Charging by local IRs

Please see the following paper on "Charging by Local Internet
Registries".  This was enhanced by the Local IR working group
and adopted by RIPE earlier this week as a brief statement of
current practice in Europe, together with some guidelines for
registries.  I'm sending this to the Local IR and the DNS lists,
and will also copy the European TLD administrators, so apologies
for multiple instances of the same mail.  Your comments and
suggestions are always welcome.

Regards.

Mike Norris





		Charging by Local Internet Registries

			ripe-xxx


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

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

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

3.  Registries and Resources
Two of the above services involve the assignment of finite resources to 
customers; these are domain name space and IPv4 address space.  They are 
managed and assigned by registration agencies, respectively domain name 
registries and IP registries.  By themselves, these resources have no 
intrinsic value; their worth is only realised in conjunction with the 
provision of Internet access.  Thus, while registries may charge for 
their administrative and technical services, they may not charge for 
namespace or address space as such; no unit cost or price tag can be 
attached to a domain name or to an IP address, public or private.

This principle must be made clear to the market in general and to the 
customer in particular.  The customer must be aware of precisely what 
she is getting from the registry, whether it is paid for or not.  Where 
there is a charge, the customer must not be under the illusion that this 
translates into a unit cost per resource assigned, nor that the transaction 
is an indefinite transfer of ownership of the merchandise.  Finally, the 
customer must accept the terms under which name or address space is assigned.  
In the case of IP address space, these include the contractual term that the 
assignment is only valid for so long as the criteria of the assignment are 
valid [ref 1].  As soon as the original criteria no longer apply, the address 
space must be returned without penalty or premium to the assigning registry.

4.  Special Case Registries
As indicated above, there are certain exceptions to the market principle in 
the Internet registration services.  These occur where, by virtue of their 
location in the hierarchy of Internet registration, certain registries find 
themselves in a monopoly position.  In the case of namespace, this applies 
to top-level domain (TLD) registries (in Europe, these are all country 
registries), as well as certain administratively unique second-level domain 
registries (such as .co.uk, .ac.at etc).  When it comes to IP address 
allocation, regional registries constitute monopolies within the communities 
they serve.  In Europe, one instance is the RIPE NCC, registry for the 
European region [ref 2].  Other possible examples are the last resort 
(non-provider) IP registries, although nowadays the customer has an 
alternative to their services.

It is important that there be transparency in the procedures and accounts of 
such "special case" registries.  They must not generate excessive profits by 
virtue of their monopoly position.  

5.  Recommendations
To meet with the objectives outlined in this paper, it is recommended that 
all registries:

	- publish their operating procedures;
 
	- publish details of the services they offer and the conditions and 
	  terms that apply, including scales of tariffs if applicable;
 
	- explicitly publish the fact that they do not sell name or address 
	  space as such.

As for "special case" registries as defined above, it is recommended that 
where such a registry charges for service, it should, in addition to 
complying with the recommendations listed above:

	- relate charges to costs of operation and apply all revenues to 
	  such costs;
 
	- regularly publish a budget of its anticipated operating costs 
	  and revenue;
 
	- publish guidelines and apply these uniformly;
 
	- ensure equality of access to registration services;
 
	- aim to achieve consensus within the community it serves as to the 
	  disposal of any surplus revenues;
 
	- regularly publish accounts of income and expenditure;
 
	- refrain from using their unique position as leverage in any other 
	  business venture.


 

Daniel Karrenberg and Mike Norris
22nd April 1996




References
1. "European Internet Registry Policies and Procedures" by Orange, C., Kuehne, M., 
   Karrenberg, D. (ripe-104, 1996)
 
2. "RIPE NCC - Delegated Internet Registry" (ripe-112, 1994)