State-wide library consortiums: Are you sure you’re getting the best deal?

Emily A. Almond

Emily A. Almond

Georgia’s state library IT looked into whether their state-wide consortium was really the best option for them. The lessons they learned could help push your library forward and provide important commentary on whether a consortium is automatically the most cost-effective connectivity solution. This post comes from Emily A. Almond, who started in news and landed in libraries. Her specialties include library systems, open-source software development, strategy development, web usability and broadband networks for libraries.

For those of you following our E-rate posts, you know we are immersed in the Notice of Proposed Rulemaking (NPRM) released by the Federal Communications Commission in July (wait, it’s only been two months??). The American Library Association’s Office for Information Technology Policy (OITP) and our E-rate team (including our colleagues in the Washington Office, the E-rate Task Force, state E-rate coordinators, consultants, and in this blog post, library IT stars) have banded together to sift through each proposal or series of questions to fill a library bucket’s worth of comments.

If you’re a dedicated E-rate follower, skip now to the heart of the post—a word on state-wide consortia. If you’d like a refresher read on. A good chunk of the NPRM is focused on making the program more cost effective and so the Commission asks for input on ways to encourage smart buying practice by the applicants. Economies of scale, bulk buying, improving competitive bidding, etc.  are concepts discussed in this section. Specifically, ALA focuses on the experience of libraries that are part of a consortia application. As Emily Almond, IT Director at Georgia Public Library Service says in the following post, our initial assumption was that, “Yes consortia will drive down costs and also provide support for the participating libraries.” While this is often true, the Georgia Public Library System experience offers some additional food for thought.

In the beginning….

GA vendor breakdown

11 years ago, the Georgia Public Library Service (GPLS) created a statewide library network for our 63 library systems across the state.

At the time, the network was primarily in use by staff. The Internet was not a service libraries routinely offered to patrons, nor was it in demand. For 8 years or so, the service was just what the libraries needed and the consortial agreements were beneficial to GPLS in providing the service on behalf of the libraries.

Then, things changed. Demand for Internet access from patrons increased exponentially just when library budgets were being cut.

So, we asked ourselves several questions: What’s the difference between what we have (basically a statewide Local Area Network) and a basic consumer internet? Price? Security? Stability? Why was it difficult for a “bulk buying club” (i.e., the state-wide consortium made up of 63 library systems and 402 library branches which = a large customer base) to negotiate an affordable contract?

Then we asked ourselves how has the market changed in the last five years? How many providers are there in Georgia? Turns out: Quite a few.

If this was a formula, it would look like this:

(Less Money) + (Higher Demand) + (Long-Term Vendor Contract/Relationship)

= Rock and Hard Place

The pros and cons of library consortia

We decided we couldn’t live with the status quo. It was not sustainable for our libraries so to figure out a more cost effective model that would yield better contracts for services we met with vendors, explained our urgent need for more bandwidth at a cost that didn’t exceed our current budget.  We also developed an assessment of different approaches, taking into consideration administrative overhead and complexity, necessary bandwidth, cost, and security. Let me share where we came out.

Library consortia: Lessons learned

A consortium does not necessarily lead to economy of scale. Our experience was that it was inexpensive in the beginning, but once we were locked into a contract, and once the administrative process was created and adopted, it was difficult to extract ourselves from the model. It took over a year of assessment and stakeholder meetings to start the process of evaluating the myriad of other providers available in Georgia.

We decided we could try a hybrid consortium model wherein we hoped to realize economy of scale through the negotiation of contracts on the state level, but at the same time we put every system out for bid in the hopes of taking advantage of the competitive market.

This is part of our assessment process and how we came to this conclusion:

Model A: Library Managed Network

Library contracts with an ISP within FCC guidelines, qualifies for E-Rate funds, and pays the balance from library budget.

Advantages Disadvantages
  • While not realizing an economy of scale, the library has the ability to take advantage of market changes – to take advantage of increased bandwidth for less cost if the opportunity presents itself.

 

  • Libraries have limited leverage with which to negotiate for lower pricing or more bandwidth. There is no economy of scale with which to take advantage.
  • Administrative complexity. Potential for filing E-rate applications on behalf of each library system.
  • No centralized filtering – the ISP or the library will be responsible for proving CIPA compliance.

Model B: Statewide Consortium

An agency working on behalf of all libraries in a state, (a state library service or agency), contracts with a small number of ISPs within FCC guidelines, qualifies for E-Rate funds on behalf of the libraries, and either pays the balance from library budgets or from agency funds:

Advantages Disadvantages
  • Opportunity to leverage statewide buying power to achieve an economy of scale on behalf of libraries.
  • Less administrative complexity: An agency may contract with and file for E-rate reimbursement with (1) or (2) vendors on behalf of a library consortium.
  • Centralized URL filtering service.
  • Opportunity for consistency of service in terms of connection speeds across consortium.

 

  • While economy of scale is achieved in the outset, the risk is high that, after the system of networks/vendors is established, the leverage with which to negotiate will evaporate.
  • Less motivation on the part of the vendor and/or state agency to provide more bandwidth for lower cost if the library consortium is less flexible and thus less able to respond to market changes.

Model C: Hybrid Consortium

An agency working on behalf of all libraries to leverage statewide buying power while taking advantage of market changes: A state library service or agency collaborates with libraries to identify and contract with the most competitive ISP, effectively creating mini-consortiums, assists the library in qualifying for E-Rate funds, and either pays the balance from library budgets or from agency funds.

Advantages Disadvantages
  • Flexibility of consortium: ability to take advantage of market changes on a statewide scale – as the price of Internet goes down, and the number of competitors increases, the agency is able to take advantage of increased bandwidth for less cost on behalf of the libraries.
  • For instance, in Georgia, the state library agency can leverage the >200 Internet Service Providers on behalf of the libraries; Considerations like infrastructure, geography, availability can all be negotiated on behalf of the libraries when we approach it within a mindset of economy of scale.
  • As certain patterns emerge, there is an opportunity to create mini-consortiums along vendor lines: if (1) ISP is contracting with (7) systems across the state, negotiate with vendor for further discounts. On an annual basis, take advantage of the statewide landscape of providers to create package deals.
  • Increased transparency: Library owns contract with ISP and thus the support contract.

 

 

  • Administrative complexity. Potential for filing E-rate applications on behalf of each library system.
  • Disparity of connection speed across systems based on availability. A rural system may only have a choice between (2) vendors & the highest speed available is 10Mbps; a more centralized system may have a choice between (8) ISPs and be able to contract for 100Mbps for the same contract amount.
  • No centralized filtering – the ISP or the library will be responsible for proving CIPA compliance.

 

We are at the mid-point of our project launching this new hybrid model.

Results so far:

  • 22 systems (out of 63) have made the transition
  • Increased bandwidth from an average of 1.5 – 3 Mbps to 10 – 100 Mbps
  • No increase in budget
  • Significant administrative overhead increase as we disassemble the previous model and create the new model
  • Once all systems are transitioned, however, the administrative burden will be shared by GPLS and the individual libraries.

Since learning of the GPLS experience and the approach they took to best advantage Georgia libraries, the ALA E-rate team has heard from a number of consortia applicants on some of the other challenges these types of applicants have in securing the most cost effective solutions. Stay tuned. Our comments are due to the Commission on Monday!

As Assistant Director of OITP, Marijke’s responsibilities include primary management of OITP’s E-rate activities, working in collaboration with Larra Clark and Alan Inouye. In addition, Marijke’s policy portfolio includes projects focused at the intersection of children and youth and information technology policy as well as broadband adoption issues including digital literacy and challenges for diverse populations. As Assistant Director, Marijke also has responsibility for OITP communications and other office-wide activities.

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Posted in E-Rate, Library Advocacy, OITP, Public Libraries, School Libraries, Telecommunications
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