[members-discuss] [ncc-announce] [GM] Draft RIPE NCC Charging Scheme 2025 Proposals

Hi,


Very politely put I do not think any of the three proposed charging schemes are in the membership's interest - they certainly aren't in mine.

All three seem to be designed to assure that NCC can continue along, business as usual, with its tasks. Thus, we could pretend that there isn't a big issue with the membership numbers declining. We could also pretend there isn't a real problem with the value proposition of the services. Furthermore, we could also pretend that we do not care that it all is conveniently funded by the membership. I mean, what is 1500 or 1900 euro to most people? I have heard the last several times in the past. After all, why should we care about the expenditure when the sums are so small for each LIR? Why should we care when it is not our own money? I'll tell you. Not caring about the transaction size is bad, if you are willing to let these kinds of sums slide, you'll let it slide on bigger amounts. As is treating other people's money (OPM) differently than if it were your own. These eventually lead to lack of accountability.

What is being proposed is really a significant increase in membership fees. In particular, significantly above what it used to cost on average to produce services for each member (whether they use them or not). Note when I say what it used to cost, as in FY2024 the cost per LIR will be higher.

Now, with the membership in further decline the average cost per member will once more be higher in FY2025. Next year, I forecast that we will have the same "discussion" for FY2026 as NCC comes around and asks for more money. Once again. Why? Because according to projections the amount of members will continue to decrease resulting in higher fees per organization. Once again. All in the advantageous name of the articles of association that allow pretty much anything.

Following the above rational thought with another is, that what one should be doing is choosing what to either invoice separately or drop completely. Yes, really. Everyone is happy with free services, it is when you apply the money test - request someone to pay for something - when you see if what you create contains value.

Considering NCC managed to "save" 5% in the FY2024 budget compared to FY2023, asking for 8.1% increase (4% annualized) the next year is, well, kind of cheeky. It restores the budget pretty much to what it would have been with two annual increases. As an exercise in budgetary engineering I do approve. As a paying member I do not.

What really would be needed is competition. Competition would make the RIR market more efficient. It is rather obvious that the RIR markets aren't anywhere near the efficiency they could be at. Competition would mean that people wanting to pay 1900 - or even more in the future - could choose to do so and those who don't want could potentially pay less. Reduced to the very basics one is paying for bits in a database. In that sense this is rather similar to the certificate market where at one time the cost per certificate was sky high and there were only a few issuers. Today, I am guessing most do not pay thousands annually for a few bits in theirs. Neither do most people care whether the cert was issued by Verisign, Gandi or someone else. Having looked into it out of curiosity, real competition does not seem to be possible as the principles in ICP-2 pretty much state that there can/should only be one RIR per region. Which makes NCC the definition of a monopoly. Monopolies with nice and polite people, well intended purpose and mission creep are not good, they're bad. For everyone.

Finally, the surplus. The concept itself is interesting and I do know where it comes from. But from an financial point of view it is really lending money to someone else and then (maybe) getting it back, a year later, less inflation if they did not spend it.


I would kindly request that the EB would add option D or "Option D: No Changes from 2023". :)




Kaj







Kaj
________________________________
From: ncc-announce <ncc-announce-bounces at ripe.net> on behalf of Simon-Jan Haytink <simonjh at ripe.net>
Sent: Wednesday, April 10, 2024 12:18
To: ncc-announce at ripe.net <ncc-announce at ripe.net>
Subject: [ncc-announce] [GM] Draft RIPE NCC Charging Scheme 2025 Proposals

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Dear RIPE NCC members,


We can now share three draft charging scheme models for 2025 that the Executive Board approved with the following resolution at its meeting on 25 March 2024:


The RIPE NCC Executive Board approves the submission of the RIPE NCC Charging Scheme 2025 options to the upcoming RIPE NCC General Meeting for members to vote on.



- Option A  -  Charging Scheme as is with 22.58% price increase for the annual contribution per LIR account (EUR 1,900) and a 0% price increase for Independent Internet number resource assignments* (EUR 50)

- Option B  -  Charging Scheme as is with 20.97% price increase for the annual contribution per LIR account (EUR 1,875) and a 50% price increase for Independent Internet number resource assignments* (EUR 75)

- Option C  -  Charging Scheme as is with 16.13% price increase for the annual contribution per LIR account (EUR 1,800), a 50% price increase for Independent Internet number resource assignments* (EUR 75) and a new AS Numbers fee of EUR 50 per assignment


*Resources falling under this charge are IPv4 and IPv6 PI assignments; Anycast assignments; IPv4 and IPv6 IXP assignments; and Legacy IPv4 resource registrations through a sponsoring LIR.


The full draft charging scheme models are available from the GM Documentation page:
https://www.ripe.net/membership/meetings/gm/meetings/may-2024/documentation-and-archives/supporting-documents/


Although the proposed models are relatively simple, we provide a calculator where you can see exactly what you would pay under each of the proposed models:

https://www.ripe.net/documents/3757/CS2025_Member_Calculator.xlsx


The main considerations for the Executive Board in proposing these three models are:

1. The consolidation of LIR accounts, which means the burden to generate sufficient income must be met by fewer accounts

2. Increased costs due to inflation that were previously catered for by the large number of LIR accounts

3. Following the discussions last year and again this year, there appears to be no clear consensus among members on how a category-based model would work and the Board does not wish to put another category model forward at the upcoming GM that will be rejected by the members. Rather, the Board will propose a simple model that guarantees adequate funding for 2025 and 2026 - under this proposal, we expect there would be no need for a fee increase for 2026. The Board will work with the RIPE NCC on a more in-depth consultation with the members aimed at arriving at a sustainable solution for 2027 and beyond, possibly involving a new charging scheme task force.


All three proposed models are designed to arrive at the same income of EUR 41.1 million for the RIPE NCC in 2025. This will cover all current services and activities, a 5% staff cost increase, a 2% inflation increase on all non-staff costs, and EUR 1 million for additional work relating to registry complexity and security projects aimed at ensuring the resilience of the Registry and the RIPE NCC more broadly. Any such additional work would be discussed with the membership during Activity Plan and Budget consultations and then need to be approved by the Board. This will also allow some leeway should more LIR accounts close than we expect.


It’s important to note that the RIPE NCC aims for an income budget that will provide a surplus, and this means that should we meet our budgetary targets, a surplus can be returned to members in 2026 should they so wish.


While the RIPE NCC continues to carry out cost-cutting efforts across the organisation, drastically reducing the budget at this time is not advisable due to the work that needs to be carried out, especially in relation to maintaining high-quality registry services and securing the registry and RIPE NCC systems. Cutting services or activities is not something the Board is planning to do, and such actions would take time and need full consultation with the membership. An overview of the activities and services that the membership fee covers is provided below this email.


I also urge you to see the presentation we delivered at the charging scheme open house in March so that the full context of the situation and the financial landscape we face is clear to you. The slides are available at:

https://www.ripe.net/membership/meetings/open-house/ripe-ncc-charging-scheme-2025/


Finally, I want to thank all those who have contributed to the consultation so far on the RIPE NCC Charging Scheme 2025. The models we present here are draft and in two weeks we will announce the final proposal that members will vote on at the GM on 22-24 May. Please discuss the draft proposal on the members-discuss at ripe.net<mailto:members-discuss at ripe.net> list - any input received by 19 April can be incorporated if possible into the final models we propose. And make sure to register for the GM so that you can vote on the charging scheme that will apply for you and all members next year:

https://my.ripe.net/#/meetings/active


Simon-Jan Haytink

Chief Financial Officer

RIPE NCC


Services and Activities Covered by the Member Fee


- A trusted, efficient, accurate and resilient registry that guarantees uniqueness of resources held by members

- Neutral information services uninfluenced by commercial or government interests that allow both the RIPE NCC and the community to carry out useful research into the Internet

- Engagement activities, including RIPE and regional meetings, that build an active membership and community and that contribute to the overall good of the Internet

- A voice and influence for the membership in key decision-making fora, including with governments and regulators

- Protection of the Joint Internet Number Registry as developed by the Internet community

- Learning and development activities that help to address skills shortages and contribute to an educated membership

- Support for the Policy Development Process (PDP)

- An authoritative registry of routing information provided by RPKI and the RIPE Database

- K-root and DNS services

- A dedicated staff with considerable expertise contributing to all of the above
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