Re: [lir-wg] Re: 50% increase in RIPE fees ? Since when ?
In a message dated 12/2/02 1:06:32 PM Romance Standard Time, kurtis@kurtis.pp.se writes: Kurtis, All, now that the discussion on the list came back to the previous (good) level I am willing to give it a try and explain the fee raise.
The burst of the dot.com bubble is no news. It was there a year ago. Businesses adopted and cut back to cope with it. Some did better, some did worse. RIPE NCC seems to belong in the later category. If this would have been a Ltd, the share holders would be asking if the management and accountants was a sleep.
The burst of the dot.com bubble has indeed impacted the RIPE-NCC, but not as much as one can imagine: the Internet is still growing, although there are less players providing services, and therefore the amount of addresses to be assigned/allocated is obviously still growing. In addition, as already explained by Axel, closing LIRs create at least as much work as creating new ones. Here are some facts for you to consider that may help understanding the situation better. 1) The RIPE-NCC business model during the last few years was biased for a number of reasons, in particular a Dutch law that prevent a non profit organization to accumulate monies beyond a certain amount (putting a limit to the contingency fund), and the too conservative assumptions made concerning the growth. In the last 3 years the Ripe-NCC fees were reduced each year because the number of new LIR each year was increasing more than forecasted and the total income was exceeding the contingency fund amount. In other words in the last 3 years most of the expenditures were supported by the influx of new LIRs coming in each year, which "artificially" reduced the fees for existing LIRs. This was no longer the case in 2002, where the amount of new LIR turned out to be overestimated, which caused, for the first time, a big hole in the budget, which was covered by the contingency fund. This old model obviously no longer works, so the LIRs have now to pay for 2003 the "actual" fees, i.e. more or less the fees paid in 1999. 2) The vast majority of expenses of the RIPE-NCC are wages. The RIPE-NCC is now comprised of about 100 employees. These people were hired during the fat-cows years both to support and improve the core activities such as registration services and database, as well as activities proposed during various RIPE working group meetings, and approved by the AGM. To fire 1 employee in NL takes as much money as to pay his salary for a full year (the financial impact/improvement would be apparent only on the second year), so since the contingency fund was almost gone we had to recover the money and replenish the reserves as explained by Axel. 3) The board is now concerned (and focusing) with long term scenarios that guarantee the stability of the core services and take in account the industry situation, the needs of the membership, and their willingness (or not) to pay for additional services. Needless to say since last August, when we became aware of the situation, Axel was asked to reduce as much as possible the expenditures (but since most of the cost are wages there was not much he could save) and to provide different possible scenarios for the future. Year 2003 will be a transition year: we believe the membership survey will help in understanding what the membership expect the RIPE-NCC to do and whether it is prepared to pay for such activities (beyond the core activities). We will also closely monitor the discussion in the LIR-wg and other lists, and try to collect as much input as possible from RIPE meetings. We will then work with Axel to prepare a business plan for 2004 that reflects what we learned. If you have input don't hesitate to approach me (or any other member of the board) at RIPE meetings or write mail to me. Best Regards Daniele
[Some personal perspectives from an old hand] The RIPE NCC is not a normal company, for better or worse! The RIPE NCC does not make a profit. The agreed model for RIPE NCC funding is to divide the costs by the number of members, with size categories added for fairness. In times of peak demand the RIPE NCC still has to deliver; it cannot just decide not to grow, produce less services than demanded, and then choose the customers that get services and those that do not. The RIPE NCC cannot build huge reserves in order not to endanger its tax exempt status. All this has led to steadily decreasing membership fees over the years. Nobody has been complaining. Now the number of members to divide the costs is smaller than planned. Fees are increased according to the funding model. Everything is working as expected. And, as expected, some people complain. Fees are back to about the 1999 levels. Absolutely speaking they are still very very low compared to other expenses of most members. Think what an unstable RIPE NCC would cost you in real terms, or what a government operated NCC would cost if you want a real nightmare. Respectfully but slightly irritatedly yours Daniel
Daniel,
In times of peak demand the RIPE NCC still has to deliver; it cannot just decide not to grow, produce less services than demanded, and then choose the customers that get services and those that do not.
The RIPE NCC cannot build huge reserves in order not to endanger its tax exempt status.
All this has led to steadily decreasing membership fees over the years. Nobody has been complaining.
you are here implying that the members only react because it's to their disadvantage. Notice that I am not necessarily against raising the fees, but doing so with a declining number of members requires good reasoning and motivation. It also demands that the RIPE NCC demonstrates that they have realized the situation and that this is being dealt with in a way that will not lead to new raises in a year. There is nothing strange in this. What is starting to worry me is the replies indicating that asking these questions would be improper.... If the raised fees in combination with a decreasing number of members leads to a significant improvement in service I am all for it. If it just keep the current state - we as a community have a problem. - kurtis -
On Wed, Dec 04, 2002 at 05:58:14AM +0100, Kurt Erik Lindqvist wrote:
you are here implying that the members only react because it's to their disadvantage.... What is starting to worry me is the replies indicating that asking these questions would be improper....
[OK. I go for the red banket, just this once ....;-)] If these are inferences on my contributions here, they hold no water. Asking questions and making concrete and constructive suggestions is not just OK but very good. Of course it would be ideal if this would happen beore the decisions being discussed are taken. Now we just have to take this as input for the next such decision. And I would hope to see concrete suggestions and proposals when the next decision point comes up. Having said that I want to make clear that I take issue with polemics without even taking the time to obtain the information that is available. I take issue with polemics against open and due process without stating where the process has been closed or not proper. I take issue with polemics claiming that "me and everyone else thinks X" without any substantiation of the claim. I take issue with polemics against a widely announced and low threshold open membership survey conducted by a well respected third party without suggesting a better alternative. .... This starts to remind me of ICANN discussions. It would be more constructive if we could hear suggested content for the activity plan 2004. Daniel
disadvantage.... What is starting to worry me is the replies indicating that asking these questions would be improper....
[OK. I go for the red banket, just this once ....;-)]
If these are inferences on my contributions here, they hold no water.
If you mean my concerns about questions - no.
Having said that I want to make clear that I take issue with polemics without even taking the time to obtain the information that is available. I take issue with polemics against open and due process without stating where the process has been closed or not proper. I take issue with polemics claiming that "me and everyone else thinks X" without any substantiation of the claim. I take issue with polemics against a widely announced and low threshold open membership survey conducted by a well respected third party without suggesting a better alternative. ....
I agree with you that these is nothing broken with the process as such. With the small notion that I support the idea of having the RIPE AGM with a RIPE meeting.
This starts to remind me of ICANN discussions.
If RIPE starts to feel like ICANN, that is really bad. But it is also the job of the NCC to make sure that does not happen. - kurtis -
The burst of the dot.com bubble has indeed impacted the RIPE-NCC, but not as much as one can imagine: the Internet is still growing, although there are less players providing services, and therefore the amount of addresses to be assigned/allocated is obviously still growing. In addition, as already explained by Axel, closing LIRs create at least as much work as creating new ones.
Ok, so for next year we will see a staff reduction or a "re-prioritistion"? Just to be clear, I am no way advocating staff reductions. But I think that the RIPE NCC have to be way more clear on where they put their priorities and where the money is spent. If it is claimed that this money is needed to run the NCC at a certain support level - fine, but then the paying members need to be abel to see that.
2) The vast majority of expenses of the RIPE-NCC are wages. The RIPE-NCC is now comprised of about 100 employees. These people were hired during the fat-cows years both to support and improve the core activities such as registration services and database, as well as activities proposed during various RIPE working group meetings, and approved by the AGM. To fire 1 employee in NL takes as much money as to pay his salary for a full year (the financial impact/
Well, after have been part of doing layoffs at a Dutch company I know more about this than I ever wanted to. What you are saying is both true and not true. But let's leave that for the time being. The interesting part is that by keeping the employees the RIPE NCC signals either of two things : 1) The "extra" staff will lead to a significant improvement of services 2) The "new LIR" rate will pick up in a year. I hope that the plan is 1), otherwise I think the RIPE NCC mgmt will have some explaining to do in a years time.
improvement would be apparent only on the second year), so since the contingency fund was almost gone we had to recover the money and replenish the reserves as explained by Axel.
So does this mean that we need to plan for an increase for next year as well?
3) The board is now concerned (and focusing) with long term scenarios that guarantee the stability of the core services and take in account the industry
I would very much appreciate some details on what is mean with "stability".
Year 2003 will be a transition year: we believe the membership survey will help in understanding what the membership expect the RIPE-NCC to do and whether it is prepared to pay for such activities (beyond the core activities). We will also closely monitor the discussion in the LIR-wg and other lists, and try to collect as much input as possible from RIPE meetings. We will then work with Axel to prepare a business plan for 2004 that reflects what we learned.
I am now playing the devils advocate so don't take this literal - the RIPE NCCs number one focus is to provide adequate registration services. Anything else is pure bonus. That said, there is a lot of that bonus that is worth paying for, but currently there is little or no insight into what that bonus is costing us - and why. Best regards, - kurtis -
participants (3)
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Bovio＠aol.com -
Daniel Karrenberg -
Kurt Erik Lindqvist