Dear RIPE NCC members,

The Executive Board continues to follow the discussion on the list and
I'm happy to provide some further clarity on the charging scheme
proposals ahead of the General Meeting in May.

Firstly, there are good reasons why the Board chose to present only two
charging scheme options rather than three or even four. The RIPE NCC's
Articles of Association provide that all resolutions must receive over
50% of votes in favour of one option in order for the resolution to be
adopted. This means that a resolution with more than two options might
end up not having enough support (more than 50%) so we would fall back
to the current one. As we try to make this as clear and easy as
possible, we decided to go for two options.

A way to get around this problem is to present three or more options as
separate resolutions with standard Yes/No voting options. In fact, this
is what happened in 2012 when the Board proposed three charging scheme
options:
https://www.ripe.net/participate/meetings/gm/meetings/september-2012

Two of the three resolutions (Options A and C) were approved by the
membership with the first one being the charging scheme adopted and
subsequent resolutions disregarded. Many comments were made to the Board
following this vote that the ordering of the resolutions had a big
impact on which charging scheme option was adopted. For this reason, the
Board is proposing only two options to allow a clear majority to be
expressed in one resolution. Both options are roughly equivalent in the
amount of revenue they would generate - the purpose of the charging
scheme is to arrive at a way to distribute the amount required to run
the RIPE NCC among the members.

So why were these the two resolutions that the Board chose to propose
for 2020?

Option A is the current charging scheme model, and the Board favours
this model for its simplicity and the fact that it treats all members as
equal with equal access to services, which is how we believe a
membership organisation should be run. The principles that the current
charging scheme model is based on were the outcome of work by the
Charging Scheme Task Force in 2012. In the absence of clear guidance
from the membership on changing these principles, we prefer to stick
with these unless we see a clear desire to change them.

For Option B, the Board had a number of concerns with proposing a model
that is based on charging per IP and volume and not per service used.
The RIPE NCC is a not-for-profit organisation and is treated as such
under Dutch law. In the negotiations with the Dutch tax authorities that
established this status, a clear argument was made that the RIPE NCC is
a membership association that does not charge for individual services or
addresses. This is also in keeping with the view that IP addresses are a
shared resource rather than a product, and the RIPE NCC acts as the
steward of that resource.

The Board wants this to remain the case, and if charging per resource
jeopardises the RIPE NCC's not-for-profit membership status then this is
not something that the Board would want to risk happening. More details
on the RIPE NCC's tax position are available in the RIPE NCC Tax
Governance Paper:
https://www.ripe.net/publications/docs/ripe-713

The Board does not believe the charging scheme should be used to drive
the IPv6 policies of the community.

That being said, in the current charging scheme, which has been in
effect for a number of years, IPv6 has no extra cost and yet this has
had no discernible impact on deployment. It is also likely that from
early 2020 IPv6 will make up the vast majority of IP resources allocated
by the RIPE NCC.

I hope this adds a further degree of clarity to the discussions. I
realise that this is an important issue for the membership and I
understand that not everyone will be completely satisfied by the
proposals put forward by the Board. I also hope that you understand the
Board's primary legal responsibility is to ensure the stability and
continuity of the RIPE NCC.

Accommodating this, and the comments and wishes we got from you, are the
the two main goals in proposing the two options that you will be asked
to choose between.

We encourage you to continue to discuss the charging scheme options on
the list, and we look forward to exploring them in more detail at the
General Meeting on 22 May.

Kind regards,

Christian Kaufmann
RIPE NCC Executive Board Chairman



On 2019-04-18 18:14, Christian Kaufmann wrote:
> Dear members,
>
> First of all, I'd like to thank you for the feedback we received from
> everyone so far, and special thanks to the people who gave some more
> context and explanation. Trying to arrive at a charging scheme that
> will
> please everyone is not an easy task.
>
> The reason the board proposes two charging schemes is because some
> members requested a real alternative and difference to the existing
> "one
> LIR account-one fee" version we have right now and that is more volume
> based.
>
> This came up previously in the charging scheme task force discussions
> but also from individual members via emails or through personal
> contact.
> Nigel and I promised at the last two GMs that we would present a new
> one
> before the May GM this year.
>
> So what was the board's thinking in proposing these two models?
>
> Firstly, many people like the existing model and the board believes
> that
> it covers the spirit of what some members want by maintaining the
> financial stability of the NCC while keeping fairness and equality in
> mind. The board also does not want a price per IP model because this
> would have tax implications (the RIPE NCC does not sell IP addresses
> and
> the charging scheme should reflect this) and we feel it is not in
> keeping with the idea of a membership association.
>
> We have also found in the past that having more than two options does
> not work well from a voting perspective. This would add considerable
> complexity to the voting in which resolutions must be approved by more
> than 50% of voters to be adopted.
>
> The second charging scheme option is one that the board believes offers
> a real alternative while staying away from the price per IP aspect.
>
> The board's thinking in making the Option B proposal is that every
> registry entry consumes resources such as customer support time,
> database memory, registration time, etc. regardless of the size of the
> allocation. A /24 and a /12 are not so different in this regard so we
> see this as fair in terms of the work required by the RIPE NCC to
> maintain the registry. The reason we suggest to charge IPv4 and IPv6 in
> the same way follows the same logic - there is no tax designed to move
> people to IPv6. We did not want to have a political, policy-driven
> charging scheme because the board believes this is the work of
> community
> rather than for the board or membership to decide on.
>
> I understand that the "volume-based" description could be seen as
> misleading and I apologise for the misunderstanding here. The proposed
> model is based on registrations and not per IP as we do not want to
> indicate that IP is a sellable product but rather the RIPE NCC should
> charge members for the registry services it provides.
>
> The new charging scheme was also not proposed so that the RIPE NCC
> could
> make more money - it takes the current budget and calculates backwards
> to achieve the amount required to run the RIPE NCC. It is just a
> different model to share the current cost among members.
>
> Despite concerns that were raised on this list, the board took the
> request of some members to propose a new model very seriously and we
> spent quite some time to discuss and model the current scenario by
> trying to be as fair as possible and sticking with the principles of a
> membership organisation.
>
> Again, we are very thankful for your input and the feedback on the two
> models. We will continue to monitor discussions and we will of course
> present on the Charging Scheme 2020 at the upcoming GM. We encourage
> you
> to register your vote so you can have the final say on the two
> proposals.
>
> Best regards,
>
> Christian Kaufmann
> RIPE NCC Executive Board Chairman
>
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