Minutes – RIPE NCC General Meeting November 2014

1. Welcome, Preliminaries

The RIPE NCC Executive Board Chairman, Nigel Titley, opened the RIPE NCC General Meeting (GM) at 18:05 UTC on 5 November 2014 and welcomed attendees.

2. Financial Update and Outlook 2014

The RIPE NCC's Chief Financial Officer, Jochem de Ruig, gave the financial update from the RIPE NCC and the outlook for the rest of 2014.

3. Report from the RIPE NCC

The first part of the RIPE NCC reporting for the GM was presented in the RIPE NCC Services Working Group at RIPE 69. This took place on 5 November 2014 from 16:00-17:45 UTC. General Meeting attendees that were not registered for the RIPE Meeting were welcome to participate in the RIPE NCC Services Working Group session.

4. Draft RIPE NCC Activity Plan and Budget 2015

The RIPE NCC's Managing Director, Axel Pawlik, gave a presentation on the Draft RIPE NCC Activity Plan and Budget 2015.

A member asked why the RIPE NCC surplus was so big and what the surplus is used for.

Axel explained that the RIPE NCC aims for a neutral budget but the influx of new members and associated income is difficult to predict. He said that the Dutch tax authorities allowed the RIPE NCC to accumulate up to three times the annual turnover in the RIPE NCC reserves without being taxed but this situation would change if members approved the resolution. He added that the RIPE NCC does not want to spend money on activities without consulting the membership, so the members should let the RIPE NCC and the Executive Board know if they believe surpluses should be spent on specific activities.

A member said that the RIPE NCC has handled the delicate balance between bureaucracy and workability very well in recent times. He asked if benchmarking was carried out by the five Regional Internet Registries (RIRs) with respect to their financial matters. He said that by publishing a comparison of the figures for the five RIRs, it would be easier to assess whether the resources allocated to certain functions was justified.

Axel said that the RIPE NCC looks at what the other four RIRs are doing but there is no formal benchmarking. He noted that the RIPE NCC carries out different activities from the other four RIRs, which makes benchmarking a difficult task. Axel also suggested that the member look at published Annual Reports from the other RIRs, which would give some indication without being a direct comparison.

A member said he disagreed that membership growth and associated income increases were uncontrollable because the growth is a consequence of no longer giving Provider Independent (PI) space to non-RIPE NCC members. He noted that this was not decided by the membership but rather in the Address Policy Working Group.

The RIPE NCC Executive Board Treasurer, Remco van Mook, said that one reason the surplus is high is that the Charging Scheme for 2015 was decided in May 2014. He said the number of new members had to be predicted based on the information available in May. He concluded that the surplus to a large extent represents the gap between what was predicted then and what turned out to be the case near the end of 2014.

A member asked how the RIPE NCC would handle this situation for the next year.

Axel said that the resolution put before the GM would address this situation.

A member said he was pleased to see that the Activity Plan noted completion of a production-quality delegation system and having the Resource Certification (RPKI) system audited. He said that beyond the Certificate Practices Statement (CPS) there are process details that are needed and that should be subject to an audit but are not documented in the CPS. He said the audit details should be published openly for the community to review and discuss. The member also asked if the RIPE NCC would support the Global Trust Anchor test-bed activity with ICANN/IANA.

Axel said there was no change in the status regarding the Global Trust Anchor and that the RIPE NCC would not be taking part in the joint test-bed with ICANN/IANA in 2015.

The member said there was a question within the IETF about how resource transfers would be modeled in the RPKI by the RIRs. He said he was waiting for a contribution from the RIRs on this matter and he suggested that it would be a good idea to add this to the relevant section in the Activity Plan and Budget.

Axel said that the RIPE NCC would make a contribution to the IETF discussion on this matter.

A member asked if the RIPE NCC had considered reducing the sign-up fee for new LIRs, considering the fact that each new LIR is entitled to receive only one /22 of IPv4 address space.

Nigel thanked the member for his suggestion and said the Executive Board would take this into consideration when proposing a new Charging Scheme to the membership in 2015. He also noted that reducing the sign-up fee for new members would not reduce the number of new RIPE NCC members.

5. Report from the Executive Board

The Chairman of the RIPE NCC Executive Board, Nigel Titley, gave the report from the RIPE NCC Executive Board.

6. New tax ruling, the updated RIPE NCC Standard Service Agreement and the updated Clearing House procedure

The RIPE NCC's Chief Financial Officer, Jochem de Ruig, explained the new RIPE NCC Clearing House Procedure and how it would lead to the RIPE NCC Standard Service Agreement (SSA) being updated if approved by the membership.

A member asked what would happen with the tax situation if the membership rejected the resolution to be voted on.

Jochem said that the authorities would take the position that the RIPE NCC is subject to corporate income taxes on its surplus.

A member asked if the new provision in the SSA would allow the members to decide to distribute the full amount in the Clearing House among them. He noted that this was typical for a Dutch membership association.

Remco said that this was a possibility if the membership proposed a resolution to do so and voted to approve it.

A member asked what the rate of tax on the surplus would be if the membership rejected the proposed SSA.

Jochem said the rate of tax was 20% up to EUR 200,000 and 25% above that amount.

A member asked if any member in good standing would receive a share of any redistribution at the end of the relevant year even if they had only become a member in October of that year. He said such a scenario could be a potential money-spinner for new members.

Jochem said that a member joining the RIPE NCC in October would only pay one quarter of the annual fee and would therefore receive a much smaller share of the redistribution. He also noted that new members were still required to pay the EUR 2,000 sign-up fee.

Remco noted that in the example given by Jochem in his presentation, a surplus of 1 million euros would lead to a distribution of approximately EUR 80 to a new member signing up in the last quarter of a year.

A member asked if the surplus had to be redistributed to members or if it could be spent on internal RIPE NCC services such as training.

Nigel said that this related to the RIPE NCC Activity Plan and Budget and that the member could suggest amendments to this document on the members-discuss mailing list.

Remco said that the RIPE NCC could not allocate resources to any activity in retrospect. He also noted that the new ruling from the Dutch tax authorities is very favourable for the RIPE NCC because it does not affect the current reserves and it does not affect any capital gains on the current reserve.

A member noted that the members could vote each year not to redistribute the surplus, in which case the surplus would be taxed and added to the reserves.

Nigel noted that the resolution relating to the new Clearing House procedure, and which would be voted on at agenda point 8, was as follows:

"The General Meeting approves the updated RIPE NCC Standard Service Agreement”

7. Charging for AS Numbers

Nick Hilliard, INEX, gave a presentation that asked members to discuss the option of having the RIPE NCC charge for AS Numbers.

A member said that he did not agree with the removal of the AS Number charge from the Charging Scheme but it was not possible to vote on that individual aspect of the scheme. He said that as a member, he had no problem with charging for AS Numbers as the amount would be a nuisance rather than a burden. He added that charging for AS Numbers might also prevent a situation in which a large amount of AS Numbers is requested and this work takes up a lot of the RIPE NCC's personnel resources.

A member asked if the cost of an AS Number was envisioned as being the same as for a PI assignment. He also noted that charging for AS Numbers should not lead to further problems with a larger RIPE NCC surplus.

Nick said that he saw no reason to charge differently from other number resources, although this was a matter for the RIPE NCC Executive Board to consider.

A member asked if the proposal was just to charge for 16-bit AS Numbers or both 16-bit and 32-bit AS Numbers.

Nick replied that he saw no reason to discriminate between the two types of AS Number.

The member said that there was previously a charge for AS Numbers, then it was removed, and now there is a discussion about reintroducing a charge. He said this was not consistent and affected members' own processes and budgeting concerns. He said the Charging Scheme Task Force recommended removing the charge for AS Numbers and he added that he does not support reintroducing the charge.

Nick said that the task force had good reasons to make that recommendation at the time, but now that there is a policy proposal in place there should be a dampening mechanism put in place to protect the pool of AS Numbers.

The member said there was nothing to stop him from requesting a large number of AS Numbers at the moment.

Nick said that the RIPE NCC approval processes and the multihoming stipulation in the current policy meant that there was an effective dampening method on the amount of AS Numbers that could be requested.

A member said it would be unlikely that members would attempt to hoard AS Numbers. He said he is more concerned about the effect any change in the current process would have on the RIPE NCC's resources. He concluded that he would be in favour of a fee for AS Numbers but he asked what an appropriate fee would be.

Nick said that, historically, people have hoarded anything that is a limited resource, and 16-bit AS Numbers are a limited resource.

A member thanked Nick for the presentation, saying it was fortunate that the financial implications were being discussed at the same time as AS Number policy discussions rather than afterwards. He added that while consistency in charging was important, it was also necessary to review the situation in light of a changing environment. He also agreed that, in principle, it was a good idea to charge some amount for an AS Number although it might be too early to make specific proposals on the fee until the policy becomes clearer. He concluded that specifically charging to prevent resource hoarding should not be the point but rather the work that the RIPE NCC must carry out to assign and manage the resources should be paid for.

Nick agreed that that the justification could indeed be that charging would be a resource recovery mechanism but a side note could be made that it would also have a dampening effect on the number of AS Number assignments.

A member suggested allowing all LIRs a certain amount of AS Numbers and then charging for any extra assignments. He said this would ensure no charge to legitimate AS Number users who had no intent to hoard.

A member asked if it was proposed to charge a one-time fee for new AS Number assignments or to charge for previous assignments as well as new ones.

Nick said that this would be a matter for the Executive Board but that he would prefer a system in line with how PI assignments are charged.

The member said the reasoning used to charge for new AS Numbers could also be applied to new /22 IPv4 allocations. He said that he was opposed to charging for AS Number assignments that were made in the past.

A member said that he did not agree with the problem statement and suggested that the Executive Board reconvene a Charging Scheme Task Force to review this proposal.

A member said that he opposed the idea of charging for AS Numbers because such a charge would only increase the value of the AS Numbers for the organisation hoarding them.

A member said that the Charging Scheme was changed in 2012 to allow for a one LIR-one fee system, but the fee for PI space was not removed. He also said that the implications of charging for AS Numbers for having a neutral budget would also need to be examined. He said it would be interesting to see what the impact of charging 50 euros per AS Number would be on the Budget and also the impact of charging separately for every resource the RIPE NCC allocates or assigns. He said it might be time to look at the whole fee structure rather than just looking at just this specific aspect.

A member said that there was a community policy saying that the RIPE NCC should charge per independent resource and the Executive Board ignored this when removing the charge for AS Numbers. He strongly objected to the Executive Board going against community policy by removing the charge for independent resources.

A member suggested charging for AS Numbers once an LIR has received a certain amount of AS Numbers. He said this would not affect current AS Number holders but would have a dampening effect once the limit on AS Numbers was reached.

Nick said this did not deal with the issue of recovery of AS Numbers by the RIPE NCC, which is an extremely important function for the organisation responsible for managing Internet resource registration.

A member expressed support for the idea of charging for AS Numbers. He said if it was possible to introduce a charge for legacy Internet resources, which have been free forever, then it is surely possible to introduce a charge for AS Numbers, which have only been free for two years.

A member said that he did not see that there was currently a problem with hoarding of AS Numbers, but any problem should be solved with clever wording in the policy rather than through financial means.

Nick said that the member could bring a policy proposal forward to the Address Policy Working Group but the General Meeting and the Executive Board needed to deal with RIPE NCC operational practices as determined by the members.

A member said he supported the idea of one LIR-one fee, but he wanted to note that PI address space is usually for the customer of the member rather than for the member itself.

A member noted that a 50-euro fee per AS Number would probably reduce the annual membership fee by 100 euros.

A member suggested that it would be possible to assign AS Numbers for free to those who could provide justification for the assignment but a fee could be introduced for those who did not want to provide any justification.

Nick concluded the discussion by saying there seemed to be support for the Executive Board to take some action but what that action should be needs further discussion.

8. Voting on resolutions

The RIPE NCC's Membership Communication Officer, Fergal Cunningham, gave a presentation on the voting procedure for the resolution to be voted on by the membership.

Resolution

"The General Meeting approves the updated RIPE NCC Standard Service Agreement”

The General Meeting was adjourned at this point until the announcement of voting results on 7 November at 10:45 UTC.

9. Announcement of voting results on 7 November at 10:45 UTC

The RIPE NCC Executive Board Chairman, Nigel Titley, announced the results of the voting on the resolution. The results were as follows:

  • Yes - 286
  • No - 4
  • Abstain - 35

The resolution was approved.

10. Close

  • 17 Sep - Open GM registration
  • 17 Sep - Open electronic voting registration
  • 24 Sep - Publish all GM documents, including Draft RIPE NCC Activity Plan and Budget 2015
  • 22 Oct - Deadline for proxy vote nominations
  • 22 Oct - Deadline for members to propose resolutions
  • 5 Nov - Close registration for electronic voting
  • 5 Nov - RIPE NCC General Meeting November 2014 begins with main meeting
  • 7 Nov - RIPE NCC General Meeting May November ends with vote