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Stenography Transcripts

 General Meeting


16 October 2019

6 p.m.

CHAIR: Good evening.  I think not many people are coming in actually.  It seems everyone who wanted to be here is now here.  So I think we can close the doors and actually start.  

Before we start, today we have a new administrative matter, this is a little bit the result of what you voted on last time.  You might remember there was the resolution about the dispute of the minutes and the General Meeting, and we said because of the electronic voting, disputing it straight afterwards and looking at all of these things it's very complicated, especially if people are remote; and, therefore, we have this new administrative thing that you actually have after the minutes are published, three weeks time on the website, there is a link then from the minutes to object.  And this was to the Article 1904, so this is now what we are doing from now on.  And we have appointed a secretary for this General Meeting, which is Athina, the legal counsel, who will basically act as a secretary for that process.  Just a new administrative matter, nothing specific about that.  Just that everybody is aware that we have implemented what you asked us to do. 

Good.  And with that, we start the General Meeting.  Welcome. 

Here we go.  We have for for agenda point number 1, we had that. 

For 2, this part is the part which we outsourced to the RIPE NCC Working Group group, which is basically the session before and the report that you have seen from Axel.  I do not have anything similar to offer but I hope you stay with me nevertheless. 

And that brings us to point number 3, the report from us, the Board. 

This is the Board.  We have Falk; me; Maria; Remco; Piotr, Salam and Andre.  We have practiced that as you clearly can see. 

Good.  So, what happened? 

This is an overview of the Board meetings we had since the last GM.  They are all in chronological order.  One sticks out a little bit out, which is the joint meeting with the APNIC.  I have an extra slide and I'll come to that in a moment.  And all the minutes are published on the website and you'll find them there.  So nothing specific there. 

So, what did we do?  Well, we had a couple of decisions. 

We approved the amendment to the RIPE NCC LIR account agreement, so now this can be submitted electronically as well, that wasn't the case before. 

We have the RIPE NCC Services for legacy Internet resources, that can now be submitted electronically as well.  So this was one of the housekeeping part where the rule was ‑‑ or the amendment was a little bit older and didn't have the electronic part in it yet.  We updated the RIPE Stat services terms and conditions. 

We also review regularly the RIPE NCC treasury statute, to see if they are still in line with what we want to do and we have reviewed them and decided that they stay unchanged because they fulfil their purpose as we need them right now. 

We approved the publication of the draft activity plan and budget 2020.  It was also published to the mailing list.  So far we didn't get many objections, suggestions or anything different.  Actually more to the point we didn't get anything at all.  So, we assume that for most parts that is all fine.  There is also a presentation in a moment about that which goes into some aspects, so you see it again if you haven't read it. 

We have approved a proposed amendment which is coming up.  This is one of the two things you can vote on today.  And Linda will.present that later and go into detail. 

We have also approved the procedural document for the due diligence and the quality of the registration data.  And one of the highlights, we accepted the role of appointing the NOMCOM Chair.  

So, we all know that we had a procedure going through the community where the question was how are we coming up with new RIPE chairs.  There was a proposal written, which was then accepted which had actually app component for the Executive Board, and our component was that we would appoint the Chair of the NOMCOM, which is then going through this process, and executes on that part.  And we not just accept it, that function, that that we would do that.  We also actually asked a person, Daniel, he was so kind and said yes, as he is ‑‑ where are you?  Is he here?  Thanks again.  He is non voting.  He will now go through the process and facilitate that. 

And with that for the time being, I think the part of the NCC board is done.  Till it comes back at the end of the process. 

The proposed articles.  This is something which then Linda will talk about.  So we have a little bit the problem and actually multiple members came up, confused and we are sorry for that.  When we have resolutions and we vote on the the resolutions we have to have 50%.  So if that is a yes and no, that is relatively easy and then we can count them.  If you have resolutions which get a certain complexity and we have three optings and the surplus is further in detail, then it is not always clear, what was ordered, what was the idea, especially when we make a recommendation which is not the highest and the lowest in the ranking but the middle one and to actually change that and make that a little bit easier, we want to change the voting on these parts.  And as I said, Linda will talk about that in a moment and explain that a little bit nicer in more detail.  Clearing house. 

One of the big questions for the surplus redistribution is why do we even have that and where is that coming from?  So this slide is a small reminder to actually remind us why we have surpluses in general.  The idea was that we have a financial buffer for unforeseen things and we decided that it would be wise to have that for roughly one year of expenditure.  So if something ever happens with the income stream or whatever, then we would have enough money for one year to operate and actually find a solution and see what we want to do. 

So this is the clearing house part.  And then what we decide on every year is the surplus component, we actually redistribute the surplus or are we putting it in the clearing house?  So in the last years you could vote on that, and then it was relatively easy, black and white, binary, 0 or 1, you either wanted it there or there.  And as you might remember, usually people voted for the redistribution, so you got the money back which we had as a surplus and it came back to you. 

This year, when we looked at the number, we figured out that the surplus was significantly higher than in the years before, and you have seen Phillipa's presentation before, this has a lot to do with now everybody runs for the last space and that we have way more member applications, new members than we had before. 

So, now without what we can do is we can either have the usual black and white question, which basically says do you want to have it?  Do we give it back?  But then there were two additional components which made us think and one was now is the number so much higher?  Does that make sense?  Is that what we want to do?  And we also thought about now as we have the runout, what exactly is the situation next year? 

We have shown in the past numbers where we said we expect a certain amount of consolidation of the members, when there is no new space to get, and for that we thought it would be probably a good idea to now actually have a little bit higher reserves or be there there on the safe side for a certain amount of uncertainty in the future. 

So, now is the number too big or either doing one or the other, we thought it would be an awesome idea if we split it and offer the compromise of the 50:50 chance.  This is the part that got confusing unfortunately.  You will see then in the presentation the exact numbers and what they mean and one big part which we looked at, if we do 50:50 the amount of money we give back is roughly in the order of what we did in the last years, so what you have expected and kind of got accustomed to.  In the 50:50 example it is pretty much the same amount of money.  But I'll leave the rest for Gwen, otherwise I'll steal all other slides.  But of that the rationale for having three options. 

And then we'll talk about how that looks like on the ballot paper, how we vote and what the consequences are if you want option A, option B or the implicit option which is giving everything back if you are not voting for either 100 or 50% redistribution. 

Now, I hope I didn't make it more complicated than it was before. 

So far to the surplus.  

Joint meeting with the APNIC.  Joint meetings with other RIRs especially with the APNIC is something wins is he do quite a while.  That was actually the third and we do them roughly every three years.  We change:  One time they come to us, one time we go to them.  And now as the three‑year mark was coming we get an invite from APNIC board and said should we meet again?  We said yes.  So we joined their members meeting in Thailand, and had then a joint Board meeting with them the whole day.  This time it was actually a bit different, because usually had a little bit more free form and we talked about the various topics, we had agendas of course, but this time we actually had an external facilitator which guided us through different Working Groups which guided us through these parts you see in the last line.  What are the issues which we have in common and probably as combined RIRs we have to solve together because they affect all of us? 

RPKI was certainly one of them, DNS, RIPE Atlas is a good one to collaborate as well.  We also decided to actually use it that we don't have to travel another time and moved our Board meeting there, and then the briefing sessions as well so at the end we had like 20 hours of Board meetings in three days.  

Ongoing work.  This is the usual slide, not much difference.  This is what we do for you, as you have elected us, this is our role. 

The generic high level stuff which is supervising the strategic direction, more concrete finalising the activity plan and budget for 2020.  Engaging with you, the community and the members.  Work with the RIPE NCC management.  This ‑‑ we are the ones in the middle right between you and them.  And as I just outlined, cooperation with other RIR Boards.  

That's my slide or our slide to that. 

As you have seen in the NCC Services Working Group, Axel has decided to step down as the Managing Director.  For that, 'til we have hired a new CEO, have decided to put Filippe, Gwen and Kaveh in charge as the interim Managing Director.  The articles of the association actually allow that that you can appoint multiple people at the same time.  So as everyone, you clearly can see, has an expertise and will then cover a specific part.  This is how we will move forward for the time being. 

That has the benefit that we will have continuity and a stability, we thought about for a second do we go for external one, but the NCC is a very specific organisation and we thought this would cause more harm and confuse everyone more instead of actually bringing stability.  The three managers are in the company you know for a while or a long time, know exactly what they do.  We trust them, we interact with them so it was it was a natural thing to appoint them for the interim time. 

We will quickly start the search for a new Managing Director already talked about it in the board how that looks like.  Prepared the things, so we will keep you posted how that goes forward.  

The idea of course is having a transparent process, so what we will do is when we have finalised the details on our side, communicate with you.  We will use a third‑party external company and then go through that process.  So stay tuned on that.  

And with that, I want to say thank you, the whole board want to say thank you to Axel.  He has done a lot to support the membership.  He has also done a lot to support the board.  It is funny in a way because I'm now there since eight, nine years, which is already a long time, but Board members have changed over time, staff might have changed to a certain degree over time, but Axel was a little bit the anchor or the part which was always stable.  So we appreciate that a lot, and I want to say thank you for all the time and all your support. 


With that, the call for action as usual is the last slide.  We are here because you have elected us, you found it at a certain time that we would do that for you.  We are still very interested to hear what we should do and what you have in mind.  So, one option is, as usual, going to the microphone here as much as time allows, talk to us during the week in the hallway at social events.  You can discuss at the members mailing list as often enough happens to various topics.  We looked very closely at the survey which was also in the Services Working Group and you know get a high level picture where you think we should go where we are good, where not.  And of course, as some of you do, you can send us an e‑mail directly, so these are your options.  So, whenever you want to talk to us, please feel free and use them. 

And with that, any questions to that part before I hand over to Axel for the report?  No?  Good.  Thank you.  Sorry, Hi Randy. 

RANDY BUSH:  Have you considered using some of the surplus to stop the brain drain? 

CHRISTIAN KAUFMANN:  If with brain drain you mean churn in staff, I assume?  

RANDY BUSH:  Which as usual starts from the top.  You have lost some critical people.  You will lose more critical people.  

CHRISTIAN KAUFMANN:  To answer that question short, the answer is no, but let me give a little bit of a longer explanation.  

We are certainly aware of changes in the organisation, right.  So that is not too difficult to see.  We didn't see the surplus as a method to deal with that.  Nevertheless, the budget which Gwen will actually show has parts of that incorporated, so we are aware of it and we want, at least when it comes from a monetary perspective, I'm not sure if that is the only one you refer to, take care about that.  But, we didn't think about using the surplus for that, because we differentiated between like a one‑time big lump sum of money and then operational component.  Does that kind of half‑way answer the question? ‑ish?  Good.  Axel... oh, sorry, Erik.  It is the light, because it's blinding, so, forgive me. 

ERIK BAIS:  Not a problem.  Question to the Board.  Currently on the NCC website, there is a list with brokers stated.  This was very helpful in the beginning when we started facilitating, you know, that people knew who to contact.  Currently the list is quite extensive, and people are actually looking at the list as if they are approved by RIPE and this might, you know, this causes confusion with people in the community.  It would be my suggestion to actually take the list off because it's done its work, and if we hear things like that where it's actually a stamp of approval by the NCC, I think it's starting to work against us.  

CHRISTIAN KAUFMANN:  Okay.  The list was never meant as such, but you know that, I guess, most of us know that.  I see your point.  I guess we have the option that we think about it here, as in the Board, which is fine.  I'm not sure, just thinking aloud right now, if that is a question, like, for the mailing list where people have an opinion about that.  I actually don't know how the list came up in the first place, if that was an activity ‑‑ I know of its existence, but I actually don't know if it came up because members asked for it or if it was a service the NCC provided and therefore we can ‑‑ do you remember? 

ERIK BAIS:  When we started a couple of years ago, somewhere around 2012, 2013, it was a service decided by the NCC.  But there is actually a legal document that you need to sign in order to ‑‑ which, you know, indemnifies the NCC for certain things.  So there is a document that needs to be signed; Athina probably knows better than that.  But what we have heard in the last year from multiple people is that you all ‑‑ there is a certified list on the RIPE NCC; it's a concern that I want to address, and I think it's actually served its purpose and can be taken off.  

CHRISTIAN KAUFMANN:  Okay.  Thank you, we will look into it.  Rudiger.

RUDIGER VOLK: Just as an add‑on to Erik's remarks, well, okay, I kind of really thinking about what implications people take out of such publication, I, yesterday, heard some innocent remark that said, in the near future, v4 transfers will be only available by using agents.  And I think that's not an intended monopoly or ‑‑ well, okay, like, in Germany, if you do real estate deals you have to go to a notary, but I don't think we need to have that here.  

CHRISTIAN KAUFMANN:  Thank you.  Peter. 

PETER KOCH:  As a fellow German, you will understand that I can't do subtleties, let alone in the English language, but my gut feeling just is that the question Randy asked hasn't been fully responded to.  And I can't tell why. 

Now, the other thing is I learned that the RIPE NCC has introduced new management methods, I think it's called bureacracy or something that sounds very similar, and there is always a risk associated with that kind of thing.  And I'm not trying to spread rumours, I'm just thinking out loud.  Maybe you want to elaborate on ‑‑ potential conflict is the wrong word ‑‑ coincidences is probably the right word, I know writing subtleties, apologies for that, between introducing new management methods or hipster agility and you name it, and what Randy politely called brain drain.  Is that enough food for thought?  

CHRISTIAN KAUFMANN:  Yes.  Let me start and then we can see if Axel actually can put more puzzle pieces into it as he is closer to it.  

The system you are referring to it holocracy, but it's actually not so much about the name.  The concept is more interesting and important.  The idea behind it is that you have a self‑management, or self‑managing structure.  So, as you have the experts knowing what their role is in the various teams, and to actually give people certain influence on their job, but also on how they structure the job and do their part.  It is to ‑‑ it went away from a traditional siloed hierarchy.  The idea was also that actually the different silos or teams with the NCC work closer together and this is a tool to facilitate that. 

When we looked into it from a Board perspective, it was clear that it is probably not to the liking of everyone, so no question about that.  Nevertheless, we did not see it as a problem to the degree, you know, that everyone would leave, which I guess is not the case, and I come actually to two things in a second. 

So, we went ahead and supported that.  The management change right now is like three quarters‑ish done in the various teams and in the organisation.  And we, as the Board, said we want to have checkpoint where we actually see does it work and what does people think about it?  And when we talked either to the various teams ‑‑ and I actually was in the NCC as well and looked at how this dynamic works, the people who did it were mainly positive as far as I can see, there were certainly the ones a lot of neutral ones, because not every part of that transformation was actually sorted out.  But I would not say that the brain drain which was referred to is solely based on the management change. 

Good?  Any other ‑‑ Randy? 

RANDY BUSH:  I'll have to draw on my eastern European ancestors, for their lack of tact which I am notorious. 

What I see is more process, more blah, blah, blah, more lawyers, and I have little sympathy for that because of the v4 pressure creating problems, but just a little sympathy, not a lot.  And more blah, blah, blah about management and loss of core engineering.  I am here because of the engineering the NCC has always done.  The services that are based on the software etc., and I see the trade‑off moving.  Now, I am off in a canary in a coal mine, so I accept the fact that this isn't really that bad yet.  That's the direction I smell. 

CHRISTIAN KAUFMANN:  What we have seen from either surveys or feedback is actually specifically that the software engineers and the people which work in that field, because they usually work in the modern world in one or the other, they define how they distribute their work, were actually the most happy one about that.  If you have a specific brain drain in that area, I actually don't think it was related to that.  But thanks for the note nevertheless.  Rudiger? 

RUDIGER VOLK:  Seeing this information emerge, I'm a bit confused where I think I heard in this session a claim of transparency and I think in the previous session there was also some mentioning of transparency, and kind of at least a little bit of reporting about such changes I think would have been expected in someone operating transparency. 

CHRISTIAN KAUFMANN:  Yes and no.  So we never made a secret out of it that we actually do a transformation inside the organisation.  But then on the other side, how exactly the NCC works in the inside, right, which kind of team structure you have and which parts you do, is up to the Managing Director and the NCC.  That it is happening per se, I think we were actually transparent about.  Would you have expected way more details in that regard? 

RUDIGER VOLK:  Well I am getting old and a little bit fuzzy and kind of my input bandwidth is dropping.  So I'm not completely sure whether I missed something that was there, kind of it seems ‑‑ it seemed to me that well, okay, there was fairly little and certainly it was easy to miss. 

CHRISTIAN KAUFMANN:  Okay.  Thanks.  Good.  Then finally, Axel. 

AXEL PAWLIK:   Hi.  Not run out yet.  

Right.  So, the famous RIPE NCC activity plan and budget.  As you have it under your pillows I'm sure, and you probably know all about it already.  So, let's just skim through that quickly. 

Now, transparency.  It's ‑‑ when I came many years ago to the RIPE NCC, I was amazed by this thing that there was an activity plan, and that it was very elaborate and detailed.  Over the last couple of years, we heard a bit that it was too detailed and too boring and so we tried to make it better, but again, it's important you know what we are doing and how much of your money we are spending there so this is what this is about. 

So, a more concise overview.  We tried to whit he will it down to make it less boring, yet still conserve the information.  So, we are putting out explicitly what is changing, so that's probably more interesting. 

Then all the repetitive stuff that was in the early activity plans all the times because we need to fully document what we are doing, we have taken some of that out, but put in some links so you can still click through and find what out what we are talking about.  

There is one little thing here, the other services section has been removed and redistributed to where it belongs, the registry section mostly, so don't be surprised when you didn't see that or don't see that any more.  And we have a new notable investments section where that also goes a little bit across the company and not into just one activity. 

Strategic focus.  We have over the last many years tried not to hop around with strategy too much.  So, for the last three years we are fairly fixed in strategy.  Now with the survey just being out and just being reported upon, we will, of course, take that information in and kick off the next strategy round for next year and the year after.  So, so we can then change moderately and carefully, but in reply to what you tell us. 

Meanwhile, for next year, we stay with these three points, carry out effective outreach to stakeholders ‑‑ sorry, the first one, rethink service delivery incorporating a professional trust model.  We are rolling that out slowly.  

Ensure accuracy of the database and the registry. 

Outreach to stakeholders.  

Strengthen the global RIR system, ensure its accountability. 

And again, understand our members needs. 

That is not new. 

Usual disclaimers, FTE's, full‑time equivalents.  OPEX and Capex, I think you know what I'm talking about.  

Key activity areas next year, things that are actually expanding somewhat.  

So, on the very top level, registry, we do more services, we do more coordination, we do a little more internal, we do a little bit less, some efficiencies there. 

RPKI.  We see to my personal enjoyment that it is actually taking off.  We go around the world and other RIRs, meetings and see that yeah, yeah, yeah, it's really happening.  So we're looking at this and thinking we are playing a fairly important role here, somewhat central and we need to make sure that all that infrastructure is stable, is secure and works well. 

So, we are looking at that and we also, again, looking at the validator, not the back end but the front end and want to see whether we need to do something with that or not. 

So, looking at the strategic sections that would go into service delivery, providing reliable data and engaging with members. 

Training.  Have you seen the presentation?  I won't talk too much about it.  35 professionals programme, I think, is a very exciting thing.  So we put in some fund there.  Again it goes into service delivery and engaging with members.  

RIPE Stat.  Like I said, more than 70 million hits a day.  Scary.  So of course the data that we are sitting on that we are generating actually, generating data, it's so much, it's quite expensive, it becomes expensive, so, we are looking at, and I think that there were a couple of mails around already at sort of Cloud‑based services for a number of these things that we are doing internally, so you want ‑‑ we want to do this. 

So, this is extended collaboration are the other RIRs because the services is nice and worthwhile to get around the world. 

New analytic tools and visualisation.  I talked a bit about that earlier already. 

We do see an uptake, a significant uptake in things around due diligence and checking what our new members are telling us, and regulatory responses, just checking that we are prepared when regulatory action happens.  It might be diverging across our service region.  So there is more needed there. 

Other notable investments. 

That go into several activities across the board more or less.  Looking at the active registry monitoring, the certified professionals, the e‑Learning content generation in general, Cloud strategy, I started to talk about that, and the revised organisational model. 

What are we talking about?  We want to be a more proactive about that and go out to members and say, hey, we figured out that there are some things that don't quite make sense in your registry entries, can you please have a look at this and tell us about it and change them. 

And of course also because that's quite a bit of work, again like more than 25,000 accounts have some machine support for that as well, so same automated approach for this. 

Cloud‑First strategy.  As I started to say something that we are looking at.  This is also something that we get a bit of concern feedback for, like what happens to our data?  So before we do anything, we will, in individual cases, individual projects talk to you and inform you and get your feedback before we do anything that you might not like. 

Revised organisational structure.  That's the whole accuracy thing, it's a funny name, I know.  I am happy to talk about that but maybe the GM right now is not necessarily the right place.  I am happy to engage with you later on, next couple of days, to go into some details there. 

I think it fits very well the structure of the community and the whole bottom‑up industry self‑regulatory process, mirrors that to some degree inside of the organisation. 

So, the budget numbers. 

Next year's budget is conservative.  It's focused on consolidation.  We are frankly saying we have no idea how many accounts we will have next year.  Currently we have more than 25,000.  We know that most likely, quite a number of them will consolidate into one account, we will, of course, have new members.  So, we are saying, probably by the end of next year, 23,000 accounts.  Maybe more.  Maybe less. 

The increase ‑‑ the decrease in income we think might be based on that 12%.  We have a budget increase of 4%, relatively moderate.  No extra FTEs and we still have an anticipated surplus of more than 3 million.  Again, the income is always very hard for us to control, so we budget carefully, conservatively.  The point is that we need this organisation to be stable for you, and we are very confident that this is sensible.  Over the course of the next year we'll see what really happens and actually, I think, over the course of  '21 we'll even have a better understanding of what's happening after v4. 

But yeah, that's the sort of the cornerstones of the budget there. 

If you look at it, and of course the last tick there to the right is projections.  FTE is stable.  Budget growing slowly.  And LIRs we see for the first time in so many years we expect for the first time in so many years a decrease in LIR accounts. 

That's it.  High level summary of the activity plan and budget, but you knew that before, didn't you? 

Any questions, please?  And if not?  Thank you. 


CHRISTIAN KAUFMANN:   Thank you, Axel.  That brings us to point number 5, the financial update and the redistribution I promised from Gwen.  

GWEN VAN BERNE:  Thank you.  Thank you Axel.  On behalf of staff also I really would like to express my gratitude for your strong leadership over the last 20 years. 

Okay, it's my responsibility to do an official update today so we have prepared an agenda to share with you some key financial facts, also some key financial trends, and mostly to share with you some more details about the first resolution on the agenda for today, which deals with the financial surplus for this year. 

So, why do we have financial strategy?  Of course to make sure that we can continue to deliver our services.  We need to make sure that we are predictable and also that we can fulfil our obligations towards the membership.  We're a non‑commercial service provider and your trust is extremely important, that is also why we always want to give full insight in our key financial data to make sure that you understand how we are utilising your money. 

So, also for today, we have prepared a couple of slides that will give you some more insight into the efficiency gains and also in the efforts cost development per LIR and also some more data about our risk appetite.  

Some key highlights looking at the most recent available data.  It's quite clear also Axel, of course, talked about it, that the revenue will be really substantial this year, above budget.  We're looking at more than 2 million more than originally anticipated.  This had to do with the enormous influx of new members, because of the IPv4 runout.  I think we saw ‑‑ it happened 500 LIRs roughly quicker than we anticipated.  So one year ago.  And also, the expenses are below budget, also more than 2 million below, that had to do that we invested and spent a little bit less in IT than originally anticipated, but also because we realised some efficiency gains.  And I think overall, it's also a nice result and it shows that we're very prudent also with how we are using your money. 

Of course Axel already talked about it, that the future income development will be impacted.  We know for sure that we will see deactivating account holders, deactivating members.  It will happen but it's very hard to predict the exact effect, but we are, of course, anticipating in our predictions and in our plans that there will be also an outflux of LIR account holders. 

The expense management is under control, which you also saw in Axel's presentation, so we are consolidating our budget and we make sure that the FTEs stay flat and that we're very smart looking at the really needed investments and where we can save even more money for you in the future. 

The main topic for today is really to talk about the enormous spike in income this year, the financial surplus, and to see how we can use that funding in the best way possible, and our proposal really is to preserve the financial surplus also for improved stability in the long‑run.  But I will tell you a bit more about that later in my presentation. 

This graph gives a really nice and clear overview, I think, about the most important key financial data for the RIPE NCC.  I think it's really good that you look at the yellow and pink bars, so look at the trend there, and of course also the pink one.  The pink one deals with the surplus.  And here you can clearly see the enormous spike in the financial surplus in this year.  We're talking about roughly 15 million euro, and that, of course, we all know where that is coming from with the IPv4 runout effect.  But you also see, of course, in blue, the income line that the show a drop off next year.  So, this, for me also really clearly shows that there is good momentum now to be talking about how we can utilise the financial surplus to also make sure we build up our buffers for the long run.  

The 2020, of course, is a budget projection and 2019 is the expectation for this year, but the numbers will give a very good indication.  

These are our financial performance indicators, I think that the highlight in this slide is the redistribution amount per LIR.  If you look at the surplus, almost 15 million, if you divide it by the expected amount of LIRs that we're going to have in the end of the year, it will be a bit more than 25,000, but let's assume that it's 25,000.  You are looking at an average redistribution per LIR of almost €600.  If we would ‑‑ if you would vote for the option B, the 50% option, as already explained by Christian, you are talking about a redistribution per LIR account holder of almost €300. 

The average cost per LIR is a really nice line and I'm going to show you that also later on in my presentation. 

So efficiency gains.  So, as I promised to you, to our membership we will always include a slide about the efficiencies gains that we are realising for you.  Last year we have done a lot of work in our administrative processes and I really want to thank you also for your support, because also what was shown in the earlier services presentation, that the billing process, we had to do a lot of changes and I know for some of you they weren't always favourable but were very happy with the fact that our processes has simplified enormously, so we will be able to reduce a lot of ticket handling, also a lot of traffic back and forth between the members and us.  So it really reduces and frees up a lot of capacity, which is really good. 

I think also, efficiency gains were realised in IT infrastructure and also in the way how we communicate and how we deal with tickets.  So the number of tickets that has to do with questions and processes has been reduced as well, and we plan to show you more information about that also in the future. 

Also next year's budget and activity plan as shown by Axel also incorporate some efficiency gains.  So, for example, in internal staff costs we do expect that we can reduce between 200 and 300 thousand euro, that will allow us also to invest in other areas such as software development and engineering to make sure that we balance out the costs also in a good way over the people that work for our organisation. 

So average cost per LIR.  This is, of course, a great trend line.  Beautiful result also in this year because of the enormous amount of LIRs that we currently have and because of the cost levels that we're looking at.  Of course, the trend line will go up next year.  We have to be honest about that.  The exact direction is really hard to predict at this moment because of the volatility in membership.  Axel already indicated that we expect to be looking at, it's an indication but roughly 23,000 members in the end of next year.  We expend an outflux of a couple of thousand members.  We still do expect that in our predictions this 500 new members will join our organisation, which is almost ‑‑ I think it's a reasonable amount but we have to see, of course, what the underlying trend is and how this really is going to develop.  But of course we will continuously communicate to you what the average per LIR level is doing in terms of financial results. 

So, the redistribution of the financial surplus.  I think this is, for today, a very important topic, because today you are going to decide whether you would like us to return the excess paid fees via a redistribution to the membership, or whether you will allow that we're going to build up capital in the RIPE NCC clearing house reserves. 

Christian already explained in his introduction, the purpose of these reserves, and it's very important, I think, that you realise why we have them.  It's, of course, also my role to look at the financial interests of the membership at large and also to protect the assets of the RIPE NCC.  So we always have to balance these out.  And I need to make sure, of course, that we have sufficient funding to continue our service delivery in the future. 

As part of this strategy, we are also maintaining a low‑risk appetite profile.  I think it's important that you know, to make sure that our service delivery stays predictable and guaranteed. 

I think it's also important to know again, so the original ‑‑ before we go into the redistribution discussion ‑‑ so we're talking about the preservation of capital, and there is a Board resolution that dates back to 2002 where it was stated ‑‑ Christian highlighted it also in his talk ‑‑ where we stated that we want to remain an equity level, a financial reserve level, that equals our yearly operational expenses.  So it's a capital expense at over a hundred percent.  I think it's important to realise that when we're going to discuss the different resolution alternatives. 

So what are the resolutions that we're going to present to you today? 

The Executive Board is proposing two options for the redistribution.  

Option A:   Will allow that the total 2019 financial surplus, roughly 15 million euro, will be added to the clearing house reserves. 

Option B:   States that 50% of the 2019 financial surplus will be added to the clearing house reserves and 50% will be redistributed to the membership in 2020. 

If neither option is approved, the total financial surplus will be redistributed to you, to the membership, according to the existing clearing house procedure. 

So you really do have three choices.  You can reject also the two proposals that we're giving you today and that will make sure that the financial surplus is being redistributed to the membership via a discount on next year's membership contributions. 

So the Board is advising to vote for option B, because option B is really a very good compromise, because it allows us to build up capital and we'll reach a very acceptable limit.  But also, it gives predictability because the last years we were able to redistribute quite substantial sums to the membership and option B will make sure that you will have the same return as in the previous years. 

I think this slide really nicely shows that to you, so what we have done there is we have made an average calculation between 2015 and 2018, what the average amount was that we redistributed, and as you can see in the orange line, it was around 6.5 million.  And if you would vote for option B, that's the green bar, we would return to the membership 7.4 million euro, which is even a bit higher than the average.  

So I think in terms of financial predictability, the membership contributions and also in terms of adding capital, this is really a beautiful compromise and a very good and strong voting option. 

Why is it also worth to really seriously consider option A? 

Therefore I would like to share some more data around our capital position.  So the current capital position stands at 25.4 million, and as I tried to explain before, we use the capital expense ratio as our target level as our financial reserve metric, and we aim for a 100% but the current capital expense ratio is 91%.  If you look at the estimated budget for 2020, which is 34.4 million, that indicates a need to build up capital with at least 9 million.  

How it works, our clearing house reserve structure also with the tax authorities, if we accumulate capital within the clearing house reserves, it's free of paying taxes.  But if we now want to add the financial surplus to the clearing house reserves, we do need to pay a normal corporate income tax.  That has changed in the last tax ruling with the Dutch tax authorities.  There was in 2014 ‑‑ it makes sense, of course, because you don't want to be seen as a vehicle that circumvents tax payments in any way, so it's very sensible that we have to do it.  But it's also important to note. 

So option A, we have to pay taxes over the surplus.  But it will allow us to add 11.1, roughly, million to the capital reserves which then generates a capital expense ratio of roughly 106%.  

Option B will add 5.5 million.  And that again brings it up to an acceptable level of 90%. 

When A and B are rejected, the capital expense ratio will likely decrease, the indication is there, 74%.  Each LIR will retrieve almost €600, but yeah, we do hit a lower level and then we have to see, of course, how we are going to deal with that in the years to come.  

So, again, my key message for today was really to seriously consider to add capital to the clearing house reserves, because it will allow us to balance the effects of volatility membership, which are there, we know that they are, and we acknowledge them.  But it will be good to be able to balance them out completely, so it will, I think, also allow us to go through these transition periods.  And also, if we're going to preserve capital, it will allow us to balance the reserves with our yearly operational costs, the original Board resolution from 2002, which gives a good indication for that measure. 

But again, really, I think both options are very good options and option B is, of course, the advised option because it gives the nice compromise and you will get also a return which is comparable with the last years. 

Any questions? 

AUDIENCE SPEAKER:   Circa.  Thank you for your presentation.  Did I understand correctly that the capital reserves are different from the financial reserves of the association? 

GWEN VAN BERNE:  It's the same, the equity and the financial reserves, the position is the same. 

AUDIENCE SPEAKER:   So then, the investments made by the Treasurer is a different instrument, a different position in the balance sheet, right? 


REMCO VAN MOOK:  Let me try to clarify the tax difference.  Any result that we create out of an assessment made out of the clearing house gets added to the reserves tax free; That is part of the ruling of the tax authorities.  If, however, we want to take a part of the annual operating result and add that to the clearing house, then we need to pay normal corporate taxes.  So that's the distinction that was ‑‑ and that's there in the ruling of the Dutch tax authorities.  

AUDIENCE SPEAKER:   Can you tell me the tax rate for the option A and B?  Is it the same rate? 

GWEN VAN BERNE:  The corporate income tax analysis you pay 19% over the first 200,000 and above that 25%. 

AUDIENCE SPEAKER:   Okay.  Thank you. 

AUDIENCE SPEAKER:   Freddie.  If you have a déjà vu, then that's intended.  The question I have is, can you figure the 19% and your 25%?  So option B, how much would that cost?  And option B how much would that cost?  So should we support the ‑‑ as a non‑profit organisation, should we support the Dutch government with our money?  I'm strongly against increasing capital, because we are a non‑profit organisation.  We can live with the money we have.  We could ‑‑ if anything goes wrong, we could reduce our expenses.  Could we have that slide again with the membership fees?  The membership fees, please.  What I want to say, five, six years back we paid about €2,000 membership fee.  Nowadays we pay much less, and has anyone a problem if we run out of money to increase the membership fee by 50 or €100 per month?  I mean, that curve looks almost like IP transit cost curve over the years.  So, we don't need any more money.  We already have 25 million on the bank account and why should we just pile up more money?  And I keep saying this for years and that's why you have a déjà vu, and I mean, the policy only changed when the tax authorities stepped in and asked for money.  So, my question is:  Can you please say how much exactly option 1 would cost, option A would cost, and option B, in millions? 

GWEN VAN BERNE:  In terms of tax ‑‑

AUDIENCE SPEAKER:   Yes, how much would we have to pay to the Dutch government?  And as I just recommend to know for both options because we don't need any more money now. 

GWEN VAN BERNE:  So in option A we would roughly pay, what is it, 4 million euro to the tax authorities.  Under option B we would roughly pay 2 million.  

AUDIENCE SPEAKER:   That's your money guys. 

REMCO VAN MOOK:  I'd like to make a couple of observations and correct a couple of things that Freddie said. 

First of all, we approached the tax authorities, they didn't come to us.  And the reason for that was that the tax ruling that we used to have dated back from 1997 back when the RIPE NCC had about 500 members and reserves that were negligible, and the tax ruling actually allowed us to build up reserves to three times the annual turnover before any corporate taxes were due.  Back in 1997, with the numbers from 1997, that was a very tenable and acceptable deal.  After taking advice from our tax experts, back in 2013, 2014, we then said, well, the tax authorities can come back on their own volition at any moment and say, well, this deal was really weird, we're going to cancel it altogether, and then we'd have been paying corporate taxes for every year since.  So, we decided let's approach them and see if we can come up with a new model.  This is what we ended up with.  And as a result of that, we have since redistributed about 25 million of excess contributions. 

So, if it maintained the old system, the current capital position would be somewhere probably between 45 and 50 million, which is, I agree, is ‑‑ I mean, that would have been a stellar, high and unnecessary high amount. 

What you were saying about raising contributions in case we run out of money, well, the problem with that is that the same people who say give me my money back right now will then have to say, I will gladly give you more money and from a continuity perspective, there is a risk in there that I, as Treasurer, would not prefer to take. 

RANDY BUSH:  Apologies for the length of this. I also want to insert a caveat that though I am a member, I am not yet a voting member.  So, take me with less seriousness than you normally do.  

I think if I fiscally, we have two major responsibilities.  One is to take the organisation forward and I think we were talking about that a little while ago.  But the other is to be prudent, and I find the truth is, I have worked in other organisations of this scale and smaller and larger, and 100% of the yearly expenses is not that large for a reserve.  And I think in a possibly very risky space, and I don't think we're verbally confessing that, that big spike in membership can be accounted for, in large part, to speculation, and when that comes transferable in two years, they are going to sell it to people with big money.  So it's not going to go one to one and you are going to collect the same rent.  They are going to sell it to existing members, which means income could take a serious hit.  That would have long‑term serious hit.  Enough said. 

GWEN VAN BERNE:  Thanks Randy for adding that to the conversation, it was a really good statement. 

HANS PETTER HOLEN:  My thoughts are along the same lines with another comment.  The money I get in a couple of hundred euro is not a big part of my budget.  I realise that that can be different from other people.  And then since my surplus increases, I have to pay taxes to Norway instead, so it's the question of do we pay the taxes in the Netherlands or all across the service region?  So ‑‑ the other point is along Randy's lines, I am more concerned about continuity and the last 10,000 of the LIRs who just became members to get a slush something sells them to somebody who is already a member and those are consolidated, something happens to the revenue stream here.  And then changing the LIR fee to a higher level again, that takes a couple of years, because you don't approve next year's fee, you approve the fee the year after there.  So it's kind of turning the ship along takes a while. 

GWEN VAN BERNE:  Thanks Hans. 

RANDY BUSH:  I would rather pay the Dutch or the regional government than the American. 

CHRISTIAN KAUFMANN:  Thank you Gwen.  Good.  Next one is Linda with point number 6, and she'll present the second resolution you can vote on today. 

LINDA SLAAKWEG:   Hello, my name is Linda Slaakweg.  I am legal counsel with the RIPE NCC and I am here to present on the amendments to the Articles of the association.  As Christian just said, we want to introduce an option that isn't one as not just we have right now for the elections of the Executive Board, so for the persons, but also for all other resolutions. 

So, what is instant runoff voting?  This is the most important thing to explain here. 

Normally, when a resolution gets approved, it needs to have the absolute majority; it needs to have more than 50% of the votes.  This goes well when there are two options, but it becomes a bit more complicated when there are more than two options.  So in that case, the voter will pick the option in order of preference, the first, second, third, if there are more, it goes on like this.  If after the first round of our voting, none of the options has the absolute majority, the option with the least votes will be dropped.  So that means that all of the ballots assigned to that option, they will recount them for the second preference on that ballot.  And this will go on until one of the options will have the absolute majority of the vote. 

To keep in mind is that when there are more than two options with the same amount of least votes, so the two in the bottom, the option that will be used for the following round or will be dropped will be decided by their own loads.  This will also be done when at the end of the voting the vote stays so there are only two options left.  Again the decisions will be made by drawing lots. 

So, I just explained the process.  The actual text, which is kind of the same, can be found on the GM page on  And also, when this will be approved by you, the numbering will change.  So from 8.5, 8.6. 

Are there any questions? 

AUDIENCE SPEAKER:   I mean, I can imagine in ten years we'll have eight options on the ballot like distributing 10%, 20%, 30%, 40%, sorry, I have to stop somewhere.  So, do you see any practical implications?  I know it's good to have this feature, but what is like the scenario?  I just want to know. 

REMCO VAN MOOK:  So, I think you are just going to have to trust the Board on the number of voting options.  One of the main reasons why we want this in here is, well, we accept this is the slight, slightly messy first resolution that we have for this General Meeting, which is this, if I want this, then I vote no on this and yes on that or maybe yes and then no, do I vote two yeses or two nos.  Instead of that you can just indicate this is my first preference, this is my second preference, after that don't care.  Same as you do with a Board election. 

AUDIENCE SPEAKER:   Yeah, but you know we can all do binary math.  So I got it.  So that's only for that. For the multiple choice. 


ANNA WILSON:  Along similar lines.  Yes or no options, yes and no questions are good as a rule.  But, we have had plenty of resolutions over the past number of years where we have really needed this.  So I'm really glad to see it.  I would, in the spirit of the last comment, like to encourage the Board, the Board's relations are valuable, and putting something out as this is our recommendation, please accept or reject it is a very valuable way to put something and is a great choice to give most of the time.  So, I would like to say that if this is approved, then now that there is a hammer, not everything has to be a nail.  But, there are certainly situations where we need this and I am glad to see it come up and I'll be supporting it. 

AUDIENCE SPEAKER:   I'm actually also glad for this instant runoff and maybe because I didn't hear this, hear this my comment in this forum yet.  This system actually solve the problem that we have now with the current situation because in this situation we have option A and option B and if option A has more than 50% yes votes, even though it would be less than number of yes votes for option B, the option A would win.  That means that option A has more chance to win than option B.  So, that means that actually the other of those options is somehow significant for the result of the votes and this instant runoff system will facilitate it.  That's why I strongly support it.  

REMCO VAN MOOK:  Thank you. 

CHRISTIAN KAUFMANN:  Thank you Linda.  And thanks to the people who commented on the various surplus options before. 

So now as you might have formed an opinion on what you want to vote, we'll tell you how to fill it out for this version. 

ULKA ATHALE:   Good evening everyone, and if I'm presenting, it means we're wrapping up with the GM and we can all go eat in a bit. 

To try to figure out the clicker.  Before I get to the voting instructions, let me give you an overview of who is voting this evening.  We have a total of 18,000251 eligible voters, and 2,000 and 23 votes registered, someone registered by the time I picked up my laptop from the detection, got over here and uploaded my presentation.  So I'll update the number.  This represents 11% of the eligible voters who have registered to vote, that's actually a higher turnout, probably the highest we have seen for an October GM, and our voters this evening come from 82 different countries. 

The top 5 voting countries, unsurprisingly, Germany and Russia in the top.  Because unsurprising because these relationship countries where we have large membership numbers.  So it's not just the people in this room voting but people from around the world.  

So, this evening, at this General Meeting, there are two resolutions to be voted on and for both resolutions you are voting alternatives are yes, no, or abstain.  And for all the options and all the resolutions, please keep in mind that abstentions are noted but they do not count towards the results. 

So, for resolution 1, it has two parts.  Option A and option B.  And this resolution will be voted on sequentially.  What this means is that the votes will first be counted for option A.  Option A requires more than 50% yes votes to pass.  That's more yes votes than no votes, just so that we're crystal clear.  Abstentions are noted but they do not count.  

If option A receives more than 50% of the yes votes, it will be adopted by the General Meeting.  In this case the results for option B will not count. 

Votes will be counted for option B only if option A has been rejected by the General Meeting; that is if option A receives less than 50% yes votes.  So option B will be adopted if, first, option A has been rejected; it's received less than 50% yes votes, and additionally option B receives more than 50% of the yes votes. 

So, what happens if both option A and option B are rejected?  That is both options receive less than 50% of the yes votes.  In this case, the RIPE NCC 2019 financial surplus will be redistributed to the membership in 2020 according to the existing clearing house procedure.  

Moving on to resolution 2.  Once again your voting alternatives are yes, no or abstain.  And this resolution requires more than two‑thirds yes votes, that is 66.6 percent, to be adopted, because it amends the RIPE NCC Articles of Association.  And once again we note the abstentions but they don't make a difference for the results. 

So how can you vote this evening? 

So voting will begin once the Chairman declares it to be open. 

If you are voting by paper ballot, that's for attendees only, you have to be physically present here in the room, and you must hand it in to the designated vote collectors before you leave the room.  We have two very fine champagne buckets, Michael over there and I will have one each and we will collect the votes as soon as voting begins.  Please keep in mind, you must hand in your paper ballot before you leave the room.  If you forget to hand it in and leave the room and then want to come back, it's very messy and we won't take it, so please find us and the champagne buckets before you leave. 

If you are voting electronically and you could be an attendee here or you could be one of our remote participants, electronic voting will begin also shortly after the Chairman declares it to be open.  And you can cast your vote until 9:00 a.m. on Friday morning Rotterdam time.  So that's UTC plus 2 on the 18th October. 

So, this is what our paper ballot looks like; it's a nice short ballot, is just three sets of things to tick.  Please make a mark in one box only.  You can make a tick mark, you can make a cross, you can fill it in, but what's important is that your choice is crystal clear.  And once again, please hand it in.  Don't forget. 

If you are voting electronically, at the point you should have already received an e‑mail containing the link to the big pulse voting platform.  Please don't share your link.  It is unique to you, just like your fingerprints, and when you click on the link you will be taken to the Big Pulse voting platform where you can cast your vote.  And once again, I remind you that electronic voting closes at 9:00  a.m. on Friday morning Rotterdam time.  

We count the votes using Big Pulse, a third‑party system.  So those of you who vote electronically your votes are directly entered into Big Pulse and for those of you who are voting by a paper ballot, after we collect them, they will be sealed and stored in a safe until Monday morning.  After the electronic voting deadline has passed at 9:00 a.m. The paper ballots will be entered into Big Pulse under the observation of independent observers from other RIRs, and I would like to thank Craig and Robbie Mitchell of APNIC who are the independent observers for this GM.  Thank you. 

And for the voting results, on Friday, the 18th October, this GM will reconvene back in this room at 10:45 local time and the Chairman will announce the results.  If you are watching this via web stream, you can watch the results using the same link. 

And I wish you all happy voting.  Thank you.  Any questions? 

CHRISTIAN KAUFMANN:  Thank you.  So, then I guess everything is crystal clear now, Which brings us to the last point number 7, the voting on the resolution.  That is my favourite part where I can read them. 

Let's start. 

Resolution number 1:   

Option A:   "The General Meeting approves that the RIPE NCC 2019 financial surplus will be added to the clearing house reserve."  

Option B:  "The General Meeting approves that 50% of the RIPE NCC 2019 financial surplus will be added to the clearing house reserves and 50% of the RIPE NCC 2019 surplus will be redistributed to the membership in 2020." 

We talked about that.  It should be all straightforward.  

And resolution number 2. 

"The General Meeting adopts the amendments to the RIPE NCC Articles of Association." 

Any last question, comment, to the voting part?  No?  

Well then ‑‑

AUDIENCE SPEAKER:   Martin Levy.  Could you explain why A was A and B was B and why they were in that order?  Has A has precedence over B? 

CHRISTIAN KAUFMANN:  They are going up the 50 is in the middle and then zero, hundred, that was the only part.  Because with the first one you have basically zero right and then with the second you have 50, so the third one is the hundred, so it's just going up.  There was otherwise no particular logic. 

REMCO VAN MOOK:  So, legal convention is that if you have a resolutions that you stagger in this order, you start with the one that has the most impact and then you go down from there.  And that's why this ‑‑ they were in the order they were in.  

CHRISTIAN KAUFMANN:  So I learned something new.  Thanks. 

Good.  And with that, the General Meeting will reconvene Friday, same room, 10:45 and then we will report on the two resolutions. 

Then thanks a lot and have a good evening. 

And with that, I open the voting.  Thanks.  

The meeting convened until Friday.