Proposal: IPv6 Allocation Fees for APNIC Confederation Members
Status: APNIC Proposal
Date: 15 February 2000
With the introduction of IPv6 allocation services on a provisional basis in 1999, APNIC must ensure that cost-recovery mechanisms are consistent with its other services, particularly IPv4.
For normal APNIC members, address space allocations have never been subject to direct fees, and it is intended that this policy should continue for both IPv4 and IPv6 services.
For APNIC's confederation members however, address allocations have been subject to a "per-address" fee since early 1998 (applied to IPv4 allocations since that time). It is now proposed to apply this mechanism as a "per-site" fee for IPv6 allocations to confederation members.
APNIC introduced a per-address fee structure for confederations in response to concerns that the existing membership and fee structure was problematic and did not properly account for the APNIC resources consumed by confederation members. The relevant discussion is available within the minutes of the Feb 1998 AGM (Manila) at ftp://ftp.apnic.net/apnic/meetings/Feb98/minutes.txt
The resulting fee structure was subsequently documented in APNIC-074, "Confederation Requirements, Fees and Policies" (available at ftp://ftp.apnic.net/apnic/archive/apnic-075.txt), as follows:
3. Confederation Fees
In order to insure regular APNIC members do not
subsidize confederation members and that
confederations provide sufficient funding to cover
the cost of providing services to the confederations
and regular members alike, fees must be charged for
the operation of confederations.
As of February 22, 1998, the fees associated with
the operation of confederations are based on the
resources allocated to the confederation. The
current fee structure is dependent on the self-
determined size of the confederation and the amount
of Internet address space allocated to the
confederation:
Member Tier Per-Address Fee
----------- ---------------
Very Large US $0.03
Large US $0.06
Medium US $0.11
Small US $0.16
This fee structure policy refers to Internet address space in general, and it is reasonable to assume that IPv6 allocations should be chargeable according to the same basic policy, for the same reasons.
For the 1999 calendar year, the following table summarises total membership fees, per-address fees, and IP address allocations for confederation members, and for APNIC members as a whole, including confederations. All figures are in 1000's.
APNIC Confed Confed
Total Members Share%
Membership fees* (USD) 1173 143 12%
Per address fees* (USD) 249 249 100%
Total fees* (USD) 1422 392 28% (1)
IP Allocations (addrs) 9688 7429 77% (2)
This table enables a comparison between the share of APNIC revenues contributed by confederations (1), and the share of resources consumed by confederations (2). According to these figures, it seems clear that the per-address fee structure is still an appropriate mechanism for cost-recovery from confederation members.
(*) note that figures provided here are based on actual APNIC invoicing, and will not match APNIC's financial statements for 1999, which are calculated on an accrual basis.
Although the per-address structure is applicable to IPv4 address space allocations, it is not directly applicable to IPv6 allocations, due to the far larger assignments that are made at the site level. Each end-site assignment under IPv6, referred to as an SLA or /48 assignment, provides 16 bits of subnet address space. With each assignment, 65,536 addresses are available for subnetting and addressing individual LAN segments (each containing many hosts). Because the minimum end-site assignment is so large, it is certainly not reasonable to impose a per-address fee for IPv6 at the /64 level.
It should be recognised that while the minimum site assignment under IPv6 is a /48, the effective maximum end-site assignment is also /48. If IPv6 allocations to confederations are charged on a per-site basis rather than a per-address basis, then the total costs recovered per end-site customer will be substantially lower, because a customer will rarely (if ever) be assigned more than one site address.
In spite of the lower per customer cost recovery, the per-site charge is still proposed as the simplest structure, and the one which is closest to the intent of the original per-Address policy.
On the basis of the proposed per-site fee, the following table gives the total charges which would apply for various IPv6 allocations to a confederation member in the "Very Large" Membership category (at the rate of USD0.03 per site address):
/48 addresses Total per-site fee (USD)
/35 8192 245.76
/32 65536 1966.08
/29 524288 15728.64
It should be noted that as in the case of IPv4 allocations, these fees would be charged differentially, taking into account the size of the existing allocation held by the confederation member, and any fees already paid for that allocation.
For allocations of more than a /29 prefix, a fee structure is not proposed, as there is insufficient information available on the likely costs to APNIC for provision of services supporting such a large allocation. However a fee cap is proposed (below) to ensure that such allocations are charged at a limited maximum rate.
APNIC proposes to apply the current per-address charge to each IPv6 site address (/48 or SLA address) for all allocations to confederation members, up to the level of a /29 or Sub-TLA allocation. For larger allocations, charges should be capped at the level of a /29 charge for any individual allocation which is larger than /29.
In addition to the risk noted above of reduced fee collections, another risk is that database operation costs may rise substantially, because IPv6 assignment policies require a database registration for each /48 address assigned. In spite of these risks however, APNIC recognises that such impacts will appear gradually, and can be reassessed at a later time in light of experience.