[Wg-apnic-fees] An Informal report from the APNIC EC Fees Meeting in Sin

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  • Subject: [Wg-apnic-fees] An Informal report from the APNIC EC Fees Meeting in Singapore
  • From: Randy Bush <randy at psg dot com>
  • Date: Wed, 11 Jul 2007 06:14:28 +0800
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    • 
      As fees WG co-chair, I attended the APNIC EC meeting on fees held in
      Singapore on 2007.07.09.  This is my personal report and is not any kind
      of formal position of the Fees WG, APNIC, ...
      
      Aside from the normal business issues dealing with financial planning
      for the organization (with the focus on fees, of course), I learned a
      lot as the EC considered the very long-term financial and market issues
      the organization may (or may not) face in the future, e.g.
        o IPv4 free pool run-out and how that could affect income,
        o IPv6 take-up of /32s implying members only need one allocation,
        o categories of membership, associate, small, ... gigantic,
        o the role(s) and impacts of NIRs,
        o aging fees a la RIPE (can not work if NIRs are not transparent
          with respect to transfers, and does not work well with IPv6 /32s)
        o service-based charging as opposed to address-holding based
        o etc.
      
      But, while doing its best to explore how these very long term issues
      might affect the APNIC business model, the EC was still very aware of
      its responsibility to deal with current and near term (two to five year)
      fiscal issues, particularly the fact that, because of currency exchange
      rates vis the US Dollar, needed expense increases to meet service needs
      while retaining employees, etc., APNIC is likely to have over a US$400k
      loss in fiscal 2007.  This means that pragmatic fiscal changes need to
      be made this year, while the EC and the membership also do long range
      business analysis and planning of the big-picture issues such as the
      above (which I personally feel are so large that it is like the idiom we
      have "boiling the ocean.").
      
      Given that there are currently two major fiscal causes of the budget
      shortfall, APNIC income is denominated in the falling US Dollar while it
      incurs expenses in the rising Australian dollar, and costs of the
      operation rise with inflation factors, the EC asked APNIC financial
      management what the current prudent course would be.  The answer was
      twofold,
        o Change the fees from being denominated in US Dollars to Australian
          Dollars so finances are predictable and budgetable, and
        o Raise fees 6-7% across the board, i.e. with no change in the fee
          model, just raise them all in parallel.
      
      This seemed normal prudent business planning and certainly appealed to
      my sense of simplicity.  But, it might make the membership nervous that
      fees could go up arbitrarily in the future.  So it was also suggested
      that fee increases be capped at no more than 6% per annum.  Though, of
      course, the membership would have to vote on any fee change anyway.
      
      And, of course, all this would need to be discussed by the membership as
      a whole, and formally reviewed and approved at the September Members'
      meeting if it is to take effect in January 2008.
      
      So, Ming-Cheng Liang and I have asked the Secretariat to give the Fees
      WG a meeting slot in September, as well as time to discuss all this at
      the Members' Meeting then.
      
      But this mailing list is also an excellent place to explore any issues
      and ideas before the September meeting, and discussion here has a wider
      audience and may save us some time in New Delhi.  So I hope this
      informal report helps us all to progress.  My apologies for the long
      message.
      
      randy