Charging by local IRs - draft paper

This closes Action 21.3 on Daniel Karrenberg and me and
is for discussion at next week's Local IR meeting.

Cheers.

Mike Norris



ripe-xxx

Charging by Local Internet Registries


1.  Abstract
------------
This paper deals with charging for services by Internet 
registries, and indicates acceptable practice for such
charging.  It identifies name- and address-space as finite 
resources with no intrinsic value; as such, direct costs
cannot be ascribed to such space.  It also makes recommendations
for the operation of European registries in general, and
additionally for those with monopoly positions.

2.  Internet services
---------------------
In Europe as elsewhere, providers offer a range of services
relating to Internet access.  These include Internet connectivity,
the provision of applications to end-users, design, consultancy 
and training services, as well as system services such as IP
registration, DNS, routing and packet forwarding.

With some identifiable exceptions (to which we shall return),
there is generally an open market in the provision of such
services.  On the supply side, there is freedom to enter the
market, to compete for business, and to charge for services in
order to stay in business.  In this context, it is acceptable
practice for Internet service providers (ISPs) to charge for
services such as domain registration, routing services, 
packet forwarding and IP services.  On the demand side, the
general plurality of service providers means that the 
customer has a choice; if not satisfied with the terms of one
supplier, she can take her business to another.

3.  Registries and Resources
----------------------------
Two of the above services involve the assignment of finite 
resources to customers; these are domain name space and IPv4 address
space.  They are managed and assigned by registration agencies,
respectively domain name registries and IP registries.  By 
themselves, these resources have no intrinsic value; their 
worth is only realised in conjunction with the provision of 
Internet access.  Thus, while registries may charge for their 
administrative and technical services, they may not charge for 
namespace or address space as such; no unit cost or price tag
can be attached to a domain name or to an IP address, public or
private.

This principle must be made clear to the market in general and
to the customer in particular.  The customer must be aware of
precisely what she is getting from the registry, whether it is
paid for or not.  Where there is a charge, the customer must not
be under the illusion that this translates into a unit cost 
per resource assigned.  Finally, the customer must accept the 
terms under which name or address space is assigned.  In the 
case of IP address space, these include the contractual term 
that the assignment is only valid for so long as the criteria 
of the assignment are valid [ref 1].  As soon as the 
original criteria no longer apply, the address space must be 
returned without penalty or premium to the assigning registry.

4.  Special Case Registries
---------------------------
As indicated above, there are certain exceptions to the 
market principle in the Internet registration services.  These
occur where, by virtue of their location in the hierarchy of
Internet registration, certain registries find themselves in a
monopoly position.  In the case of namespace, this applies to 
top-level domain (TLD) registries (in Europe, these are all 
country registries), as well as certain administratively
unique second-level domain registries (such as .co.uk, .ac.at
etc).  When it comes to IP address allocation, regional
registries constitute monopolies within the communities they
serve.  In Europe, one instance is the RIPE NCC, registry
for the European region [ref 2].  Other possible examples are the 
last resort (non-provider) IP registries, although nowadays
the customer has an alternative to their services.

It is important that there be transparency in the procedures and 
accounts of such "special case" registries.  They must not 
generate, nor be seen to generate, excessive profits by virtue 
of their monopoly position.  

5.  Recommendations
-------------------
To meet with the objectives outlined in this paper, it is 
recommended that **all** registries:

	- publish their operating procedures;

	- publish details of the services they offer and the 
	  conditions and terms that apply, including scales of 
	  tariffs if applicable;

	- explicitly publish the fact that they do not sell
	  name or address space as such.

As for **"special case"** registries as defined above, it is 
recommended that where such a registry charges for service, it 
should, in addition to complying with the recommendations listed 
above:

	- relate charges to costs of operation and apply
	  all revenues to such costs;

	- regularly publish a budget of its anticipated
	  operating costs and revenue;

	- publish guidelines and apply these uniformly;

	- ensure equality of access to registration services;

	- achieve consensus within the community it serves
	  as to the disposal of any profits;

	- regularly publish accounts of income and expenditure;

	- refrain from using their unique position as leverage
	  in any other business venture.


 
Daniel Karrenberg and Mike Norris
15th April 1996




References
----------
[1]	"European Internet Registry Policies and Procedures" by
	Orange, C., Kuehne, M., Karrenberg, D. (ripe-104, 1996)

[2]	"RIPE NCC - Delegated Internet Registry" (ripe-112, 1994)