[members-discuss] [ncc-announce] [GM] Final RIPE NCC Charging Schemes for Members to Vote On

Hi all,

The Board claims fairness of model A, but in reality it still 
significantly favors large LIRs (incumbents) over small ones - it unfair 
at all. It's just hiding that behind a lower absolute amount for small 
LIRs. But the curve does not flatten out too much, if we look on price 
per IP (see model-comparison.png attached). A and will bring only new 
problems in long-term perspective.


Only the absolute payment for small LIRs will decrease. Model A really 
reminds me of trying to buy a vote instead of a fairer model at all (68% 
members are in category from 1 to 3 and their memberships will be 
cheaper), but basic principles of the original flat model have been 
preserved. The smaller you are, the more you pay per asset.

The question is - why The Board protects (extra-)large LIRs, mostly 
telco-incumbents holding blocks like /14-/12 at the expense of the 
smaller LIRs, when we're talking about fairness? I don't see any attempt 
at a fairer approach here. Instead, they just scare us with highly 
improbable scenarios.

On the contrary, that incumbents have money to buy smaller LIRs (ISPs) - 
and that counts members in categories from 4 to 7. Those incumbents will 
hold more and more addresses, the price for their address will keep just 
falling for them, as there's nothing above proposed Category 10. Yes, 
the market is continuously consolidating. But model A doesn't care about 
that, just brings new problems to the market (small enterprises; which 
are mostly somewhere beteeen category 4 and 7). And on the contrary, it 
helps the big players on the market.


And let's in light of the concerns indicated by the Board try other 
view, if I detach discussion from IP assets and price fairness:

68% members mentioned above in category 1-3 will bring here only around 
30% of the budget income. From this perspective, current flat model is 
much fairer. That's another point of view - this will also lead to 
consolidation in membership base especially in categories 4+. They just 
have to pay more, but in fact, their ability to influence anything is 
quite small and unequal from the point of view of the money they bring 
into the organization. Especially at the border of the categories, an 
effort to optimize the expenses can be assumed.

RIPE incomes will fall as a result and this will be the primary 
consequence of category based model, which again is most problematic 
beteeen categories 4 and 7 - which makes 43% of income in category-based 
model. Sub-RIR organisations will simply start to share their costs. 
 From the point of view of ip addresses, the advantage is increasing in 
higher categories - you have to pay less per IP.

And it will not be difficult to maintain contractual or statutory 
relations within such SubRIRs - they already exists somewhat, but now it 
will be even more attractive from a financial point of view.


 From both points of view, the Board simply failed in it's primary role. 
Short-term populism trumps long-term vision after IPv4 depletion. They 
praise something that will cause problems in the future, even from a 
financial point of view. Medium LIRs were thrown overboard.


So let's watch the dance on the upper deck of the sinking ship. I'll be 
really surprised if option A doesn't win. But I'm very afraid of the 
consequences. It's a good choice from my point of view. Soon we'll 
discuss even more about how to finance still growing beast. And even for 
the small ones (in category 1-3), costs will increase significantly as a 
result. Because the money from the middle LIRs ones will simply start to 
disappear as a result of formal mergers. The middle class is the real 
victim here.


- Daniel



On 4/26/23 17:31, Raymond Jetten wrote:
> The Board believes that the category-based model (Model A) will put the RIPE NCC in the best position to manage change in the future. It addresses the perceived unfairness of the current model, based on an objective measure of members’ resource holdings. It spreads the burden more fairly if future price increases are required, and it allows us to reduce the uncertainty caused by multiple LIRs and the associated loss of income due to the consolidation of LIR accounts. Comments on the IPv6 category limits have also been taken into account and corrected in the model; the lowest category is now a /29 rather than a /31 as it was in the previous version. Model A introduces a new fee to join the IPv4 Waiting List of EUR 1,000, and a yet-to-be-determined fee before the allocation can be made. In effect, these fees replace the current practice and fees involved with creating multiple LIRs to request additional allocations. More details are in the charging scheme document.
>   
> We note that we saw many requests for a pure usage-based model. However, such a model would greatly distort the RIPE NCC’s income dynamics and may present new risks. Making the RIPE NCC reliant on a small number of members for a large part of its income could undermine its stability and independence, and it is reasonable to think these larger companies would want a greater say in the organisation’s governance as a result of their increased contribution. This is why the Board would prefer to see all fees stay within a reasonable bandwidth.
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