Business Plan

2006 2007

Version 1.0
19 April 2006

1.              Introduction

This is the final business plan for InternetNZ written under the 2004-2007 Strategic Plan. It should be read in conjunction with that Strategic Plan, whose goals and strategies are summarised below:

1.      Management of .nz

1.1.    Ensure that the .nz DNS meets the needs of registrants.

1.2.    Maintain a fair and competitive market for .nz registrars.

1.3.    Ensure .nz is operated to industry best practice.

1.4.    Maintain effective policies for the .nz space.

1.5.    Promote .nz objectives internationally.

1.6.    Develop and maintain effective relationships with key government and other organisations in New Zealand.

2.      Advocacy and Representation to Government

2.1.    InternetNZ is recognised as a respected and authoritative advocate for the Internet community.

2.2.    InternetNZ responds to relevant legislative and regulatory initiatives.

3.      Supporting Industry Best-Practice and Self-Regulation

3.1.    Effective internet industry self-regulation.

3.2.    To foster internet industry best-practice.

4.      Protect the Internet

4.1.    To protect the Internet and Internet users by responding to and resolving issues detrimental to the achievement of our vision, mission and objectives.

5.      Promote the Internet

5.1.    To promote the Internet in New Zealand.

5.2.    Be seen and heard.

5.3.    Establish and maintain strong and healthy links with sibling organisations.

5.4.    Enhanced member interaction.

5.5.    Promote responsible use of the Internet.

6.      NZ representation in the global Internet

6.1.    NZ Local Internet Community is represented in international Internet forums.

6.2.    Support Pacific Islands Internet development.

7.      Supporting volunteers, members and the organisation

7.1.    InternetNZs use of the Internet is recognised as excellent and best practice.

7.2.    Operate as efficiently as possibly.

7.3.    Investment management.

7.4.    Strategy evolution.

7.5.    Recruit and retain members.

7.6.    InternetNZ to further develop funding sources other than NZRS.

7.7.    Be a good employer of all InternetNZ staff.

7.8.    Be a good shareholder of NZRS.

8.      Supporting Internet innovation and technical leadership

8.1.    Support Internet Innovation.

8.2.    Enable Multicast on the NZ IPv4 and future IPv6 public network.

8.3.    Support Internet Research.

In assembling this Plan, Council assessed bids from Committees, and the ongoing business of the Society. The first expenditure budget was then prioritised and the proposed spending was cut by about $450,000, to arrive at the current figure. The draft Plan was then subject to discussion by members at meetings in Auckland, Wellington and Christchurch in early April 2006. This version reflects those changes and is for the Councils consideration and debate at its meeting on 28 April.

Any changes that arise from that meeting will lead to an amended Business Plan, which will then be recommended to the members for adoption at the AGM. End of Year financial numbers will also replace the current projection in the version submitted to members.

The budget amounts proposed for beyond the 2006/07 year are all subject to change: Council will be developing a new strategic plan for 2007/2010, and this years Business Plan does not prejudge that work.

Keith Davidson

Executive Director

2.              Strategy 1 Management of .nz

Please note that almost all direct .nz costs are funded out of the Management Fee paid by NZRS.

This budget is approved by the .nz Oversight Committee to whom the Council has delegated governance responsibility. It is not for amendment by InternetNZ members during consultation or by Council.

Please note further that the DNCs budget is being restructured in June 2006 and that the final version of this Business Plan may show different information to that shown above.

3.              Strategy 2 - Advocacy and Representation to Government

Cyberlaw Fellowship

This is for sponsorship of the InternetNZ Fellowship in Cyberlaw at the Victoria University of Wellington, as agreed in 2002. Dr Judit Bayer from Hungary was appointed in 2005 and took up the position at the start of 2006.

Research for Parliamentary Submissions

This is to allow the Public Policy Committee to commission professional external assistance for important submissions to Parliament and Government, when and if required over and above staff resources. An example is the 2005 work in proceedings before the Commerce Commission, which required InternetNZ having legal representation.

Parliamentary Internet Caucus

InternetNZ has proposed, similar to the UK, a Parliamentary Internet Caucus of interested MPs on a bipartisan basis. This proposal has been accepted and will begin meeting in 2006. InternetNZ will provide logistical support and speakers as required.

Public Policy Committee

This is to cover the teleconference, travel and accommodation costs for meetings of the Committee.

4.              Strategy 3 Supporting Industry Best Practice and Self-regulation

Internet Code of Practice

This project is at a balance point, with uncertainty about whether the Code should be implemented as written or developed in conjunction with the code being prepared by the TCF for ISP consumer complaints. Consultations are ongoing with ISPs to decide how to advance the project, but whatever the outcome it will come to an end in the 2006/07 financial year.

Some input is also being sought from InternetNZ to assist with the development of an Internet Caf Code of Practice.

Develop Best Practice Statements

Past budgets have provided for work in this area but the provision of best practice is now most likely to be done through internal staff resource, and/or promulgated by ISPANZ rather than InternetNZ.

5.              Strategy 4 - Protect the Internet

Anti-Spam Campaign - This is to cover ongoing of education, seminars, conferences, submissions on legislation, helping set up government agency.

APCAUCE Secretariat - This is to cover InternetNZs expenses incurred in supporting the APCAUCE Secretariat function.

Broadband Campaign - This line is to cover the costs of campaigning for a positive outcome to the governments ongoing review of telecommunications regulatory frameworks.

Enum - In 2006/07 Enum activity will continue to be mainly consultation, workshops and influencing policy. There is also a small provision for meeting expenses of the Task Force.

Internet Patents - This is to cover the $300 per month cost of the ipwatch website which will allow members (and to a limited degree the public) to view and be notified of Internet- related patent applications.

Internet Regulatory Issues - Given experience in 2005/06, this line is at a higher amount than previously, to fund a range of engagement with government on regulatory issues not covered by the budget for parliamentary submissions. The main focus in the current year is on broadband issues and telecommunications regulation.

Internet Safety Group - The Internet Safety Group (www.netsafe.org.nz) is a very important sibling organisation of InternetNZ, and many of its activities fall within INZs objectives and goals. The reduction in sponsorship in out years is in recognition of NetSafes success in attracting broad and extensive funding on its own account.

ISG Online Safety Conference - this is to provide for InternetNZ to sponsor this conference at a Gold sponsorship level.

Peering - Some funding is provided for peering activities/research, and a small budget allowed for meetings of the Task Force.

6.              Strategy 5 - Promote the Internet

Communications

INZ website $30,000

AGM $7,500

Advertising $10,000

Annual report $10,000

Technical Services $40,000

Members Meetings/Consult $20,000

General Communications $35,000

Communications Plan

$7,500 every second year for external advice in putting together a strategic communications plan for InternetNZ.

History of NZ Internet

The development of a general history of the Internet in New Zealand remains a project to be completed.

Interoperability

This project has come to an end.

Next Generation Internet

To cover the cost of annual membership of NGI-NZ.

Responsible Internet Usage

No funds are proposed for this project at this point.

7.              Strategy 6 NZ in the global Internet

APTLD Secretariat provision for direct (non staffing costs) of hosting the Secretariat provision is made beyond the current term in case APTLD renews the Secretariat agreement.

APNIC Membership this covers InternetNZs membership of the Regional Internet Registry.

ICANN 2006 Meeting gross cost of hosting the March 2006 ICANN Meeting in Wellington.

International Committee this is to cover the teleconference and travel costs for meetings of the Committee.

Internet Governance Travel this is to provide for InternetNZ representation at international meetings relating to Internet governance. It replaces the WSIS Consultation line, which comes to an end.

ISOC Membership this is to provide for InternetNZs membership of ISOC, agreed by Council in 2005.

Pacific Support intended for assisting Internet development in the Pacific through training, grants, travel etc. It is expected that some of the costs will be met by Government grant.

Travel APRICOT this is to provide for non .nz attendance at the regional APRICOT conference. It used to be presented as the Intl Travel (non-nz) line, which comes to an end.

8.              Strategy 7 - Supporting volunteers, members and the organisation

Volunteer Support - Council

$35,000 to cover travel to six Council meetings a year, $69,600 to cover honoraria, ($24,000 President, $12,000 other Officers and $9.600 other member of Exec Ctte). $7,500 for governance training. balance for Officers travel.

Volunteer Support Other Committees

$15,000 to cover teleconference and travel costs for meetings of the Executive Committee, $5,000 for the Governance/Constitutional Committee and $3,000 for the Audit Committee.

Staffing

Includes $7,000 staff training and $10,000 staff travel. Covers Executive Director, Office Administrator, Research/Policy Officer, Technical Analyst, Project Administrator, Communications resource and 1/3 of Receptionist.

Office Expenses

Bank Charges $1,500, Cleaning $1,000, Comp Consumables $5,000, Conferences $3,750, Domain Names $2,500, General $20,000, Insurance $18,000, Power $3,000, Postage $2,000, Printing $8,000, Rent $40,000, and Telecommunications $25,000.

Professional Fees & Advice

This covers accountancy, audit and legal fees.

Planning & Consultation

To cover costs of workshops and professional facilitation

9.              Strategy 8 - Supporting Internet Innovation and Technical Leadership

Technical Capability Development Fund

A re-developed Innovation Fund designed to cover many of the line items identified above as not funded in the 2006/07 year. The fund gives the Technical Committee capacity to do small project work on issues of concern that arise in the course of the year.

IPV6

To cover costs of an IPv6 Taskforce to help coordinate NZs introduction of IPv6, and to hold a national Hui for the development of the roadmap for deployment of IPv6 in NZ, in August 2006.

NZNOG

To enable sponsorship and support of network operators technical conferences such as NZNOG.

Certification Authority Scoping

To scope the possible development of a New Zealand-based Certification Authority.

CERT Scoping

To scope the development of a Computer Emergency Response Team for NZ.

Technical Committee

This is to cover the teleconference and travel costs for meetings of the Committee.

10.        Special Projects and Capital Budget

Special Projects

The following table is operating spending which does not fall into any of the specific Strategies outlined above.

The Special Projects Fund is an ongoing line item, giving Council the capacity to respond to events as they occur. Last year it was spent in a wide range of projects. The other items Council has agreed a full review of InternetNZs structure; the formation of an Internet Foundation requires some funds for legal advice and establishment costs.

The World Internet Project (www.worldinternetproject.net) is a major, international, collaborative project looking at the social, political and economic impact of the Internet and other new technologies. Auckland University of Technology is looking for independent organisations like InternetNZ to support this initiative.

Membership Campaign is to continue from the membership plan to grow actual members of InternetNZ

Capital Budget

The following table outlines planned capital spending in the next year.

The capital expenditure shown above is partly funded by a depreciation allocation in 2006/07 and for conveniences sake, fully funded by depreciation in the out years. This is highlighted in the following pages.

Annual Budget Summary 2006/2007 to 2008/2009

The following table summarises the income and expenditure of the Society for the next three years. Please note that these figures do not include .nz management fee or equivalent Strategy 1 spending for the out years, as these are set on an annual basis.

While this means total income and total expenditure are smaller in the out years, the net impact on the Societys financial position will be driven more by the other Strategies than by any anticipated changes in .nz costs.

The 2006/07 year reflects a moderate deficit of 14% of overall income, and the 2007/08 year and beyond shows operating surpluses depending of course on predicted domain name growth.

Overall the broad fiscal parameters seem satisfactory to Council in that the .nz domain name wholesale fee has been held steady, and the level of reserves remains high and is predicted to stay well in excess of $1 million.

* The DNC budget is established only on a year by year basis, and therefore is not included in the outlying years. It should be noted that the Management fee for .nz will offset the Strategy 1 expenditure.

Overall Financial Position

In looking at the overall budget, it is important to note that currently InternetNZ has considerable surplus funds of around $1.8 million. It was decided in 2003 to run a deficit for up to three years, with the expectation of break even budgets in 2007/08.

This years business plan shows the budget breaking even as expected, primarily due to increased dividends.

As at 31 March 2006, current net assets are predicted to be $2.4m. Of this, $0.6m is retained surplus of the DNC, and is therefore not available for expenditure by the Society generally. Overall available funds at 1 April 2006 are approximately $1.8m.

Council set a dividend policy at its meeting on 4 March 2006. The anticipated dividends for the current out-years are based on extrapolation of the policy as expressed by Council at that meeting. This figure is only accurate for 2006/2007.

2005/06 $500,000

2006/07 $1,400,000

2007/08 $1,583,000

2008/09 $1,766,000

The amounts for the last two years are indicative only, as noted.

The Councils policy as noted in last years business plan, is to maintain net current assets at or over $1,000,000, excluding the DNCs retained surplus. Based on the information presented above, the expected net assets each year will look like this:

The net current assets do not include InternetNZs $430,000 share capital held in NZRS, nor retained surpluses of NZRS and the DNC.