2001/2 Business Plan Budget Narrative

April 20, 2001

To be read in conjunction with ISOCNZ Budget 2001-02

Authors/revisions: Sue Leader (with material drawn from 2000-01 Business Plan Budget Narrative).

Relevant previous documents:

• 1998 Business Plan
• 1999 Strategic Plan
• September 1999 Council Minutes arising from Strategic Plan
• 1999-2000 Council decisions
• AGM 2000 Budget
• ISOCNZ BP Budget Narrative 2000-01
• ISOCNZ BP Budget 2000-01

Introduction

This document has been prepared by the Executive Director based on the ISOCNZ Budget 2001-02, and the outcomes of the Strategic/Business Planning Session held by the Council in February 2001. It draws on material in the ISOCNZ BP Budget Narrative 2000-01. It aims to explain in narrative terms what the 2001/2002 budget includes as well as directions for budget and business planning for the coming year.

Various high-cost items appear in this Budget which arise from decisions taken by the 2000 AGM, including the DRS Review and the SRS Implementation. These activities were originally covered by the post-AGM revised 2000-01 Business Plan and Budget (see URL's above), but the work falls into this financial year. Therefore, this should be regarded as a Transition Budget as costings and work which are currently assigned to the Office of the Executive Director may well change once the structure of the Office of the ccTLD Manager is established. Likewise, the costs associated with Council Meetings may change as the workload associated with the SRS decreases. The Constitution Review may impact Council activities as well. Another consideration is whether costs associated with the Review of the DRS will be reimbursed by Domainz.

Primary activities of the Society

This business planning document and budget narrative endeavour to satisfy the aims and objectives of the Internet Society of New Zealand, which are as follows:

• To promote the competitive provision of Internet access, services and facilities in an open and uncaptureable environment.
• To develop, maintain, evolve, and disseminate standards for the Internet and its inter-networking technologies and applications.
• To develop, maintain, evolve and disseminate effective administrative processes for the operation of the Internet in New Zealand.
• To promote and conduct education and research related to the Internet and inter-networking.
• To co-ordinate activities at a national level pertaining to good management of centralised systems and resources which facilitate the development of the Internet, including but not limited to the Domain Name System.
• To collect and disseminate information related to the Internet and inter-networking, including histories and archives.
• To develop and maintain formal and informal relationships with the international Internet community, including the Internet Society.
• To represent the common interests of the wider New Zealand Internet community both nationally and internationally.
• To promote widely and generally available access to the Internet.
• To liaise with other organisations, New Zealand Government authorities, and the general public for co-ordination, collaboration, and education in effecting the above objects.

REBRANDING AND NEW IDENTITY

One thing stays the same for the Internet Society of New Zealand: rapid evolution to meet changing circumstances. Through the AGM, members have asked the Society to reconsider its core missions, especially its virtual single-issue (DOMAINZ/SRS) nature. This situation put many other core missions on the backburner because operating .nz domain name system became our primary concern and kept efforts concentrated elsewhere. Taking direction from the membership, the Society is about to engage in a process of re-branding, which amongst other things will result in the abandonment of the words "Internet Society" thus reducing confusion of identity with ISOC, the American-based Internet Society.

Much of the Society's present resources are currently dedicated to a reorganisation of its operating company DOMAINZ, consultations on design and implementation of a Shared Registry System, as well as the legal and market-related aspects of a corporate re-branding. Since it is powered largely by volunteer efforts of its members and its Councilors, and because it seeks consultation from the community, the Society necessarily moves more slowly than many would like. Some of the expenditure on these processes was planned for the 2000-01 Financial Year, but the work was unable to be carried out until this Financial Year.

STAFFING LEVELS

Staffing levels have been approved by Council in line with workloads. The contracting of full-time Administrative support services in August of 1998 was seen as the necessary step forwards to improve the output and effectiveness of the work of the Society. At the two and three quarters year mark the support staff had grown to three

Executive Director

Executive Assistant (started January 2000): a full-time, limited-term contractor to develop and support the electronic communications areas such as the internal network, the website, and the mailing lists. In September 2000 the position was disestablished and the role converted to that of a limited term contract to revise and update the Society's website. This was completed in February 2001 The position has been replaced with a Technical Manager's position.

Administration Manager (started July 2000): a full-time employee dedicated to Administrative support. This person also handles reception, all administration, all financial services, membership database, Council Meetings and Executive Director support work, and event management.

Technical Manager (started March 2001): a part-time contractor responsible for all technical services for the Society including the website, mailing lists (27 currently), internal network, and security. The first responsibility was to bring all services in-house onto the Society's new servers. (see link)

EXPLANATIONS

The Budget is constructed in six functional divisions in order to more accurately reflect the current work of the Society. These functional divisions are:

1. Operating Expenses:

• Office of the Executive Director
• Council
• ccTLD Management

2. Non-Operating Expenses:

• Capital Expenditure
• Investment Expenditure

3. Income - all sources

1. OFFICE OF THE EXECUTIVE DIRECTOR

The figures are drawn from the allocations for all Staff expenses and include the cost of rent (current premises, phone, accounting and audit, bank fees, general, postage and couriers, printing and stationery, subscriptions, staff training, internal travel, domain names, insurance, and a new telephone line (Centrix - 3rd line for SRS Implementation Manager), and representation at industry conferences (e.g. TUANZ, UniForum)

With the shift to new office location on Bond and Willis Streets on March 12 we now will have to start paying for more services as well as upgrade our technology infrastructure to handle the increased demands of an "independent" work space. These include: cleaning, power, backbone access, security, faxing and photocopying. As noted in the 2000-01 Budget, the Society has received heavily subsidised rental and other services for the last two years courtesy of Actrix Networks. The Council allocated $19,018 ($6000 of which was for server, hub etc) to make the upgrade into the new premises, and the final expenditure was under budget for a total of $15946 (including servers etc).

A Capital Expenditure figure of $10,000 has been included to undertake normal planned upgrades to office PC's, the purchase of a UPS for the severs, and another hub to service the Board Room.

2. COUNCIL

Council meetings and activities are supported with funds for travel, legal expenses, honoraria, committee and working group activities, Internet audio recording of Council meetings

Face-to-face Council meetings (11 in this budget year) are imperative. Because Council membership has become more representative (from Auckland to Dunedin), and because air fares have risen dramatically during 2000-01, these costs have risen correspondingly. Councillors are encouraged to buy discount tickets when possible and to economise in other ways. The Council considered moving to longer intervals between face to face meetings but rejected this because of the workloads associated with major projects such as the SRS Implementation.

In partial compensation to the high personal costs involved, Council has established honoraria for some of its members. These include on a per annum basis: $20K for Chair, $3K for Treasurer, $3K for each Committee Chair who does not receive another honorarium (Admin [the Secretary], Technical, Social Impact, Legal and Regulatory).

The activities of Council incur three kinds of expenses , namely, Basic Meeting Expenses, Council Project Expenses, and Membership Services, noting that the first two overlap the third.

a. Basic Meeting Expenses

The biggest change from the previous Budget is the savings gained by having our own Board Room. The combined figure of $33550 (Council Meeting costs) was reflected in the previous Budget as a total of $43401 (Council Travel $21948 and Council Meeting Expenses $21432) - a saving of $9851. The current figure also includes the cost of monthly rental of audio-recording equipment ($3300) which will cease once the Methods of Electronic Participation (MEP) Working Group makes its final recommendations for purchasing audio-recording equipment (costs included in the MEP Budget as a Capital Expenditure item).

b. Council Project Expenses

In previous budgets Council Committees were given a uniform Budget allocation to enable them to carry out their work. In the event one Committee did not use its budget the funds could be allocated to another Committee. As each Working Group reports through one of the committees, Working Group budgets came out of that Committee's allocation.

In the planning for the 2001-02 Financial Year Council acknowledged that much of the expenditure takes place at Working Group level. Therefore all Committee Chairs and Working Group Convenors were required to submit Project Plans for the year accompanied by a Budget request. The following allocations have been made:

c. Membership Services

To satisfy needs for transparency and closer communication with its members, Council devotes resources to rapid appearance of draft minutes as well as audio files of all of its meetings. In this category we have included the MEP e-democracy activities, namely purchase/development of E-voting software and webfora ($5000) and the audio-recording equipment described under Council Meeting Expenses (above) - both as Capital Expenditure items.

d. Other

External Sponsorship - We are often approached for assistance for community-based projects which fit within our Aims and Objectives. In the past, ISOCNZ has traditionally sponsored NetDay, but now that New Zealand Telecom has taken this on, we do not include this item, so Sponsorship has been reduced leaving only ThinkQuest and the NZ Maori Internet Society. One of the projects that individual Councillors and members have considered to be amongst the most value has been ThinkQuest Internet Challenge. This project offers huge rewards to kids, giving away US $1 Million in prizes each year (scholarships, cash to schools etc). Not only does it offer huge opportunities for kids to work in an interactive, online, collaborative, education content development for the Internet, it involves a wide section of the community and gives a great PR boost for the Society. This budget item includes expenses, as well as Advertising/PR/promotion to a total of $5000. The Council proposes to support the work of the NZ Maori Internet Society by sponsoring their Domain Name and webhosting for the second year ($250)

Rebranding - whole of Society expenses under the auspices of the Admin Committee. This involves not only design and legal expenses, but also the website, stationery, business cards, etc. The Society has no promotional material in stock as the rebranding put all reprinting on hold, so this also covers: membership and other information pamphlets, signage, and other promotional material, e.g., banners for Conference and external events such as the RoadShow.

Conference - no Conference is planned for this year - see ccTLD Management Section for the proposed Summit.

3. ccTLD MANAGEMENT

One area of activity that has preoccupied the Society are the varied administrative and policy functions related to maintenance of the .nz domain. Our delegates have had significant effective input into almost all major issues facing ccTLD's and ICANN - Compulsory takedown of domain names, membership structure and fair elections, best practice models and delegation and re-delegation issues, Trade Marks and Famous Names, alternative funding models for ICANN, compulsory dispute resolution, SLA's for the root, and of ensuring the New Zealand domain name holders needs are at least heard in the international arena. Under this category we have both internal and external costs.

a. Internal

The Council recognises the need to involve the New Zealand ISP community more in issues of relevance to ".nz" management and development. Outreach efforts to date have not been as successful as desired, and therefore the Council has decided to use Summit 2001 to target ISP issues ($18000). It is intended to combine this with a NZ and Pacific ISP training workshop by APNIC and also to run a workshop on DNSSEC.

b. External

Externally the Society to date has deemed it important to continue to be an active participant in the global Internet governance working meetings that happen with increasing frequency. This year's budget includes costs of sending two individuals to ICANN meetings in Stockholm, Montevideo, Los Angeles and South America. These participations also allow ISOCNZ to be represented in important meetings such as ccTLD, APTLD, etc.

We have included a small amount here for International Legal advice above and beyond the considerable donated time of the Chair, who is an international lawyer in his own right.

To be active in these forums requires subscription and membership fees to ICANN, ccTLD, APTLD and CENTR. These not inconsiderable fees totalling $85000 have been covered by increased income from DOMAINZ.

c. DRS Review

This review was mandated to take place by the 2000 AGM and has an expected cost of $100000. At this stage it is unclear whether the Company will be asked to cover the cost, so the item only appears as a ccTLD Expense.

d. New Second Level Domain Names (2LD) Consultation

Interest in new 2LD's has grown in 2001 with two proposals in progress in the first half of the year. A figure of $3000 has been allocated to cover basic costs. The cost of the voting system is listed under the MEP Working Group Budget as a Capital Expenditure item as it will also be used for other Society activities, e.g., online participation at AGM's. The Council has established a sliding scale of fees for all 2LD applications which proceed past the Straw Poll stage and it is intended that this cover actual costs other than the Straw Poll. However, the Council will have to cover the initial costs (e.g. advertising) for unsuccessful proposals.

e. SRS Implementation (Investment and Capital Expenditure)

One-off expenditure must be made in order to implement the 2000 AGM decisions to move into a Shared Registry System (SRS). A crucial part of this process is the contracting of an SRS Implementation Manager, again mandated by the AGM, for which an allocation of $110000 has been made.

There will be associated legal and financial advisory costs in undertaking the division of the Society's company (Domainz) into a Registry and a Registrar. An optimistic view is that the eventual divestment of the resulting Registrar will cover these costs. At this stage, however, the Council cannot predict either the total costs nor the total resulting income, and is therefore making a prudent allocation of $200000 expenditure based on the recommendations from the Business Plan - Budget Working Group 2001

4. INVESTMENT AND CAPITAL EXPENDITURE

Council has decided to clearly separate these items as they are neither normal operating expenses nor projects. Rather they reflect either Capital Expenditure such as audio-recording equipment, or Investment Expenditure in relation to the structural changes to the Company (Domainz).

All three areas have been covered within their relevant functional divisions. In summary:

5. INCOME

a. Membership

Membership numbers are expected to drop somewhat after the 2001 AGM. This projection is based upon the unsubscription rates from mailing lists, resignations, and feedback received from new members immediately before and after the 2000 AGM. Two Corporate Platinum members have not renewed their membership (@ $1000 + GST). In addition the combined Conference with UniForum (NetForum 2000) created 38.5 new members @ 56.00 ($2156) as membership was included in Conference registration, and there is no certainty that they will renew on their anniversary. The Budget reflects this with a reduction in membership subscription income from the $27491 received in 2000-01 to $15000.

b. Management Fee

The Management Fee remains unchanged at $120000

c. International Dues

Domainz has undertaken to reimburse these fees again (see ccTLD Management Expenses)

d. Dividend

It is expected that the Company will be able to pay a Dividend of $493680. An alternative may be for the Company to pay the Investment Expenses direct, reducing the size of the Dividend.

Sue Leader
Executive Director

© 2001 The Internet Society of New Zealand
Last updated 28 May 2001