Questions and Answers on the RIPE NCC Charging Scheme

What is the RIPE NCC Charging Scheme?

The RIPE NCC Charging Scheme is the mechanism by which the RIPE NCC collects funding from its members in order to be able to carry out its work.

What is the current RIPE NCC Charging Scheme?

Currently, we have a “one LIR account-one fee” model:

EUR 1,550 per year per LIR account
An extra charge of EUR 50 per independent resource
There is a sign-up fee of EUR 1,000 for new LIR accounts

Members vote on the Charging Scheme at the first GM every year. You can register now to take part.

What changes are being proposed for the Charging Scheme in 2025?

The Executive Board has put forward three charging scheme options for the members to vote on at the General Meeting on 22 May 2024. All three options are based on the current “one LIR account-one fee” model:

Model A: LIR fee increase 22.58% (projected income: EUR 41.1M)
Model B: LIR fee increase 20.97%, Independent Internet Number Resource Fee Increase 50% (projected income: EUR 41.1M)
Model C: LIR fee increase 16.13%, Independent Internet Number Resource Fee Increase 50%, addition of an ASN fee (projected income: EUR 41.1M)

Why is the Board proposing a fee increase despite opposition from members?

The Executive Board has a responsibility to adequately fund the organisation. The proposed charging schemes will allow the RIPE NCC to continue its work in a stable way for the short-term while giving the Board time to consult fully with members on a sustainable long-term solution for the RIPE NCC. The Board further outlined its reasoning in its communication to the members following its recent Board meeting to discuss the charging scheme.

What is the Activity Plan and Budget?

Our Activity Plan and Budget sets out our plans for the year in question along with the associated costs. This document is the clearest way for members to learn about our plans and influence the direction we take next year. We see this as an integral part of maintaining the trust of our membership, by ensuring high standards of transparency and accountability.

Each year, we publish a draft Activity Plan and Budget at least four weeks before the Autumn General Meeting. At this meeting, time is allocated to discuss our services during the RIPE NCC General Meeting (GM). We also invite members to ask questions and discuss our plans on the RIPE NCC Membership Discussion mailing list and via the RIPE NCC Services Working Group.

The feedback received over this period is then incorporated into a final Activity Plan and Budget that is approved by our Executive Board and published in December. The Executive Board has responsibility for final approval of the cost budget.

What if we pay higher fees and the RIPE NCC reduces costs anyway?

At the Autumn General Meeting, members can vote to redistribute any surplus or deficit back to the members in the following year. If there is a surplus, this reduces the invoice amount for members the following year. The mechanism also applies in the case of a deficit.

This means that if the revenue budget increases (due to higher LIR fees) and the cost budget is lower than the revenue budget, we will budget with a surplus which will result in a redistribution vote at the General Meeting, reducing the fees for the following year. Section 2.2 of the RIPE NCC Billing Procedure 2024 covers this in more detail.

This surplus can be increased if we manage to find more cost savings and spend less than our cost budget, and we will continue to search for these savings. Of course, it is also a possibility that after member consultation and Executive Board approval a break even budget is approved.

Why do members vote on the Charging Scheme but not vote on the Activity Plan and Budget?

The Activity Plan and Budget is a long document that outlines in detail per activity what our plans will be for the following year. Changing those plans should be done in consultation with the members and each section should be evaluated to ensure it meets the needs of our members and community. Voting on the entire document would not allow for adequate discussion on the individual services and activities. While voting on each activity would also not be feasible given the amount of activities listed and the details provided for each. The goal is to come to a consensus on the activities and associated costs.

The Charging Scheme is currently a simple document that is designed to ensure sufficient funding to carry out the activities listed in the Activity Plan and Budget, and this allows for a clear vote on that document. The Articles of Association also specify that members should vote on the Charging Scheme. The redistribution is a safety guard so members can vote to redistribute the cash or add it to our reserves.

Why is the charging scheme decided before the budget is known?

The RIPE NCC is focused on a yearly cycle. In the spring there is time to discuss and vote on the Charging Scheme. In the summer work starts on the Activity Plan and Budget, resulting in a Draft Activity Plan and Budget that is ready for member consultation.

Combining both processes at the start of the year would result in a weaker Activity Plan and Budget as the current year has barely started. Combining both processes at the end of the year would result in a very labour-intensive process and a very complex vote.

In 2012, a RIPE NCC Charging Scheme Task Force made up of RIPE NCC members, staff and Executive Board representatives recommended that the Charging Scheme be decided upon in May rather than October to allow members to budget adequately.

The full report from the task force with all recommendations is available.

Why is the RIPE NCC Cost Budget increasing?

Costs are rising due to inflation. Also staff costs are rising, as we need to ensure we can attract and retain competent and qualified staff. The complexity and workload of the RIPE NCC has increased, due to sanctions, compliance, information security and increased uncertainty in our service regions. More detailed information on the consolidation and inflation issues are available on the Charging Scheme Consultation page.

Why is the RIPE NCC Revenue/Income Budget increasing?

With the proposal for the RIPE 88 General Meeting, the revenue budget would indeed increase by 8% compared to 2024 in order to cover increasing costs. If the current charging scheme would be applied to 2025, our revenue budget would decrease significantly to 34 million EUR or by 11%. The main reason is the consolidation of multiple LIR accounts, which is expected to continue, and we expect to end up with an almost equal number of members and LIR accounts.

What value do I get for the annual fee I pay?

The annual fee pays for the activities and services provided by the RIPE NCC. The specific services and activities are listed in our Activity Plan and Budget, but the list below gives an overview of what your fee pays for:

A trusted, efficient, accurate and resilient registry that guarantees uniqueness of resources held by members
Neutral information services uninfluenced by commercial or government interests
Engagement activities 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
RIPE and Regional Meetings
RPKI, K-root and authoritative DNS services
A dedicated staff with considerable expertise contributing to all of the above

Why were alternative models not proposed by the Board given the discussions last year and since the draft proposals were made?

The RIPE NCC has been focusing on cost efficiency and cost-cutting efforts since the May 2023 GM. We understood the no change vote as a clear message to focus on this. A category model was put forward for members to vote on in 2023, and we interpreted this (perhaps incorrectly) as a preference not to have a category model and this made us reluctant to propose another one this year that might be rejected.

We also clearly see that there is no consensus on what is the best charging scheme for the community and the RIPE NCC. We feel strongly that we need to invest time and effort to seek this consensus, getting as much input as possible from the membership, while incorporating requirements to ensure we can run the RIPE NCC as an association. This is to make sure it is operationally sound and fully compliant with rules and regulations, has low legal risk, and is run in a financially stable way.

The Executive Board will also start a review of the RIPE NCC’s structures and funding model that might impact on the charging scheme, so we are aiming for simplicity and stability while that process takes place.

Why was the model I suggested not added to the list of options to vote on?

Any new model will need an impact analysis from the financial, operational and legal perspectives. A new charging scheme will have a very big impact on the future of the RIPE NCC and its members, so we simply can not rush into a charging scheme if we do not understand its implications. We have taken note of the suggestions and will be able to assess them at a later time.

Why is there no option without a fee increase?

A fee increase is needed to account for continued economic uncertainty, inflation and a reduction in the number of LIR accounts. An option without a fee increase would seriously compromise the RIPE NCC’s ability to carry out its work and provide high-quality services.

Can we vote to reject all three proposed charging scheme models?

No, the vote will be conducted with instant run-off voting. Members will be asked to vote for the three options in order of preference, and the scheme that achieves more than 50% of preferences either on the first round or second round will be deemed to have been chosen.

Article 18 of the RIPE NCC Articles of Association provides more information on how the vote will work at the General Meeting.

Why does it take so long to provide an impact analysis on a charging scheme suggestion?

To fully understand the operational, legal and financial impact simply takes time. Each different model will define the behaviour of members in an association of 20,000 members spread around a very diverse service region and who have very different business models. Additionally, due to this diverse service region, there are different issues that deserve attention. But a solution for one member can cause problems for others, so we need to do comprehensive research on the potential impacts of a new charging model. We also need to be careful that we are not unduly influencing the address policies set up by the RIPE community when we apply a new charging scheme.

Will there be a spreadsheet to help with calculations for the proposed charging schemes?

Yes, the charging scheme calculator where you can see what you would pay for each of the three options is available on the Charging Scheme Consultation page.

Why is the RIPE NCC’s budget higher than the budgets of the other four RIRs?

Each RIR and the policies that govern them have developed differently in line with the wishes of the communities that exist in their service regions. The RIPE NCC is the oldest RIR and its services and activities were developed together with the membership and community since it was founded in 1992. This means it is very different in terms of its structures and service offering compared to the other four RIRs. The RIPE NCC service region in some cases provides more services than other RIRs and it also has to deal with an incredibly diverse geographic, cultural and political environment that brings many complexities. The last few years have also introduced new issues that must be dealt with, such as accommodating sanctions and conflicts in the service region as well as complexities brought about by the run-out of IPv4 (e.g. fraud and hijacking attempts).

How does it work getting an item onto the agenda of the GM?

Together, 2% of members can make a proposal to add an item to the GM agenda. The details on how we provided for this are available in this email that was sent to the members-discuss list.

Can members propose an alternative charging scheme option if they get enough votes?

No. According to the RIPE NCC Articles of Association, only the Executive Board can propose a charging scheme to be voted on.

This legal framework ensures that a Charging Scheme may only be proposed by those who were elected to serve on the Executive Board, who have better insight into the financials and the operations of the organisation, and who have a duty of care for the well-being of the organisation and are liable in case of mismanagement. Parties without such insight, responsibility and liability may not put forward charging schemes for voting that - although appealing for individual members - may be inappropriate for the sustainability of the organisation.

In the past decade, from 8% to 13% of members have voted at the General Meeting. The figure is higher for the Spring GM than the Autumn GM. This is likely because members vote on the Charging Scheme and on Executive Board elections at the May GM. Page 40 of the PDF of our Activity Plan and Budget 2024 gives precise figures on how many members have voted in GMs since 2010.

How much does it cost to run just the registry?

This is not a straightforward answer, as all activities of the RIPE NCC work together to provide and protect our Registry services. Based on the Activity Plan and Budget 2024, the budget for the Registry is 9.6 million EUR. This focuses purely on the work associated directly with the Registry and includes compliance and sanctions checks.

The following activities all support the work of the Registry although they are not budgeted in the 9.6 million EUR for the Registry: Legal, Finance, IT, InfoSec, Information Services, Learning and Development, Community and Engagement, Public Policy and Internet Governance, HR and Facilities.

Why doesn’t the RIPE NCC use sponsorship to cover services like RIPE Atlas?

We are always searching for sponsors and doing what we can to increase sponsorship contributions, but we do not see a lot of sponsors who are willing to cover more than the costs of these services and the activities such as RIPE Meetings.

What different charging schemes have been used in the past?

All previous Charging Schemes going back to 1996 are provided in the RIPE Document Store. A summary showing the development of the RIPE NCC Charging Scheme since 1995 is available on the Charging Scheme Consultation page.

Why doesn’t the RIPE NCC move to a cheaper country or hire staff in other countries to offset staff costs?

Moving to a “cheaper country” is not impossible, but it would require a very significant investment. We would also risk losing a significant part of our staff, as we cannot force staff to move to a new country, so we would have to reinvest in new staff, while risking losing a lot of in-house knowledge and expertise.

The RIPE NCC is an association under Dutch law. We have a lot of experience and knowledge in the legalities in regards to this Dutch law. The RIPE NCC together with its community has built what we have built together, and moving to a different country would require a full revamp and setup.

The combination of all of the above could potentially make the RIPE NCC very vulnerable. We currently do have the option to hire staff locally. So if we need local presence we do have this option and we are using this where it makes sense.

Why doesn’t the RIPE NCC seem to care about the low level of member engagement on the MLs and in its GMs?

The RIPE NCC works hard to drive engagement on the mailing lists and regarding the GM. Numerous emails are sent to all members about the GM, including specifically about the Charging Scheme, Activity Plan and Budget, convocations for the General Meeting, invites to cast votes at the GM, and much more. We also keep the members updated on services developments, and we send a monthly member update that covers all key issues members should know about. Where discussion is needed, we also organise open house meetings that members can join in remotely to discuss issues in more depth. And we use other channels such as our website and social media to amplify news about membership issues.

We see a lot of engagement on the charging scheme topic every year, but we would also like to see much more engagement around our services and activities on specific mailing lists and in more places. And although we can do much to encourage people to get involved, at the end of the day it is up to members whether or not they choose to do so.

Why can’t the RIPE NCC translate all of its content into [my language] when we pay them 40M?!

We have long recognised the need to provide more support in other languages. This presentation on language support from the RIPE NCC at RIPE 81 discusses the issue in more depth. The main barrier to comprehensive language support is costs - similar organisations pay millions of euros to translate their materials. The RIPE NCC has a lot of material that could be translated, and also publishes materials that have specific legal content or that is owned by the RIPE community. Nevertheless, we published a website with translated material on key issues in six languages in 2021. Our next goal is to expand the number of languages and materials provided, as well as bring the website into the main www.ripe.net website for greater accessibility. We will ask for community support when providing translations in order to keep costs to a minimum.

Why don’t you equalise the status of all resources (PA, PI, legacy) in order to stabilise the income?

The status of resources is decided by the Address Policy Working Group. The RIPE NCC implements the registry-related policies that come out of this working group. If you want to get involved with making policy there or joining discussions, you should subscribe to the Address Policy Working Group mailing list and follow the discussions that take place at RIPE Meetings.

Why can’t members just pay for the services they use?

From the beginning of the RIPE NCC it was decided that all members should contribute to the work of the RIPE NCC. This was also a recommendation from the RIPE NCC Charging Scheme Task Force in 2012. Changing to a pay-per-use model would be a significant change for the RIPE NCC and this is something that would need to come as part of a full structural review of the RIPE NCC. It could have a big impact for the users of our services, so a full and involved discussion on this would be necessary to examine all the implications before it could be implemented or even put to a vote.

Why do you still rent an office in such a central and expensive area in Amsterdam?

We moved into our offices in 2016, when we entered into a ten‑year contract. The contract is renewable with another five plus five years so we don't have to move. It's got 140 seats so there is not room for all staff members.

In 2013, before the move, we spent 1.1 million euro on facilities costs, and in 2021 we spent 1.1 million euro. If we would change offices, there would be a year where we would spend at least half a million euro extra in moving costs so that's not a solution to save money in the short term. The price per square metre for office locations in Amsterdam is between 325 and 500 euro, and our current contract is way below the 325. So we will continue to assess the situation, but it's not a magic bullet for cost reductions to change office locations.

Our Managing Director explained this in more detail in his presentation at the General Meeting in May 2023.

Did the RIPE NCC make any efforts to cut costs?

Over 2023 we saved 2.7 million euro in costs compared to the Budget 2023. We outlined this in our Annual Report 2023 (pages 43 to 45).

The top 5 cost saving areas were:

1.9 M EUR (36%) Consultancy
0.8 M EUR (18%) Information Technology
0.2 M EUR (6%) Outreach & Public Relations
0.3 M EUR (20%) Contributions
0.2 M EUR (21%) Travel

Our cost budget for 2024 was lowered by 1.8 million euro compared to 2023. We outlined this in the Activity Plan & Budget 2024 (pages 4 to 11). The RIPE Labs article from our Managing Director on our budget plans for 2024 outlines how we are trying to maintain stability while being efficient with costs, and it also links to other articles from our Management Team on how we are doing that in specific areas.

In 2024, the footprint of our physical server location will be reduced by 50%, as outlined in this RIPE Labs article from our CTO.

Why is the RIPE NCC so worried about a 100% linear model?

A full linear model that would derive income based on a price per IPv4 address and/or IPv6 address would make the income of the RIPE NCC very strongly dependent on a very small part of the membership. This creates a lot of risk.

A quick initial assessment of this scenarios shows that:

37.48% of the revenue budget would come from 25 members or 0.12% of the membership
47.35% of the revenue budget would come from 1,350 or 6.7% of the membership
15.17% of the revenue budget would come from 18,790 or 93.18% of the membership

This dependence has a very high operational risk, because if the 0.12% of the membership left, 37.48% of the revenue budget would have to be covered by the membership that is left. The current “one LIR account-one fee” model is the complete opposite, as if 0.12% of the membership would leave the RIPE NCC we would lose 0.12% of our revenue.

Why does the RIPE NCC allow members to have multiple LIR accounts?

For many years, the terms members and LIRs were used interchangeably. However, organisations/members would occasionally merge or acquire each other, which resulted in them ending up with multiple LIR accounts. Such members would keep these multiple accounts because they had operations in several countries and it made sense for them to have separate accounts to manage operations in each country.

With the run-out of IPv4 and the community policy restriction that meant LIRs could only request a /22 of IPv4 address space, other companies started opening multiple LIR accounts in order to get more address space. The Executive Board recognised this as a problem and issued a resolution preventing the opening of multiple LIR accounts. However, people then started establishing new legal entities in order to start new memberships and request a /22 of IPv4 address space. This meant that Registry accuracy suffered by having addresses registered to separate companies rather than to the same legal entity.

This issue was discussed with the membership and the Board decided to ask the members to vote on whether multiple LIR accounts should be permitted. At the General Meeting in May 2016, the Board presented on the issue and the membership voted to permit multiple LIR accounts to be held by the same member.