[members-discuss] [ncc-announce] [GM] Publication of Draft Charging Scheme Models 2024

Hi Gert,





A few thoughts… 😊



There isn't a 2024 budget proposal [externally] yet as that is something that belongs to some process which seems to only start in the fall. However, wording from RIPE NCC imply there will be a 5 - 12% increase for FY2024E. Thus, there seems to be [internal] preparatory work for the 2024 budget already now. I mean, how else would they know the band of increases? NCC (at least externally) seems to model their operations, from a financial perspective, as "we have this pot of money, we need to spend it somehow".



Some (I will avoid using the word "many") of the discussants in this thread (or the previous ones in March) have opined that the charging model and budget should be more tied together, including myself. Of course, some others have opined that it is good they are separate, and we should not confuse one with the other or combine them. Everyone has their opinion and is entitled to it.



For what it is worth, I think that separating them is not ideal. Most forecasting in an integrated three-statement financial model is based on estimated revenue streams and estimated expenses that then drive the income statement, balance sheet and cashflow statements. If modeling expenses are disconnected from the rest of the model, it creates a discontinuity in the forecasting model. Things like what should RIPE NCC spend money on, how much can it spend and for the benefit of whom should be valid and acceptable questions when doing forecasting. Particularly, as there is one significant source of income (members) and a multitude of small streams where that revenue goes to. On the other hand, should there be any hurdles to meet or exceed for something to proceed year on year or can something continue forever if there is money to spend? Yes, technically there is more than one source of revenue but since 98% comes from membership fees and sign-up fees, the remaining 2% is not very material in my opinion.



As for the models that have been presented and some have discussed as to what is and what isn’t fair. Particularly model A in its original or present version, does not have any kind of fairness – quite the opposite. It seems more of a model where those who have [resources] pay for the services of those who do not have [resources]. Those without resources – the 2/3 receiving a lower invoice – will pay well under the average expense for a LIR (when contrasting to FY2022 realized figures) or less than 1480 euro. How is this fair?



It is not a big stretch to imagine, that with the FY2023E budget increase compared to FY2022, AND when there have been a multitude of cautions about costs having gone up, etc. AND there have been LIR closings (imminent decrease of some revenue), that the average expense attributable for a LIR in FY2023 will be higher than for FY2022 and again higher in FY2024.. So, it looks like won’t be getting any better in the future with the current trend, either. Those who will have to pay for this include the ones who are not in the lowest charging categories but the LIRs in category 4-10. Why should organizations in these categories subsidize smaller LIRs w.r.t RIPE fees? How is this fair or even reasonable? Certainly, there isn’t any benefit of having to paying more. We don’t even get a T-shirt or a trendy hoodie. Is this a Europe-wide socioeconomic experiment on fixing some kind of perceived inequality and disparity of IP address distribution?



Btw, can someone explain – beyond the word itself – what 4.3 million spent on consultancy in FY2022 is? In the 2023 budget this is 5.1 million. How many contractors does this equal to? It sounds like an awful amount of people doing professional services for NCC. I mean, in addition to the 20 million fully loaded personnel costs for 172 FTEs, of course.



Comments and thoughts welcome, as always.









Kaj



-----Original Message-----
From: members-discuss <members-discuss-bounces at ripe.net> On Behalf Of Gert Doering
Sent: Tuesday, April 18, 2023 23:47
To: Maximilian Wilhelm <max at rfc2324.org>
Cc: Gert Doering <gert at space.net>; RIPE member discuss list <members-discuss at ripe.net>
Subject: Re: [members-discuss] [ncc-announce] [GM] Publication of Draft Charging Scheme Models 2024



Hi,



On Tue, Apr 18, 2023 at 09:07:08PM +0200, Maximilian Wilhelm wrote:

> If that's the argument here, than we should also introduce a charge for

> IPv6 resources because all of the above applies there too. It's not a

> scarce resource but we should keep track of it, and if it's not used it

> should be returned, no?



Already in place - IPv6 resources are either PI (50 EUR/piece charge exists)

or PA, tied to LIR accounts, with LIR fees.



(Yes, there is no *extra* fee for IPv6 PA blocks, and I think that's a

feature - the goals "keep track of resources" and "incentivize *end users*

to return resources they no longer need" are both met)



[..]

> > I've never done the math on "how does this influence the NCC budget?" - but

> > assuming some 20.000 "RIPE" ASNs out there, and also assuming 50 EUR/year,

> > this would be a million EUR/year, which otherwise would have to be part

> > of the member fees.  So, while this was explicitly never my intention

> > ("lower our member fees by making other people pay for their ASN"), it

> > does have an effect - ASN fees and PI fees can be billed "onwards" toward

> > the customer, while the regular LIR fee is "mine to keep"...

>

> Well the financial bit is another conversation. I've seen a lot of push

> back here on increasing the fees and it seems a lot of folks would

> rather like to see where spending could be reduced. But let's keep those

> conversations separate.



Indeed, that's a separate conversation.  But if we do have agreement on

some sort of NCC budget, the question remains "how is that budget financed",

and "fee for ASNs" would inevitably lower the LIR fees (and vice versa),

to reach the same total budget.



TANSTAAFL :-) - if you want ASNs to be free, the money needs to come

from somewhere else.



(Reducing the budget will still not make things "free for all")



Gert Doering

        -- NetMaster

--

have you enabled IPv6 on something today...?



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