RIPE NCC general meeting
25 May, 2016
At 6 p.m.:
NIGEL TITLEY: 30 seconds. Welcome everyone to the RIPE NCC general meeting of May 2016. You have all been to the NCC Services Working Group, of course, so you have seen the report were the RIPE NCC. Can we get the door closed, please. Lovely, thank you. We have rearranged the order of the agenda a little bit this time, and it looks like I am on first, unfortunately. So, I think I shall now stand up and do the presentation of the report from the Executive Board. This is the report from the RIPE Executive Board which we give every general meeting, it gives you an idea of what we have been up to since the last time you saw us and so forth.
The Executive Board is now seven members, used for five for a lot of time and then we acquired two more, so we are now running with seven members which is excellent. The members are myself, Remco, Christian Kaufmann, who is the secretary, Dimitry Burkov, ICANN liaison, Maria Hall, and Salam Yamout and Janos, who is our newest member. Executive Board meetings:
We have had three meetings since the last GM, one on 18 November, one on 10 December, 2015 and one on 31 March. We published the minutes. We get them out two weeks after the meeting and they are made available on the website. And we also publish a summary of the decisions in case you don't want to read the interminable minutes but would like to have a look through the minutes. As always, we welcome comments on the minutes so that we know what you think of what we are doing, and as usual, the comments are very welcome on the members' discussed list, which is the place for discussing stuff between members as always.
So, let's run through what happened at these meetings: November 2015, weighed board decision to suspend the ability of RIPE NCC members to open additional LIR accounts. This actually happened at the last RIPE meeting, as you may recall. And this was a temporary measure to actually see whether we could have an effect on the rate of depletion of /22s out of the last /8. And Janos will present on this issue at agenda point 7 in this meeting at some length.
In December 2015, we approved the activity plan and budget for 2016. We decided on the surplus amount, which we were going to redistribute to the members as a rebate, and we asked the RIPE NCC to move forward with plans to join the SEED Alliance. This has been going on for a long time, it's an off shoot of the good of the Internet activity which is referred to in the activity plan.
We also agreed to wait for further information from the IETF before making a decision on contributing to the IETF endowment fund and you have had a presentation from ISOC and the IETF this afternoon, and I understand that if there are any questions, there are people present in the audience here who can answer that if necessary. But you have had quite a bit of information, I would suggest that discussions go on on the members' discuss list about this. We would particularly like to know if you would like us to contribute further to the IETF or if you don't want to us contribute to the IETF, and information from the memberships, always welcome.
And finally, we discussed procedural issues around the suspension of the ability to open additional LIRs and again this will be discussed by Janos further on.
In the March 2016 meeting, we agreed to contact members who had not received correct convocation to the GM and I will talk about this later. And the board decided to include network acquisitions in the scope of the transfer policy. Prior to this, network transfers could just be transferred. There were no limits or anything on network transfers. They are now subject to the same conditions as mergers and acquisitions or standard INET num transfers so this actually closes a small loophole which a number of people were trying to exploit, not only trying but actively exploiting.
Furthermore, we agreed to submit the financial report for the GM so you get to look at that ‑‑ well you got to look at this some considerable time before but you get to vote on whether or not to approve that at this meeting. And we approved the draft RIPE NCC charging scheme which again is to be presented to you at this meeting for your approval or otherwise.
And finally we confirmed the wording of the resolution which you are also going to be voting on later on today for whether or not he allow multiple LIRs for a single legal entity or not.
Furthermore, on the convocation for November 2015, when we sent out the invitations for the last general meeting, due to an error in the construction of mailing lists, the e‑mails didn't go out to everybody that they should have done. It was new members basically, mostly, the majority of the affected members were less than six months old and therefore they didn't have voting rights. All members with voting rights were contacted separately immediately to invite them to participate and they actually got an invitation some three weeks before the GM rather than the four weeks that they should have done. The board looked at the issue and we looked at the numbers and we determined that the number of members concerned would not actually have made any difference to the results of the voting, and, therefore, the issue had no effect on the general meeting outcome. All members who didn't receive the convocation were subsequently contacted, so this was an honest mistake, it wouldn't have made any difference, but obviously there is still the possibility in under Dutch law, as people feel like it, to call the GM to account. We don't think this would happen because there would be no change, but that is available if necessary.
Ongoing work:
Well, we are obviously already planning for the activity plan and budget for 2017. As usual, we are engaging with membership and community on line and at industry events, huge amount of travel, this tends to result in. We liaise with other RIR boards, majority of the APNIC board are here this week and will be holding a half day shared board meeting with them on Friday afternoon. And of course, we supervise the RIPE NCC management, make sure that Joachim doesn't run away with the money.
So, how can you help us with our work? Because we are really only representing you, we are trying to do what you want and so we need to know what you want. So, you need to let us know what you think at the general meeting, now, on the members' discuss mailing list which you have all got access to informally at meetings and events, you can back any of us into a corner and shout at us at the coffee breaks. We would prefer if you didn't shout of course, nice friendly discussions are always better, but we are always around. You can feedback through the RIPE NCC and it comes back to us if needs be. Take the RIPE NCC survey, we do a major survey every three years and this is coming up starting on Friday this year, and for goodness' sake, fill in the survey, it gives a first rate way of you telling us what you want to us do. You can always e‑mail us directly at executive@ripe.net, this gets straight to the board and we all look at it on a very, very regular basis.
And of course, the biggest impact you can have is by voting on resolutions and on the ‑‑ and in the Executive Board elections and you have elections this time around. There were four resolutions to be voted on today, number one is the financial report 2015 which is a standard resolution that we do once a year, you have to vote to accept or otherwise the financial report.
You had to vote on the discharge of the Executive Board. This is a legal requirement, and basically it says that you are satisfied that the RIPE NCC board didn't do anything illegal this year. This is basically all it's saying, that we discharged our duties as set down by the ‑‑ of the company, of the association. So if you vote no to this, you are basically saying we think you did something illegal, and if you think we did something illegal we would sure as hell like to know what it was, so please do tell us.
You are going to be voting on the multiple LIR issue, that is whether or not a single entity, a single legal entity can open multiple LIRs or whether or not each LIR must have an individual legal entity ‑‑ each LIR must have a separate legal entity, and again, Janos will be talking about this further on.
Finally, you are voting on the RIPE NCC charging scheme 2017, this happens once a year, it decides on what fees you are going to pay this coming year.
Finally, there are two board member positions coming vacant at the end of their three year terms, that is myself and Remco and we have four candidates, so it's a really election, please think about who you are going to vote for and vote, please.
IETF Endowment, a little bit more on this: If you were here in the NCC Services Working Group we got a presentation from the IETF and ISOC and also this is a follow‑up to the presentation they made during the RIPE 71 meeting at Bucharest. Many people asked for more details and we brought them along this time to give us some more details and they gave us a very full presentation, and I am sure they are around if you want to ask some additional questions. We decided to wait until the details were provided, so if you could give some indication of your support or otherwise for further funding for the IETF, then please let us know.
And as it says at the bottom of the slide, we would like to know what you think, it's your money, after all, and it's your choice as to what we spend it on.
Any questions?
ERIK BIAS: Erik. I am actually surprised about your question for additional feedback, how to proceed with the IETF Endowment, because that was actually already, I think, agreed in the last GM that there was going to be a vote on it.
NIGEL TITLEY: I don't think we ever said there was going to be a vote on it. We asked for expressions of opinions and we got precisely zero, which is why we are asking again.
ERIK BIAS: I think I will express exactly what I said at that time, I think the funds are sufficient enough to ask for a vote on it.
NIGEL TITLEY: OK. Right.
ERIK BIAS: I was expecting actually one in this meeting but based on the fact that the information was a bit late for that.
NIGEL TITLEY: Yes, we only got the information on Tuesday morning.
ERIK BIAS: Exactly. That might delay the process with another six months, I am not sure if that is helpful for the IETF, but, you know, I would seriously consider for a substantial amount of money ask the membership what had he feel about this.
NIGEL TITLEY: This is what we are trying to do. The idea is not that we give it in one lump sum because a lump sum towards the endowment is actually a transfer of assets from one not for profit to another not for profit and that has significant tax implications, so what would probably happen is that we would make an annual payment of a certain amount, possibly €100,000 is the number that is being thought of for ten years, rather than making a single upfront payment. The tax implications are considerably different in those two scenarios. But interest, we need to know. We need to know.
ERIK BIAS: I would say, ask the membership by voting.
NIGEL TITLEY: OK. That is noted, thank you.
ERIK BIAS: Second question.
NIGEL TITLEY: Go ahead.
ERIK BIAS: You and I shared some e‑mails on the back, I also copied the board on that in regard to the passing of Rob. And specifically, on any excess funds that we might need to provide back to the membership, because of the tax implications. And actually, see if we can set up a Rob Blokzijl fund specifically instead of handing back the membership the excess fees, actually putting funds aside and spend that for open source development, encryption development, those kind of things, and do good things for the Internet in his remembrance. Could you provide some insight on how that discussion went internally.
NIGEL TITLEY: Yes, we are in the process of putting together a proposal for a Rob Blokzijl foundation. Such things take a little while to set up and we weren't able to do it in time for last year's tax year, so it will definitely come along this year and you will definitely be consulted on it.
ERIK BIAS: Excellent, good to hear.
HANS PETTER HOLEN: Partly with my RIPE chair on and partly as a member. I express my support for supporting the IETF in the Services Working Group and I want to repeat that for the record at the GM. Doing the calculation on what you just said an annual contribution of €100,000, if you divide that by 13,000 members, I'm sure you can see that this is less than €10 per member per year. So I would see that this is actually the decision that should be well within the Board's power to decide upon, it shouldn't require a GM vote, in my opinion, so if you look at it in that perspective it's well spent money on something that is very important for Internet, that would be my personal take on it, thank you.
NIGEL TITLEY: Thank you, any other questions? This room is so big I am not sure we are all in the same time zone. Can everybody hear me? OK. No further questions. Thank you very much everyone. I think the next item on the agenda is the financial report, and Jochem is about to come up and deliver it.
JOCHEM DE RUIG: Good evening, I am the CFO of the RIPE NCC. I will be talking you through the financial report, when you have received a meeting pack there is a detailed report in your packs, there is also an on‑line version available which provides a lot of accounting principles and beautiful other stuff, but let me give you some highlights.
I think the four key things this year, first of all as mentioned before, also in Axel's presentation, has been the membership development, we had the highest growth ever in the last year, more than 1,700 members net growth and that reflects in our revenue, obviously, and it was well above budget and above last year. Above 2014.
On top of that, our expenses were below budget so all in all, this gave a good result, but since you decided last November that we would give back the excess funds we received, there was a very sizable redistribution taking place and together with the accountants we agreed that this would be a negative income, so over all, this comes down to that we actually ran a deficit last year, but that is all due to the redistribution we get back to the members.
So, just trying to clarify this a bit. I just here present some of the indicators, I want to show the real income without the redistribution which was about 27 million, 16% up from the budget, 11% up from 2014 so here you see the membership growth kicking in and we have got to realise with new members we have got the signups fees that contribute to it. When you look at the income, including the redistribution, it's a lot lower, 21.5. The redistribution was 5.3 million in total, so that is deducted from it. Comparing it with the budget in 2014 it doesn't make much sense but the figures are here because in 2014 we didn't have this facility.
Expenses: 22 million. Below the budget, it bit up from 2014. I will share a bit more details later on. All in all, a deficit. We have some interest income from the investments we have, that is the difference causing between the income and the expenses, resulting in the deficit.
Capital expenses: A bit up. We do see an increase in our investments this year, especially this year with the new office location coming in.
Membership Growth: Number of members, you see the increase, 15% up from 2014, and this results in substantial decrease of the average expense per member. So it was 4% lower than the budget and 10% from 2014.
The last indicator is the capital expense ratio that shows the total reserve we have in comparison to the total expenses, you see when it's over 100%, that shows we have more than one year of total expenses in reserve and it's still well above that figure. It has decreased, that's caused by the redistribution, so our reserve is remaining stable at the moment.
Well, the membership development, well you have seen the graph, from midway 2012 the runout started and we see it going up since then. This is 12 month average, so it gives a good I wantedication over a 12‑month period how it's growing. Here you see the income a bit more detailed, well the first line item is the existing member fee, we can forecast that quite well, at the end of 2014 we know what there is. We do see quite some closures and mergers happening in December so compared to the budget we do see a bit lower figure. From 2014 it's only 3% up but there is, of course, quite a substantial fee decrease of about 9% from 2014 to 2015.
The big changing items are the service fee for new members and signup fees, when compared to the budget about 100% increase and when compared to 2014 more than 40% increase, resulting in three‑and‑a‑half million increase from the budget and about 2.9 from 2014. Other income is some miscellaneous item like RIPE meeting fees, EU reclaim fees ‑‑ beautiful system, I can recommend to use it never now and then. It's a bit unknown and we don't always can count on it, so we just take it as income when we do receive it. Some countries have very different rules than Netherlands and there is always a difference. It's a bit lower, it's mainly some exchange rates and, as I mentioned, the EU VAT reclaims which we can't budget for.
The redistribution of fees, you see them here. All in all 5.3 million. It's split up in two items: We have to determine the redistribution at the end of the year, sort of in the beginning of January, so beginning of the new year, because we discounted on your invoice which is sent out in the middle of January. By that time I don't have fully audited year end figures so there is always a bit of margin in between the end result. The problem we have a bit is under the text ruling we can't redistribute more than the surplus so we have to be on the safe side and redistribute a bit less than we actually supposed to. What happens with that excess money you see it as 300,000 here, that is still on the balance sheet and that will be redistributed in the next year to you.
So, this is how the calculation has worked. So all in all, the service fee paid by the members was 20 million. Total redistribution, 5.3 million. We are redistributing just a bit over 5 million. There is still a bit left, which is on the balance sheet and will be redistributed next year. Number of members was 12830. 66 were non‑eligible, that is because they were new members and they paid 2016 fees and no fees for 2015. And the average rebate was about €400. Of course, the rebate depends a bit on the service fee you paid, so when you have a lot of independent resource you get a bit more back than someone else.
Moving to the expense side. The big cost item for us is personnel. About 60% of our cost, and last year we saw a decrease in number of FTEs, we aimed for the same number of FTE as 2014, we were a bit below, we had some open vacancies and here you see the graph over the last five years. And actually, these two items, what I first mentioned, the membership growth and the FTE growth have shown quite a different trend, one you see the membership growth with the ‑‑ which is going up and up with 15% and you see the FTE growth actually last year was minus 3%.
So, zooming in a bit on the expenses, as I mentioned personnel costs about 60%, our main cost item, housing, that is the office location we have, the office cost is everything, it's also a lot of the meetings costs, we have location hire so it's quite high, about 8%, marketing ER contributions we pay, IT infrastructure, it is increasing a bit, we do see we need more and more capacity.
Travel: It's stabilising. Luckily we have had quite some cost in IANA transition organising more meetings. Consultancy is quite stable.
Bank charges, bad debts, are quite small items but we do see increasing. Bad debts is still less than 1% of the overall membership.
I won't go much into detail. These are the figures, they are in your pack. Looking at the bottom line you see the 1% below budget, 4% up from 2014.
Then looking at the average expense per member, well you saw the growth figures in the membership and decreasing FTE, and we see quite efficiency, if you look at the average expense per member, last year, 1713 is the expense per member from 1909.
Then the last item, the balance sheet, I won't look much at the assets. We did, in accordance with our treasury that you purchase some additional bonds, you see increase in financial fixed assets, we published detailed overview in the financial report if you are interested. But main change is in capital and liabilities, and especially of course the item, the redistribution item, you see popping up here on the balance sheet, when we received the payment from you then it actually, the redistribution is deducted. Just to show how that works, actually if you look at the 30th of April, you see that actually that amount has decreased already to just a bit over a million, we still have to send out invoices for the second half year and Q3 and Q4 so this should end up around that 320 mark which is still going to be left over.
And that's my presentation. Any questions?
AUDIENCE SPEAKER: Lu Heng: Actually quite a quick question. So you say you can't actually exactly distribute the money which is excessive, right, so and I also been told the last time the reason why we have the distribution because Dutch ‑‑ so is the leftover going to be taxed?
JOCHEM DE RUIG: No, because our fiscal surplus is exactly zero, so we leave it on the balance sheet and pay it back to you.
LU HENG: You said excess is less than the distributed, so there is a surplus in that part.
JOCHEM DE RUIG: Yes, but because we put it on a balance sheet and give it back to you, it means our fiscal surplus is exactly zero. I hope it's a bit clear.
NIGEL TITLEY: Any other comments or questions on the financial report? Right. Thank you very much indeed.
(Applause)
Right. Now we move on to the motions. We have four resolutions, so these are on the agenda and they are open for discussion.
So, Resolution Number 1:
"The general meeting adopts the RIPE NCC financial report 2015, the voting for this will actually take place under agenda point 10."
Has anybody got comments or questions on this resolution at this point? Thank you very much.
Agenda Point 6: Discharge of the Executive Board. I have already touched on this. The resolution is:
"The general meeting discharges the Executive Board with regard to its actions as they appear from the Annual Report 2015".
Again, voting for the resolution takes place under agenda point 10. Has anybody got any questions or comments to make at this point?
REMCO VAN MOOK: Can I just ask that if you intend to vote no on this one, that you make very clear to us why that is because we ‑‑ every year we get people voting no on this and we are quite stupefied, we have no idea what we have done wrong because nobody comes forward. If you think we are doing a bad job or do so right now, you are most welcome to.
NIGEL TITLEY: More to the point, if you think we are doing an illegal job, we really want to know. Thank you very much.
Agenda point 7: Which is about RIPE NCC members with multiple LIRs. We promised to vote on this at the last general meeting. This is the resolution:
"The General Meeting approves the ability of RIPE NCC members to create additional LIR accounts."
What this is basically saying is that members can open multiple LIRs per member, which was the situation prior to the last general meeting, OK. We stopped that at the last general meeting as a temporary measure, we promised the membership that they would get a vote on it, it doesn't appear to have made any difference whatsoever, apart from the fact that it makes it difficult for us to actually determine whether members have got multiple LIRs and so we are offering you this opportunity to vote on it. I have read the resolution, haven't I. Janos is now going to present on it, my apologies.
JANOS ZKSKO: Thank you. So, at the last GM we realised that there is a perceived problem, namely that members are allowed to register several LIRs with the same membership. This feature existed in the system from the very beginning and it didn't cause any problems as long as there were enough IPv4 addresses to be distributed. Once the ‑‑ we entered the last /8 period, nobody could get IP addresses from the RIPE NCC unless they opened a new LIR. Therefore, this was seen as a good possibility by some to get new address space and others felt that this is abusing the system, which actually I think in many cases is. And based on this feedback from the last GM as well, the board decided to suspend this possibility until we analyse the consequences and the possibilities and we decided at that time to give the possibility to the membership to vote on this at the later GM, namely this one.
We analysed the data and we found out that over the time, more and more LIRs were created by existing members. This graph showed, sorry I think ‑‑ yes, anyway, the graph showed the distribution of new LIRs opened by the ‑‑ by existing members over the 2014 and 2015 years. This summarises these graphs and it becomes clear that as long as there was no need for the /8 ‑‑ last /8 policy so there were enough addresses, very few people applied for multiple LIRs because of valid reasons. So, they had, for example, several LIRs in different countries, they had networks which were not necessarily managed in the same way so there were some valid reasons which were brought up by many people later on in the discussions. However, as the last /8 policy went into effect, there was a very increasing number of new LIRs. So, in 2015, 17% of the new LIRs were already held by existing members, which is a significant number, over 400 of such LIRs.
On 11th of February, Nigel sent out a mail to the members, themembers discuss list in fact, with two very clear questions: First of all, whether the membership considers that this is a problem that some members, or the members can set up several LIRs, and if the answer is yes, what possibilities do we have to stop this. And there was a huge amount of response, which is very good and we thank you very much for the feedback because there was a lot of discussion and many, many ideas came up. These were summarised by the Board and overviewed by the Board at the Board meeting on the 31st of March and we realised that a very large ‑‑ wide range of opinions was expressed. Many suggested that this is a problem; others felt that there are valid reasons to set up such LIRs, some of these reasons I mentioned just before and we identified over 20 different solutions proposed. These were categorised in three different areas, admintive measures, financial measures, which means that some suggested to pay more for these, and so on, and a couple of possibilities within the PDP itself. The Executive Board realised that there is one particular instance where we can help stopping the abuse, namely to make clear rules for the so‑called network acquisition. It was unclear how this should be interpreted and basically the Board gave guidance to the NCC to treat these as transfers and ‑‑ unless there is a legal merger or acquisition proved by the documentation in the countries company house documents.
Therefore, we implemented immediately this measure and we said that we will ask the membership at this GM to vote on the possibility of setting up multiple LIRs. Now, there are a couple of things which you should know before deciding whether you want to allow or not. We don't think that this is a good solution but we think definitely that it is less bad than the other one; namely, the fact that we stopped allowing multiple LIRs for the same members meant that people started to set up new entities and apply for membership and they become new members and then they asked for the address space anyway. We realise that had it is very difficult to track who exactly were applying for multiple LIRs, who were behind this so the transparency and the accuracy of the database was basically at stake. In some cases, we saw that some people are really eager to get further address space and in other view abused the system in the ‑‑ in the way it was used to meant to be used, namely some people set up 60 different companies and applied for membership. And this can be, well, it is difficult to figure out who are exactly the ones who set up multiple LIRs but if the owners of the companies are the same people, the addresses had got ‑‑ exactly the same, it is very probable that this is the same group of people. Also, we noticed that this may not be directly related to the fact that they had ‑‑ they couldn't open multiple LIRs but that there is a higher incentive to provide fake documents, so this was mentioned by Axel at the RIPE NCC Services Working Group as well, that we see more and more fake documentation. Obviously, when the NCC realises that this is fake, then the addresses are reclaimed and basically this is not going to fly, but we are kind of afraid that there may be cases when we do not realise immediately.
Also, the set‑up of new legal entities poses other kinds of problems as well. In some countries, setting up a new company is basically very cheap and it goes very quickly, so in these countries the fact that you have to set up a new entity is definitely not a deterrent for applying for new addresses. At the same time, as I said, it is very difficult to figure out who exactly is behind this; it is much less transparent, we cannot say for sure who ‑‑ which LIRs belong to a given member or its group, let's say, of interest.
At the same time, these new ‑‑ these new members if they set up the new LIR, they can merge officially so they can use the merger and acquisition procedure, basically, to transfer this address space because they are different entities and this is also an act which should be prevented.
Also, which is important, perhaps, is that these members get also voting rights. So, as long as before they set up only the LIRs and they close them if they wanted, now they set up multiple membership basically and they get further votes. Being, at the same time, the same group of people, for example.
So, our recommendation would be to vote yes to this resolution, for the reasons which we already mentioned. This would bring the transparency to the distribution of the address space from the last /8, or under the last /8 policy. This would also result in a reduction of memberships or number of people who hold multiple membership and this would make it the same ‑‑ so as it was before, so this would also close the loophole of setting up multiple LIRs, it would create the possibility to close this loophole by PDP. We know that this is not easy because we went through the suggestion which were given at ‑‑ on the mailing list but we still think that the PDP is ‑‑ can improve the situation. We don't think that it can stop it, as we said, but it can probably improve the situation. So, therefore, as a conclusion, the Board recommends the membership to vote yes, on this resolution. If you have any questions, I think we are happy to take them.
ERIK BIAS: Just because people are actually able to set up new entities, does not mean that we should entertain them by allowing them to set up secondary LIRs because there is no requirement to do so. You cannot stop people from setting up new entities, and we cannot stop them from gaining additional voting rights by doing so. What you are actually recommending here is basically, you know, let's go back to the old ways and hope that the people with the abusive behaviour will actually do the same and go back to their old habits, which is in no way, shape or form a guarantee that whatever you say here will actually not happen any more.
JANOS ZKSKO: Exactly. So we are aware of this fact that this is not solving the problem. However, there will be less incentive to spend more money to set up multiple memberships just before getting further address space.
ERIK BIAS: But setting up new entities is not a money‑incentive issue. Setting up or ‑‑ getting ‑‑ setting up a new VOF, for instance, in Netherlands between a couple of free of charge, you don't need to go to a notary, it's very cheap. So getting a new entity in itself is not expensive exercise. So what are we trying to solve here by this recommendation, because, you know, we can still close things in the PDP but why do we need to be able to set up secondary LIRs. That is the question that needs to be solved instead of condoning it or allowing it because there is no reason why we should.
JANOS ZKSKO: Well, we think that the reason is that it makes the process more transparent. So if you want to have multiple /22s from the last /8 or under the last /8 policy, then you will definitely apply for multiple LIRs. Irrespective of the fact that you can do it as a single member or you have to become multiple member. And we think it is much more transparent if you do it by applying just for the address space, if that is ‑‑ your goal, if your goal is to have multiple votes, then of course this doesn't help.
ERIK BIAS: OK. Yes, so, it's puzzling for me.
NIGEL TITLEY: Basically we have two bad situations, OK, and there appears to be, at the moment, with the state of policy, no way of not going down the route of one or other of these bad possibilities. What we are suggesting is that allowing a single entity to open multiple LIRs is better than allowing the same person to create multiple entities in the name of John Smith, Jane Smith, John Smith's aunt, John Smith's cousin and so forth, which we cannot necessarily track, that is a worse position than allowing John Smith to open multiple LIRs because at least at that point we know it's the one entity that is doing it. So, as I say, we have two bad situations, we are just trying to choose the least bad until the whole thing can be fixed by the PDP or IPv4 runs out. Which of course will solve the whole problem.
ERIK BIAS: So in. The PDP, in policy 2015‑04, which is mine, the transfer policy, the actual change of ownership is changing this particular problem in fixing it, that can you not merge directly.
NIGEL TITLEY: Good.
ERIK BIAS: So that is already in that policy proposal, it's going to last call soon, I hope.
NIGEL TITLEY: Good.
ERIK BIAS: And then still it makes it a lot harder at least and having two LIRs, I don't see the ‑‑ I don't see the benefit of doing it.
NIGEL TITLEY: Well, one thing is, is that Address Policy is always couched in terms of multiple LIRs rather than couched in terms of multiple entities. So, in a sense it doesn't really make any difference so for the transparency point of view multiple LIRs for membership probably wins.
PETER KOCH: I would like to thank you for that comprehensive summary. I guess I have two questions to balance the risk assessment between the two approaches, so Janos you mentioned the potential, far‑reaching capture situation when these entities or individuals gain more voting rights. On the other hand, if the electorate would vote yes, that should be a counter‑incentive to open up more members but would also probably incentivise people to close down memberships. That is something that would influence the projection that the ‑‑ that the projected membership growth and income and so on. I know that might invoke your crystal ball now but what is the balance between these two?
JANOS ZKSKO: Well, this is very hard to tell but I think that these memberships would be closed anyway due to the fact that the people who use this technique, I would call it, usually set up the new membership just to get ‑‑ in order to get the new address space and close down the LIR very soon after by merger and acquisition for from another company of theirs. So, that would not affect on a... not even on a short‑term the financial results of the NCC. That's ‑‑
PETER KOCH: But in turn, it would also mean that the voting rights accumulation risk will also be minimised in any way?
JANOS ZKSKO: If this is what happens then the voting rights problem is also not immediate. Yes. But we can't tell that everybody does this way.
PETER KOCH: My second question, if I may, is that we could try to, like, narrow the policy requirements on entities, separate entities, unrelated entities further and further and I work for an organisation that has tried this for some time, I am pretty sure that you have looked at the effort of enforcement or enforcement costs to go down there, could you elaborate on that in some way?
REMCO VAN MOOK: Well, I mean, absolutely, so, basically the situation we ended up in while imposing the ban made enforcing a whole bunch of things a lot more obfuscated, it was a lot harder to figure out what is who and who is doing what. We are still in a situation where all of these new members, as of this general meeting, still don't have voting rights but, yeah, that could happen, and certainly the cost of trying to figure out who is who in keeping the registry and the database as accurate as possible, which is one of the very cool principles of RIPE NCC, is actually being violated more by having ‑‑ keeping this ban in place.
NIGEL TITLEY: Bear in mind the RIPE NCC operates over 68 different legal environments and sometimes working out who is who may be difficult.
PETER KOCH: Thank you.
CARSTEN SCHIEFNER: I just wonder to what extent you guys have considered put ago cap actually on both, on the number of the memberships as well on the number of LIRs that can be opened by a particular member. So, just to ‑‑ because I am with Erik here by any means that right now I can't really see any decent, apart from the /22 factor, any decent reason why a certain entity should open up more than one membership and more LIRs than one LIR per membership, whether that is three or five I don't care but it could also possibly put a condition in the by‑laws saying that any more memberships by a certain entity and LIRs by that particular membership is at discretion of the board, for example.
JANOS ZKSKO: Yes, so this was becaused on the members discussed mailing list as well. I think the number proposed was three and we came to the conclusion that there is no way to enforce that, and I would refer to the previous discussion about finding out who is who because once you have set up a member and he can get three LIRs, but he can open another membership and set up another three, so you divide the number of new members by three with this approach. At the same time, I think there are valid reasons for setting up multiple LIRs, but I don't think this is the time to discuss them because these are reasonably there, as we saw in the previous figure.
CARSTEN SCHIEFNER: That is why I am saying put it up to the board.
REMCO VAN MOOK: Basically what it amounts to from a practical point of view is that you impose a vetting process for new members where the board has to decide on every new member going forward. Given that the current run rate is 2000 new members a year I don't think anyone this room is going to be very pleased with the hold ups that that is going to introduce in the process, let alone the workload on the group of seven people here on stage.
NIGEL TITLEY: Who willl work pro bono.
CARSTEN SCHIEFNER: Have you also considered coming up with a higher admission fee in terms of when the applicant is a bit dubious, maybe, or like it's hard to suss out whether he is ‑‑ it's really like a legal entity or whatever.
REMCO VAN MOOK: Could I make this real easy by setting the fee for /22 to 17,000 because at that point everybody would go to Elvis.
ELVIS VELEA: Thanks, I really appreciate. Let's do that. No, a quick question: You said that if they open multiple entities therefore multiple memberships, they could merge and therefore that be would be one of the things they could do, but they can also consolidate, if we can call it that way, if they get two LIRs under the same name and after a year or maximum two, they either decide to merge the two LIRs into one or just transfer the address space because two years later they can already transfer it because the policy says.
JANOS ZKSKO: Exactly. In two years' time you can do whatever you want but in the meantime, merging two LIRs, if it is the same company, it would mean a network acquisition or anything which is basically not even something you can interpret when you are the owner of the two LIRs, so this would go definitely to the transfer policy and this is where I think we would like to go because the two years' time restriction to transfer is a good deterrent. And it can be raised at any time if the membership or the community rather considers it useful.
ELVIS VELEA: If someone opens two LIRs they have to wait two years before consolidating into one?
JANOS ZKSKO: Yes, because they have to go through that transfer policy.
ELVIS VELEA: Are you sure about that?
JANOS ZKSKO: I was sure so far, I think yes, yes, that is a good answer.
ELVIS VELEA: I will show you an example after that it's not like that.
JANOS ZKSKO: Thank you.
FILIZ YILMAZ: I don't have a question, I want to make a comment. And I have been thinking today a lot, also after the Address Policy Working Group sessions, we seem to be as a community generally, we seem to be passing some policies and three years after we are doing intention bashing, we know why we did that and all that conversation again, while I don't think we have that luxury nowadays for this kind of stuff. We need to be thinking a bit ahead and we have responsibility here because we are dealing with a resource which a lot of different players are looking into, those players will be looking at you as the Board, they will be looking at us as community membership, etc., etc.. so, we knew that this abuse could have been in place today, already three, four years ago when these resolutions, other resolutions were made. We can go dig into the mailing archives and people who were pointing out to that. And then the argument was this was already happening so, registration is important. I agree, registration is important, but we also as a membership I think we have a responsibility for the community today in the ‑‑ in the morning, there were applause actually for giving room to the real new entrants and I don't understand simply lifting a ban, making it easy to the abusers of the current system, helps or not that situation. We really need to think about that. To me, lifting the ban just like that will only help the abusers, it will not solve the situation, but remember, there is no good solution as you said here. Let's do the right thing. Thank you.
SANDER STEFFANN: Well, I think indeed lifting the ban would send the wrong signal but it wouldn't change much. I just want to comment as Address Policy chair you comment that there are things that we can do in Address Policy to at least solve part of it are a bit too optimistic. We have currently have on the table 2016‑03 which tightens down a lot of things but in the discussion about that this morning even then was said if somebody keeps open multiple LIRs there is not much we can do, so we can only prevent them from merging. So if we want to do something in Address Policy that works even when people have multiple LIRs open that means we are going to have to treat one LIR different from the other and I think that is a situation we don't want to get into. So, if you look at it like that, I really think there is very little we can do about this. We could of course say OK, we are going to change the /22 into a /24 and suddently the economic incentive would be a lot less especially with continuing LIR fees, but apart from that I think we shouldn't be too optimistic about policy being able to solve this.
JANOS ZKSKO: Thank you. Who is next?
AUDIENCE SPEAKER: (Lu Heng): I'd like to make a comment. Same comment last year, I think the whole point of this abuse is the total cost of open new membership and continuing maintaining membership is lower than buying address in the market, so that essentially is a simple mess. Of course, we can put it into policies, put restriction noose forcing person open multiple membership, but as well as this ‑‑ economic incentive exists, I don't think it's going to stop anything. Of course we can make barrier higher, we go harder on the people who actually open multiple and use the same address and we go after them, trying to make barrier on that but the more higher cost on our side and it would be less accurate in terms of registry, the registry, because people were trying to hide harder, then we probably end up with registry with all forced names and stuff like that. Essentially something we really don't want. So I think to essentially solve this problem is not to put restrictions on multiple membership, opening restriction policy, we should solve it very simple: If the cost of opening a new LIR and getting free piece will be higher than the market cost, then nobody would do that, nobody would abuse that because I mean, if they can't make any money out of it, right. And the last point would be if we do that, then the company ‑‑ the new entrants, if they don't want to bother with the transfer market they can still come to RIPE NCC and get free piece of pie which, that pie, because of another abuser will last very, very long. Thank you very much.
NIGEL TITLEY: I think if we started to increase barriers to entry to the IP address market significantly, we will fall afoul of mergers and competition law. Because we will be discouraging new entrants into the market by financial means, we are already operating a monopoly and if we start to do that we will fall really foul of competition legislation. Which we have in the EU.
AUDIENCE SPEAKER (Lu Heng): Sorry about my English ability, but I am trying to mean is actually, that for example, we reduce /22 to /24 when the cost is higher than buying the market to maintain two year cost, we have two year restriction of transfer there, so total cost two of year holding that /22 will be higher than current market price of IP addresses nobody would abuse it. I am not saying raise the entrants to the market for the IP addresses.
NIGEL TITLEY: Not only are you raising barriers to entries of multiple LIRs but of first LIRs. So you are basically preventing new companies coming into the market by raising economic barriers. And that is anti‑competitive, and that is illegal, and when we start doing that you may vote against the Board actually discharging its duties because it will be doing something illegal. You may not have laws like that in China but we have them in the EU.
AUDIENCE SPEAKER (Ly Heng): I don't think it's EU or China scene, China has ‑‑
NIGEL TITLEY: Whatever. We have an issue there. It's not as straightforward ‑‑ it's not a straightforward as you may think and we would have to take legal counsel as to the legality of such an act. Thank you very much indeed.
AUDIENCE SPEAKER: Michael from the NCC, I have got about five comments on chat, if that is all right. First one from Arash: Is it something ‑‑ sorry, is it always like this that the Board recommends their membership on which way to vote? It's kind of a general question, not necessarily directed at you.
NIGEL TITLEY: No is the answer.
AUDIENCE SPEAKER: Next one is from Jason Schiller from Google: Multiple LIRs is helpful for address management when the addresses have discrete uses and different attribution, I would be happy if we permit multiple but only one get initial /22 in voting rights.
NIGEL TITLEY: The voting rights issue is neither here nor there, if they all belong to the same entity.
AUDIENCE SPEAKER: Another one from Terence, affiliation, Darkness Reigns. You are recommending to allow abusers to open multiple LIRS with the objective to make it easier to fix the problem and have transparency, the abusers are always members so they know this as well. Wouldn't they not choose to create a new legal entity anyway just to avoid problems later, you basically let them know as long as they create new legal entities RIPE can definitely not touch them.
NIGEL TITLEY: And the answer to that is yes, we know that, we have two hard problems and neither solution is good.
AUDIENCE SPEAKER: A few comments from Alexi. Firstly, transfers are not possibly during 24 months by policy 2015‑01 so what are you afraid of? The next one: Also the NCC can return IPs which were allocated before 2012 which are not used. There are so much of these allocations. And finally, some time ago the new merge procedure took place, will it be the same after or not?
NIGEL TITLEY: I don't think there is any change planned in the mergers and acquisitions policy and on the subject of used addresses if anybody can tell me how to determine whether an IP address is used then I would be very, very interested. Addresses do not necessarily have to be advertised on the Internet to be used. Thank you.
Who was next?
AUDIENCE SPEAKER: Andrew de la Haye, RIPE NCC. Just a clarification on one of the topics mentioned by Elvis on the consolidation, depending on the outcome of of the this discussion, the RIPE NCC will do a proposal for implementation which will cover this specific point stating that a consolidation will fall under transfers. That is just clarification.
NIGEL TITLEY: Next back microphone, in the centre. And then Sander. And then Gert.
AUDIENCE SPEAKER: Tahar Schaa, consulting for German government.
I just have a question. You stated that it would be illegal if we raise the cost. This is what I don't understand why, if we raise the cost to a market equivalent level, why is it illegal because if someone wants to enter the market he can just buy it and just afford the cost of it?
NIGEL TITLEY: I said we would have to take legal counsel before that. I have a suspicion it would be interpreted as monopolistic behaviour but I said we would have to take legal counsel before doing that. Thank you.
GERT DORING: I am not sure who of you is going to kill me first. I do agree to some extent with Lu Heng that charging scheme should be considered. I am not saying it will fix anything. Why are people opening multiple LIR accounts to get multiple 22s? Because after two years' time they can just merge it all in one and then they have paid something like €3,000 and bought ten, so either we get Elvis to lower his prices or we make it less attractive to basically have multiple /22s and charging scheme ‑‑ well adjusting the signup fee is a no‑go, at least I think it's a no‑go because the whole point of having the last /8 policy is permit entrants of new members and new members tend to be small, so having a signup fee of 10,000 ‑‑ 10 bucks is no good or having the ‑‑ it would be nice and have nice money and all fine but what I propose you consider is whether we could actually declare /22s are special in the sense of 2016‑03, and have a clause in the charging scheme that says if you have two of them or three or four, you pay 2000 bucks a year for every but the first one. So if you merge your 10 LIRs you pay ten times the yearly fee, and it's not as attractive as going to the market and just buying something. I am not saying it will work but I think we should consider it. So...
REMCO VAN MOOK: I think that is a lovely suggestion. However, before we can even consider making such a thing part of the charging scheme, 2016‑03 would have to be accepted policy and have been implemented, because until that point, I have nothing that I can measure against or do against.
GERT DORING: The RS knows very well which /22s have been assigned under which policy.
REMCO VAN MOOK: RS might.
GERT DORING: And it's publically documented. I think it's not thathard.
NIGEL TITLEY: I think we certainly need to consider charging scheme solutions, but probably not ‑‑ well, we can't at this stage.
AUDIENCE SPEAKER: Radu Feurdean, Coriolis Telecom. There is another issue that I didn't hear it mentioned, is the chance that some unfriendly people or group of people may actually take control of RIPE NCC, and if we lift the restriction there is less incentive to go there, the risk isn't gone, especially we had six months when we gave them time to think about this kind of issue, but we lowered the incentive to actually do it. There are some calculations which go to something like three million to take control of RIPE NCC, which is very bad, and still related, somehow, there is always let the community decide, but on one side there is the community and there is the membership and I have an impression that there is more and more difference between the community and the membership, so, this is something that should be taken into account, too.
JANOS ZKSKO: I think we close now the microphones, so I think Martin is next.
MARTIN LEVY: So Resolution 3, I want to confirm this is essentially correcting a mistake the Board made in November and yet you want us to also vote on the resolution to let you discharge the Board on not making any mistakes? I just want to confirm that.
NIGEL TITLEY: That is incorrect.
MARTIN LEVY: I know, it's a long meeting and somebody needed to say it.
NIGEL TITLEY: Resolution No. 2 is to discharge us from the suspicion of having done something illegal. Resolution 3 is a request of the membership as promised at the time when we took the emergency decision to allow the membership to decide. And I appreciate that Martin was making a joke. Thank you. I think it's Elvis next.
AUDIENCE SPEAKER: No, it's Jabber. A few comments from Paul Marco from Lebanon. Why not enact a rule that disallows mergers that are done in less than a couple of years, what if mergers that are suspicious would need to pass some kind of investigation?
NIGEL TITLEY: That is what we already do. It depends upon the degree of investigation you want us to do. And whether you are willing to pay for it.
JANOS ZKSKO: Yes, so I think it is in the presentation that we also ask the NCC to ensure that, in case of mergers and acquisitions, proper documetnation is provided and designed by the people authorised to sign such a merger.
AUDIENCE SPEAKER: I also have a response from Terence from Darkness Reigns. I didn't understand the condescending tone to our Chinese colleague. I understand there isn't a legal opinion about whether his solution would actually clash with anti‑trust laws. It seems the only solution that doesn't waste time and money, so why not get a legal opinion on what is possible and what is not possible.
NIGEL TITLEY: We will get that, and I apologise to Lu Heng.
ELVIS VELEA: Two things. First of all, Elvis cannot lower his fees, he already charges for a /22 less than you pay for a meal.
Second thing, you are talking about taking legal advice. Legal advice on what? I mean, what is the market price of an IP address so that we could try at some point to increase the charge fee to level that price? I mean, not even the brokers know the exact market price of an IP address, they might have an indication because they have multiple customers coming and asking for a price, but even then these kinds of contracts most of the happen in the NDAs and this information is not available or public. So, asking the ‑‑ asking legal advice about what exactly, how much to increase the fee for signup or for membership, that's ‑‑ doesn't really make sense because the market is confused. They don't really know exactly why the price is ‑‑ the brokers don't know it either.
NIGEL TITLEY: The response from the legal counsel is whether or not this is likely to be a breach of competition law, not what the exact level we should charge. I think ‑‑ Lu Heng was next and Erik ‑‑
LU HENG: I thought about it and thank you very much for colleague's comments. Actually, the amount of IP address we give out is a community decision, it's part of the policy. How much we charge per membership is a membership decision. It's two different things essentially. So let's say if tomorrow we passing policy we don't give out /22 any more, we only give out /24, it's essentially RIPE NCC need to obey that community decision and I was wondering would that be a legal problem that a lawyer would say the community can't do that?
NIGEL TITLEY: I think probably not, but I would like to ask Athina beforehand.
LU HENG: OK, I would love if the Board taking this into account and asking legal advice about that, if community passing sol see we immediate to limit it to certain amount I don't think that should be related to member at all, my personal opinion.
REMCO VAN MOOK: So if a policy proposal were to be launched to do that, there is ‑‑ the whole PDP allows for RIPE NCC input, even before the proposal goes into the final phase, part of which is a legal review and at that point the RIPE NCC board and the community would both be advised on that legal review and if there is anything really hairy coming out I can absolutely guarantee that you will know before you approve such a policy, that is the reason why the whole review was put into place because we didn't have it at some previous point and that caused a whole bunch of trouble between the community and the RIPE NCC board so that is why we have it these days.
LU HENG: Thank you very much for clarification but again I would like clarity on the matter to which level we charge the member that would actually cause anti‑competitive law problem, thank you.
JANOS ZKSKO: And the last comment from Hans Petter, please. We have closed the microphones.
HANS PETTER HOLEN: I am trying very hard to be the last speaker here. RIPE Chair. As you said, Nigel, this is an impossible decision. As RIPE's Chair I am sorry to say that if the membership votes that it's OK to open different LIR accounts you are basically saying that you don't care about the policy that is set by the community because the community has set a policy that you should get not get more than /22. You are creating a mechanism that you can get as many /22s as you want as long as you pay for them by just opening another LIR, so you could just remove the open LIR criteria and then you could charge your membership fee, €1,400, per /22 a year. That is, in essence, what this decision does. So ‑‑
NIGEL TITLEY: Not strictly speaking true because the community told us to not allow more than one /22 per LIR. This vote is about how many LIRs an entity can open.
HANS PETTER HOLEN: Technically you are right, Nigel, but since you have been talking about preventing abuse or misuse, I'm putting into that some intent of stopping a person or somebody behind the legal entity for getting more addresses. So, all the arguments saying if I open multiple companies to have multiple LIRs, then I'm breaching the intent of the policy, I would turn the same argument against you and say this is not really the case. So, is there any other way of solving this? Well, if you want to have somebody with some continuity in the business to keep the addresses, you may require them to have been in business for a certain amount of time before they can get addresses. If you want to have rules about ownership and things like that, it gets really messy, so yes, the membership here has an impossible decision in front of you. One of them will signal strongly to the policy people that here is a loophole that the RIPE NCC is now allowing so then there may be a policy proposal on the table saying that you can't have more addresses per member instead and there you go, you have a new circle. There is still nothing to prevent people from setting up companies and getting multiple votes if you allow multiple LIRs. So, as I said, this is an impossible decision. We will run out of addresses, maybe that would have been the best, to run out sooner so we wouldn't have to spend time on this.
NIGEL TITLEY: You are right. The microphones were closed about ten minutes ago.
ERIK BIAS: There is a way around this and actually looking at cost of transfers and actually looking at that in the charging scheme.
NIGEL TITLEY: Perhaps you could bring that to the mailing list. Thank you very much indeed, Erik. Thank you very much everyone, it's been an interesting discussion. I wish it had shown a way forward for us. Regretfully, I don't think it has. But the resolution is still ahead of us anyway, we have to to vote on it one way or the other. So, I will read the resolution just for nth time and then we will move on.
Resolution is: "That the General Meeting approves the ability of RIPE NCC members to create additional LIR accounts."
And you will be voting on that in point ‑‑ agenda point number 10.
OK. Agenda point number 8, the RIPE NCC charging scheme, we have a presentation on this from Jochem, it's a fairly short presentation, I hope.
JOCHEM DE RUIG: I will keep it short. Let me get into it. Membership development, I showed you the graph before and you see what happens in the first couple of months, it's gone further up, we are about 2,000 members on annual basis. From that, you can extrapolate the different memberships scenarios and I ran three different scenarios and also a zero growth scenario, which is a bit hypothetical scenario, although that could happen. Anyway, I think looking at all these projections there is enormous amount of uncertainty and we also looked a bit from a different angle, and when you look at average expense per member you see it's been decreasing quite steadily. We do expect it to further decrease in 2016 and 2017 to just a bit below €1,600. When you compare that actually to the service fee, the base service fee, the €1,400, I just plotted and you see the red area that of course is covered by signup fees and new members coming in. So ran a surplus and that can be distributed if you choose to do so. But you still see the average expense per member is a bit higher than the service fee.
So, the considerations we looked at: Is we have the rebate tool so if there is a surplus we can just return that to the membership. When you look at the net fee this year, it's about €1,000 and we expect that to continue for the next year. This actually rewards a bit people who are in the game for the bit longer term, people who come in, merge and move on, they don't get the rebate. The fee we have currently is quite low already, lower fees may attract some more abuse or more people opening more LIRs, who knows. And the membership growth is very uncertain, we had a lot of talk in Address Policy and here on the membership growth and on multiple LIRs, there is a lot of policies playing so there is a huge degree of uncertainty. So, to cut to the chase, we propose to keep the charge scheme as it is at the moment. €1,400, €50 per PI assignment, sign up fee, €2000 and if you choose to do so, if we run a surplus we can redistribute that via rebate tool. And that is it.
NIGEL TITLEY: Any questions?
ANNA WILSON: Thank you, that graph of the service fee and the cost per member is very striking. I would like to make a comment that I can refer back to in a few years' time. It would probably be wise for us not to become dependent on service fees funding that difference.
REMCO VAN MOOK: So there is one point I would like to make before we take your question, so if you choose to vote no on this one, technically speaking we will end up with the same charging scheme because we haven't changed it. However, the Board will commit to bringing you a new proposal that is going to be different from the current one in the next general meeting, if you happen to dislike this one.
WILFRIED WOEBER: Just a request for clarification. Jochem, if you could go back for one slide. Or maybe two. It's related to the per PI assignment, I read that as this is the €50 per PI assignment plus adopted legacy resources and all that stuff, which is sort of on the clock list. Is this the case?
JOCHEM DE RUIG: Yes.
WILFRIED WOEBER: Second one is an idea or suggestion: At least with our background we are in the process of adopting quite a considerable number of those €50 items and sort of may be an idea to rethink the relative percentage of the cost for the next round, to assess the fact whether these 50 is still sort of the lowest level of contribution, I don't have any problem with the €50 because it's still sort of grabbing stuff from the stamp money, but in relation to the 1,400 which is the basic service fee, the local registries which have adopted a large number of legacy or other resources, they seem to be a little bit penalised, again no problem with that, I fully agree with the charging scheme, just an idea to review that for the next time around. Thank you.
NIGEL TITLEY: I think Elvis was next.
ELVIS VELEA: So, you are saying that might see a possibility that the service fee would be a bit too large, but the board or the NCC, I am not exact lie sure any more, proposes that the charging scheme is not changed in 2017 because by applying the ‑‑ giving back money mechanism, you kind of try to discourage the abusers of the last /8?
JOCHEM DE RUIG: No, that is not ‑‑ I think we are just proposing to continue the same charging scheme. With the reasoning, if we run a surplus in these uncertain times we can return it to the membership. That is the proposal.
ELVIS VELEA: So if I vote no, is there any chance that with the next ‑‑ because you will have to take the message. Is there any chance that with the next proposal, the service fee might drop and the signup fee might grow in order to keep kind of the same idea?
JOCHEM DE RUIG: Well we would have to look at that, I don't know how it will look, it depends on the developments.
NIGEL TITLEY: That is a matter for discussion by the board but yeah we will probably double them.
ELVIS VELEA: Good, the signup fee?
NIGEL TITLEY: Both.
Mark from the NCC, one comment on chat from Jan how long Prins, the comment is it looks like you have a problem spending your money. Why not make the RIPE meetings cheaper or increase share sponsorship? It might result in better communication with the community.
REMCO VAN MOOK: That is very interesting suggestion. At the same time if you look at the annual budget and compare our revenue flow with the total revenue we get out of people paying for RIPE meetings, it's not going to have any measurable impact. So I appreciate it. If you would like this meeting, the RIPE meeting to have three‑and‑a‑half thousand attendees, about 600 of them will show up, and making logistics an absolute nightmare for the RIPE NCC staff, please go ahead and ask us to make the RIPE meetings free, otherwise I think the ‑‑ I mean to be perfectly honest with you, the RIPE meeting is just about the cheapest professional conference I am aware of.
AUDIENCE SPEAKER: My own little LIR. Just a very simple question regarding the redistribution. Certainly the redistribution in the case of excess funds like happened last year gives back a bit of money to all the LIRs but also including the abusers, would we rather do that or give the money to the Dutch government?
REMCO VAN MOOK: As a Dutch citizen, and the only Dutch citizen on the board, I have a bit mixed feelings about this. Giving back money to abusers but ‑‑ doesn't really feel right. Potentially lowering my personal tax rate, however sounds pretty appealing but I am also not sure whether the majority of the membership agrees.
NIGEL TITLEY: Sander.
SANDER STEFFANN: Just put all the excess money in the Rob Blokzijl fund and everybody will be happy.
NIGEL TITLEY: You may well be right. Yes.
(Applause)
Any other questions?
AUDIENCE SPEAKER: Jan Ferre from DeiC in Denmark. I don't think the signup fee, PI assignment is really wrong, nor the price of this conference and we did agree on the financial report that we actually do like the way that the RIPE handles the funds right now. So, the only problem is the excess funds, and I would like somebody said, giving them back to people who are misusing the system, doesn't quite feel right but we could give them to somebody who would benefit the Internet Society as a whole, like some ‑‑
REMCO VAN MOOK: I mean ‑‑
AUDIENCE SPEAKER(Jan Ferre): Research, whatever.
REMCO VAN MOOK: We would love to do that and that is a bit of a fiscal issue with that, is in the same way that I have to use the rebate as negative income and put it into the annual accounts for the year, I can't just go around the budget saying, well oh, it looks like we have going to have three‑and‑a‑half million left in the kitty for this year, lets go to the IETF which I am sure the people from the IETF will hugely appreciate, but the Tax Office will then likely come back and say that is all very nice but we will collect 29% anyway. So that is, that is the main reservation, and the main problem we have of that. So, if we put it into the budget we are budgeting for surplus which is something that you wouldn't probably wouldn't like if I budget for three‑and‑a‑half million a year for the IETF so I am a little bit stuck. The best thing that we can do right now is either raise the budget or give money back to you guys. Those are pretty much the two options that we have.
AUDIENCE SPEAKER (Jan Ferre): I just wanted to say as a Dane, I am certainly not startled about a tax at 29%, that is almost fun.
NIGEL TITLEY: Thank you. Hans Petter was next.
HANS PETTER HOLEN: That is what I wanted to say but even as my Danish colleague has even higher tax than Norway I sympathise with him. In some cases we should be willing to pay tax in order serve a common good. I am a bit uncertain why increasing our contributions towards the Internet Society or the IETF would not be just an expense in the budget and reduce the surplus so that it would not cause a tax effect but I will leave that to legal and financial advice.
REMCO VAN MOOK: The problem with that is I need to know it in advance and if I know it in advance that's ‑‑ I'm ‑‑
HANS PETTER HOLEN: Yes, of course so you make the decision now and problem solved.
REMCO VAN MOOK: Looking forward to everybody's opinion on the activity plan for 2017.
AUDIENCE SPEAKER (Jabber Channel): Comment from Sergey from IU.Fonton Telecom. It could be hard to understand where a new entity is in fact new or just an attempt to open additional LIR account, however folks like Spamhaus do a lot of investigation when they address spam House, why can't the RIPE community do the same it, would be a good use of finances even require hiring more people for this job. Also I have an experience of requesting PI space while at one of my previous jobs and what my then LIR did was in fact artificially drawing graphs for us, why the necessity for space is not checked in a more strict way by the RIPE NCC?
REMCO VAN MOOK: Because policy doesn't allow us.
AUDIENCE SPEAKER: Any further comment on that?
NIGEL TITLEY: It's difficult and expensive and want us to spend more money on more rigorous checks when we get an application from an entity, we will do so, no problem at all. We would like some indication that you would like us to do this. Is the response. Anything else from certificate guy?
AUDIENCE SPEAKER(Jabber): Not from him. Terence again from Darkness Reigns, there are ways to evade tacks, why doesn't RIPE explore a way to legally evade as much taxes as possible when donating to other organisations that are working for the Internet as a whole?
REMCO VAN MOOK: I would kindly refer back to Resolution number 2.
NIGEL TITLEY: Thank you very much indeed.
HANS PETTER HOLEN: I couldn't resist this one. Well actually, by giving money back to me you are not avoiding taxes, because when you give me €400 back guess what, the surplus in my company increases and I have to pay Norweigan tax on that. So yes, Dutch government get less and all the other countries get more.
NIGEL TITLEY: Lovely. Not our concern, though.
AUDIENCE SPEAKER: Alex ‑‑ every year we have the same thing, too much money, every year we get money back. Service fees are such that I don't really care about it because the service fees are fairly low compared to all my other expenses. I think if we need to pay some tax toss help out the guys in the corner or someone else there then why not do that?
NIGEL TITLEY: That is useful feedback, thank you. Jabber channel again.
AUDIENCE SPEAKER (Jabber): Thanks, response from Terence, please note that I said legal, I was not proposing an illegal act, all large multinationals use P.O. Box companies to legally evade taxes.
NIGEL TITLEY: Evasion is illegal, avoidance is legal.
REMCO VAN MOOK: I would suggest to Terence to read the other half of the news about the Panama papers.
NIGEL TITLEY: Thank you very much indeed, we will investigate the possibility of opening a pan main Jan company.
AUDIENCE SPEAKER(Jabber): Comment from Jason Schiller from Google: Yes, please spend more money on reviewing new membership requests for abuse. Also, if there is coverage plus one for funding the IETF.
NIGEL TITLEY: Thank you. Anyone else? Going, going, gone.
OK thank you very much indeed.
(Applause)
We are now on agenda item 8 which is the RIPE NCC Executive Board elections at which point I will hand over the microphone to Christian.
CHRISTIAN KAUFMANN: Thanks a lot. So this is a little bit about my prepared so many good German jokes and we are running so late on time. As it is custom, if we have an election for the board and the chairman itself is up for re‑election, then someone else does it, so that will be me in this case. As Nigel pointed out we have two vacant seats, this would be Nigel and Remco. As you have seen, we have sent out the e‑mails, we got four candidates in total, so what we will do now is, despite the fact that you could see their platform and their statements on line before, give the various people a chance to present themselves. And then we will quickly explain again how our voting works and then we go through and execute the same. We are starting with the gentleman Mr. Pardi which is prepared a video because unfortunately he couldn't come. Can you start the video.
Speaker: In the name of God, the compassionate, the merciful, hello everybody. My name is, it is too long most people know me as /STKPWHRA*PBLG. I wish I could join you in Copenhagen but unfortunately it didn't happen, it's about 20 years I am working in network industry and I work both in technical and management departments of several telecom companies and because of my ‑‑ I had the chance to work with many ISPs in my countries and also some international telecom companies especially in VoIP and IP transit section. RIPE NCC board should you present membership and support plans that benefit members, I have this evening that at the moment very few percent of members are really receiving services they are paying for. Actually, there are plenty of members that they just pay their annual invoices and even without knowing why they need to pay it and how they can benefit from their membership. Many of new members are not really receive any training and they are not able to do their LIR jobs. My primary motivation is to work with RIPE NCC management to find new ways to address current members' issues, the fact that less than 7% of RIPE NCC members are participating in general meetings and there are silent members on mailing lists, makes me think there should be something we can do to bring all members together and improve our communication with each other to build a better community. With years of experience in management and running several IT companies I believe that I can bring some values to members community. Thank you for listening and hope you enjoy the meeting.
CHRISTIAN KAUFMANN: Thanks a lot. That was candidate number one. Candidate number 2 ‑‑ by the way, they have in alphabetical order ‑‑ candidate number 2 would be Mr. Garrott. Are you in the room? Perfect. Please come to the stage.
SPEAKER: So, dear members, my name is Pierre Garrott ‑‑ a telecom operator based in Belgium, I started my career at GTS. When I was just over 19 years old. I am now 37. So after 18 years in this world, in this community, I have been supported by a few members to become a board member candidate and I decided to accept nomination. What I can tell you about me: Very open‑minded, I like to find solutions or let's say I like to act a problem and by living in a very multi‑cultural environment in the heart of Europe I am used to find consensus with very different peoples. Oh, and I am not ending my sentences by period all the time. I promise I will will work to achieve our goal and to take on the challenge. If you want to know more about me, don't hesitate to ping me here on or on social networks. I hope I can count on your support. Thank you for your attention.
CHRISTIAN KAUFMANN: Perfect. Thanks a lot.
(Applause)
Number 3, would be Mr. Titley.
NIGEL TITLEY: I am not going to talk about myself. If you have been here any length of time you will know what I have done and how I conduct NCC business, I am going to remind you all of the functions of the RIPE NCC board as some people seem slightly confused about it. First, it's there to ensure the stability of the RIPE NCC. This is a legal duty. If we violate it we are liable to prosecution. We are personally liable. This is a case for any board of course, but it doesn't do harm to remind you of it, it means we can't do anything that is likely to cause the RIPE NCC to break Dutch law.
Secondly we are there to interpret the will of the membership as best as we are able to discern it and to ensure that the RIPE NCC executes policy as decided by the community as a whole. These two functions mean that there are some desirable characteristics of board members. They should ideally have some experience of acting on a board before and understand the responsibilities involved. This includes understanding the amount of time involved, at least 30 days a year and more for the chairman. They should be well connected with the community and should ideally have taken part in the policy making process, in particular they should understand that the board does not make Address Policy. They should be approachable and willing to listen to concerns expressed to them. Then, there are additional characteristics that I as a chairman insist on; they should treat NCC business with the highest priority, in my case it takes priority over my day job. They should leave their personal, regional and national interests at the door, we are there to represent the community as a whole. And they should be willing to work by consensus, we do not vote. Please bear these in mind when you cast your vote. Thank you.
(Applause)
CHRISTIAN KAUFMANN: Thanks a lot, Nigel. Last but not least, Remco van Mook.
REMCO VAN MOOK: It's me on the stage, hardly ever happens. But this is different because I very rarely get in front of you on stage because I want something for me and usually I am here doing things for you guys, the community, the members. And this is one of these rare exceptions, I have been a treasurer for the RIPE NCC for the past six years, and I would like to ask you to return me to the board for another three. In the past six years I think the board has seen some remarkable successes, I had to write a couple down because I usually forget some. So, membership has doubled, the charging scheme has changed, we ran out of IPv4, whether it's a success or not is up to you. Whether we ran out or not is up to debate. We launched regional meetings to improve outreach, set up a stability fund, so we could have continuity in the system. We cut the expense per member by 25% and we worked our way through most of IANA transition and we got the amount of members involved in the general meeting from about 3% back in 2010 to just under 10% at this meeting. The world around RIPE NCC is continuing to revolve quite rapidly within the membership as we have been discussing extensively over the last hour‑and‑a‑half as well as outside. While RIPE NCC's currently probably in the best state it's ever been in but I am biased. But by no means we are out of the woods yet. I would like to help the NCC to take it forward for another three years, much in the same way I have done in the past six. If you think I have done a decent job in the past six years, vote for me. If you don't think so, don't, but tell me what I did wrong. But bear in mind, if I am not on the board I am going to be back in the room with you, any general meetings are going to last a hell of a lot longer. Thank you.
(Applause)
CHRISTIAN KAUFMANN: Good. I hope these informations were helpful for you to make a decision. Now you know the candidates, all four of them, now Fergal will come up and show us how to vote.
FERGAL CUNNINGHAM: Hello, I am from the RIPE NCC. I am the membership communications officer. And I am here to tell you about the voting. So yes, as has been said, we have a record number of voters registered for the GM, we have nearly 1,200. That figure has gone up by seven or eight since the presentation was made. You can vote with paper ballot or electronic vote and the voting will start as soon as I finish this presentation. If you have a paper ballot you must hand it in before you leave the room, if the ballots leave the room they can't be taken back in. If you have electronic votes you can take your time and cast your vote up until Friday at 9 a.m. We have four resolutions to be voted on, and for resolution to pass, it needs more than 50% of yes votes. The abstentions are noted but do not affect the vote count. Please fill in just one box or it will be deemed invalid.
For the election, we have four candidates, as you have seen. We use the instant one‑off voting system for the election, and you need to rank your candidates rather than mark one box with an X or tick. From 1 to 4 with 1 being most preferred and 4 your least preferred candidate. If you want, you can just elect one or two or three. Candidates need over 50% of the votes to be elected as well. And if no candidate gets 50% in the first count, the candidate in 4th position is eliminated and his second preferences are reallocated to the other candidates and this goes on until someone achieves more than 50% ever the votes. After this process, the winner of the first seat is removed and preferences change but you should fill preferences all the way one to four if you want to be sure that your vote is going to count in the second election for the second seat.
So yes, please, use just digits, 1 to 4. If you receive the ‑‑ you should have received your electronic voting e‑mail by now. When Christian declares voting opening, you will be able to click this link and voting will take place in the same way on line. For the voting process, we store the paper ballots in the hotel safe until Friday morning, and after the deadline passes the paper ballots are added to the electronic votes in the big pulse system we use.
We have two independent observers, Geoff from APNIC and Hartmut from the LACNIC board, and going to oversee the process of inputting the paper ballots and on Friday at 10:45 we can reconvene here and the results of both the resolutions and the elections will be announced. And I believe that is it. So if you have any questions on the voting process, please let me know. Thank you.
AUDIENCE SPEAKER: For the paper ballot, I can see we have a number of, on the letter ‑‑ this is not exactly what I could call anonymous vote, as with the number on my ‑‑
FERGAL CUNNINGHAM: You are not asked to submit the vote in the envelope, you can take the ‑‑ please take the vote out of the envelope and just submit the ballot.
AUDIENCE SPEAKER: OK.
FERGAL CUNNINGHAM: There will be no number that will identify you on the ballot.
AUDIENCE SPEAKER: Thank you.
JAN ZORZ: I have a question: If you don't put a preference for the candidates in a box, what does this exactly mean?
FERGAL CUNNINGHAM: Well that is pretty much down to the independent scrutinies, but in my experience they have deemed those to be invalid and therefore not counted on the ‑‑
ATHINA FRAGKOULI: Do you mean if you just have one preference and no other preferences?
JAN ZORZ: Or two preferences for example.
ATHINA FRAGKOULI: OK, so if you have more than one preference you are requested to number them according to your preference. Because the system Fergal explained isn't one of voting, allows us, if your first preference takes the least votes, is eliminated in this first round of counting of the votes and then your second preference will be counted for the second round.
FERGAL CUNNINGHAM: Thanks Athina.
ELVIS VELEA: I was just a tiny bit surprised at Nigel's speech, it sounded a bit threatening. However, however, he did say something about if you vote and at least that is how I understood it, if you vote and the person elected to be part of the board does not perform its duty and affects the NCC, then we are liable for that. No? I misunderstood.
FERGAL CUNNINGHAM: I am not going to comment on any of the candidate's statements but Christian is probably the person to answer this, I presume. If I misunderstood then my fault.
CHRISTIAN KAUFMANN: OK. I think you did. Any other questions to Fergal? No. Good, thanks a lot.
(Applause)
So, we are nearly there. I have to read through all the resolutions quickly and then I will open the voting.
So resolution number 1: "The general meeting adopts the RIPE NCC's financial report to 2015." This is what we discussed in agenda point number 5.
We have resolution number 2:
"The general meeting discharges the Executive Board with regards to its actions as they appear from the annual report to 2015." We discussed this in agenda point 6.
Resolution number 3: "The General Meeting approves the ability of RIPE NCC members to create additional LIR accounts." This was really long discussed.
Resolution number 4: "The General Meeting adopts the RIPE NCC charging scheme 2017."
Discussed in agenda point item number 8.
And last but not least, the executive voting, you have seen the candidates, and you had an explanation how it works. So that means I will open the electronic voting, wherever the electronic voting push‑button person sits, and we start collecting the ballots. One additional information: If you leave the room with a ballots, because at the moment where we have collected them they go to a safe, you cannot bring them back in two minutes, an hour, so please put the ballots in before you leave the room, otherwise they are not valid. Otherwise, I will suspend the general meeting until Friday, as Fergal said, 10:45 and we come back to this room and I will announce what you voted for. Thanks a lot, have a good evening.
(Applause)