From: MICE Discuss [mailto:MICE-DISCUSS@LISTS.IPHOUSE.NET] On Behalf Of Shaun Carlson
Sent: Friday, October 05, 2012 11:22 AM
To: MICE-DISCUSS@LISTS.IPHOUSE.NET
Subject: [MICE-DISCUSS] New cost breakdown worksheet

All, 

Richard Laager from Wikstrom Telephone and I have put together a spreadsheet (see link below) detailing the cost breakdown and potential fee structures for MICE.  I've highlighted the input fields in orange (you're welcome Mike H) and would encourage you to review the values and assumptions annotated within the sheet.

This spreadsheet proposes fees based on the current costs of the exchange. While slightly simplistic (e.g. no effort was made to account for inflation), this seemed like a reasonable and mostly-objective path to calculating the first year of fees. These costs assume that labor is still donated. The space and power costs are included, even though they're currently donated for 3 years; the effect of this will be to build up reserves. These reserves would be to allow for unforeseen events as well as growth (e.g. adding another switch if we run out of ports). The hardware costs of the existing switches are included as well, even though the switches are already paid for. This will build up funding to buy the next generation of switches (40G or 100G).

Yearly, the Board of Governors ("steering committee") needs to update (or review the work of a committee which has updated) the inputs to cost projections. After this first year, since the "expected life" will be one year less, the hardware purchase costs will need to be updated to account for costs already recovered. For example, pretend we had only one switch that cost $10,000, support costs $1,000/year, and we expect to install then next generation switch in 5 years. The methods used in the spreadsheet would show we need to recover: 10000 / 5 + 1000 = $3000/year. Next year, if we are still exactly on, the fees don't change. Since we recovered $2,000 in the first year, we now need to recover: 8000 / 4 + 1000 = $3000/year. As the best estimates (for the cost of the next generation of switch and the remaining time until such a switch is necessary) are updated, the costs will go up or down.

Additionally, Richard and I discussed some policy notes and considerations and wanted to include the following for your review and comment as well.

POLICY PROPOSALS:

General

The term "Resources" refers to physical or logical resources such as IP addresses, ports, etc.

In the 4th quarter, the rates for Resources for the upcoming year shall be fixed by the Board of Governors. The new rates shall take effect on January 1.

Future policy action may define a Grace Period (e.g. for new members) during which fees are waived. This Grace Period is separate from, and in addition to, the "one month" references below.


Prorating

Annual rates shall be prorated by months only. Resources connected on or before the 15th of a month shall be billed effective the 1st of that month. Resources connected after the 15th shall be billed effective the 1st of the next month. No refunds shall be given for disconnections. Credit is only given during migrations, as provided below.


Migrations

Additional resources utilized during MICE-initiated migrations are not billable provided the member complies with MICE's timetable for that migration.

Members upgrading (not downgrading) the type (speed) of their ports (e.g. one or more 1G ports to one or more 10G ports) shall be prorated the difference between the port costs. If the difference is negative, the credit may be carried forward up to one year. During the period of overlap between the sets of ports, one month's overlap of the cheaper set shall be credited; if there is less than one month of overlap, no overlapping charges apply.


IPs

Upon application, a new member shall be assigned one set of one IPv4 address and one IPv6 address. The IPs are billable one month after the route servers are configured (unless the member opts out of multi-lateral peering) and the member is notified of the assignment.

Additional IPv4 and IPv6 addresse sets are billable at the same rate as the first set. Members may not be assigned more than two sets of addresses without future policy action.


Ports

Ports are billable once configured and the member is notified of the assignment, except that ports assigned to new members are billable one month later.


Transceivers

Transceivers (SFP, SFP+, etc.), when required for ports, must be purchased from MICE or provided by the member. If purchased from MICE, no Grace Period applies. If provided, the transceiver must meet MICE's requirements, which may include a manufacturer or manufacturer compatibility specification for switch support reasons. Transceivers (once paid for) remain the property of the member.

Feel free to play around with the numbers and understand the cost breakdowns for yourself.  Let us know if you have questions regarding the sheet or the included calculations/assumptions.

Thanks!

s