Introduction

This document provides a policy interpretation of the contract between UCLA Extension (UNEX) and OnlineLearning.net (OLN) for the distribution of UNEX online courses or programs. It addresses questions about whether the contract affects individual faculty, the College, and the professional schools, especially in cases where faculty or academic units may wish to collaborate with UNEX in online course offerings. These issues are discussed in the context of the key factors that need to be considered in any attempt to develop or implement such programs.

This document focuses on "online" courses and programs of courses, which are one dimension of "distance learning." The terminology "distance learning" has been used for many years to encompass a variety of technology-assisted instruction ranging from non-interactive correspondence courses to highly interactive face-to-face teleconferencing courses to online Web based courses. The common trait among all distance learning approaches is that the instructor and students are physically separated, but their interactions may be synchronous or asynchronous, and can involve any number of different technologies including television, audio or video conferencing, online instruction, Web support, e-mail support, chat rooms, telephone, fax, etc. "Online" is used to describe courses and programs of courses that are typically offered in an interactive mode through the Internet or other means, with asynchronous communication between and among teachers and students. These may or may not be offered for credit, and they may or may not involve degrees or credentials. Many colleges and universities across the country, including the University of California, are involved in online education. At UCLA, UCLA Extension has played a major role, in partnership with OnlineLearning.net, in the development of successful online offerings.

Developing Successful Online Courses

Many online course offerings are developed with the intention of attracting new markets—students who are not primarily within an institution’s traditional or local student pool. Such students are attracted to online educational opportunities for their convenience, accessibility, and other personal reasons, but many students are not, preferring instead the traditional classroom setting. Online courses also involve new technologies and new approaches to teaching, factors which make developing them different from and more costly than developing new courses to be delivered in traditional settings.

Thus, the success of an online course or program of courses depends on many factors. What is most important, however, is the identification of potential students and assessment of the strength of market demand. In short, a thorough market analysis at the outset is critical. If this shows that the ideas are sound, effective promotion, advertising, and communication about the program are required next. These marketing elements are a costly, but essential, ingredient for success. As will be discussed later, marketing was a central reason behind UCLA Extension’s partnership with OLN.

In addition to marketing, developing successful online courses has a number of other requirements:

• Translating course material originally designed for the traditional classroom setting into effective, state-of-the-art material for use in an online mode.

• Providing appropriate pedagogical training and assistance to course instructors to assure the most effective "virtual" interaction between teachers and students.

• Assuring appropriate copyright protection for newly created, original online material and permission for use of copyrighted third-party materials incorporated into online courses.

• Providing relatively seamless or transparent technology to assure that distance learners can concentrate on the course, not the delivery.

• Establishing efficient and responsive administrative mechanisms for student services, including registration and enrollment, and for the collection and processing of fees or tuition.

Overall, online education is not an economical or otherwise "light" alternative to the traditional classroom, but rather an extension of that classroom to students who, by choice or for other reasons, cannot be on campus. Students at the other end of the line have the same needs for quality in course content, instruction, and related services as traditional classroom students. The challenge lies in ensuring that the online approach and logistics developed for each course are of the quality expected of UCLA courses.

The UNEX/OLN Partnership

UCLA Extension entered into its contract with OLN as a means to meet the challenges that have just been described. The contract between UNEX and OLN has been the focus of close scrutiny both on the UCLA campus and in the public press. Concerns have been raised about the contract’s impact on faculty rights in their course material and whether OLN "owns" UNEX or other UCLA courses. The following question and answer series addresses these concerns and provides important information about the UNEX/OLN partnership.

1. Originally called The Home Education Network, OnlineLearning.net is a privately owned company dedicated to distributing continuing higher education courses primarily for the professional market through online means. Its investors and strategic partners include Sylvan Learning Systems, St. Paul Venture Capital, the Times Mirror Corporation, and Houghton Mifflin Publishers. The company’s chairman and founder is Alan Arkatov, whose previous career experience includes television production and political consultancy. Its president and CEO is John Kobara, formerly UCLA Associate Vice Chancellor for University Relations. More information about OLN can be found at http://www.onlinelearning.net.

1. OLN’s contract with UCLA Extension was executed in June, 1994 and runs through June, 2004. To date, UCLA is the only institution of higher education that has contracted with OLN. The contract is a detailed and complex legal document that was first signed on June 30, 1994. At that time, online courses were not contemplated as part of the UNEX-OLN partnership; instead, the contract dealt with class "recordings," i.e., primarily audio and video recordings of traditional UNEX courses that were to be sold commercially as secondary products. By the beginning of 1996, no such recordings had been made, and the market demand for online courses was recognized. The contract was then amended simply to incorporate online courses as one form of "recording." Recognizing that different circumstances pertain to online courses, UCLA Extension insisted and OLN later agreed to amend the contract once more. The amendment was executed July 8, 1999, but it is effective as of January 1, 1998.

Q3: I have heard reports suggesting that this contract eliminates copyright protection for my UCLA course materials. Is this true?

1. The answer is no. All rights to course content and materials remain with the instructor and (in limited pre-determined and agreed-upon instances) with the University. The contract itself pertains only to UCLA Extension courses and in no way involves regular UCLA courses or programs. Subsequent questions address this in more detail.

1. Under the terms of the initial contract, OLN has exclusive rights to produce and distribute recordings of UNEX courses for commercial purposes. OLN’s rights of ownership were only in the recordings themselves (i.e., in the audio or video tapes); no rights were granted to OLN in the content or materials developed for the UNEX course that were anticipated to be recorded by OLN. In practice, the contract provisions pertaining to recordings have never been exercised, and there have been occasions when OLN has explicitly waived its ownership rights, enabling UCLA Extension to videotape and/or audiotape course proceedings.

Under the terms of the contract amendments which incorporate online course delivery, all rights, title, and interest, including without limitation the copyright, in all course content, syllabi, other materials, and curricula of UNEX classes distributed online are retained by UNEX or its instructors, as appropriate. Practically speaking, this means that all such ownership rights are retained by online instructors exactly as they are currently retained by instructors of traditional UCLA Extension and regular UCLA courses.

OLN, on the other hand, retains the exclusive right to distribute all UNEX online courses for commercial purposes, i.e., for general public enrollment. The OLN contract recognizes UNEX courses as those offered "by, through, or in conjunction with UNEX." UCLA has interpreted this to encompass only courses listed in the UNEX catalog and website, and students in these courses are considered to be only UNEX students. (Furthermore, OLN’s distribution rights do not include regular UCLA courses, for which non-matriculated students may register concurrently through Extension, even when such courses are advertised in the UNEX catalog.) Moreover, in every case, UNEX is responsible for designating the courses that can be considered for online distribution. OLN has been granted the distribution rights to any general public enrollment class UNEX develops as an online offering, but not to all UNEX classes in existence.

OLN may enter into independent, i.e., not tied to UCLA per se, and mutually acceptable agreements with individual UCLA faculty for the development of online courses in which OLN might retain principal ownership rights. These courses, however, cannot be marketed as UNEX or UCLA courses, and UNEX cannot be prohibited from offering equivalent courses, either in the classroom or online.

OLN may not, however, enter into independent agreements for online courses with UCLA or other UC academic units directly. If the College or the professional schools wish to utilize OLN’s services for such purposes, arrangements must be made through UNEX. For related information about working with OLN and revenue sharing, see questions 6 and 7 below.

1. As the exclusive distributor of UNEX’s online courses, OLN provides essential financial, marketing, and other support to UNEX. This support has four primary forms, which are specified in the contract:

1. Full marketing services. OLN is solely responsible for planning, implementing, and funding all external marketing of UNEX online courses. i.e., all advertising of online courses that is done in addition to the listings in UNEX's own marketing materials(catalog, brochures, and websites). This relieves UNEX of the burden of major promotional costs essential to developing the online student market beyond the Los Angeles County area. UNEX retains the right to review and comment on the content of OLN promotional material, and to enforce strict conformity with UC policy on use of the UCLA Extension and UCLA names.
2. Financial support for course development. OLN provides for fair reimbursement to UNEX of the unique costs incurred by UNEX in the development and implementation of online courses distributed through OLN. This includes up-front incentives and course guarantee fees to assure a progressive growth in the number of online courses available from year to year. UNEX retains full academic oversight over courses and the right to review and approve course content and presentation before online release is authorized.
3. Coverage of instructor and staff expenses. Instructors’ salaries are reimbursed in full, and UNEX staff expenses are reimbursed at a level that reflects UNEX’s estimate of the effort required to support online course development and implementation. Instructors are also entitled to course development fees in instances where they are responsible for the design of new online courses.
4. Fees and Royalties. Students enroll with UNEX and pay fees directly to The Regents. Those fee revenues are forwarded to OLN, and UNEX is later reimbursed. After reimbursement for all instructional and administrative expenses enumerated above, OLN shares net course revenues with UNEX according to a formula, under which UNEX receives 6% of net course revenue up until December 31, 2001, and 8 ¾% thereafter. Since Winter Quarter 1999, OLN has begun to realize marginal net revenues and UNEX has begun receiving corresponding small royalty payments. The UNEX/OLN contract does not include provisions for intra-UCLA royalty sharing. It was an assumption in the original negotiations that royalty income for collaborative projects would flow from UNEX to participating instructors and academic units based on mutually developed agreements when and if royalties reached a meaningful level.

1.  It is important to distinguish between the course development process and the choice of which unit shall offer the course. The UNEX/OLN partnership is triggered only when online courses are offered through UNEX for general public enrollment. Thus, cooperation with UNEX on the planning and development of online courses does not require any involvement with or connection to OLN. UNEX may also assist units in mounting or marketing online courses to be offered independently of UNEX. Departments or faculty may consult and work with UNEX on these matters at any time. Additionally, the UNEX/OLN agreement reserves to UNEX and the campus the right to collaborate without OLN’s involvement on online courses to be offered exclusively for matriculated students of UC.

If you develop and offer an online course through the UNEX/OLN partnership, it will be advertised in the UNEX catalog and distributed by OLN. This will require the same operational coordination with OLN that applies to all other UNEX online courses, including becoming familiar with OLN’s technical platform, coordinating any special logistical support needs with OLN (e.g., textbooks or other supplementary materials needed by students for the course), and working as necessary with OLN course managers who provide technical support and other customer service to UNEX’s online students.

1. Online instructors for UNEX will be entitled at minimum to a course development fee and instructor remuneration consistent with what is already paid to UNEX online instructors in the same subject area. Depending on the nature of the proposed course and the uniqueness of the opportunity it may offer for expanding UNEX’s online curriculum, this could be supplemented by a special agreement between you and UNEX.

1. Course instructors for UNEX retain all rights and interest in original content and material used for instruction of online courses in exactly the same way they retain rights and interest for traditional classroom courses. OLN has specifically agreed that it has neither ownership nor any other interest, including copyright, in UNEX online courses distributed by OLN. The rights retained by UNEX pertain to all curricular matters, including the right to offer courses in a subject area or with a particular course title—again, in exactly the same way that UNEX and UCLA retain such rights for traditional classroom courses. UNEX does not claim copyright or any other interest in course content or material, unless such interest is specified by mutual agreement between UNEX and a course instructor or author (i.e., a mutual agreement to provide a "work for hire").

1. The manner in which UCLA Extension online courses are offered and existing copyright policy together provide complete protection of all instructor-developed materials used in such courses. Online courses involve complex human intervention, including a variety of live, asynchronous instructor/student interactions, examinations, and grading. The syllabus, hand-outs, tests, and arrangement of these activities are the property of the instructor, and cannot be copied, retained, or used without the instructor’s consent. Thus, while UCLA Extension retains "ownership" of the course title and description, i.e., the right to offer the course as part of its curriculum, the content of subsequent offerings would be unique. Instructors are free to use their materials and offer the same course content through other channels or providers, but, in such cases, the course may not be described as a UCLA Extension course.

1. The current agreement between UNEX and OLN is scheduled to expire on June 30, 2004. Prior to that date, there is an exclusive negotiating period, and the contract may be extended or allowed to run out. If that occurs (or occurs ahead of schedule should the parties mutually agree to end the agreement earlier), OLN’s distribution rights would completely expire at the end of the academic quarter then in progress. Assuming there is no extension, courses would already be underway for Summer Quarter, 2004, and both parties would fulfill their obligations through the end of that quarter. When that quarter is completed, OLN’s distribution rights will cease, and UNEX may market and distribute its online courses through other means.

1. As stated above, campus units may work with UNEX on course development and marketing without involving OLN. Units may also decide to offer new online courses through the UNEX/OLN partnership. Making this determination will involve cost/benefit analyses focusing on the quality of marketing programs and revenue potential under the UNEX/OLN contract as contrasted with other available service providers, either on-campus or outside. Should other options appear to be more cost effective, campus units may decide to mount their courses through other means. Of course, campus units may also utilize alternative approaches for offering online courses.

Further Information

If you have questions about this document, please contact one of the following individuals:

• Associate Dean David Menninger, UCLA Extension, ext. 55603, dmenning@unex.ucla.edu
• Campus Counsel Ruth Simon, ext. 52284, rsimon@conet.ucla.edu
• Associate Vice Chancellor Paula Lutomirski, ext. 55573, plutomir@conet.UCLA.edu