<html><head><meta http-equiv="Content-Type" content="text/html; charset=utf-8"></head><body style="word-wrap: break-word; -webkit-nbsp-mode: space; line-break: after-white-space;" class="">On 9 Apr 2018, at 10:07 AM, Bill Woodcock <<a href="mailto:woody@pch.net" class="">woody@pch.net</a>> wrote:<br class=""><div><blockquote type="cite" class=""><div class=""><div class=""><br class=""><blockquote type="cite" class="">On Apr 9, 2018, at 6:43 AM, ARIN <<a href="mailto:info@arin.net" class="">info@arin.net</a>> wrote:<br class="">ARIN has increased operating costs in recent years to meet<br class="">customer demand for improved and broader services<br class=""></blockquote><br class="">The membership seem to be relatively clear that they’re not in favor of scope-creep. And there are already 88 staff, the majority of whom are in Engineering. The theory was that they were supposed to be temporary contractors, doing one-time projects to automate ARIN registry functions. Yet the “temporary” part never seems to come to a conclusion.<br class=""><br class="">Can you present the budget, and explain what specific new services you’re proposing to perform with this additional money, and give us a status-update on the progress being made toward specific goals by the existing 45 engineers?</div></div></blockquote><br class=""></div><div>Bill (and David) - </div><div><br class=""></div><div> Both the specific deliverables accomplished, as well as the upcoming deliverables can be found online here</div><div> <<a href="https://www.arin.net/features/" class="">https://www.arin.net/features/</a>>, and here <<a href="https://www.arin.net/features/planned.html" class="">https://www.arin.net/features/planned.html</a>> respectively.</div><div> </div><div> The budget is always available online here <<a href="https://www.arin.net/about_us/corp_docs/strategic_plan.html" class="">https://www.arin.net/about_us/corp_docs/strategic_plan.html</a>></div><div> along with the Strategic Plan and two-year operating plans which includes our annual objectives. For 2018,</div><div> we anticipate revenues of $20.9 USD million and expenses of $23.8 USD million, thus we are impacting our </div><div> reserves in the short term. Our base model does (as you note) include additional engineering “surge" staffing </div><div> and this continues through 2018, although this does not continue in 2019. Even with that adjustment, ARIN </div><div> will be operating at approximately at $1.3 million USD net-to-reserves position each year on a going-forward</div><div> basis. </div><div><br class=""></div><div> So while ARIN’s present medium-term (5 year) financial outlook is solid, it not as robust as the Board has </div><div> traditionally sought – specifically, with present plan and fee schedule we’ll be taking our reserves from $25.9 </div><div> million to approximately $21.6 million though 2022. This downward trajectory is likely to continue over the </div><div> long-term, and could even accelerate, since our annual revenue includes about $1.4M of investment income </div><div> that will drop in a corresponding manner with a declining reserve balance; hence why addressing the gap </div><div> is a simpler matter if done sooner rather than later. </div><div> </div><div> The proposed fee change would provide the following net increase in annual revenues:</div><div><br class=""></div><div><div class=""><span class="Apple-tab-span" style="white-space:pre"> </span>• Facilitator fee - net revenue increase <span class="Apple-tab-span" style="white-space:pre"> </span>+ $34,000 <br class=""></div><div class=""><span class="Apple-tab-span" style="white-space:pre"> </span>• End-user Maintenance fee: net revenue increase <span class="Apple-tab-span" style="white-space:pre"> </span>+ $1,400,000<br class=""></div><div class=""><span class="Apple-tab-span" style="white-space:pre"> </span>• LRSA holders Maintenance fees: net revenue increase<span class="Apple-tab-span" style="white-space:pre"> </span>+ $33,500<br class=""><br class=""></div><div class=""> The total annual revenue increase with the proposed fee schedule change is 1.47M USD, which would have ARIN </div><div class=""> be net neutral to the reserves for the foreseeable future. The increase to facilitator fees was deemed appropriate </div><div class=""> because we are seeing significant increased costs related to maintenance of that program (specifically in addressing</div><div class=""> parties who are not actual participants but still call themselves “ARIN Facilitators”. ) </div><div class=""><br class=""></div><div class=""> Regarding the maintenance fee increases, our end-user community engages in significant ongoing interactions with</div><div class=""> ARIN and yet is approximately one fifth of ARIN's total revenue. Our investment in systems (such as ARIN Online) </div><div class=""> benefit the entire ARIN community, and that community is disproportionately end-users. In fact, much of our most</div><div class=""> improvements have been “easy-of-use” related for the benefit of those smaller organizations that are new to ARIN </div><div class=""> and doing requests for the first time. </div><div class=""><br class=""></div><div class=""> For the vast majority end-users, the fee change results in a modest $100 to $150 annual increase –depending on </div><div class=""> whether the organization has only one of IPv4 or IPv6 and an ASN, or both IPv4 block, IPv6 block, and an ASN. </div><div class=""> While the total impact is still quite small in terms of individual end-user invoice, it is true that it could be deemed </div><div class=""> a very significant increase when viewed on a percentage basis. This increase is not without corresponding value, </div><div class=""> as the services provided have been quite enhanced over time (including improvements to ARIN Online allowing </div><div class=""> easier administration, addition two-factor authentication, streamlined request and ticket sections, etc.) so those </div><div class=""> using ARIN services have indeed benefitted from ARIN’s investments in staff and systems in recent years. </div><div class=""><br class=""></div><div class=""> I will cover this material in more detail at ARIN 41, but felt that the communities consideration of this matter </div><div class=""> would be more productive with some fo the budget, development progress, and fee distribution information</div><div class=""> that was being sought in the interim. Please do not hesitate ask any additional questions that would help </div><div class=""> in consideration of this consultation. </div><div class=""><br class=""></div><div class="">Thanks!</div><div class="">/John</div><div class=""><br class=""></div><div class="">John Curran</div><div class="">President and CEO</div><div class="">American Registry for Internet Numbers (ARIN)</div><div class=""><br class=""></div><div class=""><br class=""></div><div class=""><br class=""></div><div class=""><br class=""></div><div class=""><br class=""></div></div></body></html>