[members-discuss] [ncc-announce] [GM] Consultation on RIPE NCC Charging Scheme 2024

Hello Everyone,

As a representative of one of the country's largest sponsoring LIRs and 
IPv4 transfer brokers, I would like to express my concerns about the 
proposed charging models, particularly the inclusion of transfer fees. I 
believe these fees introduce a significant degree of unpredictability to 
the RIPE NCC's annual budget due to the fluctuations in the number of 
transfers each year, making it difficult for the organization to 
maintain financial stability.

I also see the following disadvantages of charging transfer fees:

1) It would create an additional administrative burden on the RIPE NCC, 
resulting in longer transfer ticket processing times.

2) It could cause payment difficulties from sanctioned countries such as 
Russia, Iran, Syria and parts of Ukraine that currently have issues even 
with the annual membership fees payments.

3) PI blocks and ASNs transfers might become more challenging, as LIRs 
may be reluctant to pay for their end users.

4) Charging transfer fees would lead to additional administration, 
accounting and taxes issues for the sponsoring LIRs, which may 
negatively impact their operations.

Instead, I propose focusing on increasing fees for PI resources and 
ASNs, which are more stable and manageable sources of revenue. By 
adjusting LIR fees based on the amount of resources held (as per the 
Model 2 ranging from 200 to 6400 euros) and increasing the fees for PI 
resources and AS numbers, we can establish a more solid financial 
foundation for the RIPE NCC.

If we raise the fees for PI IPv4 and IPv6 resources to 100 euros and 
ASNs to 100 euros, the RIPE NCC can generate consistent revenue while 
allowing for future fee adjustments based on demand and financial needs. 
To demonstrate the potential financial benefits of this approach, 
consider the following calculations:

Current RIPE NCC resources (approx. to date, PI IPv6 are excluded):
26,440 PI IPv4 blocks
14,910 ASNs

26,440 x (100 - 50) + 14,910 x 100 = 2,813,000 EUR

Now, let's compare this with the potential revenue from transfer fees, 
assuming a rate of 500 EUR per transfer based on last year's statistics 
of 5,082 transfers:

5,082 x 500 = 2,541,000 EUR

As seen in these calculations, by increasing the fees for PI and ASN, 
the RIPE NCC could generate similar or even higher revenue compared to 
the unpredictable transfer fees, while avoiding the associated 
disadvantages.

This approach, which relies on the more predictable nature of PI 
resources and ASNs, ensures that the RIPE NCC can adapt to changing 
circumstances without putting undue strain on its operations or 
financial stability. Additionally, this strategy aligns with the 
practices of other RIRs and would not create an additional 
administrative burden on the RIPE NCC.

Regards,
Victor



> Dear RIPE NCC members,
> 
> We would like to re-open the consultation we began with the membership in 2021 on the RIPE NCC Charging Scheme model, and we would like to carry out that consultation well in advance of the RIPE NCC General Meeting (GM) May 2023.
> 
> In 2021, we presented on this topic at the GM, and we also surveyed our members and held an open house to get direct input on the charging scheme model that members would like to see implemented by the RIPE NCC. The outcome at that stage of the consultation was that there were strong cases made for both the current one-LIR, one-fee model and for a category-based model that would charge based on the number of resources held by a member. A strong case was also made to charge for all resources allocated or assigned by the RIPE NCC, including ASNs, and to charge a fee for transfers.
> 
> The Executive Board decided to suspend the consultation in light of the war in Ukraine, but we are eager to decide on a way forward on this matter together with the membership.
> 
> One of the main reasons that we would like to advance the discussion on the charging model is that we expect many members with multiple LIR accounts who received resources in 2021 to merge these accounts in the coming year. This means that the income the RIPE NCC receives will be reduced by a significant amount and we will need to ensure that our charging model allows us to collect the revenue required to maintain our operations. We believe that a category-based model would be best suited to cover this consolidation risk. Continuing with the existing model would mean that an increase in fees for all members would be required. Our ultimate goal is to arrive at a charging scheme model that will be sustainable for many years to come, meeting the needs of the RIPE NCC’s members.
> 
> To help with discussion and to provide something tangible for members to assess, we are putting forward two draft models for members to review. These models can be summarised as:
> 
> Model 1: A “one-LIR, one-fee” model based on the current RIPE NCC Charging Scheme 2023  that also charges for independent resources, ASNs, transfers and changes in business structure such as Mergers & Acquisitions.
> 
> Model 2: A category-based model that charges per member (not per LIR account) and is based on resources registered and that also charges for independent resources, ASNs, transfers and changes in business structure such as Mergers & Acquisitions.
> 
> In order to allow members to form an opinion based on their own situation, we are providing an Excel sheet that will allow you to calculate the fees you would pay under each of the draft models. It is important to be aware that at this stage, the numbers assigned for each item are indicative and would be reviewed in light of the discussion with members. We plan to review these figures following consultation with the members, and giving input on those figures would greatly help to arrive at a good model.
> 
> You can download the Excel sheet from:
> https://www.ripe.net/participate/mail/member-and-community-consultations/member-calculator-charging-scheme-2024.xlsx
> 
> We also plan to hold another Open House meeting on the Charging Scheme in March to further discuss the charging scheme models. The Executive Board will then take the input and decide on one or more charging schemes for the membership to vote on at the GM to be held on 24 May 2023. The outcome of that vote will determine the charging scheme model to be used in the coming years.
> 
> I ask that you provide your input on this important consultation on the Membership Discussion mailing list (members-discuss at ripe.net) by 26 April. Input provided up to this date will be considered by the Board when formulating the charging schemes to be proposed for the GM. Input after this date is of course also welcome although it might not be reflected in the schemes put forward to the membership at the GM.
> 
> The consultation will also be recorded and available from:
> https://www.ripe.net/participate/mail/member-and-community-consultations
> 
> I look forward to your input.
> 
> Kind regards,
> 
> Simon Jan Haytink
> Finance Director
> RIPE NCC
> 
> Summary
> 
> 7 March: Start consultation with membership on RIPE NCC Charging Scheme model
> 21 March: Open House to discuss charging scheme with membership
> 24 March: Executive Board meeting to discuss input received so far
> 12 April: Publication of Draft RIPE NCC Charging Schemes 2024
> 26 April: Publication of Final RIPE NCC Charging Schemes to be voted on by members
> 24 May: RIPE NCC General Meeting May 2023
> 
> References
> 
> Open House and Survey Results
> https://www.ripe.net/participate/meetings/open-house/ripe-ncc-open-house-charging-scheme-principles
> 
> Presentation at General Meeting
> https://www.ripe.net/participate/meetings/gm/meetings/may-2021/documentation-and-archive/ripe-ncc-charging-scheme-discussion.pdf
>