Status: APNIC Proposal

Date: 15 February 1999

1. Background

Under the current APNIC Fee Structure, APNIC members are able to select their APNIC membership category voluntarily. This structure has been in place since APNIC membership fees were first introduced, at the end of the APNIC Pilot Phase in June 1996.

The current membership categories are Small, Medium, Large and Very Large. The following table indicates for each of these categories, the current Annual Fee, the current number of APNIC members, and the total Annual Fee revenue* within that category (as of 1 February 1999).

Category	Annual Fee (USD)	Current Members	Total Annual Fees* (USD)	Funding Share (%)
Small	2,500.00	326	815,000.00	55
Medium	5,000.00	59	295,000.00	20
Large	10,000.00	20	200,000.00	14
Very Large	20,000.00	8	160,000.00	11
Total		413	1,470,000.00	100

(*) Note that the Total Annual Fee figures shown here are based on the number of APNIC members in each category, on 1 December 1999. Because memberships are renewed throughout the year, and because APNIC will continue to gain and lose members during the coming year, total revenue from this source will never exactly equal the above figures.

2. Current Situation

The following chart illustrates the trend in APNIC membership over 42 months, from the introduction of the membership structure, to 31 December 1999.



From this chart is can been seen that:

1. The numbers of APNIC members in the Medium, Large, and Very Large categories have remained relatively static, in spite of continual growth in membership. (It is notable that while new members have joined APNIC in all categories, members in higher categories have at the same time "drifted" to smaller categories).
2. The number of members in the Small category continues to grow, even while many of those members can be shown to have increased their address space holdings substantially, and continue to impose a substantial burden on APNIC services. (At the same time, a number of members have nominated larger categories than they may need to, without these extra contributions being recognised).

The primary concern with the current APNIC fee structure is that it cannot ensure that the cost of resources consumed by an individual APNIC member is proportional to the fees paid by that member to APNIC. The burden of funding APNIC is therefore unfairly distributed, with some members contributing more, and some less, than their appropriate share. In addition, the future funding of APNIC may be threatened, by the possibility of more members choosing to make smaller contributions.

An environmental factor which is also relevant here is the increasing number of ISP mergers and acquisitions in the region. Many of these result in the closure of the APNIC membership of one party, and as this trend continues, APNIC members may actually reduce in number, while APNIC's total IP allocation and management responsibilities continue to increase.

3. Proposal: Category determination by IP Allocations

Because of the problems described in the previous section, it is now proposed to modify the APNIC Membership Fee structure, in order to ensure fair sharing of funding responsibilities, and sustainable operations into the future.

It is proposed that an APNIC member's minimum membership category be determined by the amount of IP address space held by that member. Both IPv4 and IPv6 address space holdings would be used to determine membership categories, however only address space originating from within APNIC's officially delegated blocks (currently 202/7, 210/7 and 61/8 for IPv4; and 2001:0200::/23 for IPv6) would currently be considered.

For both IPv4 and IPv6 Address Space holdings, specific "brackets" are proposed for each membership category (illustrated below). These have been chosen to ensure the following:

1. APNIC’s income is maintained at current levels;
2. Members holding the minimum current allocation (/19 for IPv4 or /35 under IPv6) are given a "small member" category;
3. A relatively small percentage of APNIC members are affected by an increase in fees.

It is proposed to retain a mechanism whereby members may voluntarily select a larger size category than their minimum.

1. IPv4 Allocations

For members holding IPv4 address space only, the membership category would be assessed according to the following table (which also shows the number of members in each category, and the resulting total membership fee revenue). Note that the Total IPv4 Allocation would be calculated as the single prefix representing the aggregate of all IPv4 address blocks held.

Total IPv4 Allocation (aggregated)	Category	Fee (USD)	Members	Total Fee Revenue (USD)	Funding Share (%)
Up to and including /19	Small	2,500.00	314	785,000.00	53
More than /19, up to /16	Medium	5,000.00	70	350,000.00	23
More than /16, up to /13	Large	10,000.00	22	220,000.00	15
More than /13	Very Large	20,000.00	7	140,000.00	9
Total			413	1,495,000.00	100

 

2. IPv6 Allocations

For members holding IPv6 address space only, the membership category would be assessed as follows (no member or fee totals are shown for IPv6, as IPv6 services have only recently been launched, and very few allocations have been made).

Total IPv6 Allocation	Category	Fee (USD)
Up to and including /35	Small	2,500.00
More than /35, up to /32	Medium	5,000.00
More than /32, up to /29	Large	10,000.00
More than /29	Very Large	20,000.00

 

3. Combined IPv4 and IPv6

For members holding both IPv4 and IPv6 address space, the membership category could be assessed separately for IPv4 and IPv6 as above. If the categories for IPv4 and IPv6 are different, then the member's category would be assessed as the larger of the two; while if the categories are identical, then the member's category could be assessed as the next larger category.

4. Combined IPv4 and IPv6 (alternative proposal)

As an alternative, separate APNIC memberships may be required for management of IPv4 and IPv6 address space holdings, with each membership assessed separately, as described above. Separate membership fee payment would be required (and separate voting entitlements would accrue) for each membership. This structure would ensure equity of funding obligations by those organisations that require both IPv4 and IPv6 services from APNIC.

4. Outcome

The intent of this Proposal is to secure APNIC's future against current trends which may eventually threaten our sustainability. The Proposal leaves intact the basic APNIC Fee and membership structure, which has proven effective over a number of years; and makes a well-defined change to only one aspect of that structure, namely the method of determining APNIC membership categories.

The financial outcome of the proposed fee structure change is that APNIC's total member income is increased by 1.7%, from USD1,470,000.00 to USD1,495,000.00. This again is a theoretical figure, for the reasons explained earlier.

In terms of specific impact on individual APNIC members, analysis has been performed as follows, on the basis of current membership and allocation figures. Of 413 APNIC members, 103 would be affected by fee changes (that is some 25% of members), and of these members, 44 have a fee reduction (a total reduction of USD 175,000), while 59 have a fee increase (a total increase of USD 200,000). The following table summarises these findings.

Annual Fee Change (Increase or Decrease)	Members with Annual Fee Decrease	Members with Annual Fee Increase
2,500.00	30	44
5,000.00	6	9
7,500.00	7	6
17,500.00	1	0
Total Members Affected	44	59
Total Annual Fees (Increase or Decrease)	175,000	200,000

 

5. Implementation Timetable

This document has been published as an APNIC Draft, and member feedback sought. In early February 2000, all APNIC members were advised of their address allocation status, so that they could confirm the effect of the proposal on their APNIC membership category and annual membership fee.

After this period of review, the document has been finalised as a formal proposal, to be put to a vote of the APNIC membership at the APNIC members meeting on 3 March 2000.

It is proposed that once approved, the new fee structure should take effect immediately for new APNIC members. For existing members, it is proposed that the fee structure should take effect from 1 July 2000, after which all memberships would be assessed under the new structure, at the time of renewal (whenever that may occur after 1 July 2000).

END