[members-discuss] Response to Comments on the Charging Scheme Proposals

Silviu
Sory, but
profit | non profit usualy defined by oganization foundation documents.
So I think, dutch law is not anusual.
Serbulov Dmitry.

> Hi,
>
> A per resource charging scheme has been rejected many years ago because
> that type of charging would force RIPE to become a for profit organization
> - from the dutch government / fiscal point of view. It was a lenghty
> discussion and the consensus was that RIPE must remain a not-for-profit
> organization.
>
> Silviu
>
> ________________________________
> From: members-discuss <members-discuss-bounces at ripe.net> on behalf of Josh
> Jameson <josh at servebyte.com>
> Sent: Wednesday, May 24, 2023 2:08:31 PM
> To: members-discuss at ripe.net <members-discuss at ripe.net>
> Subject: Re: [members-discuss] Response to Comments on the Charging Scheme
> Proposals
>
> The deadline for members to propose resolutions was 10th May.
> Unfortunately RIPE ignored the elephant in the room that showed the most
> activity in members-discuss, which was pay-per-ipv4 - like some other
> RIRs currently operate.
>
> They are so confident that it is not something people will vote for,
> that they refused to include it as an option, despite it providing RIPE
> with the most funding of any other option.
>
> If RIPE was not a monopoly in our region, I would go elsewhere. To say I
> am disgusted with the behavior is a gross understatement.
>
> Regards,
> Josh Jameson
>
> On 5/19/23 15:00, sdy at a-n-t.ru wrote:
>> Dear Simon-Jan,
>>
>> Until the fee for one resource becomes the same for everyone, we will
>> look
>> for a way to distribute and pay for IPv4 resources indefinitely.
>> If we don't have enough resources now, it doesn't matter how someone has
>> 1
>> billion addresses for some reason. If they need them, they MUST to pay
>> like everyone else!
>>
>> I do not understand why the NCC do not offer to vote a scheme: 1 IP for
>> everyone = one price for everyone !!!??? Are there any reasons? They do
>> not want to pay for these addresses? OK! Somebody else will take it and
>> will be pay in happy.
>>
>> Dmitry Serbulov.
>>
>>> Dear all,
>>>
>>> I’d like to answer the comments and questions that have been raised
>>> since the Board Treasurer announced the final proposed charging scheme
>>> options.
>>>
>>> See Raymond’s mail announcing the options at:
>>> https://www.ripe.net/ripe/mail/archives/ncc-announce/2023-April/001645.html
>>>
>>> Also see my colleague Fergal’s mail explaining the instant run-off
>>> voting method and how it will work with the charging scheme vote:
>>> https://www.ripe.net/ripe/mail/archives/ncc-announce/2023-May/001647.html
>>>
>>> Purpose of the Charging Scheme and Budget
>>>
>>> The charging scheme is the mechanism the RIPE NCC uses to ensure it
>>> collects sufficient funds to carry out its promises to the members in
>>> future years. As a safeguard, any excess (or shortage) of funds is
>>> subject to a redistribution vote by the General Meeting. This
>>> redistribution has happened many times in the past. This ensures that
>>> the RIPE NCC operates on a cost-recovery basis, or in other words
>>> operates as a not-for-profit.
>>>
>>> The Charging Scheme does not define the cost budget of the RIPE NCC,
>>> but
>>> of course there is a relation between the two. The projected income
>>> does
>>> at the very least provide direction regarding discussion on the
>>> Activity
>>> Plan and Budget.
>>>
>>> The Activity Plan and Budget defines the planned activities and
>>> associated costs for a financial year. And for the longer term, we have
>>> developed a five-year strategy. Both of these documents are published
>>> for the members to provide input on, and they are then approved by the
>>> RIPE NCC Executive Board.
>>>
>>> The Draft Activity Plan and Budget is published on a yearly basis every
>>> autumn, specifically to consult with our membership. Additionally, this
>>> year there is the option to provide input and feedback via the RIPE NCC
>>> Survey 2023, which will launch next week. The Activity Plan and Budget
>>> is effectively the RIPE NCC’s promise to its members in terms of what
>>> it
>>> will do and how much it will spend in the coming year.
>>>
>>> The most recently approved Activity Plan and Budget (in this case 2023)
>>> forms the basis for projections of the required income for the
>>> following
>>> financial year, as this is the most recent approved “promise to our
>>> members”. All charging scheme projections are made with this promise in
>>> mind, to ensure sufficient income to continue that promise. If the
>>> Activity Plan and Budget 2024 requires us to cut or add activities or
>>> costs, then that is what we will do to fulfill our promise.
>>>
>>> That being said, efficient and effective use of membership funds is a
>>> priority and will remain a priority of the Executive Board and the
>>> management of the RIPE NCC.
>>>
>>> Why Change the Current Model?
>>>
>>> We need to ensure sufficient and sustainable income to continue our
>>> operations in a stable and predictable manner. The high market value of
>>> IPv4 resources combined with the possibility of multiple LIR accounts
>>> per member has created uncertainty and unpredictability for a
>>> significant part of our income. A member-based model rather than an LIR
>>> account model will help to reduce this uncertainty by removing the LIR
>>> account as the basis for the charging scheme.
>>>
>>> We are also addressing the stated unfairness in the current model.
>>> Although some members have expressed the desire for increased
>>> differentiation, we see the proposed change as a significant difference
>>> from the current one LIR-one fee model. It allows us to spread the
>>> funding burden differently because in the current model, all members
>>> with one LIR account pay the same fee (exception is the independent
>>> resources). Due to a significant inflow of New LIRs in 2019 and 2021,
>>> there is a considerable amount of members who hold more than one LIR
>>> account, and these members do pay additional LIR account fees. One of
>>> the major benefits of the category model is that it charges per member,
>>> and with that it reduces the uncertainty caused by multiple LIRs and
>>> the
>>> associated consolidation risk.
>>>
>>> We aim to achieve a clearer distinction between RIPE Policy and the
>>> RIPE
>>> NCC Charging Scheme by removing the LIR account as the basis of the
>>> charging scheme.
>>>
>>> And we want to ensure that the RIPE NCC together with its members is
>>> ready for any change the future might bring, by increasing the
>>> possibilities the charging scheme provides to adapt for this change. Of
>>> course, this can only happen with formal approval by the GM.
>>>
>>> The Category Model
>>>
>>> Under this model, the categories would apply as soon as a member holds
>>> IPv4 or IPv6 resources as defined in the charging scheme document.
>>> Limits as defined in the charging scheme document are the upper limits
>>> of the categories. The lower limit for Category 1 is one resource (one
>>> IPv4 address or one IPv6 address). The base category applies to all,
>>> including members with no IPv4 or IPv6 resources.
>>> We have been asked why there is not a per-IPv4 address model, with
>>> comments that the category model favours bigger members. In a way, it
>>> does, but less so than in the one-LIR account, one-fee model. We also
>>> need to stay true to the fact that we are a membership association, so
>>> while we can differentiate between members, this needs to stay within
>>> reason.
>>>
>>> Additionally, we need to ensure the independence of the RIPE NCC by not
>>> becoming too dependent on a small subset of our membership for a
>>> significant part of our income. Furthermore, protecting the one
>>> member-one vote principle could become significantly more difficult if
>>> the contribution differences become extreme. So we can facilitate
>>> differentiation between members in size of contribution, especially
>>> compared to the current model we have, but it is essential that this
>>> stays within reason. One clear benefit of the category model is that we
>>> can refine it over time, working towards a model that is acceptable for
>>> more members.
>>>
>>> On the pricing and category limits, they have been set with the latest
>>> Activity Plan and Budget in mind, to ensure at the very least that we
>>> can continue with our promise to members in 2024. If the Activity Plan
>>> and Budget 2024 requires the RIPE NCC to reduce or add activities or
>>> costs, we will act accordingly.
>>>
>>> Regarding the options presented for voting, our initial plan was to
>>> submit two charging schemes for a vote, to provide a clear choice to
>>> the
>>> members on a category-based model or the current model. Both of these
>>> models would provide income at the level of the 2023 budget if we apply
>>> a correction for expected inflation of 5%, resulting in a projected
>>> income of EUR 42 million.
>>>
>>> After feedback from members we wanted to ensure the GM could vote for
>>> “NO CHANGE” which is represented in Option D. Additionally to this “NO
>>> CHANGE” vote, I personally requested to add a vote to keep the income
>>> (before any correction for inflation) at the same level as in 2023,
>>> which is the reason Option C has been added. The 2nd or 3rd vote on
>>> charging for ASN assignments and/or transfers would (if approved)
>>> provide additional income over that provided by the charging scheme
>>> voted for by members.
>>>
>>> The Waiting List
>>>
>>> The current situation regarding the IPv4 waiting list and costs
>>> associated with a /24 IPv4 allocation is in our eyes an undesirable
>>> one.
>>> With the uncertainty of the waiting period (around 1.5 to 2 years)
>>> which
>>> can be shorter or longer, plus the two-year “non-transfer” policy, it
>>> means unpredictable costs for our members and income that is not
>>> transparent for the RIPE NCC.
>>> - Two-year waiting period = sign-up fee plus two years LIR service fee
>>> =
>>> 4,100 EUR
>>> - Two-year “non-transfer” policy = two years LIR service fee = 3,100
>>> EUR
>>> - Indicative price 7,200 EUR
>>>
>>> To address this, we propose a one-time join-the-waiting list fee, and a
>>> to-be-determined /24 IPv4 allocation fee. This would replace costs that
>>> apply to members based on being on the waiting list for a long time
>>> without receiving resources, as members would be charged the waiting
>>> list fee upon placement on the waiting list, and the allocation fee
>>> only
>>> just before resources are allocated (with the opportunity to reject the
>>> resources).
>>>
>>> This is, in our opinion, a fairer way to charge for these resources. To
>>> define this charge and work out any possible issues with RIPE Policy,
>>> we
>>> are postponing this vote to allow for consultation with the membership
>>> because this to-be-determined fee will have an effect on who applies
>>> for
>>> the resources. We also need to consider fees already paid by LIR
>>> accounts, and whether a discount would be in order for fees already
>>> paid
>>> in relation to specific IPv4 allocations. And for this, time is needed
>>> to consult with membership.
>>>
>>> Additionally, this fee will also result in additional income for the
>>> RIPE NCC, which will be subject to a redistribution vote, assuming this
>>> provides excess funds.
>>>
>>> See the original announcement on the waiting list freeze:
>>> https://www.ripe.net/ripe/mail/archives/ncc-announce/2023-April/001643.html
>>>
>>> Finally, there are probably more questions and comments than I have
>>> answered here. But we are preparing for the General Meeting (GM) next
>>> week where there will be several presentations from our side on the
>>> charging and budgeting of the RIPE NCC. Our Managing Director will
>>> present at both the NCC Services Working Group on the past and future
>>> of
>>> the RIPE NCC, and he will present a more detailed presentation on
>>> budget
>>> developments in the GM. I will also present on the Charging Scheme
>>> options as well as give an update on our current financial situation.
>>>
>>> I hope you will register to join and follow these presentations, and
>>> you
>>> will have the opportunity to further ask questions and discuss the
>>> various options to vote on.
>>>
>>> https://www.ripe.net/participate/meetings/gm/meetings/may-2023
>>>
>>> Kind regards,
>>>
>>> Simon-Jan Haytink
>>> Chief Financial Officer
>>> RIPE NCC
>>>
>>> _______________________________________________
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>>> members-discuss at ripe.net
>>> https://lists.ripe.net/mailman/listinfo/members-discuss
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>>> https://lists.ripe.net/mailman/options/members-discuss/sdy%40a-n-t.ru
>>>
>>
>>
>>
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