I give up. What's a CETI?

A complicated scheme by some education bureaucrats to privatize the entire computer and communications network at the California State University system. The plan is to get it going around May, 1998.

What does it look like?  (link to Main CSU CETI site)

Wow, that's complicated!

When will this happen?

Maybe never. First they said the deal would be signed last December, but then it was January, then March, and now it's been pushed forward to May.

Who is involved?

The CSU central administration will set up a new "Auxiliary", or "puppet foundation" that will own part of a new "Limited Liability Company." GTE, Fujitsu, Microsoft and Hughes Satellite are the corporate partners in CETI. They will own a majority of this new company and control the Board of Directors.

What's the plan? How will it work? (read The Emperor's New Internet)

They've been trying to figure that out for almost a year. The idea is that the CETI company will borrow $300 million and the corporations will put in $36 million. CETI will hire GTE to re-wire telephone and internet communications on the 23 campuses and to build an inter-campus network.

All campuses of the CSU will have to buy all their computers (except mainframes), their computer software, support and training, their telephone and communications equipment and services from the CETI company for ten years. The CETI company will also sell computers and internet access to students and faculty. Finally, the inter-campus network is deliberately being built with excess capacity, which will be sold or leased to other corporations and the public. (read A CETI Tale)

The hope is that the profits of the CETI company from selling to the CSU, selling to the students and faculty, and selling to the public will pay off the loans. This would leave a profit to divide between the CSU and the four corporate partners.

How much money is involved?

The CSU has posted a summary of the financial plan. Here's what they project over ten years: 

Part I: CSU purchases from CETI
CSU pays CETI	CETI's Cost	CETI's profit
$945,294,000.00	$722,463,000.00	$222,831,000.00

 

Part 2 Student and faculty purchases
Students & Faculty pay CETI	CETI's Cost	CETI's profit
$1,481,675,000.00	$945,976,000.00	$535,701,000.00

 

Part 3 telephone and data services re-sale
Users pay CETI	CETI's Cost	CETI's profit
$1,338,125,000.00	$1,003,563,000.00	$334,562,000.00

 

Part 4: The billion dollar profit margin is used to:
Pay off the loan (& allowance for wear and tear)	$221,553,000.00
Pay operating overhead	$57,440,000.00
CSU 's New Help Desks and Training	$26,333.000.00
Pay interest and taxes	$294,630,000.00
Pay for managing CETI	$252,100,000.00
Profits for the partners	$241,031,000.00

That's a lot of $$$. Are these numbers real ?

Let's Find Out: read Realnumbers

Can we believe Anything they say? Read In the Dark

 

What else is wrong with it?

Just about everything, because they are trying to privatize the most complicated part of the University and make a billion dollars in the process.

There are built in conflicts of interest everywhere. (read Take Me To Your Leader: Who Controls CETI?)  The corporate partners who control CETI will be selling to CETI, and CETI will have a ten year the monopoly right to sell to the CSU. The puppet foundation that will be set up to handle the on-campus operation will be buying from CETI but also share in CETI profits, and be asked to monitor the fairness of the prices. The professors who may recommend CETI products to their students will get their new desk computers from CETI profits. Microsoft will decide what software CETI supports, and Fujitsu will decide what kind of telephone equipment and laptops we get.

The structure is top-heavy with bureaucracy. Imagine a teacher in San Marcos or San Francisco having to call a help desk in Fresno to fix the classroom projector. Or take a look at how many committees are still involved in negotiating this deal.

Finally, the purpose of a university is scholarship and learning, not making a profit from selling merchandise and connection time. At the heart of the opposition is the feeling that this is a dangerous attempt to turn higher education into a commodity and to make education subordinate to the bottom line.

Who else thinks that way?

Unions representing faculty and staff

Professors who have researched the issues and don't like what they've learned, such as:

James L. Wood, Sociology, San Diego State
Les Pincu, Professor of Criminology, Fresno State
Rolland Hauser, Professor of Geosciences, Chico State

Faculty senates from Sacramento to Fresno to San Jose and San Diego

Student webmasters at Humbolt and Chico (I wish my pages were as good as theirs!)

 

Why would anyone want to do this?

Good Question. Some people really think that if you get something today and pay for it tomorrow it's at "no net cost" Perhaps every education bureaucrat dreams of becoming a businessman.

Other people may have doubts, but in a bureaucracy like the Cal State system no one wants to tell the boss he's wrong. (Read The Wit and Wisdom of Chancellor Munitz). Once something like this gets going, bureaucratic momentum and the lure of that billion dollars in profits may keep it in motion. It's just like the old story about the Emperor's New Clothes -- no one would dare say that the Emperor was naked.

 Who decides now?

The California legislature has expressed a lot of doubt regarding the CETI scheme. They don't want to micro-manage, but it's tax dollars that are being used to feed CETI.

The Board of Trustees of the Cal State system and newly chosen Chancellor Reed. In the past, they expressed support, but we can hope that they have now learned how impractical and dangerous this plan really is.

 

What's with the Pyramid? Why is it the CETI symbol?

 The CETI Essays by Robert Daniels: Back to Top

No News is Good News March, 1998

Rocket Science February, 1998

In the Dark February , 1998

Real Numbers February, 1998

Take Me to Your Leader: Who Will Control CETI February , 1998

The Wit and Wisdom of Chancellor Munitz January , 1998

So What's Wrong with CETI? January , 1998

A CETI Tale January 4, 1998

The Emperor's New Internet (part I) October 24, 1997

  Build date 3/20/98