# The NIR structure: Annual fees and voting entitlement

By on 13 Jul 2022

Category: Tech matters

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After recent discussions about the APNIC NIR fee structure and voting rights, it seems useful to provide some explanation of both the background and effect of the current structure.

The APNIC NIR structure was set up in 1996 to recognise IP address registries which were being formed at that time at the economy-level (referred to as NIRs).  Today, APNIC recognises seven NIRs (CNNIC, IDNIC, IRINN, JPNIC, KRNIC, TWNIC, and VNNIC), with an NIR membership class that defines annual fees and voting entitlements.

## Voting Entitlement

Each NIR is a single Member of APNIC, and has a voting entitlement according to its membership tier.  All NIRs are in the “Extra Large” tier, giving them 64 votes each.

## Annual Fees

The original NIR fee structure included “per address” fees, but this was replaced in 2010, when the APNIC EC adopted the current fee calculation formula.

Today, each NIR pays fees as a single Member based on total aggregated address holdings; and according to the same formula as regular APNIC Members:

Annual Fee = (Base Fee) x (Bit Factor)(Address Bits)

Where the current fee parameters are:

Base Fee = AUD 1,180

Bit Factor = 1.30

APNIC Member Fee Schedule

The aggregation of address holdings gives a huge discount to NIRs, when calculated in a ‘per address’ basis; and therefore, an “NIR multiplier” of 190% is applied to partially compensate for this (as explained further below).

## Analysis

To illustrate the effect of the NIR fee and voting structure, Iet’s assume there are 500 organisations, each with a /22 of IPv4 space; and who may join a hypothetical NIR, xxNIC.

Scenario 1: xxNIC serves 500 organisations, each with /22 (1024) of IPv4.

Annual fee: The standard annual fee for 512,000 IPv4 addresses is: \$20,958.50.  With the NIR multiplier of 190%, the annual fee for xxNIC is \$60,779.65.

Voting entitlement: As an NIR in the Extra Large tier, xxNIC has an APNIC voting entitlement of 64 votes.

Scenario 2: xxNIC does not exist, and the 500 organisations are Members of APNIC.

Annual fee: The standard fee for each Member, for 1,024 IPv4 addresses, is \$1,994.20. For a total of 500 Members, the total fees to APNIC would be \$997,100.00.

Voting entitlement: Each Member is in the “Very Small” tier and entitled to two votes, for a total of 1,000 votes.

As this example shows, there are advantages and disadvantages for NIRs, and for network operators who join NIRs.  The portion of APNIC fees an NIR pays is much lower, but their voting entitlement is also much lower.

## How does this impact members of NIRs?

Each NIR is free to set its own fees for the resources it distributes to its members in line with the local services and value it believes it provides.  Therefore, in the example above, the 500 individual members of xxNIC may pay fees that are lower, equal to, or higher than individual Members of APNIC as a result of what xxNIC decides.

Members of an NIR do not have an APNIC EC voting entitlement, however; as they pay no fees to APNIC, they are not directly APNIC Members.

Under APNIC rules, it is a free choice for any organisation for join an NIR in their economy, or to join APNIC.  They can make this choice according to the fees and the range of services of the NIR, and their interest in voting in APNIC elections.

## Future Fee Structure options

The APNIC fee structure is established by the APNIC Executive Council, and it can be changed.  The APNIC EC may review the structure again in future, particularly if APNIC Members (or NIR members) call for this.

I hope this has been a helpful contribution to the discussion and I welcome comments from the community if further explanation is needed.