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TWNIC ’ s New Fee Structure

TWNIC ’ s New Fee Structure. Chia-Nan Hsieh hsieh@twnic.net.tw. 13 th APNIC Open Policy Meeting. CONTENT. Current TWNIC Fee Structure Comparison with APNIC and other NIRs Why Change? Proposals Conclusions. TWNIC’s current fee structure. 1. TWNIC ’ s current fee structure.

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TWNIC ’ s New Fee Structure

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  1. TWNIC’s New Fee Structure Chia-Nan Hsieh hsieh@twnic.net.tw 13th APNIC Open Policy Meeting

  2. CONTENT • Current TWNIC Fee Structure • Comparison with APNIC and other NIRs • Why Change? • Proposals • Conclusions

  3. TWNIC’s current fee structure

  4. 1. TWNIC’s current fee structure • Established in Dec.1999 • Didn’t charge anything for IP allocations/assignments • Current fee structure (started Jan. 2001) • Allocation fee NT$5,000 per /20 • Annual maintenance fee

  5. Comparison with APNIC and other NIRs

  6. APNIC’s fee structure • First Allocation Fee (One time) USD$2,500 = NT$ 87,500 • Per Address Fee (only for confed. members) USD$0.02 = NT$ 0.7 • Membership fee (35:1)

  7. KRNIC’s fee structure • Start-up Fee (One Time) 2,200,000 Won = NT$ 59,459 • Annual fee (1:37)

  8. JPNIC’s fee structure • Contract Fee (One time) 250,000 Yen = NT$ 67,568 • Per Assignment Fee 4,500 Yen = NT$ 1,216 • Annual maintenance fee (1:3.7)

  9. Fees comparison (I.)- one-time fee & allocation fee

  10. Fees comparison (II.)- annual maintenance fee TWNIC charges 7 – 17 times less than 3 NICs’ average

  11. Why Change?

  12. 1. APNIC’s new fee structure • 2001/8/31, 12th APNIC Open Policy Meeting • New tier ‘Extra Large’ approved • TWNIC’s tier Very Large -> Extra Large • Annual fee US$20,000 -> US$40,000

  13. Net loss: NT$3,701,667 2. IP Dept. cost recovery • Reduce Cross-Subsidies, i.e. more financial independence • Income (2001) • Maintenance fee NT$ 840,000 • Allocation fee NT$ 2,430,000 • Total NT$ 3,270,000 • Cost (2001) • APNIC membership fee NT$ 700,000 • Per Address fee NT$ 2,511,667 • Operation cost NT$ 3,760,000 • Total NT$ 6,971,667 Personnel`, Office space, Sw/Hw, Training…

  14. Proposals

  15. Principals • Balancing! - TWNIC is a nonprofit organization • Total income = Total cost • Variable income = Variable cost • Fixed income = Fixed cost • Calculations based on 2000 data

  16. Allocation fee to decrease 40% Variable income = Variable cost • Variable Income • Allocation fee • Variable cost • APNIC Per address fee • NT$5,000(per /20) x K1 = NT$0.7(per /32) x 4,096 → K1 = 0.57 • Proposed new IP maintenance fee NT$ 5,000 x 0.6 = NT$3,000 (per /20)

  17. Maintenance fee to increase 400% Fixed income = Fixed cost • Fixed income • Maintenance fee (Annual) • Fixed cost • APNIC Membership fee (Annual) • Operation cost (½ for the first phase) (Annual) • 840,000 x K2 = 1,400,000 + 1,880,000 → K2 = 3.9

  18. Fixed income = Fixed cost (Cont.) • Target value computation Target value

  19. X 2 X 2 X 4 First Proposal • Allocation fee NT$3,000 per /20 • Maintenance fee

  20. X 2 X 2 X 4 Inputs from ISPs- 2002.1.24, TWNIC IP delegate meeting Agreed with fees increase, suggested: • More tiers • Less fee gap between tiers • Economic scale • Request for proposals

  21. Second Proposal NT$ 636,000 less than target value * Maintenance fee increases as the tier gets larger by a rate that decreases 10% every tier

  22. Inputs from ISPs- 2002.2.21, TWNIC IP delegate meeting • Two ISPs presented alternative proposals • Consensus was TWNIC’s second proposal • 2002.2.22 TWNIC IP Committee approved the new fee structure on condition that TWNIC must review and re-evaluate the outcome after one year • New fee structure began effective from 2002.3.1

  23. Scenario I. Tier 6 • An ISP obtains a /15 address space in a year • With old fee structure • Tier: Large • Cost: Maintenance fee NT$30,000 Allocation fee NT$160,000 (32x5,000) Total NT$190,000 • With new fee structure • Tier: 6 • Cost: Maintenance fee NT$257,000 Allocation fee NT$96,000 (32x3,000) Total NT$353,000 (Raised 186 %)

  24. Scenario II. Tier 4 • An ISP obtains a /17 address space in a year • With old fee structure • Tier: Medium • Cost: Maintenance fee NT$30,000 Allocation fee NT$40,000 (8x5,000) Total NT$70,000 • With new fee structure • Tier: 4 • Cost: Maintenance fee NT$122,000 Allocation fee NT$24,000 (8x3,000) Total NT$146,000 (Raised 209 %)

  25. Scenario III. Tier 1 • An ISP obtains a /20 address space in a year • With old fee structure • Tier: Small • Cost: Maintenance fee NT$7,500 Allocation fee NT$5,000 (1x5,000) Total NT$12,500 • With new fee structure • Tier: 1 • Cost: Maintenance fee NT$25,000 Allocation fee NT$3,000 (1x3,000) Total NT$28,000 (Raised 224 %)

  26. Conclusions • TWNIC is a nonprofit organization • Fee schedule changes aimed to reflect costs • IP Dept. to be more financially independent • TWNIC to provide higher standard of service

  27. Thank you, comments?

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