limited than that of faculty or staff.
- In general, students are assigned a "weight" of 16% for full time students and 8% for part time students.
- Students are assigned by unit of registration for the Fall term.
- Students registered with multiple units are split among them.
Michigan Medicine manages the Medical School network, which provides the primary means of network access for Medical School students.
- Students in the Medical School also take advantage of U-M Net WiFi and Campus Computing Sites which are attached to UMnet, but no Medical School networks are attached to the U-M Net Backbone Core.
- Medical School students are assigned a "weight" of 5% for full time students and 2.5% for part time students.
Students in Residence Halls & Northwood
Students with devices on UMnet in residence Halls have dedicated, consistent access. Devices can be used 24 hours per day to access academic and recreational resources.
Counts are determined as follows and attributed to University Housing:
- Residence Hall occupants are assigned a weight of 55%.
Students living in Northwood Apartments are connected to UMnet via cable modems and include the equivalent charge of 100% FTE. This service provides a speed of 20–100Mbps but utilization is constant and the administration overhead is high. It is similar to a residential service in that all occupants may use it.
Groups with an Agency Relationship
Agencies that use UMnet: Staff in these agencies use UMnet in much the same fashion as faculty and staff. Counts are determined as follows:
- Each individual at the agency will be counted as one FTE.
U-M Net Internet Rate Model
The basis for this model is:
- Costs should be allocated to units based upon the factors that drive those costs.
- The architecture of the network should not be negatively influenced by the cost allocation model. That is, decisions on architecture should be made based on an overall assessment of relevant factors of what is best for U-M units and our community members in aggregate. The model should encourage good architecture.
- The model and mechanisms should be as simple as practicable.
- The base charge should recover the full cost of operations, including capital improvements.
- Substantial changes in a unit's fees should be predictable based on knowledge of the cost drivers and the units' own changes in behaviors and use.
Internet Access Fee
Industry typically charges for Internet access based on utilization with price and performance increase occurring in a step function. At U-M, individual unit needs vary, but collectively, the university’s utilization is well above normal industry scale. The university model allocates cost on a weighted FTE count. There is little cost for additional utilization, making it the most cost-effective for all units to use the same Internet attachment. This is effective because it:
- Encourages effective network architecture since it is based on users rather than an architectural artifact such as to which network a user is attached.
- Applies a collective utilization cost driver rather than unit utilization.
- Does not allow one unit’s charges to be affected by another unit’s utilization.
- Enables everyone to take full advantage of Internet network improvements.
Weighting
The cost allocation model incorporates weighted counts of regular faculty and staff, occupants of the residence halls, and all registered students.
- Faculty and staff are assigned to units based on funding department
- Students are assigned to units based on registration
- Residence hall occupants are assigned to University Housing
- Counts for individuals with more than one funding department are split among the units based on FTE effort
- Counts for students with more than one unit of registration are split among those units
Because Michigan Medicine (which includes the Medical School) has different business drivers than the academic side of the university and has its own core network, Michigan Medicine is charged for Internet service based on utilization.
| Population | Weight Utilization |
|---|---|
| Unit Faculty and Staff | 1 |
| Michigan Medicine | Utilization |
| Non Med Student – Full Time | 0.16 |
| Non Med Student – Part Time | 0.08 |
| Med Student – Full Time | 0.16 |
| Med Student – Part time | 0.08 |
| Fully Online Student | 0 |
| Student in Residence Halls | 0.55 |
| Northwood Housing Contract | 1 |
Regular Model Evaluation
U-M must continue to monitor utilization, encourage responsible use and recommend model changes in the future if needed.
MiNET Circuits
In addition to regular Internet and Internet2 use, the MiNet infrastructure, operated by Merit Network, gives U-M access to point-to-point circuits that are available in many locations on the Merit state-wide network. With current technology these can be configured as 10Gbps, 40Gbps, and 100Gbps circuits. This capability can be extremely useful to researchers.
Those U-M units that connect to the U-M Net Backbone Core may acquire waves for a monthly charge equal to incremental cost. Those U-M units that connect to the U-M Net Internet may acquire waves for a monthly charge equal to average cost. Note that there will be additional fees to connect these circuits to networks at either end. Those charges will be variable based on the end points. Work with your ITS Infrastructure project manager to determine if a circuit can be set up and what the charges will be.
Pricing Model Detail – Prior to FY26
The pricing model sets forth the methodology used to determine the charges assessed to the units. These charges represent each unit's share of the University network costs based on their share of the university's users of the network and utilization of the Internet.
The basis for this model is:
- Costs should be allocated to units based upon the factors that drive those costs.
- The architecture of the network should not be influenced by the model. That is, decisions on architecture should be made based on an overall assessment of relevant factors, not influenced by attempts to game the cost recovery mechanism.
- The model and mechanisms should be as simple as practicable.
- The base charge should recover the full cost of operations, including provisions for capital improvements.
- Substantial changes in a unit's fees should be predictable based on knowledge of the cost drivers and the units' own changes in behaviors and use.
The model has two components:
| Component | Frequency | Fee Based On: |
|---|---|---|
| 1) Core Network Rate | Annual | # of people in the unit who use the network |
| 2) Internet Rate | Annual | # of people in the unit who use the network |
The model will not impact other backbone fees such as one-time installation fees and on-going fees for off-campus circuits.
Core Network Rate Model
The Core Network rate covers operational cost and provision for capital improvements. It covers all capital improvement to the core routers, core sites, and first distribution layer switch in each building. Redundancy of the distribution switch hardware is largely at the building owner's discretion and is therefore funded directly by the local unit. The fee also covers operation and maintenance of both core and first distribution switches.
Most Core Rate costs are determined by the number of buildings, the geographic distribution of the buildings, the number of local networks and the number of people using the network. A small portion of the core cost is due to network utilization.
The basis for this model:
- Encourages effective network architecture since it is based on users rather than architectural components such as a "router port"
- Drives cost based on the number of network users and access vs. utilization
- Remains independent of the number of locations a unit occupies
- Enables everyone to take full advantage of core network improvements
| Population | Weight |
|---|---|
| Unit Faculty and Staff | 1 |
| Michigan Medicine | n/a |
| Non Med Student | 0.2 |
| Med Student | 0.05 |
| Student in Residence Halls | 0.67 |
| Northwood Housing Contract | 1 |
The cost allocation model incorporates weighted counts of faculty and staff who access the network, occupants of the residence halls, and all registered students.
- Faculty and staff are assigned to units based on appointments
- Students are assigned to units based on registration
- Residence hall occupants are assigned to University Housing
- Counts for individuals with more than one appointment are split among the appointing units
- Counts for students with more than one unit of registration are split among those units
- To make these counts, the number of users in each category is determined and the costs are then allocated
Users are determined to have full access to the network and be someone:
- whose unit attaches their building to the Core Network
- who is able to attach a device to the network
- who may have a device attached 24 hours per day, every day
- who uses the network.
Faculty and Staff
Faculty, staff, and temporary staff members from the previous fiscal year who meet the user criteria are assigned a weight. They are determined by log files captured in the fall which count:
- Uniqnames that are in use
- Windows Active Directory current authorized users
Headcount is determined as follows. ITS works with unit management to resolve any anomalies.
- Regular faculty and staff are identified by matching uniqnames in use against the HR dataset in the central warehouse to acquire appointment information as of November 1, of the current year.
- Temporary staff are those who were appointed on November 1st of the current year.
- Students who are employed by the University are excluded from the counts.
- Faculty and staff (not FTE) counts as one.
- Faculty and staff appointed in more than one unit are split evenly among appointing units.
- Multiple appointments in the same unit count as one appointment.
- Only paid appointments are counted unless a person only has unfunded appointments; that person is then divided among the unfunded appointments.
- Regular appointments take priority over temporary appointments.
Students
All students benefit from a number of on-campus services including:
- Computing Labs: ITS provides computer labs across campus in study lounges, dining areas, and collaboration and study spaces for students.
- Public Access Ports: Public computing labs provide ports which enable wired connections to the network.
- Wireless: ITS provides wall to wall, basement to penthouse WiFi access in most campus locations.
- Computer Classrooms: Some schools have computerized classrooms which are distinct from computing labs.
Headcount is determined as follows and attributed to units:
- Student counts are assigned a fractional weight since their access is assumed to be more limited than that of faculty or staff.
- In general, students are assigned a "weight" of 20%.
- Students are assigned by unit of registration for each term in which they are registered.
- Students registered with multiple units are split among them.
Michigan Medicine manages the Medical School network, which provides the primary means of network access for Medical School students.
- Students in the Medical School also take advantage of Campus Computing Sites and MWireless which are attached to UMnet, but no Medical School networks are attached to the UMnet core.
- Medical School students are assigned a "weight" of 5%.
Students in Residence Halls & Northwood
Students with devices on the Residence Hall network (ResNet) have dedicated, consistent access to the network. Devices can be used 24 hours per day to access academic and recreational resources. ResNet makes effective use of the university network to connect the Residence Halls to each other and to the Internet.
Headcount is determined as follows and attributed to University Housing:
- Residence Hall occupants are assigned a weight of 100%.
- Because the connection is only available to the student eight months out of the year this is multiplied by 2/3.
- Students signed up for ResNet will therefore be given a weight of 8/12 or 66.6%.
Students living in Northwood Apartments receive cable modem lines and include the equivalent charge of 100% of a Network User. This service provides a speed of 20–100Mbps but utilization is constant and the administration overhead is high.
Groups with an Agency Relationship
These groups will be charged in one of two ways depending on how they are attached to the university network.
- Agencies attached to a U-M unit's network: Staff in these agencies use the network in much the same fashion as faculty and staff. Headcount is determined as follows:
- Each individual at the agency will be counted as one Network User.
- The unit should ask how many people are at that location and bill them appropriately.
- The unit will determine if this is accurate by the number of IP addresses in use.
- The resulting counts will be attributed to either:
- The unit, in which case the unit will need to charge the agency.
- ITS, in which case the agency will be charged by ITS.
- Agencies that have a network attached to UMnet: Staff in these agencies may use the network differently than faculty and staff. Headcount is determined as follows and charged directly to the agency:
- Agencies with their own router port they will be charged rates comparable to Merit access rates as roughly determined by the following formula:
- University price = (Merit price / Merit circuit speed) * (U-M port speed / 2) + (Internet Utilization Fee)
- Therefore, a 10Gbps router port will cost roughly $25,000/year, plus Internet Utilization Fee.
- The university provides certain attachment speeds: (e.g., 1Gbps, 10Gbps, and 40Gbps).
- Merit provides other speeds.
- Agencies with their own router port they will be charged rates comparable to Merit access rates as roughly determined by the following formula:
Internet Rate Model
The basis for this model is:
- Costs should be allocated to units based upon the factors that drive those costs.
- Substantial changes in a unit's fees should be predictable based on knowledge of the cost drivers and the unit's own changes in behaviors and use.
- The model should not be influenced by architecture and administration of the network.
- The model and mechanisms should be as simple as possible.
- The charge should recover full cost of operations, including capital improvements.
Internet Access Fee
Industry typically charges for Internet access based on utilization with price and performance increase occurring in a step function. On campus, individual unit needs vary, but collectively, the university’s utilization is well above normal industry scale. The university model allocates cost on a weighted number of users of the network by headcount. There is little cost for additional utilization, making it the most cost-effective for all units to use the same Internet attachment. This is effective because it:
- Encourages effective network architecture since it is based on users rather than an architectural artifact such as to which network a user is attached.
- Applies a collective utilization cost driver rather than unit utilization.
- Does not allow one unit’s charges to be affected by another unit’s utilization.
- Enables everyone to take full advantage of Internet network improvements.
Weighting
The allocation model incorporates weighted counts of various network users, including students. A "Network User" with a weight of 1 is defined as someone who has full access to the network during the business day (e.g., faculty, staff, or student/faculty/staff living in a campus Residence Hall or Northwood). Therefore, it is possible for one individual to be allocated a total weight of 2. More specifically, a "Network User" with a weight of 1 is defined as someone:
- Whose non-Health System unit attaches their building networks to UMnet in Ann Arbor.
- Who is able to attach a device to the network
- Who may have a device attached during business hours or in their residence, and
- Who is a "user" of a U-M unit network.
- The Residence Hall user weight of one is multiplied by 8/12 to reflect the service is only of value to student residents for eight months.
Because Michigan Medicine (including the Medical School) has different business drivers than the academic side of the university and has its own network, Michigan Medicine is charged for Internet service based on utilization. Outside organizations such as Google who use the university Internet will also be charged based on utilization.
| Population | Weight Utilization |
|---|---|
| Unit Faculty and Staff | 1 |
| Michigan Medicine | Utilization |
| Non Med Student | 0.2 |
| Med Student | 0.2 |
| Student in Residence Halls | 0.67 |
| Northwood Housing Contract | 1 |
Regular Model Evaluation
Campus must continue to monitor utilization, encourage responsible use and recommend model changes in the future if needed.
MiNET Circuits
In addition to regular Internet and Internet2 uses, the MiNet infrastructure that U-M has access to, makes point to point circuits available to many points on the Merit network available. With current technology these can be configured as 10Gbps, 40Gbps, and 100Gbps circuits. This capability can be extremely useful to researchers. Those U-M units that participate in the headcount model may acquire waves for a monthly charge equal to incremental cost. Those U-M units acquiring Internet service based on utilization may acquire waves for a monthly charge equal to average cost. Note that there will be additional fees to connect these circuits to networks at either end and those charges will be variable and dependent on the end points. Please work with your ITS Infrastructure project manager to determine if a circuit can be set up and the charges that will be associated with that circuit.