Interim Report

April 23, 2002

Online Learning And Digital Media Initiatives Committee

Executive Summary

The Online Learning and Digital Media Initiatives Committee hereby submits its interim report to the University Senate in accordance with the February, 2001 Senate resolution which requested that the committee report to the Senate from time to time. This report provides background information on the committee, highlights its activities over the course of the preceding year, and presents some initial observations and recommendations.

Columbia University has aggressively embarked on a multi-pronged strategy to make itself into the premier institution of higher education in the area of online learning and digital media. Towards this end, the University has funded a large number of ostensibly profit-making initiatives from discretionary monies gleaned from patent and royalty incomes. Since the early 1990's, the pool of discretionary funds available to support these initiatives has risen steadily: in 2001 alone, after all transfers to the various academic units, some $63 million in discretionary monies remained. But the projection of significantly declining revenues over the next 3 to 5 years, and the general decline in the online market, raise the question as to whether the current strategy is optimal for a less cash-rich environment. With this in mind the committee offers five key recommendations:

  1. Rationalize and eliminate competing resource centers;
  1. Fund initiatives that either make a profit, provide infrastructure for those that do, or reinforce core missions of the university;
  1. View online learning as an extension of the traditional classroom experience;
  1. Reinstate and staff the Innovation Advisory Council; and
  1. Continue to fund Fathom, but focus efforts on increasing the consortium's value.

In the following year the committee will continue its work, highlighting three activities:

        Hold hearings with those actively engaged in e-course development;

        Hold hearings with key end users, including students, alumni and affiliates; and

        Conduct more comprehensive comparisons across Columbia's peer group.


Background

History

The Online Learning and Digital Media Initiatives Committee (OLDMIC) was convened in response to a recommendation issued in February 2001 by the Joint Subcommittee of the Budget, Education, External Relations, and Student Affairs Committees on Fathom.com. The decision to form the Fathom subcommittee was precipitated by a number of concerns about the University's internet strategy in general, and about Fathom.com in particular. After reviewing the University's efforts and lengthy discussions with key officers in the administration, the subcommittee recommended that the following actions be taken:[1]

1.      The Budget Review Committee should request a meeting with Executive Vice Provost Crow and take up the budgetary issues relating to Fathom.com and like commercial ventures.

2.      An on-campus oversight committee should be established, perhaps in conjunction with Fathom's own internal review committee, to ensure the quality of the courses offered through Fathom's directory.

3.      A new ad hoc committee on Online Learning & Digital Ventures should be established to examine the university's overall strategy for new media learning, including online and distance learning as well as commercial digital enterprises.


Item 1 has been achieved. In December of 2001, the Budget Review Committee presented to the Senate a resolution requesting more transparency in budget reporting.[2] In particular, monies arising from patents and royalties were to be listed as a separate line item in the annual budget statement. The resolution was adopted, and its exact implementation is currently being discussed by the Budget Review Committee and the University Budget Office.

The second item, which highlights the more ubiquitous problem of faculty oversight and input in decision making, is currently under negotiation with Executive Vice Provost Crow. Notwithstanding these efforts, the exact nature and timing of faculty involvement in decisions to allocate discretionary monies arising from patents and royalties is an ongoing concern that is also shared by the Senate's External Relations and Research Policy Committee.[3]

The third item resulted in the Senate's creating the Online Learning and Digital Media Initiatives Committee in the Spring of 2001, which is now completing its first year of work. A committee roster is provided in Exhibit 1.

Objectives

The Senate rationale for creating the Online Learning and Digital Media Initiatives Committee highlights five key activities to be undertaken:[4]

  1. Catalog the various activities currently underway by the university;
  2. Evaluate the extent to which these various enterprises enhance the core mission of the university both academically and financially;
  3. Review the status of policies of peer institutions in addressing these concerns;
  4. Explore alternative institutional mechanisms to balance the possible tensions between commercial imperatives and the preservation of an independent research faculty; and
  5. Recommend university policies and procedures for online learning and digital initiatives.

One of the first tasks of the Committee in its inaugural meeting of July 19th, 2001 was to clearly define its mandate and scope of inquiry. The committee decided that it would focus on review and oversight of online learning and digital projects and the development of policies to manage these evolving issues. The committee realized that it had neither the resources nor the authority to micromanage individual projects. Therefore, the committee chose not to evaluate the merit of current activities, but rather to focus on overall strategy and implementation. Moreover, while the committee recognized the value of centralized, top-down decision making, increasing faculty input in resource allocation decisions was seen as an important goal. With this in mind, the committee decided to apply its mandate to three broad areas:

  1. Governance issues: These include policies and strategies, financial decisions and planning, and faculty oversight and input.

  2. Internal Implications: These include resource allocation between on-campus teaching and research and digital initiatives, as well as tensions between commercial opportunities and academic pursuits.

  3. External Implications: These include the impact of digital initiatives on Columbia University's brand name, digital rights management, and a comparison of Columbia's efforts to those of our peer institutions.

Committee Activities and Scope of Inquiry

The committee met throughout the course of the fall and spring terms, holding a series of hearings with deans, administrators, and staff in charge of key aspects of Columbia's online learning interests. A list of invited guests, their affiliations, and current activities is provided in Exhibit 2. In addition, monthly briefings with Executive Vice Provost Crow and the committee chair were instituted as a means to keep the information flow between the Committee and the administration open and regularized. The chair reports on these monthly briefings to committee members.

The organizational chart of the Office of the Executive Vice Provost provided in Exhibit 3 shows that the committee met with most of the key decision makers orchestrating Columbia's digital initiatives strategy. With reference to this organization chart, the committee defined its scope of inquiry to be the activities under the Research and Innovation branch of the Executive Vice Provost's Office, excluding the Office of Projects and Grants, plus commercial ventures like Fathom and separate online learning activities undertaken by individual academic units.

The subsequent section reviews the funding sources for current online and digital initiatives and how these allocation decisions are made. Next, Columbia's current online learning and digital media initiatives are considered, followed by a brief comparison of Columbia's approach to those of peer institutions. The last section makes some preliminary observations about the committee's findings and outlines an action plan for the coming year.

Funding and Distribution of Monies

The online and digital media ventures undertaken within the purview of the committee's jurisdiction have been funded largely by monies generated through the licensing of university patents and innovations. For this reason, understanding how these monies are generated, distributed among the various units, and referred back to the central university budget is one focus of the committee's inquiry. This section reviews federal rules and regulations covering the commercialization of inventions arising from federally funded research, how the university has implemented this policy, and the fiduciary implications for the various units of the university.

Review of the Bayh-Dole Act

The transfer of technology from research universities to the marketplace has grown tremendously since the enactment of the 1980 Bayh-Dole Act, which permitted universities to become directly involved in the commercialization of inventions made under federal funding and to retain exclusive rights to these inventions.[5] This legislation, co-sponsored by Senators Birch Bayh and Robert Dole, enabled universities, nonprofit research institutions, and small businesses to own and patent inventions developed under federally funded research programs. In return, universities must share with the inventor(s) a portion of any revenue received from licensing the invention. Any remaining revenue, after expenses, must be used to support scientific research or education. The Act also provides an incentive for universities to market their innovations and for industry to make high-risk investments in these ventures.[6]

Nationwide, university patenting and licensing efforts have fostered many new technological advances. In 1980 there were approximately 25 to 30 universities actively engaged in the patenting and licensing of inventions. Fewer than 250 patents were issued to U.S. universities each year and discoveries were seldom commercialized for the public's benefit. In recent years, this number has increased ten-fold: between 1993 and 1997 academic institutions were granted more than 8,000 U.S. patents.

In FY 1999, the Association of University Technology Managers (AUTM) reported that 3,914 new license agreements were signed. Between FY (fiscal year) 1991 and FY 1999, annual invention disclosures increased 63% (to 12,324), new patents filed increased 77% (to 5,545), and new licenses and options executed increased 129% (to 3,914). Over 2,000 new companies have been formed since 1980 that were based on the licensing of an invention from an academic institution. In FY 1999 alone, 417 new product introductions and 25% (more than 4,000) of the 18,617 active license agreements were associated with product sales by their licensees. Currently, over 1,000 products on the market are based on university-licensed discoveries. Approximately $40 billion of economic activity each year, supporting 270,000 jobs, can be attributed to the commercialization of new technologies from academic institutions.

Monies Generated from Patents and Royalties

Columbia University is the leading academic institution in translating federally funded research into commercial products. Since 1999 Columbia has ranked first in revenues generated from patents and licensing under the Bayh-Dole regulations. Exhibit 4 shows that since 1995 the annual number of patents has increased 18 percent, averaging 123.5 patents a year. Exhibit 5 shows that these patents have been productive. Since 1984 the university has generated cumulatively a total of over $803 million in revenues from technology transfers. In 2001 alone the university earned over $140 million in licensing income.[7]

Exhibit 6 shows the return to research funding. The first bar indicates the revenues generated from Columbia technology transfers in billions of dollars. The second bar shows the amount of external research funding the university received from the federal government as well as private industry. The third and lightest-colored bar reports the ratio of technology revenues to research funding. In 2001, for example, for every research dollar brought into the university licensing produced 33 cents of income.

Exhibits 7 and 8 break down the number of invention reports filed by the various units of the Health Sciences and Morningside campuses, respectively. On average, the Morningside campus produces about 75 invention reports a year, with the Health Sciences campus producing 117 reports. Noticeably, virtually all units of the Health Sciences are active participants in commercializing research innovations, while few units outside of the School of Engineering and biological sciences on the Morningside Campus contribute to this number.[8]

Distribution of Patent Income and Royalties

The distribution formula for income generated by patents and licensing is detailed in Exhibit 9. Two separate schedules are applied, depending on the overall amount of income earned by commercialization. Twenty percent of gross income is taken off the top for pooled legal and administrative expenses; once costs are covered, the surplus can then be spent at the university's discretion.[9] The remainder after this 20% is deducted is denoted net income. For inventions with cumulative net incomes less than $100,000, 50 percent goes to the inventor, 25% to the developer's research account, and the remaining 25% to the central university. For inventions producing cumulative net income above $100,000, the inventor's share is reduced from 50% to 25%, with this 25% reduction divided evenly among the department, the school, and the central administration. For each technology, accumulation caps on income limit the inventor's research account to $500,00 per year and the department share to $1 million per year; aggregate income from all inventions is limited to $5 million for the school.[10] Any overflow funds in excess of these amounts are returned to the central university budget.

The allocation of discretionary monies returned to the central university has been a subject of considerable discussion. Beginning in July 1993, funds from income derived from patent royalties and license fees were set aside for the purpose of establishing the Strategic Initiatives Program.[11] The easiest way to understand the implications of this distribution formula and how it plays out in practice is illustrated in Exhibit 10 , which offers a flow diagram of how monies are distributed among the various units and the discretionary funds available at each stage in the process. The arrows indicate the flow of monies. The solid lines depict required flows and distributions; the dashed lines indicate that both the stock and flow of monies are discretionary.

Following the arrows in the flow chart, and using 2001 as a working example, we see the following allocation. The gross income to the university from licensing of patents in 2001 was $141.7 million.[12] Of this, $13.4 million was allocated to outside institutions, leaving a total of $128.3 million. From this number, 20% is deducted for administrative and legal expenses, as well as contributions to the capital fund and the equipment matching fund programs.

The net income of $103.1 million is then dispersed among the various units according to the formulas set out in Exhibit 9. Over $27 million was awarded to inventors with an additional $3.8 million going to the inventors' research funds.[13] The remaining income was divided among the departments, schools and university, which received $4.4 million, $9.1 million, and $32.8 million, respectively.

As noted above, University policy limits the researcher's, department's, and school's accumulated share of monies to $500,000, $1 million, and $5 million, respectively. The overflow funds arising from these caps are pooled into the Strategic Initiative Fund. In 2001, the overflow from the research share was $20.8 million, and $5.1 from the department's share, amounting to a total of $25.9 million available for the Strategic Initiative Fund.[14]

From this distribution chart, three stocks of monies flow directly to the central administration: the Strategic Initiative Fund, the University's Development Fund, and the 20% Fund, amounting to a total of $83.9 million for 2001, or approximately 59% of the total gross income or 65% ($83.9/$128.3) of the gross income available after partnering institutions have been reimbursed. The central administration then makes several discretionary "givebacks" to the schools. For example, in 2001 the schools received $8.6 million from the Strategic Initiative Fund, $8.2 million from the Development Fund and $3.9 million from the University's Share by way of an indirect tax break. After all the givebacks are taken into account, the monies remaining among the various discretionary funds are $25.2 million in the 20% Fund, $17.4 million in the Strategic Initiative Fund, and $20.7 in the University Development Fund, for a total of $63.3 [SO1] million.[15]

Exhibit 11 shows a pie chart containing the amount and percentages allocated to each unit after the givebacks to the schools (but excluding the $3.9 million tax break). Nearly 22% of the gross income goes to the inventor for either compensation or to support research, 18% to the schools and close to 50% of the gross income to the University's discretionary funds.[16]

Columbia's Online and New Media Strategy

One of the key uses of these licensing revenues has been the development of Columbia's online learning and new media strategy. The University is involved in a variety of different activities, from high-profile, national efforts like Fathom and UNext to more homegrown, grass roots endeavors like Columbia International Affairs Online (CIAO), which offers online international resources to libraries. The wide range and diversity of Columbia's online and digital activities is clearly one of its strengths, but it also highlights some of the problems in identifying and implementing a coherent long-term strategy consistent with the university's core objectives of research and learning. This section reviews the University's overall approach, examines the implementation of this plan, and provides a partial list of activities funded under these initiatives.

Overall Strategy

In different contexts the administration has provided a series of explanations for the strategy underlying its online and digital media initiatives. According to one overview document, online learning and digital media provide the opportunity to improve teaching and research at the university and to extend its reach via three activities:

  1. Internal Development and Innovation-bringing new media into the class room and developing e-courses and e-seminars that can be used to either enhance current course offerings or reach non-traditional audiences.
  2. Entrepreneurial Outreach-patenting and copyrighting faculty innovations and managing intellectual property.
  3. Marketing-adapting and marketing via the internet Columbia teaching, research and innovations to a general audience.

For the commercialization of inventions under patent and copyright, three activities again are highlighted: knowledge creation, knowledge transfer and knowledge projection. To date, the focus has been on: 1) the identification and recovery of scientific and technological innovations from Columbia science and engineering laboratories; 2) the creation of value from University discoveries by conveying them to industry either as licensee or as the catalyst for new company start-ups; and 3) the construction and operation of transfer mechanisms that will move Columbia knowledge content to the marketplace as quickly as possible.

With regard to online learning and digital media, the University has again pursued a three part strategy: 1) Columbia Center for New Media Teaching & Learning (CCNMTL) supports digital innovation in classroom-based teaching and learning; 2) Digital Knowledge Ventures (DKV) builds bridges between Columbia and the outside world; and 3) Fathom.com disseminates knowledge from Columbia and other consortium members to a global audience.[17] In addition, the University also seeks to commercialize inventions either through incubation for startups or licensing with commercial enterprises.

Although the objectives described in each of these strategies are important, it is not clear that they collectively define a coherent set of activities to be undertaken, or help to prioritize the projects in which the university is currently involved. To put the existing programs in perspective, then, the committee provides a listing of the major components of the University's current initiatives and similar programs being run by individual departments and schools.

Organization of Activities

As shown in Exhibit 12, the Office of the Executive Vice Provost sits at the nexus of many of Columbia's online learning and digital initiatives. The flow chart identifies the key administrative units responsible for implementing Columbia's new media strategy and where they sit in the administrative hierarchy. The organizational flow chart divides activities into two groups: those with an external focus under Science and Technology Ventures, which are numbered 1 through 3 for convenience; and those with an internal Columbia focus under Digital Knowledge Ventures, which are numbered 4 though 7. Units with an external focus seek to find ways to commercialize Columbia technology or tailor research and teaching to a non-traditional, global audience. Units with an internal focus seek to enhance the University's core missions of the teaching and the dissemination of knowledge through new media technology. While there is clearly some overlap between the offices under each of these headings-STV works with new media technology that is patentable and DKV also licenses and collaborates with external parties-this stylized schematic does help organize the purpose, activities, and relation among the various units. Exhibit 13 describes each of these units in detail.

The ovals under each numbered entry indicate the internal source(s) of funding and the total amount allocated to that unit for the 2001 fiscal year. Five key sources support the majority of the central administration's activities in online learning and digital media, which are labeled A though E for convenience: A) the 20% Fund; B) the University Development Fund; C) Endowments and private gifts; D) Outside fees charged to partnering institutions; E) Grants and awards from federal and private foundations; and F) Sales revenues.[18] The following describes the key units, discusses their core missions, and indicates their funding sources.

External Strategy

Beginning with the upper left-hand of Exhibit 12, Science and Technology Ventures (formerly Columbia Innovation Enterprise) (1) is the organization within Columbia University that interacts with industry. It is responsible for patenting, marketing and licensing inventions. In 2001, it received $2.2 million for operating expenses, $4.0 million to cover legal expenses and raised $2.3 million in fees charged to partnering institutions. Fathom.com (2), a privately held C corporation in which the University is a majority shareholder and provides most of the funding, received a total of $14.9 million from the University Fund: $11.9 million to cover operating expenses and $3 million for research and development costs. In addition, Fathom generated $0.7 million from outside institution fees and sales revenues. The third branch of Columbia's external strategy is the International Innovation Initiative (3), which seeks to establish collaborations with other institutions to jointly commercialize inventions. As the newest element of the external strategy, it received over $700,000 in 2001 to launch its activities.

Internal Strategy

Columbia Digital Knowledge Ventures (DKV) (4) works with faculty to create online resources, licenses intellectual property in joint-content development projects, and incubates new media companies. As the key organizer of Columbia's new media strategy, it received a total of $5.4 million from the 20% Fund and the University Development Fund. The breakdown of costs was $2.7 million for operations, over $400,000 for the incubator, over $400,000 for production, and a one-time capital- expense charge of $2 million to renovate space. Columbia Interactive (5), which is Columbia's digital media "storefront," showcases students, faculty, and staff to a worldwide audience.[19] As a direct subsidiary of DKV, Columbia Interactive has no independent budget line. Electronic Publishing Initiative at Columbia (EPIC) (6) creates scholarly and educational publications tailored to specific disciplines. It generates income from fees for its online offerings and also supports activities through external grants. It received a total of $326,000 from the Development Fund. Columbia Center for New Media Teaching and Learning (CCNMTL) (7) aids Columbia faculty and instructors in enhancing teaching and learning through the use of new media, such as building course websites and developing adaptive tools like the CU Analyzer. CCNMTL's total budget is approximately $3 million, derived from endowment and private gifts as well as additional monies from the Development Fund.

Academic Units' Strategies

During the committee's hearings with various deans, it became apparent that an enormous amount of activity in online learning is also taking place within different academic units mostly, although not always, independent of the administrative apparatus detailed above. Indeed, Columbia has one of the earliest and most successful distance learning programs in the country: since 1986 the School of Engineering has hosted Columbia Video Network, offering master's degrees and specialized certificates. Exhibit 14 shows the various academic units, the distance learning programs featured, the approach adopted, their respective audience, and their funding sources.[20] Four units are discussed: Teachers College, School of Engineering and Applied Sciences, Columbia Business School, and Arts and Sciences' Continuing Education.

The first thing to note is that each of the schools has adopted a targeted, vertical approach that builds off of their traditional student base. For example, Columbia Video Network (CVN) tapes current courses and makes them available over the internet via streaming technology. Distance learning is thus an extension of the current degree programs made available to students unable to relocate. CVN is completely self-funding, run by a small, devoted staff on a very tight budget. According to Dean Galil, CVN makes a small but steady profit.

The Business School adopted a similar marketing approach, focusing on its traditional audience, but pursued an alternative business model-funding for online learning was procured by partnering with a private firm, UNext. Dean Feldberg contracted with UNext to produce courses that would be available and sold online to non-Columbia students.[21] Dean Feldberg stressed that GSB's online offerings both supplement and complement current programs and will be made available to Columbia students.

The second thing to note is that none of these distance learning initiatives are funded through any of the monies generated by patents and royalties.[22] Nor are they closely aligned with DKV, Fathom, or Columbia Interactive, each of which produces e-courses for global consumption.[23] Moreover, each of the academic units is developing technology, courses and marketing with little reference to one another. This third point is most disconcerting, as mutual gains from trade are readily apparent in cross-marketing and in sharing technology.

What Projects are Being Funded?

One of the committee's mandates is to catalog the various ongoing concerns and activities of the university in the area of online learning and new media initiatives. As a first step, Exhibit 15, compiled by former staff member Debra Elfenbein, provides a partial lists of such projects. The fact that the committee had a great deal of difficulty in compiling a complete list is symptomatic of the approach adopted: a few well-funded initiatives, operated and controlled by the central administration, with a larger number of "seed" grants extended to individuals or centers to fund specific projects. For this reason, Exhibit 15 should be viewed only as a representative sample of projects-those that are sufficiently developed and funded to have a web presence.

From what the committee could gather, most of those activities that identify the Provost's Office as their primary funding source are financed out of the Strategic Initiative Fund or the University Development Fund. Recall that the Strategic Initiative Program (SIP) is an effort to coordinate and in some cases invest in cross-disciplinary research and scholarly projects on a university-wide basis. Cross-disciplinary initiatives are defined as "research and educational development efforts that either directly capitalize on university-wide strengths or lay the foundation for new efforts of potential benefit to the entire community."

What is immediately clear from this list is that a great deal of activity is currently being funded and underway. Wonderful projects like the Computer Music Center and the Digital Tutorial Lab, for example, are being supported by the Provost's office. Each of these projects has merit on its own and each deserves the highest level of support possible. But what is equally clear from looking over this list is that these projects have little congruence, do not build off one another, and together do not represent a package that is readily marketable as a distinctive "Columbia" product.

Comparison with Peer Institutions

A quick and dirty comparison of Columbia's activities to those of other universities offering distance learning programs was compiled from a Yahoo! directory search citing listings under "Distance Learning > Colleges and Universities," yielding a ten-page list with over 240 entries.[24] What is most obvious from this list is the surprising absence of many of Columbia's traditional peer institutions. Neither Harvard, Yale, Princeton nor Stanford are mentioned. While some outstanding schools do offer distance learning programs, such as the Johns Hopkins School of Public Health, most universities offering e-courses, like Hong Kong Cyber-U, tend not to pull from the same pool of students. The other aspect to note is that most schools of Columbia's reputation offering distance degree programs do so in very specific/targeted markets-Johns Hopkins' program, for instance, offers a Masters in Public Health (MPH) to mid-career professionals. Clearly, this is an area warranting more systematic investigation and will occupy much of the committee's time in the coming year.

Preliminary Findings

Overall, we find that online learning and digital initiatives represent an enormous potential for Columbia University: the opportunity to better meet our traditional goals of teaching and the dissemination of knowledge and to embrace audiences that heretofore have been beyond our reach. The challenge is how to meet this promise in ways that support the core values of the university. This final section summarizes the committee's observations to date, provides some recommendations for overall strategy and implementation, and then lays out our agenda for the upcoming year.

Evaluation of Strategy and Implementation

In assessing the current strategy for online ventures and new media resources, the committee identified three criteria by which to evaluate the various components:

1.      Does the initiative support faculty in their traditional provision of courses, instructional materials, and research?

2.      Does the initiative support departments and schools in pursuing revenue-producing initiatives, such as CVN?

3.      Does the initiative support or directly engage in revenue-producing activities or is it self-sustaining, e.g., though grant procurement?

An activity that fails to meet at least one of these goals would be seen as requiring more justification for continued support. Moreover, these objectives should be accomplished in the most cost-efficient manner possible, and in such a way so as to enhance Columbia's reputation as a world leader in knowledge creation and dissemination.

What Works?

With this in mind, the committee's first key observation is that the enterprises being conducted by individual departments and academic units are doing well. They have identified a market for their products and have adopted a targeted approach to serving it. As a result, none of these programs is costing the university any funds; to the contrary, most are making a small profit, and all contribute positively to the university's profile. From this observation, the committee derives three conclusions:

1.      Online learning should be an extension of the classroom

The features of the school-based programs that make them successful are readily identifiable. Take, for example, the School of Engineering's Columbia Video Network. This venture is homegrown, focused, and incremental. Distance learning is an extension of the classroom, thus it is an enhancement of, not a substitute for, traditional course offerings. The program attracts qualified students who cannot relocate (students must go through the same admission procedure as all others), and therefore does not compromise the school's academic standards.

On the other hand, the programs under the DKV rubric, as well as Fathom, have yet to realize a return on investment. Despite considerable startup funds, representing a large share, nearly a third, of recent income generated from patents and royalties, these programs have failed to identify and capture a market segment sufficient to warrant the resources dedicated to them.[25] Neither do they provide support for, share technology with, or assist in marketing the school-based programs (although DKV did help negotiate the Cognitive Arts and UNext contracts). Thus to date they do not meet any of the three criteria set forth above. Clearly, these programs are in their nascent stages, and the strategy has been evolving over the last two years. Nonetheless, as of now, they have not fulfilled their promise.

The committee believes that the primary reason for these shortcomings is that these units are largely externally focused, seeing themselves as a substitute for Columbia's traditional classroom offerings. For example, neither Columbia Interactive nor Fathom is directly linked to courses presently taught on campus. Even CCNMTL, which is predominately a faculty service, does little more than develop course websites. In fact, the majority of their effort focuses on developing web-enabling tools that have little direct benefit to the majority of faculty and students. The production of online courses is a very expensive undertaking, at times exceeding $1 million per course. Even 3- to 5-hour e-seminars cost $30,000 to $50,000 to produce and sell for $50 each, requiring 600 to 1000 units to be sold just to cover production costs. It is thus difficult to justify the expense of producing new online content, especially when it is completely separate from the instruction offered in Columbia's traditional degree programs.

Rather than create new content, the focus of Columbia's online strategy should be to assist in structuring a hybrid of online learning and traditional classroom instruction, in which the same multi-media content is available to distance learners and on-campus students. This would require a good deal more coordination than is currently present in the system, and it would require investments in course development to serve both audiences. These hybrid courses would benefit both types of students: on-campus students would be offered a greater variety of materials and learning formats; distance learners would be offered access to the same quality education that has traditionally been available only to on-campus students.

2.      Units must generate revenue or provide infrastructure for those that do.

Although the university's online ventures are in general underperforming, one bright spot is EPIC, and it is instructive to see why. EPIC digitizes content, catalogs it, and makes it available to libraries for a fee; for example, EarthScape and CIAO are part of EPIC's portfolio of offerings and have gained a considerable audience among research institutions and high school students. In addition, EPIC has gained expertise and specialized knowledge in copyright management, and is now in the position to offer its services to other content providers-in one NSF grant, for example, EPIC is providing the copyright management services in return for a portion of the funding. As for financing, EPIC has been able to supplement its university funding, which is considerably smaller than that allocated to other units, with external grants to support most of these activities in their initial phases. EPIC is small, targeted, and incremental, providing infrastructure services to outside institutions as well as to other university projects. It thus resembles CVN, discussed above, much more than Fathom or other larger university-based endeavors.

3.      Current online and digital initiatives must be coordinated and rationalized.

It is also clear that the various digital and online efforts now underway could sorely use more coordination from the central administration. This is particularly true of the initiatives being funded directly by the administration: each individual project has merit, but the range of projects is so great that they do not add up to a unified presence on campus or in the larger academic community. Indeed, right now many of the initiatives are set up as competing resource centers-for instance, both DKV and STV incubate new ventures, and both Columbia Interactive and Fathom develop e-seminars. Thus the whole appears less than the sum of its parts-many worthwhile activities are being pursued, and each could be an element of an integrated whole, but the disjointed nature of their operations hinders their advancement and wastes resources.

Fathom

A special note should be made of Fathom.com, as it was concern over this venture in particular that led to the present committee's formation. Fathom is both a privately held for-profit corporation entirely separate from the University and, at the same time, an integral component of the University's online strategy. While it is a for-profit enterprise, it is also described as a "place-holder" in the space of knowledge aggregation. These apparent contradictions are endemic in the present overall strategy, where potentially worthwhile ventures are developed with little or no reference to one another.

Fathom does provide returns to the university, but not in the usual sense of the word. It does not generate large profits, but few start-ups do. While its technology platform is a useful navigation tool for organizing materials online, it has not been readily adopted elsewhere. Moreover, Fathom does showcase Columbia research to a broader audience, but Columbia Interactive seeks to do the same. And while Fathom could facilitate the activities of DKV and the schools, it has yet to do so.

Instead, the value of Fathom lies in bringing together a consortium of renowned institutions of higher learning under a unified rubric. And this is worth a great deal in expanding the University's reach, creating innovative cross-cutting programs, and strengthening internal resources. To be consistent with the criteria set forth above, however, Fathom's strategy and relation with the university will need to be modified. The committee suggests the following:

  1. The University should continue to fund Fathom, but at the minimum level to keep basic operations going.
  2. Fathom should focus on marketing and advertising the consortium and fostering innovative programs that leverage the strengths of its members. Fathom should not be in the business of producing e-courses or content, any more than a bookseller writes the books. The new focus would greatly reduce the costs and overhead.
  3. Fathom should engage in activities that enhance the value of the consortium; e.g. facilitate joint programs like the SIPA-LSE degree in public policy.
  4. Fathom should be more integrated into the University's internal online strategy. In short, if Fathom is not going to be a profit center in the short to medium term, then it should either enhance the University's other online initiatives or reinforce its core missions of research and the dissemination of knowledge.
  5. In the long term, Fathom should rethink its business model. As the value of the consortium is realized, it would be proper to charge members a fee and/or request cost sharing on production expenses.

Faculty Input

Another concern that the committee had when beginning its deliberations was the extent to which commercialization would impinge on the intellectual endeavors of faculty. The committee had assumed an inherent tension between these goals. To our surprise, this seems not to be the case. In fact, just the opposite may be true. Dean Feldberg from the Business School, for example, stated that more faculty wanted to participate in e-course development than there was opportunity to do so.

This statement in itself may suggest an appropriate place to redirect funds. Perhaps the best investment in online learning is not through costly vehicles formulated and developed independent of their product (Columbia faculty's knowledge and expertise), but more localized, smaller-scale endeavors that allow Columbia's unique stamp of quality and diversity to be prominent. These may yield higher returns both financially and in reputation.

Furthermore, given that faculty see online learning and digital media as another avenue to pursue their normal activities, and given the need to better coordinate and integrate ongoing initiatives, it is clear that faculty input both in the creation and implementation of strategy should be welcomed and institutionalized. The easiest place for input given the current organizational structure would be in the currently defunct Innovation Advisory Council. Members could include key administrators involved, faculty engaged in online activities and those having expertise in the area, as well as members of the University Senate. Moreover, a mechanism for peer review or the equivalent to a Committee on Instruction should be established to oversee the quality of online content.

Recommendations

To summarize, the committee offers five general suggestions that can be readily implemented:

1.      Eliminate Competing Resource Centers

The current organizational structure creates considerable overlap and redundancy of efforts, with some units even in competition with one another. For example, Columbia currently supports four web production teams located in EPIC, Fathom, DKV, and CCNMTL. A reevaluation of current components' jurisdictions and competencies should be undertaken with the goal of rationalizing units and economizing on cost and effort.

2.      Build Infrastructure to Support Units

According to the criteria set forth above, most projects currently receiving university funding are underperforming. On the other hand, all the self-financed activities are profitable or, at least, budget neutral. If a unit is not set up to be a profit center, and many are not, then it is necessary to evaluate the activities of the unit or initiative along enhancement lines. In short, infrastructure investment should be made so as to balance the need to make a profit with educational concerns undertaken independent of profit motives.

3.      Build off Columbia's Strengths in Targeted Markets

What is notable about the self-funded activities at the academic unit level is that they are very vertically targeted to their audiences, as opposed to the Fathom and Columbia Interactive, which are spread out over a wide variety of audiences. Future efforts should be directed more at specific, defined markets.

4.      Extend the Classroom via Online learning

The courses that work the best are a hybrid of online learning and conventional classroom experience, and these should be the object of future online course development.

5.      Reinstate the Innovation Advisory Council

The university should increase the role of the Innovation Advisory Council, the only existing oversight body, in the allocation of funds. The Advisory council should provide monitoring and oversight.

Next Steps

Over the coming year OLDMIC will hold focus groups with Columbia faculty and staff with experience developing online courses and working with new media. These discussions will guide the committee's recommendations on how best to direct resources to enhance Columbia University's core missions of teaching and learning and take advantage of the foundation already laid. The envisioned activities include:

1)     Task forces with developers, including technology people, researchers, and professors actively creating e-courses and e-seminars;

2)     Task forces with key end users, including students, alumni and affiliates; and

3)     More comprehensive comparisons across Columbia's peer group.

Exhibits

Exhibit 1 - Online Learning and Digital Media Initiatives Committee Roster
Exhibit 2 - Committee Hearings: Guests, Affiliation, and Ongoing Initiatives
Exhibit 3 - Administrative Organization of Digital & Online Initiatives
Exhibit 4 - Number of Patents Granted to Columbia Affiliates, 1995-2001
Exhibit 5 - Technology Transfer Income, 1984-2001
Exhibit 6 - The Productivity of External Funding: Total Research Funds to Columbia and Revenues Generated by Columbia Technology Transfers, and the Ratio of Returns to Funding
Exhibit 7 - Health Sciences Invention Report
Exhibit 8 - Morningside Invention Reports
Exhibit 9 - Distribution of Patents and Licensing Income
Exhibit 10 - Distribution of License Income, 2001 Fiscal Year
Exhibit 11 - Distribution of License Revenue, 2001 Fiscal Year
Exhibit 12 - Organizational Chart of Digital Initiatives and the sources and amounts of monies for each in 2001 FY
Exhibit 13 - List of Key Units
Exhibit 14 - Distance Learning Activities by Academic Units
Exhibit 15 - List of Currently Funded Activities



[1] See Joint Subcommittee's report submitted to the University Senate on April 27, 2001.

[2] See Resolution Seeking Greater Budget Transparency dated December 14 2001.

[3] For now, the Fathom Board of Directors has opted to contract quality control for its online courses to a group of evaluation experts at Columbia University's Teachers College. These procedures were described to the Committee by Fathom CEO Ann Kirschner during the March 2002 hearing. Fathom's quality assurance statement reads: "Our extensive Course Directory includes hundreds of online courses that have been carefully reviewed by the Media Evaluation Group at Teachers College, Columbia University, and meet the highest standards for content and instructional design. Fathom's standards of academic and editorial integrity are ensured by an Academic Council, established by Fathom's Board of Directors, which advises and supports Fathom in its mission to have programming that is of the highest academic quality." This may be somewhat misleading - the board, for instance, does not review all course offerings - and further avenues of faculty oversight are currently under discussion.

[4] See Senate Resolution dated March 30, 2001.

[5] See P.L. 96-517, The Patent and Trademark Law Amendments Act and subsequent amendments in P.L. 98-620.

[6] See the Council on Government Relations, 1999, "The Bayh-Dole Act: A Guide to the Law and Implementing Regulations," available on the web at: http://www.ucop.edu/ott/bayh.html.

[7] These monies, however, are projected to decline over the next 3 years as several key patents go off line. Barring any significant developments, revenues are predicted to drop to around $126 million in 2002, $113 million in 2003, and $67 million by 2004, where incomes should remain relatively steady.

[8] This pattern is mirrored in revenues returned to inventions. Over the last three years (FY 1999 to 2001) alone, the Health Sciences Campus produced a total $363.8 million in revenues or 94.7% of the total. The School of Engineering and Applied Sciences produced $13.9 million or 3.6%; Arts and Sciences produced $5.8 million or 1.5%; Lamont Doherty Earth Observatory produced $0.7 million or 0.2% and the Graduate School of Business did not participate.

[9] Moreover, the University reserves the right to deduct additional sums for extraordinary expenses.

[10] The distribution model for intellectual property with respect to software differs slightly from the formulas presented here, depending if the software requires additional development efforts to support the innovation. See Columbia's Copyright Policy: http://www.columbia.edu/cu/provost/docs/policies.html.

[11] The Strategic Initiative program funds projects like Virtual Information Initiative, New York City Initiative, Global Systems Initiative, School or Institute Investments, Center Development, and Interdisciplinary Conferences.

[12] These include all cases where Columbia was the lead institution.

[13] Recall that developers receive 50% of the income on inventions yielding less than $100,000 in net income and 25% for sums above this amount.

[14] Note that only four technologies reached the overflow limits and the only school that exceeded its limits was Health Sciences, which was allowed to keep its overflow.

[15] Most discretionary funds flow from top four technologies that exceed caps. Additional allocations were made to individual schools, departments and Project Investigators from discretionary funds.

[16] It is useful to compare Columbia's policies with those of other universities. For example, the UC system assigns 50% of net royalties and fees to the inventor. The University of Michigan is also on a graduated system: depending on the income, Michigan assigns one half to a third of net revenues to the inventor. Stanford divides royalty income as one third to the inventor, one third to the inventor's department (as designated by the inventor), and one third to the inventor's school. Also, in no case did the administrative fees exceed 15 percent plus legal expenses, while Columbia's policy requires a minimum of 20 percent but covers these costs.

[17] See Executive Vice Provost Office. 2001. Columbia Digital: A Supplement to the Columbia Record. Details on these particular organizations are provided below.

[18] The Strategic Initiative Fund also funds a number of similar projects, but not any of the major units found in Exhibit 12.

[19] Dr. Crow contrasts this to Fathom's mission, which is to build an authenticated knowledge and online learning site, so that Columbia Interactive and Fathom have "distinct and complementary missions."

[20] Almost all schools have some digital media projects underway. The ones highlighted in the chart are perhaps the most developed and offer degrees or certificates online.

[21] According to Dean Feldberg GSB has received $2 million from UNext, of which 36 percent was allocated to the central administration's Strategic Fund. UNext also covered all production costs.

[22] CVN did receive a small grant from the Strategic Initiative Fund, but this was only $100,000 and on a one-time basis. Moreover, STV and DKV did actively participate in negotiations with UNext and Cognitive Arts, as well as the re-negotiation of support when both companies experienced financial difficulties.

[23] Columbia Interactive A&S only recently changed its name. Nonetheless, it is administered and funded wholly by Arts and Sciences, and was produced by a private outside firm, Cognitive Arts. However, DKV does plan to use some of the material produced in future projects.

[24] A list of universities offering online courses and brief description of activities is available upon request.

[25] Combined, DKV and Fathom received $20.4 million in allocations in 2001. This represents 14.2 percent of the total license income (20.4/143.3, and 32% (20.4/63.3) of the available discretionary funds after give backs.


 [SO1]Discrepency in numbers check

--!>