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                       Charging by Local Internet Registries


                                    Mike Norris
                                 Daniel Karrenberg
                                 Document: ripe-152
                               Date: April 22nd 1996




    1.  Abstract

                This  paper  deals  with  charging  for  services by
                Internet registries, and indicates acceptable  prac-
                tice  for  such  charging.   It identifies name- and
                address-space as finite resources with no  intrinsic
                value;  as  such, direct costs cannot be ascribed to
                such space.  It also makes recommendations  for  the
                operation  of  European  registries  in general, and
                additionally for those with monopoly positions.

    2.  Internet services

                In Europe as elsewhere, providers offer a  range  of
                services relating to Internet access.  These include
                Internet connectivity, the provision of applications
                to  end-users, design, consultancy and training ser-
                vices, as well as system services such as IP  regis-
                tration, DNS, routing and packet forwarding.

                With some identifiable exceptions (to which we shall
                return), there is generally an open  market  in  the
                provision  of  such  services.   On the supply side,
                there is freedom to enter the market, to compete for
                business,  and  to  charge  for services in order to
                stay in business.  In this context, it is acceptable
                practice  for  Internet  service providers (ISPs) to
                charge for services  such  as  domain  registration,
                routing services, packet forwarding and IP services.
                On the demand side, the general plurality of service
                providers  means  that the customer has a choice; if
                not satisfied with the terms of  one  supplier,  she
                can take her business to another.

    3.  Registries and Resources

                Two  of the above services involve the assignment of
                finite resources to customers; these are domain name
                space  and IPv4 address space.  They are managed and
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                               Charging by Local Internet Registries

                                      Mike Norris, Daniel Karrenberg
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                assigned   by  registration  agencies,  respectively
                domain name registries and IP registries.  By  them-
                selves,  these  resources  have  no intrinsic value;
                their worth is only realised in conjunction with the
                provision  of  Internet  access.   Thus,  while reg-
                istries may  charge  for  their  administrative  and
                technical  services,  they may not charge for names-
                pace or address space as such; no unit cost or price
                tag  can  be  attached  to a domain name or to an IP
                address, public or private.

                This principle must be made clear to the  market  in
                general and to the customer in particular.  The cus-
                tomer must be aware of precisely what she is getting
                from  the  registry,  whether it is paid for or not.
                Where there is a charge, the customer  must  not  be
                under  the illusion that this translates into a unit
                cost per resource as