RIPE NCC Charging Scheme 2000 van Draanen and Kuehne ____________________________________________________ RIPE NCC Charging Scheme 2000 Kees van Draanen Mirjam Kuehne Version 1.0 RIPE NCC Document: ripe-198 See Also: ripe-197 Updates: ripe-187 1. Scope This document defines the 2000 RIPE NCC charging scheme and the companion document 'RIPE NCC Activi- ties & Expenditure 2000' (ripe-197) describes the activities and the associated operational costs. The charging scheme is based on the model that was approved at the 1996 contributors' meeting and that has been used in previous years. Section two out- lines the charging scheme and section three details further steps to implement the scheme. Details of the reasoning behind this scheme are provided in section four. Status This version of the document has been produced by the RIPE NCC management and with the particular input and assistance of Maldwyn Morris. It will be submitted to the membership for approval at the Annual General Meeting on October 19, 1999. ____________________________________________________ ripe-198.txt Page 1 RIPE NCC Charging Scheme 2000 van Draanen and Kuehne ____________________________________________________ 2. Charging Scheme The charges for 2000 will be fixed annual charges to be paid in advance and based on the size category of a local registry. A minimum size category will be determined based on address space allocations held by the registry on November 1,1999 and will be pub- lished. New local registries established during 2000 will be charged a sign-up fee and 25% of the yearly fee for each quarter that they are members. Their initial minimum size category will be SMALL. Enterprise registries are classed as small reg- istries for charging purposes. The charges for 2000 are as follows: +--------------+------+--------------------+ | Charge | 2000 | 1999 1998 1997 | +--------------+------+--------------------+ | Yearly SMALL | 2400 | 2650 2450 2200 | |Yearly MEDIUM | 3350 | 3700 3400 3000 | | Yearly LARGE | 4400 | 4900 4500 4000 | | | | | | Sign-Up | 2100 | 2100 2000 1300 | +--------------+------+--------------------+ Discussion Registry charges will decrease by approximately 11% in 2000 and drop to just below their 1998 levels. This is in spite of the increased expenses as out- lined in the 'RIPE NCC Activities and Expenditures 2000' (ripe-197) as the costs are not expected to increase as rapidly as the number of registries. By decreasing charges evenly (in percentage terms) any cross subsidies are prevented. ____________________________________________________ ripe-198.txt Page 2 RIPE NCC Charging Scheme 2000 van Draanen and Kuehne ____________________________________________________ The 1998 charging model algorithm was used to deter- mine the minimum size category for each registry, based on the address space allocations held by the registry. As the distribution generated by the algorithm clearly suggests the three size categories it can still be considered fair. Further, the total number of registries per category is not dramati- cally different from the current distribution. The following table compares the distribution of current size categories with that of the minimum size category determined from allocation data on September 1, 1999. +---------------------------------+ |Category New Minimum Current | +---------------------------------+ | SMALL 72.6 77.3 | | MEDIUM 21.7 17.2 | | LARGE 5.5 5.5 | +---------------------------------+ While the distributions themselves suggest that few changes are happening, the breakdown of changes below shows the changes in detail: +----------+------------------------+ |From \ To | SMALL MEDIUM LARGE | +----------+------------------------+ | SMALL | 1069 94 3 | | MEDIUM | 18 221 14 | | LARGE | 1 11 65 | +----------+------------------------+ The minimum size category for each registry, for the purpose of charging, will be determined based on the address space allocations held by that registry on November 1, 1999. Up to this date the minimum size category for all registries based on allocations received before November 1, 1999 can be found at and the allocation data this is based on, together with current registry size, can be found at All reg- istries are expected to check this data and report any inconsistencies to . Conclusion We strongly believe that the charging model used in previous years is still fair, equitable and practi- cal and the 2000 charging scheme will therefore ____________________________________________________ ripe-198.txt Page 3 RIPE NCC Charging Scheme 2000 van Draanen and Kuehne ____________________________________________________ follow exactly the same principles. The charging scheme will generate sufficient revenues to cover budgeted costs, ensuring stability for the RIPE NCC. The reserves accumulated in prior years are consid- ered adequate to provide for the reliable operation of the RIPE NCC in case of unexpected developments. ____________________________________________________ ripe-198.txt Page 4 RIPE NCC Charging Scheme 2000 van Draanen and Kuehne ____________________________________________________ 3. Steps to Implementation 8 Sep 1999 2000 charging scheme published Preliminary allocation listing per registry published. Preliminary minimum size category listing pub- lished. 19 Oct 1999 RIPE NCC Annual Membership Meeting 2000 Charging Scheme formally approved. 8 Sep - 31 Oct 1999 Registries can review preliminary data and request any corrections. 1 Nov 1999 Billing procedures (methods of payment and credit management procedures) for 2000 pub- lished. Definite allocation listing per registry pub- lished. Definite minimum size category listing pub- lished. 15 Nov 1999 Deadline for registries requesting to be moved to a larger category. If no response is received it will be assumed that a registry wishes to be in the minimum category allocated on 1 November 1999. 21-26 Nov 1999 Invoices and contracts for services in 2000 sent out. 31 Dec 1999 Deadline for receipt of payment of invoice for 2000 services. ____________________________________________________ ripe-198.txt Page 5 RIPE NCC Charging Scheme 2000 van Draanen and Kuehne ____________________________________________________ 1 Jan 2000 New charging scheme in effect for new local registries. ____________________________________________________ ripe-198.txt Page 6 RIPE NCC Charging Scheme 2000 van Draanen and Kuehne ____________________________________________________ 4. Detailed Reasoning of Charging Model Section 4 describes the reasoning behind the choice of the charging model laid down in section 2. Some degree of repitition is inevitable here as section 2 is intended as a stand-alone description of the charging scheme itself. This section should be read in conjunction with ripe-143 as it is the base docu- ment on which this reasoning is founded. The fol- lowing three sub-sections will describe the determi- nation of a registry's size, the revenue required for 2000, and the mechanics of the charging model. 4.1. Determination of Minimum Registry Size To determine a registry's size, we have defined a measure N(reg) which produces a value in the range {0,1,2,...,100}. N(reg) is a simplification of the charging measure discussed in Appendix C of ripe-143, and is described briefly below. Let k(reg,i) be the number of addresses allocated to the registry "reg" in year i. Let w(i) = i - 1992. Define use(reg) = sum(i in 1993 to 1999) k(reg,i) * w(i). Let MAX = max{use(reg)} be the maximum use measured for all registries. The normalised usage for a registry "reg" is then defined as: N(reg) = (use(reg) * 1000) / MAX Based on this measure rounded to the nearest inte- ger, three distinct groups of registries could be clearly identified. Those with: N(reg) <= 10 (SMALL) 11 <= N(reg) <= 102 (MEDIUM) 102 < N(reg) (LARGE) This algorithm provides a distribution quite similar to the current distribution of size categories. ____________________________________________________ ripe-198.txt Page 7 RIPE NCC Charging Scheme 2000 van Draanen and Kuehne ____________________________________________________ 4.2. Revenue Required for 2000 Reserves from previous years are 477 kEUR with the only significant long-term liability being possible corporate taxes for 1997 and earlier. These are estimated to be a maximum of 130kEUR. Based on the experience of the past years and the expected devel- opments in 2000 this level of reserves is considered to be sufficient. It equals just under 33% of the budgeted income from new registries. There are no plans to increase this level during 2000 but, due to the rounding off of the service fee to a multiple of 50 EUR, the budgeted revenue is 73,000 EUR (1.2%) over the budgeted operating expenses (see ripe-197) of 6,210 kEUR. 4.3. Income 2000 The income generated according to this scheme is budgeted to be composed as follows (in kEUR): +---------------------------+ | New Registries | | | | 450 Startup Fees 945 | | 450 Small 540 | | | | Existing Registries | | | |1233 Small 2959 | | 366 Medium 1226 | | 97 Large 427 | | | | Other Income | | | | 750 Ripe Meeting 186 | +---------------------------+ | Total Income 6283 | +---------------------------+ The revenue from new registries is composed of the start up fees plus the small service fee and assumes an average service period of 6 months. The RIPE meeting and dinner fees are budgeted to increase to 270 EUR with a conservative estimate of 250 dele- gates attending three meetings. Only 2/3 of the attendees are expected to go to the RIPE dinner. ____________________________________________________ ripe-198.txt Page 8 RIPE NCC Charging Scheme 2000 van Draanen and Kuehne ____________________________________________________ ____________________________________________________ ripe-198.txt Page 9