Re: NIR SIG Proposal at APNIC-18 - Changing NIR fee structure

  • To: hosaka at nic dot ad dot jp, sig-nir at lists dot apnic dot net
  • Subject: Re: NIR SIG Proposal at APNIC-18 - Changing NIR fee structure
  • From: MAEMURA Akinori <maem at maem dot org>
  • Date: Wed, 4 Aug 2004 15:52:57 +0900
  • Cc: sig at apnic dot net
  • In-reply-to: <20040804145732.75AA.HOSAKA@nic.ad.jp>
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    • 
      Thanks for this submission.  Hope we can have a good 
      disucussion and result on this proposal.
      
      
      
      Regards,
      Akinori, Chair of NIR-SIG
      
      
      In message <20040804145732.75AA.HOSAKA@nic.ad.jp>
         "NIR SIG Proposal at APNIC-18 - Changing NIR fee structure"
         "Toshiyuki Hosaka <hosaka at nic dot ad dot jp>" wrote:
      
      | Dear Maemura-san and all NIR colleagues,
      | 
      | The following is another proposal from JPNIC, which I have submitted by
      | email today. Your questions, comments, and suggenstions are highly
      | appreciated.
      | 
      | Looking forward to seeing you all in Fiji.
      | 
      | Thanks and best regards,
      | Toshi@JPNIC
      | 
      | ----------------
      | 
      | Proposal: Changing NIR fee structure
      | Author: Toshiyuki Hosaka, Japan Network Information Center (JPNIC)
      | Version 1.0 as of August 4, 2004
      | 
      | _____________________________________________________________________
      | Introduction:
      | (A very brief description of your proposal.)
      | ---------------------------------------------------------------------
      | 
      | This document proposes new NIR fee structure, which could be acceptable
      | for all stakeholders, i.e., APNIC, APNIC members, and NIRs. This 
      | proposed fee structure sets an per allocation fee charged to NIRs 
      | (indirectly to NIR members) at a reasonable level even when NIRs make 
      | a large allocation to their members, by setting an upper limit to the 
      | fee.
      | 
      | 
      | _____________________________________________________________________
      | Summary of the current problem: 
      | (Describe the situation that this proposal is intended to address.)
      | ---------------------------------------------------------------------
      | 
      | NIRs are charged NIR fees, or per address fee, defined in APNIC-103 
      | (Operational policies for National Internet Registries in the APNIC 
      | region), in addition to yearly membership fee, which all APNIC members
      | pay as well.
      | 
      |   1.3 	NIR fees
      |   ----------------
      | 
      |   APNIC charges fees for providing NIR services. These fees are set at
      |   a level that ensures that other APNIC members do not subsidise NIR
      |   members and that NIRs provide sufficient funding to cover the cost of
      |   providing the services they require. Details of the NIR fees are
      |   described in the APNIC document "APNIC Fee Schedule: Membership
      |   Tiers, Fees, and Descriptions", within the provisions describing the
      |   'per address fee' for confederations.
      | 
      | 
      | This NIR fees increase in proportion to the address space allocated to 
      | NIRs (or NIR members), and there is no upper limit in the fee. This is
      | the problem for NIRs/NIR members especially in large allocation.
      | 
      | For exapmle;
      | 
      |  /10 in IPv4 : 4,194,304 * USD 0.02 (Extra Large) = USD 83,886.08
      |  /20 in IPv6 : 5,534,417 * USD 0.02 (ditto) = USD 110,688.34
      | 
      | Such large allocations are feasible for JPNIC members. Our IPv4 address
      | allocation size to our members shows a trend of increase. JPNIC has made
      | 5 allocations exceeding /14 in recent 12 months, from July 2003 to June
      | 2004, for instance.
      | 
      | Furthermore, revised IPv6 policy document (prop-016-v002) clarifies 
      | that LIRs can apply for larger IPv6 allocations based on the current
      | IPv4 infrastructure, and that the allocation size is decided in 
      | accordance with the HD-ratio. So it is very likely for our members to
      | request larger IPv6 allocations. In fact, JPNIC had inquiries recently
      | from two of our members regarding large IPv6 allocation at /20 level.
      | 
      | This is actually a huge amount of fee, larger than yearly APNIC/JPNIC 
      | membership fee. JPNIC has to pass such cost to our members in either 
      | ways as below;
      | 
      |  a) JPNIC passes this cost on our members
      |  b) JPNIC passee this cost on the requestor
      | 
      | Choice a) is not acceptable for JPNIC because this means small/medium
      | ISPs are to pay larger ISP's per allocation fee. 
      | 
      | Choice b) also has problems as below;
      | 
      |  1) NIR members may lose the motivation to request large allocations
      |     under NIR membership, since the expense is far larger than receiving
      |     allocations directly from APNIC. This is not the situation we want.
      | 
      |  2) This large per address fee is beyond the level that NIRs can 
      |     justify as "value added service", such as local language/whois/
      |     information/translation.
      | 
      |  3) This large per address fee is beyond the intention described in 
      |     APNIC-103.
      | 
      |  4) In order to avoid a per allocation fee, NIR members *may* receive
      |     the large amount of IP resources as an APNIC member and after that 
      |     it *may* transfer its membership to NIR. This causes much burden
      |     both APNIC and NIRs.
      | 
      |  5) If Large NIR members flow out to APNIC direct membership, APNIC's 
      |     opration cost could increase which might be transfered to membership
      |     fee applied to all APNIC members in the long run.
      | 
      | _____________________________________________________________________
      | Situation in other RIRs:
      | (If applicable, describe any policies which may apply to this 
      | situation in ARIN,LACNIC, or RIPE NCC. If you are not sure, leave 
      | this section blank.)
      | ---------------------------------------------------------------------
      | 
      | (blank)
      | 
      | 
      | _____________________________________________________________________
      | Details of your proposal:
      | (Describe your proposal in detail.)
      | ---------------------------------------------------------------------
      | 
      | JPNIC proposes to "set an upper limit on the per address fee for NIRs". 
      | Non-NIR confederations is not the target of this proposal.
      | 
      | This proposal consists of two parts. Details are as follows;
      | 
      | 
      |     (1) JPNIC proposes to set an upper limit on the per address fee 
      |         for a single allocation, provided that the NIRs make an 
      |         allocation from APNIC common address pool (including Direct 
      |         Member Allocation).
      | 
      |     (2) JPNIC tentatively proposes that the upper limit of per address
      |         fee for a single allocation should be set at /14 in IPv4, and 
      |         /28 in IPv6. However, this specific value is subject to a 
      |         financial impact assessment by APNIC.
      | 
      | 
      | Proposed per address fee is calculated as follows;
      | 
      |    (IPv4)
      |    /20 :   4,096 * (per address fee)
      |    /19 :   8,192 * (per address fee)
      |    /18 :  16,384 * (per address fee)
      |    /17 :  32,768 * (per address fee)
      |    /16 :  65,536 * (per address fee)
      |    /15 : 131,072 * (per address fee)
      |    /14 : 262,144 * (per address fee)
      |    /13 : 262,144 * (per address fee)
      |    /12 : 262,144 * (per address fee)
      |    ...   ...
      | 
      | 
      |    (IPv6)
      |    /32 :  7,132 * (per address fee)
      |    /31 : 12,417 * (per address fee)
      |    /30 : 21,619 * (per address fee)
      |    /29 : 37,641 * (per address fee)
      |    /28 : 65,536 * (per address fee)
      |    /27 : 65,536 * (per address fee)
      |    /26 : 65,536 * ...
      |    ...   ...
      | 
      | 
      | _____________________________________________________________________
      | Advantages and disadvantages of adopting the proposed policy:
      | (Explain what you believe to the be the main advantages and 
      | disadvantages that would flow if APNIC adopted your proposal.)
      | ---------------------------------------------------------------------
      | 
      | 1. Why adopt the upper limit for per address fee?
      | 
      | Changing the fee structure should be acceptable for all the stakeholders,
      | APNIC, APNIC members, and NIRs (NIR members). That is;
      | 
      | (1) For APNIC
      |  - New structure should not have siginificant inpact on APNIC financlal 
      |    condition.
      | 
      | (2) For APNIC members
      |  - New structure should not force current APNIC members to pay additional
      |    fee.
      | 
      | (3) For NIRs (NIR members)
      |  - New structure should solve current problem.
      |  - New structure should not cause unfairness amoung NIRs.
      | 
      | When we see those points, this proposal meets points mentioned above.
      | 
      | 
      | 2. Other choices?
      | 
      |   2.1 Discount per address (site) fee
      | 
      |   Even if you discount per address fee (ex. USD 0.02 to USD 0.01), it 
      |   won't help NIR so much since there is still no upper limit for per 
      |   address fee.
      | 
      | 
      |   2.2 Implement allocation fee (fixed fee per allocation)
      | 
      |   If this scheme is implemented, APNIC has to charge larger fee than 
      |   current per address fee corresponds to /20 or /19, in order to keep
      |   the revenue from NIRs. This means smaller NIRs and NIR members are 
      |   charged more than current scheme, and this is not aceptable for them.
      | 
      | 
      |   2.3 Raise membership fee for NIRs
      |   
      |   This could be an appropriate solution for the problems, however we
      |   do not take this here since we cannot propose concrete NIR fee 
      |   structure which is acceptable for all NIRs without knowing how much
      |   each NIR pays yearly including both membership fee and NIR fees.
      | 
      | 
      |   2.4 Revise current fee structure as a whole, involving all APNIC 
      |       members
      | 
      |   It takes time and probably this is not acceptable for current APNIC 
      |   members.
      | 
      | 
      | 3. Why 262,144 hosts (65,536 sites in IPv4) are the upper limit?
      | 
      | Based on the stats JPNIC has, /14 (in IPv4) is the appropriate level 
      | we can agree on. If we set the upper limit at /14, APNIC doesn't lose 
      | much revenue from NIRs since currently there are not so many allocation 
      | over /14.
      | 
      | Below is the JPNIC allocation made to the members.
      | 
      | (1) Recent 12 months (July 2003 to June 2004)
      | 
      |  /14+          : 5  (3%)
      |  /14 and under : 185 (97%)
      | ----------
      | /11+ : 0
      | /12  : 2
      | /13  : 3
      | /14  : 1
      | /15  : 6
      | /16  : 15
      | /17  : 11
      | /18  : 20
      | /19  : 37
      | /20  : 95
      | -----------
      | 
      | (2) January 2002 to December 2002
      | 
      |  /14+          : 2   (0.8%)
      |  /14 and under : 236 (99%)
      | 
      | (3) January 2001 to December 2001
      | 
      |  no /14+ allocation
      | 
      | 
      | 4. Why restrict to the allocation made from APNIC common address pool?
      | 
      | Without this restriction, NIRs with its own pool can pay less than NIRs
      | allocating from APNIC pool, which may cause serious impact on APNIC 
      | revenue. For example;
      | 
      |   (Case-1)
      |   - When APNIC allocates /12 (4*/14) to NIRs as their address pool,
      |     and NIRs allocate 4 * /14 to their members...
      | 
      |      262,144 * USD 0.02 = USD 5,242.88 (/14 limit applied)
      | 
      |     +-------+     +------+       +-----+
      |     | APNIC |-----| NIRs |-------| LIR |
      |     +-------+     +------+   |   +-----+
      |              ---->           |   +-----+
      |               /12            |---| LIR |
      |                              |   +-----+
      |                              |---
      |                             ..
      |                             ..
      |                           ------>
      |                           4 * /14
      | 
      |     In this case NIRs are to pay only USD 5,242.88, and can allocate
      |     4 * /14 to their members.
      | 
      |   (Case-2)
      |   - When NIRs allocate 4*/14 to their members from APNIC addres pool...
      | 
      |      262,144 * 4 * USD 0.02 = USD 20,971.52 >> USD 5,242.88
      | 
      |     +-------+     +------+
      |     | APNIC |-----| NIRs |------+
      |     +-------+     +------+      |
      |         |                    +--+--+
      |         |------------------->| LIR |
      |         |         /16        +-----+
      |         |                    +-----+
      |         |------------------->| LIR |
      |         |         /16        +-----+
      |        ..                ..
      |        ..                ..
      | 
      |     In this case NIRs are to pay USD 20,971.52, much larger than case-1.
      |     So we should have the restriction that proposed upper limit is only
      |     applicable to the allocation made from APNIC common address pool.
      | 
      | 
      | (*remark) ----------------------------------------------------------
      | Per address fee here is the one applied to ex.large members, and set 
      | /14 upper limit.
      | --------------------------------------------------------------------
      | 
      | 
      | In IPv6 case all NIRs allocate IPv6 block from APNIC pool so this 
      | restriction is not applied. /28 (in IPv6) limit for per address fee 
      | is applied to all NIRs.
      | 
      | 
      | 5. Detailed financial impact on APNIC operation
      | 
      | (Subject to the calculation by APNIC)
      | 
      | 
      | _____________________________________________________________________
      | Effect on APNIC members:
      | 
      | Briefly explain how you think this may affect APNIC members. For 
      | example will APNIC members save costs, have more efficient 
      | administrative procedures, and so on.
      | ---------------------------------------------------------------------
      | 
      | There is no negative impact on current APNIC members.
      | 
      | 
      | _____________________________________________________________________
      | Effect on NIRs:
      | 
      | Briefly explain how you think this may affect NIRs. If you are not 
      | sure, leave this section blank.
      | ---------------------------------------------------------------------
      | 
      | There is no fee raise for NIRs, and large NIR members can stay NIR 
      | membership so all NIR and NIR members have a merit.
      | 
      | (end of document)
      | 
      | 
      | 
      | 
      | --
      | Toshiyuki Hosaka <hosaka at nic dot ad dot jp>
      | Japan Network Information Center (JPNIC)
      | Tel: +81-(0)3-5297-2311  Fax: +81-(0)3-5297-2312
      | 
      | 
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