[members-discuss] Charging scheme 2025 proposal (logarithmic)

I'm glad others have also understood the problem with increasing fees while the number of members is falling. I like to think I'm foresighted, some might call me cynical, but that means spend needs to be constrained. The RIR system is not an example of "to make money one needs to spend money" (like businesses that have a flywheel with an ad component).

Let's do some napkin math and comps with the other RIRs. I chose to normalize AUD and EUR to USD so comparing is easy. Revenue figures are latest available from public sources as are the membership numbers. Numbers rounded to whatever was closest and convenient. Assumption that all have roughly budgets that coincide with their expenditure.

RIPE, revenue 38M EUR (40M USD), members 20k = 2 k/member
ARIN, revenue 25M USD, members 25k = 1 k/member
APNIC, revenue 33M AUD (21M USD), members 10k = 2 k/member
LACNIC, revenue 10M USD, members 12k = 0.8 k/member
AFRINIC, revenue 6M USD, members 2k = 3 k/member

All RIRs together end up with an annual revenue of 100M USD and about 70k organizations as customers. Didn't bother summarizing total assets but they'll the total assets to revenue (sales) is at least 1.

Now, in my opinion, there are a few surprises. ARIN, located in a very expensive country, is quite efficient per member. PPP wise USA and NL are about the same meaning their cost base should also be rather similar. Ceteris paribus, etc. US inflation is Y/Y probably on the level of NL, too. In principle there should be some kind of economies of scale in most lines of businesses where, once reached, the marginal cost is below the average production cost. The RIRs do not seem to work that way for some strange reason... or they do in the registry function but as for other functions they do not.

On the other hand, AFRINIC seems to be rather inefficient.

Is there a point to this? Probably not considering there are too many people who do not want to rock the status quo. Also, considering one needs 400+ signatures to change something it is rather impossible to shake the establishment. It is what it is, we can voice our opinions but in the end they're just that.

If you're unhappy with the financial policy, pretty much the only option is, in the AGM, to vote against adopting the next year's scheme and against discharging the EB. The numbers against tend to be somewhere between 10% and 20% so they're mostly protest votes in my opinion.

Anyway, happy to revisit the topic again next spring. 👍



Kaj

Sent from my iPad

________________________________
From: members-discuss <members-discuss-bounces at ripe.net> on behalf of Petru Bunea <suport at bunea.eu>
Sent: Tuesday, April 16, 2024 5:46 PM
To: Daniel Pearson <daniel at privatesystems.net>
Cc: members-discuss at ripe.net <members-discuss at ripe.net>
Subject: Re: [members-discuss] Charging scheme 2025 proposal (logarithmic)

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No, actually RIPE is a hybrid between transalators, lawyers / legal, technical, accounting, event and PR, running critical infra etc.
And yes, what now can be done with 40mil used to be done with 25 mil in 2019. Everything got more expensive, get used to it.

Perhaps RIPE team can adjust here and there, but I honestly don’t see the budget to be able to drop more than 20%. So the question is where do we take those 20% from, because if we raise the prices high enough, IPv4 allocation would migrate to other RIRs, which in turn will mean more work and on the long run - less income, and after that of course - raise taxes again.

Thanks

On 16 Apr 2024, at 17:33, Daniel Pearson <daniel at privatesystems.net<mailto:daniel at privatesystems.net>> wrote:

Everybody is still fighting about the wrong question.

The question everyone should be arguing about is why it costs 40 million a year to run an internet registry for 20,000~ members.

Sure, the bulk of the expense is due to navigating the legal landscape of multiple member nations, but you can't tell me that's 20-30 million a year in legal fee's.



On 4/16/24 9:31 AM, Petru Bunea wrote:
Where have I said it should be 1 EUR across the board?

It doesn’t have to be 1 EUR, but it also doesn’t have to be 333 the difference. It can be progressively cheaper, but not at such a large difference.

Also, FYI, UK Gov or any Gov, could always put back IPv4 if they find it to be too expensive. Just like they force people and companies to put back on the market real estate that have a very high yearly tax. How would that work out for a change? Call this a tax hike on public property, like IP addresses. Maybe they would in fact like it, since it’s their way of doing business.

Otherwise, with this model, we will just move the burden from the big ISP/companies/resource holders to the smaller ones.

Thanks.

On 16 Apr 2024, at 17:25, Daniel Pearson <daniel at privatesystems.net<mailto:daniel at privatesystems.net>> wrote:

I'd like to see you tell the UK Government that they are going to pay 1 Euro per IP for a /8

Let me know how that conversation goes :)



On 4/16/24 9:20 AM, Petru Bunea wrote:
This is NOT a good example. In this example we see how a /22 allocation pays 1094 EUR per year, which is close to 1 EUR / 1 IP / Year, and a /8 allocation pays 48.000 EUR, which is 0.003 EURO / 1 IP / Year, which is 333 times less expensive. So tell me again how this is a good example.

Thanks

On 16 Apr 2024, at 17:07, Firma KOMPEX <gabi at kompex.pl<mailto:gabi at kompex.pl>> wrote:

very good example Sebastian

Others are doing it and Europe should too

We should be pioneers and we are in the Middle Ages.
We are chipping away at such obvious issues from others.

The fixed fee for the LIR Account + the resource fee can stay
they need to be calculated

But necessarily, as you pointed out, IP usage should be accounted for


Pozdrawiam
Gabriel Sulka

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Firma Handlowo - Usługowa KOMPEX
34-400 Nowy Targ ul. Szaflarska 62A
tel(18) 264-60-55 pn-pt 09:30 - 17:00 sb. 09:30 - 13:00
www.kompex.pl<http://www.kompex.pl/> ; bok at kompex.pl<mailto:bok at kompex.pl> ; kompex at nowytarg.net<mailto:kompex at nowytarg.net>

-----Original Message-----
From: members-discuss <members-discuss-bounces at ripe.net<mailto:members-discuss-bounces at ripe.net>> On Behalf Of
Sebastien Brossier
Sent: Tuesday, April 16, 2024 3:51 PM
To: members-discuss at ripe.net<mailto:members-discuss at ripe.net>
Subject: [members-discuss] Charging scheme 2025 proposal (logarithmic)

Hello all,

I propose to add the following model to the charging scheme 2025 voting
options.


*1 - Introduction:*

This charging scheme is heavily inspired by APNIC. If you are not
familiar with this, you can see an example here:
https://www.apnic.net/get-ip/apnic-membership/how-much-does-it-cost/member-f
ees-calculator/

The main idea is that each LIR pays according to its resources, but not
linearly. You don't pay twice as much because you have twice as much
resources.
The resulting fees are similar to what the other RIRs are charging, with
infinite granularity (no categories).

It can be easily tweaked to reach any desired budget, and will remain
viable when IPv4 has disappeared.

I have made IPv6 less punitive compared to APNIC, because RIPE has
larger initial allocations.

Independent resources fees, sign-up fee, lack of ASN fee, remain as
before in this proposal. I believe it is better to have a separate
debate on these subjects at a later time.

The goal of this charging scheme is to lower the cost for members with a
very low amount of resources, in order to attract newcomers and retain
existing members. This way the RIPE NCC membership will remain numerous
and diverse.


*2 - Charging scheme:*

(Warning: math incoming !)

IPv4_count = number of IPv4 addresses allocated
             (excluding independent assignments and legacy)
IPv6_count = number of IPv6 /56 subnets allocated
             (excluding independent assignments)

Base_Fee = 638 EUR
Bit_Factor = 1.31
Minimum_Fee = 500 EUR
Offset_IPv4 = 8
Offset_IPv6 = 24

IPv4_Fee = Base_Fee * Bit_Factor^(log2(IPv4_count) - Offset_IPv4)
IPv6_Fee = Base_Fee * Bit_Factor^(log2(IPv6_count) - Offset_IPv6)

Fee = max(IPv4_Fee, IPv6_Fee, Minimum_Fee)
        + 50 EUR per independent resource (excluding ASN)

My simulation, based on public data (2024-03-28), results in an average
fee of 1900 EUR per LIR (+ 50 EUR per independent resource), so it
should provide the same budget as the other options.
If RIPE NCC find different results with their simulation, they can
adjust Base_Fee.


*3 - Examples:*

50 EUR per independent resource should be added to all these fees.

No allocations:   500 EUR
IPv4 /24 and/or IPv6 /32:    638 EUR
IPv4 /23 and/or IPv6 /31:    835 EUR
IPv4 /22 and/or IPv6 /30:   1094 EUR
IPv4 /21 and/or IPv6 /29:   1434 EUR
IPv4 /20 and/or IPv6 /28:   1878 EUR
IPv4 /19 and/or IPv6 /27:   2461 EUR
IPv4 /18 and/or IPv6 /26:   3224 EUR
IPv4 /17 and/or IPv6 /25:   4223 EUR
IPv4 /16 and/or IPv6 /24:   5533 EUR
IPv4 /15 and/or IPv6 /23:   7248 EUR
IPv4 /14 and/or IPv6 /22:   9495 EUR
IPv4 /13 and/or IPv6 /21:  12439 EUR
IPv4 /12 and/or IPv6 /20:  16295 EUR
IPv4 /11 and/or IPv6 /19:  21347 EUR
IPv4 /10 and/or IPv6 /18:  27965 EUR
IPv4 /9 and/or IPv6 /17:  36634 EUR
IPv4 /8 and/or IPv6 /16:  47991 EUR

Largest LIR is just below 60 kEUR.

There are no categories, so your fee can be somewhere between these numbers.

If you think the fees are too high, I invite you to read the fee
schedule of the other RIRs.


Thank you if you've read this far.


Best regards,
Sebastien Brossier

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