AUSTRALIAN PUBLIC ACCESS NETWORK ASSOCIATION INC.

VRN: A0026600C ARBN: 081 355 722 ABN: 74 766 293 648

2004 ANNUAL REPORT

PRESIDENT'S REPORT:

Dean Hollister

In last years report, I reported 2002/2003 being a tough year for APANA. In 2003/2004, the climate has been just a challenging as before. Considering the steady decline in Membership over the years, the focus is more on sensible financial management and working with the Members we have to improve services.

Our hardworking Treasurer, Carolyn Baird, has kept a close finger on the pulse, monitoring all Regions income and expenditure, with the ultimate aim of ensuring the future viability of all Regions.

More Regions this year have deployed ADSL, despite Telstra throwing down the gauntlet by introducing ADSL services at pricings comparable to commercial dialup Internet prices.

APANA's direction is gearing more towards providing training and education services. This is further illustrated by proposed changes to the Statement of Purposes, as explored by the Management Committee.

APANA stands to benefit greatly from identifying new niche areas not serviced by any other organisation or commercial interest, such as Member education/training services being one such potential area of specialisation. At Management Committee level, we have been actively nurturing new areas of specialisation and several promising ideas are currently being explored.

As a club, we continue to face challenges and struggles that are certainly not unique just to APANA. Maintaining Member interest and involvement is an ongoing battle for any non-profit, volunteer-based organisation. However, we remain confident that APANA will remain strong in the long term and retain its long and impressive history of achievements.

SECRETARY'S REPORT:

Jeremy Malcolm

This year's membership loss has accelerated slightly over last year's, with the statistics at the date of writing (22 August 2004) looking as follows:

MEMBERSHIP STATISTICS (2003-2004)

Last year I noted in my annual report, “Failing a reversal of our decline in membership, it is necessary for us to re-evaluate the way that APANA operates, and drastic times call for drastic measures.” That may seem like a truism, but in fact it is only an opinion, and the majority opinion within the Management Committee is for a more conservative course, resisting significant change. Consequently, I do not see any change of direction for APANA and in my estimation this means that APANA has between 3 and 4 years remaining before its membership falls below the minimum required by law.

Since this prospect although unassailable is rather bleak, I feel I ought to summarise for the record some of the issues that I have raised for the association's consideration in my own endeavour to influence its direction. However in doing so I do not want to suggest any fault on the association's part for deciding not to implement those suggestions, since I am only one member among many and there are undoubtedly good reasons for the association's other representatives to prefer maintaining a steady course – such as risk minimisation – even if it does mean the gradual decline of the organisation.

My suggestion in last year's annual report was that APANA uniformly cease using its own dial-up infrastructure and adopt national outsourced connectivity in its place, so that we could take advantage of price breaks that could only be gained with a united approach. This year, my suggestion has been to consider a merger with a stronger organisation of similar aims, such as the Internet Society of Australia, or to become an umbrella body for other organisations of similar aims. Neither of these suggestions has been accepted (although in the case of the umbrella body idea, this is mainly for lack of interest from the organisations approached).

Since I do still personally believe, as I concluded in last year's report, “that we need to make some more significant changes than those we have made so far if we are to ensure that APANA will survive and remain relevant into the future,” and since I have no further suggestions of my own that I consider are likely to be adopted, I leave it to other members to take the initiative from this time forward. For my own part, I am resolved to continue in the role of Secretary to perform the administrative functions of that office, but will no longer attempt to influence the association's strategic direction or momentum for change.

I would, however, encourage any member of the Independently Connected Members region to volunteer to take on the position of its Region Coordinator and Management Committee representative, since this is the one region that ought to be able to survive the losses that other regions are experiencing to other providers' inexpensive broadband offerings. For other regions' parts, they should all encourage those members who are leaving them, to transfer their membership to ICR so that they can still participate in APANA management, meetings, newsgroups and camaraderie.

TREASURER'S REPORT:

Carolyn Baird

The reversal of fortunes commented on in last year’s Treasurer’s Report were again demonstrated during this past year. Those regional committees that took immediate action to compensate for lost members by reducing their expenditure or attempting to improve on the services offered to members were able to reduce their losses and have shown steady improvement since. While those that have been relying on last year’s profit margins to continue to sustain their region have been badly affected by a sudden and dramatic loss of members during the latter part of the year. This appears to indicate that if all regional committees had been pro-active rather than reactive, the financial benefits stemming from their actions would have been reflected in these end of year figures.

NATIONAL: A substantial profit was achieved for the year and as a result the Management Committee approved my proposal to pass these profits back to the regions in the form of a rebate of $5 per financial member as of June 30^th.

ACT: It appears that ACT will have lost all its members except for those connecting through Edwin Gibbon’s machine, Rosella, by December this year – the anniversary of the cessation of routing of the mail.act.apana.org.au domain by ACIS. To conserve ACT’s funds Edwin has opted to pay for Rosella’s ISP connection himself with all contributions from members going towards paying the region’s Telstra accounts. To be viable in the long term, ACT needs 24 members – it currently has less than half that number connecting through Rosella – but its existing funds should last at least another 2 years under this arrangement.

ADELAIDE: South Australia Region’s deficit last year is entirely due to its expenditure on equipment and installations pertinent to providing its members with 56K dialup connections. However, my figures indicate that it still needs 8 new members for long-term viability.

BRISBANE: While Brisbane’s membership has remained relatively stable, it failed to record a profit after outstanding bills owed to its ISP as of June 30^th were taken into consideration. My figures indicate that Brisbane needs around 20 new members to make the region long-term viable under the current arrangement. However since its ISP bills in arrears for the co-location provided it can retain its current membership this shortfall in income may not be reflected in its bottom-line for some months.

HUNTER: Small loss is entirely due to depreciation on equipment purchased in the past 3 years. In real terms it was one of only 3 regions that recorded a profit for the year.

ICR: While it doesn’t feature in the financial records, ICR has also suffered membership losses. One of the biggest problems in this regard is that it currently is without a Regional Co-ordinator or MC representative.

MELBOURNE: While Melbourne recorded the second highest profit for the year, it’s unlikely that this will continue throughout this year as it has already lost some of its permanently connected members who have taken up broadband connections with ISPs. (Apparently even members on regional committees are unaware that broadband connections at reduced rates are available nationally on deals that have been brokered by other regions with their respective ISPs).

NORTHERN WOLLONGONG: If ever a region was to be singled out as having suffered the greatest number of misfortunes not of their own making, it would have to be Northern Wollongong. Yet, despite having lost a number of members and having one of the lowest fee structures of all the regions, it still managed to record the largest profit - even surpassing National. Wollongong’s future resides in what happens over the next few months. With all the problems they’ve encountered that have been beyond their control and which they have overcome or are endeavouring to overcome, it would be most disheartening to see them lose more members because of that.

PERTH: Perth has recorded the largest ‘unexplainable’ loss. Its membership has almost halved in the past 12 months but that alone doesn’t account for its deficit nor is there any indication of the reason so many have abandoned the region without notice. However, recent actions taken should retain Perth’s profitability and the effects of that should become apparent within the next few months.

SYDNEY: Sydney’s end of year figures take into account the 6 month’s rent that is overdue but for which no invoice has been received as yet. While the loss for the year is considered reasonable under the circumstances, unless the hub room is vacated soon Sydney may have problems trying to recover from the additional expense incurred as a result of any delay.

In summary, if we assume that the losses most regions have suffered have been due to members being enticed away by the widely advertised and presumed affordability of broadband connections, then we have failed to effectively communicate to members that broadband connections could have been arranged for them – if not at a reduced price then at least under APANA’s protection or guidance against excess volume charges.

The only regions that remain a concern at the present time are Melbourne (“Will they be able to afford the rent increase due on Oct 1^st?”) and Sydney (“Can they vacate the hub premises before the rent increase gobbles up all the gains they have made in the past 3 years?”). All of the other regions appear to be financially secure for the next 12 months.

BRISBANE REGION:

Pauline Sheppard

Brisbane APANA has had a varied year. Although we have experienced very few technical problems over the year, both Goblin and Gargoyle are in need of an overhaul and upgrade.

Loss of membership is still of major concern. Whereas our membership was almost touching the 100 mark at one point, our numbers as at this date are 89. We have introduced a one-hour and three-hour per day connections in the hope of keeping members whose computer usage has decreased. Rather than lose them altogether we would rather they downgraded, which a number have done.

Reasons for members defecting seem to vary from better ADSL deals elsewhere or being lured by glamorous television ads from such commercial ISP's as Dodo, Telstra and Optus. Many are unaware of hidden costs down the track from these companies. Despite many emails to members advising them of our costs and deals, only a very small nucleus seems to ever read their emails. If we had the time, resources and inclination, a better way of reaching our members might be via normal mail, although how many read and/or act on what they might consider as 'unsolicited' mail is unknown.

Carolyn has already advised us that we are not covering costs. Luckily ECN bill us for dialups in arrears and we have a bit of surplus. Thus, so far we have not plummeted into the red. However, we need to heed Carolyn's warning and do something about it immediately.

To my way of thinking increasing revenue means looking at our fee structure and increasing our membership. I can't see any particular areas that we can cut costs. Currently we are renting 30 lines from ECN, which is the minimum allowable by them. At peak times we are lucky to be using half of those, so we have plenty of scope to sign up new members without disruption to current ones. A good way to go might be to look at non-profit organisations, most of which would only be using the service during weekday low-peak times.

ADSL has also been introduced during the year. With never-ending competition and lowering of fee structures in the commercial marketplace, Brisbane ADSL fees, which are determined by ECN and Telstra, are not competitive. Most of our ADSL members are those on the committee or support with next to no interest from Members. Thus, our fee structure for ADSL needs to be looked at with ECN and once we are more competitive we can start getting our name out in the marketplace.

In all we haven't had too many problems or disgruntled members this year. From memory we have had one outage affecting ADSL members, and one affecting dialups, which is pretty good in comparison to most commercial ISP's.

In summary, if we can increase membership and find a way of becoming more financially viable, I feel Brisbane APANA can look forward to a bright future.

HUNTER REGION:

Marc Walters

Membership has remained stable throughout the year, with a fairly high retention rate. Finances have continued to improve.

Our hub equipment has been aging, and failures have prompted replacement with new and donated parts when required.

At the beginning of 2004 the region changed from Ozemail to NetCentral for provision of Internet connectivity, and it appears it was a good move. Our connection appears to be more reliable, and we received a good deal and further excellent assistance from NC when installing the broadband connection recently.

Throughout the year broadband connection has been a regular topic of discussion within the committee and recently it was decided to implement ADSL service with a local ISP. The benefits to regional members include faster serving of members' web pages to the outside world, and faster Internet access at peak usage times. We feel that this will play a major part in retaining members as well as allowing the region to offer more attractive services to potential members.

Having the hub located in the same house as two of our Admin team has allowed quick response to problems. Additionally, Cas has assisted a number of members who have required help to remove viruses and fix other problems with their machines, while Chris has been busy maintaining the software on the machines and hardening the hub to spam and malicious software. It is this type of positive member-centric and volunteer-based ethic of APANA that truly sets it apart from the ISPs.

In conclusion, the region is in an overall better position than this time last year to meet its goals of retaining and improving membership and provide an increased range of services to its members. Our hardware situation has also improved noticably. Overall, the outlook is an optimistic one for Hunter over the coming year.

INDEPENDENTLY CONNECTED MEMBERS REGION:

Position vacant

None received.

AUSTRALIAN CAPITAL TERRITORY REGION:

Edwin Gibbons

None received.

NORTHERN WOLLONGONG REGION:

Sid Moir

At present we have a financial deficit that I hope will be addressed by October. We have a lot of Members’ fees due in September and this should assist our finances substantially. However with competition from other ISPs getting cheaper, and the problems that we have had in recent months, I suspect that some members will change to other providers for broadband or other promised better services etc. With membership numbers lower than before, we just recently reduced the number of our telephone lines by two in order to cut costs.

Our Router was replaced in January, and the Server rebuilt from scratch in July, (the whole system is within one tower now) so hopefully nothing else (major) will happen for quite a while. There are still some unexplained glitches with email from some members, and we are continually trying to solve this. Interruptions to the power supply to our area seem to happen frequently, about every 2 or 3 weeks, and this problem does not make our members ‘happy’. Currently any problems that do arise with our server are generally fixed with a reboot of the system, though this is not a good solution – we are still trying to resolve this problem too!

The main concern for Wollongong APANA is that we have no resident technics guru, with one having moved interstate, and one now with family and business commitments and no longer local. Problems now take a little longer to fix - depending on the busyness of these fellows, and when they can get around to assist us; though fortunately they are still willing to help, and often manage to solve problems remotely from their homes. Other involvement from the local membership is disappointingly minimal. Attendance at the last two meetings has been only 5 and 3 respectively. Many members make no contact unless the system is ‘down’, and show no interest or gratitude for any work involved in the running of the system, or for efforts made in rectifying problems. The concept of a local ISP with community involvement seems to have been forgotten by many who just want the convenience of a cheaper service.

SOUTH AUSTRALIA REGION:

Martin Bull

None received.

SYDNEY REGION:

Craig Dewick

Very, very belated apologies for the lateness of this report. There's been far too much going on this week at home and I was too sapped from work last night to write something then...

2003/2004 has been an interesting year for us. We changed wholesale connectivity provider and ugpraded our baseline ADSL connection to a much faster, same-cost plan after an analysis of our member's data usage, did a lot of work trying to keep the machines at the hub going (especially Goliath which suffered a couple of major failures), and too a lot of small steps to make the machines at the hub more reliable.

Jedi was upgraded and improved as well overall, with hardware upgrades (apart from problems with serial multiplexer boards which are still bugging me), continuously upgraded software packages, the highly-controversial change from Sendmail to Postfix with some members up in arms over legit email being blocked while I try to explain how it's impossible to have a 'perfect' spam filter, new software features, etc.

Unfortunately we had to drop support for one of our long-time member-access sites (GCO) after a falling our with the site operator, and his unwillingness to support it as much as he should have been to keep generating (and retaining) members which were using his dial-up server. This meant that we went back to having only Jedi as a dial-up access server.

The biggest change of all is happening right now - abandoning the hub. Because of a rental increase of about 45 percent per week (to around $100 per week!), we have no choice but to move out of the hub and completely change our network.

To this end, we scoped out options and found a local Sydney ISP run by a great guy who is young and keen to support APANA, and have arranged a small number of leased ports which will take over the dedicated connections at the hub very shortly, and after that is done Goliath will be re-located to a data centre (we've negotiated a price of $175 per month for co-location), the dedicated connections used by myself (for Jedi, etc.) and by David Fisher will be changed to something provided by the same ISP offering the ports and co-lo service to us, and the hub will become redundant.

Out of the change, we will end up with a lot of surplus hardware (my Cisco 3620, the two machines running as Ion and Sprout, Stallion cards in Sprout, a few banks of NetComm ProRack modems, and lots of miscellany), but the core regional network operating cost after the whole task is finished will far less than the cost of the hub as it stands now with the inflated rent, Iinet ADSL service cost, etc.

Membership has fallen due to the dropping price of commercial retail dial-up services, and also because of broadband coming more available. What people don't see is the hidden costs of these low-cost commercial plans (bandwidth limiting and/or excess data charges) which we have never had and (at least with leased ports used for modem-based connections) will not have in the future.

The one bright spot on the horizon is wireless networking. Jamie Lovick of the Australian Wireless Association contacted me recently to followup on discussions we had late last year about getting APANA Sydney involved in wireless networking for sharing of non-Internet resources, and between now and the end of this year we're hoping to get this translated into some equipment being set up to try out ideas.

Thankyou to everyone who has supported up over the last 12 months. Almost all of the members who have opted not to renew their membership have given glowing reports about how supportive we have been and I will make sure we continue to do that. We might have dwindling membership and (currently) be unable to offer re-sold broadband services, but the focus on helping and supporting our members is one of our key strengths.

Our positive cashflow during the last 12 months has seen our regional deficit fall very significantly and once the hub changes are done, we hope the flow-on from the greatly-reduced core operating costs will have a big impact on pushing the rate of deficit recovery up which will have the effect of improving the APANA national funds balance (and that benefits all regions and all members as it makes APANA nationally more stable financially).

Lets look forward to a happy and healthy 2004/2005!

MELBOURNE REGION:

John Newnham

None received.

PERTH REGION:

John Breen

A verbal report was presented by Dean Hollister on behalf of John Breen, advising that Perth has sustained a major loss of members during this year for no obvious reason apart from the advent of inexpensive broadband connections from major ISPs. The region is currently in the red, but this will be addressed with the move to a new ADSL uplink that will be a third of the price of the current link, and the cutting of several dialup lines. In three to four months, the region is expected to be back in the black and on a level footing for the following year, so long as membership is maintained.