[Community-Discuss] Resolution 201604.274 about Set-Up fees

Thu Jul 14 17:08:33 UTC 2016

Dear Owen,

I am happy to know that you are the PR or/and the lawyer of the board. Based on your sentence <"I will provide you the answers that I have seen on this list and in the AFS which I think are quite adequate:">, the following points are in order for your meditation.

A series of questions has been asked in a coherent manner. You are claiming that the questions have been answered in this mailing list. What you have attempted to do is to put together the piecemeal statements made by the chair in his various emails, extracting sense out of them to answer the questions I asked. A very good exercise of the "new PR/lawyer" of the chair of the board (LOL). Do you want to tell me that it is coherent, professional, pedagogically and andragogically, and responsible (name them) from our chair to answer specific set questions in piecemeal?

I have read and analyze thoroughly your email. In fact, the best I can say about it is it is a very good piece to show empty verbiage case.  The questions I asked were straight forward questions which answers should be factual and in case there is not fact, with humility acknowledge it. Again you are turned yourself into the "new PR/lawyer" of the chair of the board shielding him to be accountable. Your empty verbiage has not answered the questions. We want to hear from the horse's mouth. 

Cheers!!!

Marcus

From: owen at delong.com
Date: Thu, 14 Jul 2016 08:18:32 -0700
To: community-discuss at afrinic.net
CC: members-discuss at afrinic.net
Subject: Re: [Community-Discuss] Resolution 201604.274 about Set-Up fees

On Jul 14, 2016, at 00:29 , Noah <noah at neo.co.tz> wrote:

On 28 Jun 2016 19:08, "Marcus K. G. Adomey" <madomey at hotmail.com> wrote:

>

> Dear Chairman 

>

> Thank you Mr. Chairman for your response which unfortunately has not addressed the two main issues I raised in my email.

>

>I will provide you the answers that I have seen on this list and in the AFS which I think are quite adequate:

>

> Allow me to restate the questions here once again:

>

> What problem are solving?

AfriNIC’s annual revenue is dangerously close to its operating budget and AfriNIC has a woefully inadequate operating reserve of roughly one quarter of continued operations. This should be roughly 2 years by standard good business practices.

> What options have been evaluated?
All of AfriNICs revenues come from two sources… Fees (the vast majority of the revenue) and investment income from the reserves (especially low at the moment due to the frighteningly small reserve).
The only way to increase the investment income would be to increase the reserves.
The only way to increase the reserves is to increase revenue.
If you can’t increase the investment income first, then that leaves only some form of increase in total revenue from fees.
Since the fee structure was, in part, falling short due to an error in implementation, clarifying that fact and correcting that implementation seems like low hanging fruit IMHO.
Other options that have been mentioned were increases in fee amounts, removal or reduction of some fee exemptions, and cost cutting measures, some of which have been implemented.> What is the meaning of the membership fees, which increase with my category If i have to pay allocations fees anytime i request additional resources?

These are two different things. Your membership fee based on category is an annual maintenance fee which you pay to sustain the organization and keep your records in the database, etc.
The fee per resource is (at least theoretically) to cover the staff time required to review your application and the other expenses associated with that process.
> Shouldn’t the membership fees be turned to a lower maintenance fees at a lower price?
It would be utterly and completely irresponsible to reduce membership fees when revenues are so perilously close to the operating expenses and the reserves are so dangerously low.
> Have we done impact analysis?
Admittedly, I haven’t seen an answer to this question, but I confess I didn’t see the question in the earlier seas of accusations and fomenting dissent, so perhaps I missed the answer as well or perhaps it got lost in the other comments.
In any case, it seems to me that the answer is irrelevant and the question you really want is “What was the outcome of the impact analysis?”
After all, if the board were to day “Yes, we did the analysis.”, then you really don’t know anything useful that you didn’t know before. If the board says “No, no analysis was done.”, then similarly, there’s no useful information gained.
I will say that the most obvious impact is that a few organizations requesting resources will pay slightly more for those resources and that AfriNIC will be able to restore its needed reserves over the next 10 years or so. This seems like a reasonable balance between the need to restore the reserves and make the organization financially sustainable and an effort to minimize the impact on members and subscribers.

> What is the foreseen negative impact on membership and how do we mitigate? (Some may not come for additional allocation as they have to pay allocation fees plus increase in membership fees.. )
As with the previous question, I admit I haven’t noticed the question or the answer in previous discussion.
However, since the premise of this question is false, perhaps a simple clarification of the premise will suffice.
When one gets a new allocation in a given year, your annual fee for that year does not increase. You pay the allocation fee only. The following year, when your annual renewal comes up, you will pay the increased annual fee for your new tier. So, if you are so completely sensitive to this issue, you can mitigate it 100% by timing your resource request for just after your annual renewal.

> What is expected impact on revenue and how we plan to use it?

>We never recieved any feedback to this important questions.This can be computed from public statistics and at least one person has already done so on the list and determined based on the 2015 run rate that it would be roughly $200k.
I haven’t done the analysis myself, but assuming his numbers are roughly correct, then I would argue the most responsible way to use it is to bolster the reserves for at least the next 9+ years, barring unforeseen events.
The most recent submission by the chair on the same was not clear either.
Perhaps he didn’t feel the need to rehash data already publicly available in the AFS and other previous statements from the board.
In any case, if you feel the above answers are inadequate, please ask specific additional clarifying questions. Note, the above are based on public statements from the board and information from the AFS, not my conjecture or opinion except to the following extent:
1.	Common good business practice is to have a 2 year operating reserve.2.	My clarification of the purpose of the two distinct fees is conjecture on my part based on statements from	staff of varoius RIRs in in-person discussions and my reading of the fee information from the AfriNIC	web site. I do not know whether the board has publicly stated the same or not.
I would argue that item 1 is simply well known good business practice and that any reasonable person could intuit item 2 from the information on the web site. However, I want to be clear about the sources of my information in these posts, so I provide that detail in the interest of full disclosure.
Owen

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