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Re: [Wg-apnic-fees] Proposal: Interim APNIC fee structure adjustments(Draft)
Paul,
I support this proposal as the first step.
This appears to be a very pragmatic approach to getting the APNIC budget
back into a balanced state and a very good first step for APNIC moving
forward with delivery of those services that we are after as members.
Whilst no-one is in favour of paying rate increases, it appears that
after a decade it's time for some adjustment to ensure the work and
services provided by APNIC continue as well as some neede services can
be funded.
The decline in value of the US dollar against many of the Asia Pacific
currencies it may not be much of a real fee increase for many APNIC
members.
With a number of key issues related to IPv4 pool exhaustion coming to
the fore, APNIC needs to become more proactive in its work within our
region region. APNIC also needs to look at some major changes to it's
services and roles to adjust to these changing circumstances in the
coming years. This can be more effectively done within the framework of
having a budget that allows APNIC to continue to operate effectively and
not be limited in its services, and limited in its ability, to make
these changes due to a funding shortfall from the membership.
Regards
Nick Hannaford
Telstra Corporation
-----Original Message-----
From: wg-apnic-fees-bounces@apnic.net
[mailto:wg-apnic-fees-bounces@apnic.net] On Behalf Of Paul Wilson
Sent: Wednesday, 8 August 2007 3:58 PM
To: wg-apnic-fees@apnic.net
Subject: [Wg-apnic-fees] Proposal: Interim APNIC fee structure
adjustments(Draft)
Dear all,
Following is the proposal for interim APNIC fee structure adjustments,
for discussion and voting during APNIC-24 next month. This measure was
discussed by the APNIC EC during their meeting last month, as reported
earlier by Randy Bush on this mailing list.
The attachment to this proposal is the management letter from KPMG,
which recommends and supports these changes.
I look forward to your comments, and your support for this proposal.
Regards,
Paul Wilson
APNIC.
________________________________________________________________________
proposal: Interim APNIC fee structure adjustments (Draft)
________________________________________________________________________
Author: Paul Wilson, Director General, APNIC
Akinori Maemura, Chair, APNIC Executive Council
Version: 0.1 (Draft)
Date: 6 August 2007
1. Introduction
----------------
In May 2007 the APNIC Executive Council commissioned a study by
international consulting firm KPMG into the revision of APNIC's fee
structure. The first stage of this work has been completed and will be
reported at the APNIC 24 meeting in New Delhi. These results include a
recommendation for an interim fee structure adjustment to address both
the immediate budget shortfall and the ongoing uncertainty arising the
use of the US dollar in setting APNIC fees.
2. Summary of current problem
------------------------------
The current problem is stated by KPMG in their recent advice to the
APNIC EC, which is attached to this proposal.
In section 2 the problem is summarised as follows:
"KPMG's analysis clearly shows that the impact of the foreign
currency
movements, and the general impacts of movements in the Consumer
Price
Index (as a proxy for inflation), represent risks to APNIC which
must
be addressed. It is also clear that these factors have resulted in a
significant reduction in the real costs of APNIC membership, and
that
an adjustment in fees should be seen as a response to an erosion in
income, and not as a fee increase resulting from escalating costs."
In section 4.1, the justification is provided as follows:
"We believe there is a justification for an immediate increase in
the
members' fees, and not to do so would expose APNIC to financial
risk.
The following provides an overview of the key considerations which
support the decision that EC reached to increase APNIC's membership
fees:
* Exchange rate variations - The strong increase in the Australian
Dollar ($AUD) compared to the US Dollar (USD) has detrimentally
impacted on APNIC's financial performance. The 2007 APNIC budget was
struck at the rate of .78, and the exchange rate has been hovering
around .85 and this represents a 10% deterioration in this year
alone.
Furthermore since 2000, when the rate was around 0.5479, the real
deterioration in APNIC's AUD revenues has been over 40%.
* No increase in fees since 1996 - The membership fees have not been
increased since 1996. There has been no adjustment for inflation
over
this period and this has resulted in a narrowing gap between
revenues
and expenses to the point where APNIC will incur a deficit for the
first time in 2007. A percentage increase in the order of 7%
represents
a very small proportion of the losses due to inflation, but provides
the opportunity to balance the endorsed budget for 2007.
* Member expectations - The demand for greater and better services
by
APNIC members. While members have generally been very positive about
the services provided by APNIC, certain improvements and
enhancements
are expected. However, the fact that APNIC faces a declining revenue
base, when taking into account exchange rate fluctuations and
inflation, limits the opportunity for APNIC's management to address
all
key service improvement requests proposed by its members.
"We believe that the decision to implement a percentage increase in
member fees in the short term, is a prudent way to manage risk."
3. Details of the proposal
----------------------------
Under this proposal, adjustments are made to APNIC fees sufficient to
produce a balanced result for the approved budget for 2007.
Firstly, it is proposed to levy all APNIC fees in Australian Dollars.
The proposed conversion rate from US Dollars to Australian Dollars is
0.7889, which is the same exchange rate that was used to prepare the
2007 APNIC annual budget.
Secondly, it is proposed that fees be adjusted to a level which would
produce a balanced budget in 2007. This involves an overall increase of
around 7% in total in fees derived from APNIC members and non-member
customers.
The complete revised fee schedule is provided in Appendix A. It should
be noted that "round figures" have been chosen in order to allow easier
communication and administration, and therefore the percentage change is
not consistent in all cases.
4. Advantages and disadvantages of the proposal
-------------------------------------------------
Advantages:
The proposed changes are necessary to ensure sustainable operations for
APNIC in future. Without such changes, APNIC would need to reduce
service levels, or continues to incur losses in future.
Disadvantages:
The adjustment in currency will have administrative impacts on APNIC
members and customers, who may need to make new foreign currency
arrangements in some cases. In order to facilitate payment, APNIC will
continue to accept payments in USD, based on the exchange rate
applicable at the time of invoicing.
===
A. Appendix - Revised Fee Schedule
A1. Membership Fees
Current Current New fee
(USD) (AUD) (AUD)
Extra large $40,000 $50,704 $54,400
Very large $20,000 $25,352 $27,200
Large $10,000 $12,676 $13,600
Medium $5,000 $6,338 $6,800
Small $2,500 $3,169 $3,400
Very Small $1,250 $1,584 $1,700
Associate $625 $792 $850
A2. Per Address Fees
Current Current New fee
(USD) (AUD) (AUD)
Extra large $0.02 $0.0254 $0.027
Very large $0.03 $0.0380 $0.04
Large $0.06 $0.0761 $0.08
Medium $0.11 $0.1394 $0.15
Small $0.16 $0.2028 $0.22
A3. Non-member Allocation Fees
Current Current New fee
(USD) (AUD) (AUD)
Host or site address $1 $1.2676 $1.35
AS number $500 $633.7939 $680.00
Reverse DNS domain $50 $63.3794 $68.00
A4. Non-member Maintenance Fees
Current Current New fee
(USD) (AUD) (AUD)
Host or site address $0.10 $0.1268 $0.14
AS number $50 $63.3794 $68.00
Account fee $100 $126.7588 $135.00
===
________________________________________________________________________
Paul Wilson email: pwilson@apnic.net
Director General, APNIC sip: apnic@voip.apnic.net
http://www.apnic.net phone: +61 7 3858 3100
