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                       JPNIC Translated Document

Source document: JPNIC REPORT 14
Date of the source: December 1994
Date of the last update of this translation: November 16, 1995

This is a translation of a JPNIC document. JPNIC provides this
translation for convenience of those who can not read Japanese. But it
may contain mis-translations, and is by no means official. One should
consult the source document written in Japanese for detail.
                Modification of the membership fees system

 As it was mentioned in the 8/94 issue, JPNIC has been performing several
investigations related to the membership fees system. The contents of the
investigations was reported during the general meeting held at the Tokyo
Institute of Technology (October 7). During the general meeting, as a step
towards the modification of the rules, the approval has been achieved for
the modification of membership fees for the year 1995. Here, the details
will be explained.

 For the present membership fees and rules, please refer to the 12/93 issue,
and for an outline of the modification, please refer to the 8/94 issue.


 The main points of the proposal for the new membership fees rule are as

 o Membership fees from the JPNIC members

   The network projects will be treated as members and membership fees is to
   be obtained from them in the conventional way. However, the so far
   difference related to the amount of membership fees between academic and
   other organization is to be abolished.

 o Introduction of registration fee and maintenance fee

   A new registration fee for the network resources (IP address, domain
   name) that are administrated by JPNIC and the annual charge for maintaining
   these resources is to be introduced.

 o Introduction of supporting member system

   This would be the system where the member will support and aid JPNIC
   activities. Because of the reasons like, new rules are not thoroughly
   investigated, lack of mutual agreement from the domestic Internet users,
   time necessary for taking the step for setting up the expenses etc., it
   has been decided that further investigation is necessary and the work
   is in progress for starting this system from 1996.

 As the administrative works get increased the expenses also get increased.
In order to handle this problem along with a smooth introduction of the new
rules, the membership system for the year 1995 will remain the same but on
the contrary the new rule for obtaining a registration fee for IP address and
domain name is set. The charge for 1 IP address (1 class C address) and 1
domain name is set to 10,000 Yen.

        Prerequisites for membership fees

 The following prerequisites has been set for investigating the membership
 fees system.

 o Unbiased rules

   Internet is used widely for the academic research purpose and it is about
   to become an important basis of information within the country. In this
   situation dependency on some particular community, and the wide difference
   in the membership fees will block the sound development of the Internet.

 o Fund for a stabilized administration of JPNIC

   With the growth of the Internet, the administrative work of JPNIC has
   increased and a rise in the expenses is expected. In that case a mechanism
   is necessary for which the income would get increased as the administrative
   works get increased. Besides, at the same time it is necessary to consider
   the importance for transforming JPNIC into an incorporation and at present
   the subject is under investigation.

 o Should be approved internationally

   Internet is realized by international cooperation. Even for the
   expenses of JPNIC it should not stray from the international Internet

 o Should be realizable

   It is necessary to think about a realistic payment system where the payment
   would be simple.

        Membership fees from the network projects

 JPNIC members are formed by the network projects that administrate the
networks. This is because JPNIC is set as a common center for these network
projects. This basis has not been changed in the process of modifying the rules
related to membership fees. Even under the new system, membership fees remain
the main financial source of JPNIC.

 In the present system (table 1), there is a 1 to 5 difference between
the academic organizations and the rest. This has caused unfairness between
the conventional academic organizations and the widely increased general
users. Besides, in reality it is difficult to setup a criterion for
determining academic and non-academic organizations.

 Although the membership fee is almost logarithmically increasing with respect
to the scale of the network, the number of committee members that can be
registered has also became a problem and it is under investigation.

        Introduction of a fee based on resource allocation

 This is the most important point of the present proposal for modification.

 Until now, JPNIC did not charge any specific fees for the registration of
IP address and domain name.

 Here, depending on the network resources utilized by a user, two new
charges, namely registration, and maintenance fees are to be introduced
(table 2).

 This would correspond to the future NIC cost due to the rapid development of
the Internet and would secure the necessary expenses for a stable
administration of JPNIC. Besides, as the charge is proportional to the
amount of space utilized, it would reduce the feelings of unfairness. Moreover
that, organizations possessing class B addresses can replace the same with
the adequate number of class C addresses.

 In the past, this kind of basis for distributing expenses has been thought
as equivalent to selling the network resources which would effect the sound
development of the Internet. However, because of the rapid growth of the
Internet, and for supporting the NIC work, this is considered to be one of the
natural method and it is considered internationally. However, the proposal of
modification by JPNIC might be the first for setting a clear direction.

 In order to realize this, it is necessary to consider the opinions of
domestic users as well as users of countries other than Japan and the
approval from the Internet community is a must.

 Original expenses

 If the new rules are put into practice, the charge for each organization that
gives connection to the Internet would be related to the scale of the network
project to which the organization belongs, the IP address class and the number
of IP address allocated to that organization.

 For example, in case of an organization which belongs to a network project
that have 50 registered organizations, it will become the following.

    Present      class C * 1   class c * 8   class B * 1
      10           14            22          269

 Here the unit is 1000 Yen. In most of the cases, if a class B organization
replaces it with class C then the cost would become double.

 On the other hand, in case of a commercial network project where 800
organizations are registered, it would be calculated in the following way.

    Present      class C * 1   class c * 8   class B * 1
      7.5          5.5           12.5           260.5

        Schedule for the future

 As it has been said earlier, a lot of problems related to the new rules
has to be solved, opinions of the Internet users have to be considered
and mutual agreement has to be confirmed prior to applying the new rules.
The new rules are to be applicable from 1996 and for 1995, only the new rule
for introducing a charge for the registration of IP address and domain name
has been added to the current rules. The membership fees for the year 1995
will be the following.

 o The membership fees system is not changed from the present one (*1).
 o Registration fees are be obtained for fresh registration of IP address and
   domain name.

        IP address  :   10,000 Yen / class C
                      2560,000 Yen / class B
        Domain name :   10,000 Yen / domain (*2)

        (*1) Division 12 is added as a natural extension of the present rules
        (*2) Handling of Geographic Domain name is not yet decided.

 The investigation is on progress for reporting the main points of the rules
from 1996, during the general meeting for the year 1995.

        Problems that have to be investigated

 There are a lot of problems which are yet to be investigated prior to the
introduction of the rules. Out of them the main points are as follows.

 o Possession and charge for network resources

 This time, it has been decided to charge against the amount resources
possessed by individuals. To be specific, the charge will get proportionally
increased with respect to the space possessed. For example, the registration,
maintenance charge for class B is set to 256 times more than that of class C.
Although, from the users there are opinions like the charge is too expensive,
if thought from the allocation side, if the value of class B and the exhaustion
of the same is considered, then there are opinions like the charge is not at
all expensive. Although a compromised plan is applied here, this also has to be
investigated and mutual agreement has to be achieved.

 o What would be the penalty in case the amount is not paid?

 This is a provision for the users with a default. If thought from the
fairness point of view then some kind of penalty is necessary. However, on
the other hand, in reality the introduction of penalty is not familiar to the
conventional Internet where administration is based on gentle agreements.
Therefore a concrete measure has to be taken based on careful discussions.

 o Method for paying the registration and maintenance fees

 Although there are methods where the applicant can directly pay it to
JPNIC and the method where the network project can pay it on the behalf
of the user, both of the methods has its merits and demerits. In case of
the present membership fees system, there are opinions that the payment
based on public expense is difficult, and these points also to be

 o Member, delegate, and the right for a claim

  At present, only the delegates that represent the network project can
  participate in the general meeting. There are opinions that some
  kind of arrangement is necessary for considering the opinions of the
  users for the registration and maintenance fees.

 o Future budget, expected earning and the verification of the same

  The finance necessary to support the increasing administrative
  works is to be calculated. Besides, an estimation of charge has to be made
  with respect to growth rate of the Internet. Finally, it is necessary to
  verify whether the new membership proposal is valid or not.

 o Other source of income, relation to incorporation process

   In the present proposal, the financial expenses of JPNIC is covered
   by the network projects and the Internet users. On the other hand, there
   are strong opinions that official grants from the country is necessary.
   This problem is to be investigated along with the problem related to the
   incorporation process.

 Although the proposal for membership fees has received the approval during
the general meeting, the mutual agreement from the domestic Internet
community is a must for executing the same.

 JPNIC is to function for the Internet of Japan and it is not a profit-making
organization. In order to maintain its neutrality, the guarantee to support
the proper budget of JPNIC through membership fees and charges has become
an important problem. In reality, the administrative work of JPNIC has
increased along with the development of the domestic Internet. Strengthening
the staff or the facilities in respect to the increasing administrative work
is not a sole solution. Reducing the labor by applying technology and the
cooperation with other networks for distributing the administrative work is

 JPNIC is performing activities like address allocation, domain name
administration for supporting the base of the Internet. The maintenance
and development of the domestic Internet can not be blocked because of a
delay in work due to unreasonable operation.

 The mutual agreement from the Internet community is necessary for solving
these problems, and for that JPNIC's administration should be open and
the decisions for deciding the future direction should also be made public.

 JPNIC is performing the investigations based on mailing list. For sending
opinions related to membership fees system, please use the following mail


 Persons interested in participating in the mailing list for investigating the
membership fees system are requested to write the following.

 . Name
 . e-mail address
 . name of the network project
 . name of the organization

 And e-mail the same to the following address.

                                                        (Susumu Sano, WIDE)

 Table 1. The present membership fees of the JPNIC members and number of
          delegates registered.

|     |             |Most of the members |Fees(per member)|Delegates   |
|Class|Organizations|  are individuals   |Type A | Type B |(registered)|
|   1 |      -  10  |         -   10,000 |     2 |     10 |        1   |
|   2 |   11 -  20  |  10,001 -   20,000 |     3 |     15 |        2   |
|   3 |   21 -  30  |  20,001 -   30,000 |     4 |     20 |        2   |
|   4 |   31 -  50  |  30,001 -   50,000 |     5 |     25 |        3   |
|   5 |   51 -  70  |  50,001 -   70,000 |     6 |     30 |        3   |
|   6 |   71 - 100  |  70,001 -  100,000 |     7 |     35 |        3   |
|   7 |  101 - 200  | 100,001 -  200,000 |     8 |     40 |        4   |
|   8 |  201 - 300  | 200,001 -  300,000 |     9 |     45 |        4   |
|   9 |  301 - 500  | 300,001 -  500,000 |    10 |     50 |        5   |
|  10 |  501 - 700  | 500,001 -  700,000 |    11 |     55 |        5   |
|  11 |  701 -1000  | 700,001 -1,000,000 |    12 |     60 |        5   |
                                         Membership fees: 10,0000yen/member

Table 2. Registration, maintenance fees

    |         | Registration fees |Maintenance fees/year|
    | Class B |          2,560    |        256          |
    | Class C |             10    |          1          |
    |  Domain |             10    |          3          |
    +---------+-------------------+---------------------+ (Unit: 1000 yen)

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