Alternative Models for RIPE NCC Revenue & Charging 1997
                                                     Orange & Ridley

                ____________________________________________________





                                 Alternative Models

                                        for

                                      RIPE NCC

                              Revenue & Charging 1997


                             Carol Orange & Paul Ridley
                                 Document: ripe-143




    1.  Scope & Process

                This report describes the revenues that must be gen-
                erated for operating the RIPE NCC in 1997. A number
                of alternative charging models are considered which
                can be used to generate the required revenues.
                These models are described in detail and the bene-
                fits and drawbacks of each are considered carefully,
                resulting in a recommendation for a charging model
                for 1997.

                This document provides input for the deliberations
                of the RIPE NCC contributors committee.  The revenue
                figures and a particular charging model are expected
                to be decided at the contributors committee meeting
                on September 11th, 1996. After that meeting the rev-
                enue and charging model chosen will be described in
                a separate document, to be submitted to TERENA for
                formal endorsement as the charging mechanism to be
                implemented in 1997.  This document will remain
                unchanged, providing documentation and background of
                the models researched.

    Related Documents

                The companion document "RIPE NCC Activities & Expen-
                ditures 1997" (ripe-act), describes the activities
                to be undertaken with these revenues.






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    2.  Introduction

                The services provided by the RIPE NCC are funded by
                those ISPs which operate a local Internet Registry
                serviced by the RIPE NCC.  Together, representatives
                of the local IRs make up the RIPE NCC contributor's
                committee.

                During the annual meeting of the RIPE NCC contribu-
                tors in September 1995, the charging model described
                in "RIPE NCC Revenue & Charging 1996" (ripe-134) was
                formally endorsed.  Simultaneously, the RIPE NCC was
                requested to investigate the possibility of imple-
                menting a more usage based charging system in 1997
                (see ripe-132).

                In this document, we describe a number of alterna-
                tive charging models that were investigated as part
                of a study performed at the RIPE NCC in the first
                half of 1996. The study was split in two parts and
                performed by MBA students as master's theses pro-
                jects.

                In the first part of the project, it was determined
                that because the RIPE NCC is a non-profit service
                organisation, it should charge for its services
                based on a "cost +" scheme. The revenues received
                must pay for the costs of the services rendered
                (cost), and provide stability should the circum-
                stances in which the organisation operates need to
                change significantly, or should some unforeseen dis-
                aster take place (plus).

                Because the RIPE NCC is a service organisation which
                has activities at its heart, it was determined that
                the most suitable mechanism for investigating the
                cost of services is Activity Based Costing (ABC).
                The second part of the project therefore consisted
                of an ABC study into the services performed at the
                RIPE NCC.

                In addition to determining the actual costs of spe-
                cific services, charges required to cover the "plus"
                factor must be determined.  In Section 3, we con-
                sider the issues which effect the stability of the
                RIPE NCC, and therefore determine what the "plus"
                factor should be. In Section 4, we turn our atten-
                tion to the categorisation of services performed at
                the RIPE NCC which enables us to define and evaluate
                a number of charging models in Section 5. Finally,
                in Section 6, we argue for a given charging model,
                based on fairness, ease of implementation, the
                degree to which it will enable long term stability
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                for the RIPE NCC, and to which it will encourage the
                application of global address space policies.


    3.  The "Plus" Factor

                Each organisation needs a different level of
                reserves to guarantee long term stability, and each
                organisation has different liabilities that need to
                be covered. It is the earning of revenues beyond the
                costs of operations, i.e. the "+" that enables an
                organisation to build up necessary reserves and
                cover its liabilities.  The level of "+" that must
                be earned in a given year, is determined by the cur-
                rent and the target level of reserves, and the time
                frame in which the target level must be reached.

                To guarantee the long term stability of the RIPE
                NCC, it must be possible to quickly respond to
                changing requirements.  To this end, a half year's
                operating costs will be needed. Because the RIPE NCC
                is growing at such a rapid pace, the precise figure
                must be updated annually to reflect the changes in
                operating costs.

                The liabilities which make up the second aspect of
                the "+", consist of two distinct elements. The first
                is one year's salary for each RIPE NCC employee.
                This is in keeping with standard Dutch employment
                regulations.  Again, as with the operating costs,
                the precise figure must be adjusted annually. The
                second liability that needs to be covered are taxes
                owed from the years prior to 1996. The accumulated
                profit over this period, which consists mainly of
                the profits from 1995 has not yet been declared as
                taxable income. This is a new occurrence and is
                presently receiving our full attention. We expect
                this to be resolved with the Dutch tax office in the
                short term.  We currently expect the owed taxes and
                a possible fine will have to be paid. To cover the
                worst case, we must reserve kECU 232 to cover this
                tax liability.

                The third and final aspect of the "+" is the time
                frame over which the reserves and the liabilities
                should be built. For the RIPE NCC, we consider a two
                year time frame to be applicable. During a longer
                period circumstances can change dramatically,
                thereby rendering the argued for "+" levels obso-
                lete, whereas a period shorter than two years makes
                contributors pay too much for long term stability
                from which future contributors will also benefit,
                and should therefore contribute to.
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                The "+" figures for 1997, derived according to the
                above arguments are given in Table 1 below.


                  +---------------------------------------+
                  |           1997 "+" Figures            |
                  +---------------------------------------+
                  |Purpose                           kECU |
                  +---------------------------------------+
                  |Half year operating costs          996 |
                  |One year salary costs             1377 |
                  |Tax Reserves                       232 |
                  |Total "+" to be earned            2605 |
                  +---------------------------------------+
                  |Reserve build up (2 years)             |
                  +---------------------------------------+
                  |Reserves expected at start 1997    958 |
                  |"+" to be earned per year          823 |
                  |Tax to be paid per year            443 |
                  |"+" to be earned per year         1267 |
                  +---------------------------------------+


                            Table 1: The "+" Figures for 1997


    4.  The "Cost" Factor

                In order to evaluate various "cost +" charging mod-
                els for the RIPE NCC, a study was performed to
                investigate the actual cost of the services provided
                by the RIPE NCC during the 1996 calendar year.  One
                of the key reasons to investigate a new charging
                model is to associate the cost of providing services
                to the amount actually paid for them.

                In that study, the services performed by the RIPE
                NCC have been categorised into one of three areas,
                namely, (1) services for new registries, (2) ISP
                coordination services, and (3) registration ser-
                vices.  Each of these categories are described in
                more detail below.

                As described in the companion document "RIPE NCC
                Activities & Expenditures 1997" (ripe-act), the
                total costs for the RIPE NCC for services provided
                in 1997 are approximately 1990 kECU. (The amount
                will fluctuate slightly depending on the charging
                model used.)  The revenue that must be generated in
                1997 is therefore given by 1267 kECU "+" and 1990
                kECU (cost), which brings the total required revenue
                to 3260 kECU.

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                Before we describe the RIPE NCC services, a short
                word about terminology: The term "service" as used
                here differs from the term "activity" used in ripe-
                act, in that a service is a clearly measurable item
                that can be obtained from the RIPE NCC. For example,
                holding a training course for the staff of local IRs
                is a clearly measurable service.  Likewise perform-
                ing a reverse delegation is a distinct service.
                Many activities, however, may be associated with
                performing each distinct service.


    4.1.  Services for New Registries

                New registries need services which differ from those
                required by existing registries. For example, they
                require initial support from administrative staff at
                the RIPE NCC in order to find out what they need to
                read and how to set up a registry.  Documentation is
                produced at the RIPE NCC aimed to assist new local
                IRs in understanding the Internet registry system
                and their role in it. In this sense new registries
                incur extra documentation costs.  In addition to
                remote help, courses for new local IRs are held in
                order to facilitate the future working relationship
                between the RIPE NCC and the new registry. These
                courses, held both in the Netherlands and elsewhere
                in Europe, consume management, administrative and
                trainer time.


    4.2.  Coordination Services

                The activities grouped in this area are quite
                diverse. However, they share a common purpose: to
                support the coherent operation of the Internet in
                the RIPE NCC service area. As such, the majority of
                these services are of a technical nature, such as
                RIPE database software maintenance and development,
                DNS quality monitoring, etc., and therefore require
                engineering time.  The information services provided
                by the RIPE NCC also fall in this category, and con-
                sume both administrative and engineering time. Coor-
                dination services are accessible to the general
                Internet public, as is necessary if they are to be
                effective.  RIPE NCC contributors, however, always
                receive precedence when special support is needed.


    4.3.  Registration Services

                These are services directly related to the RIPE
                NCC's role as the Regional Internet Registry for
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                Europe and the surrounding areas.  Handling of
                requests for assignment or allocation of IP address
                space, management of reverse domains associated with
                this address space as well as auditing and quality
                control to ensure fair and expedient processing of
                requests all fall into this service category.  In
                general, these services consume hostmaster time.
                However, engineering time is also required to (par-
                tially) automate these services in order to make
                them both scalable and auditable.  Registration ser-
                vices are accessible only to local IRs that con-
                tribute to the funding of the NCC.


    5.  Charging Models

                The three distinct services that the RIPE NCC pro-
                vides will be charged for separately, though they
                will be compiled into one final charge for each
                individual registry. The differing methodologies
                possible for charging for each of the services has
                led to the creation of three different charging mod-
                els; hereafter known as model 1, model 2, and model
                3. Model 1 is similar to the flat fee charging sys-
                tem currently in use. Model 2 is a detailed usage-
                based charging system, and model 3 is a system in
                which charges are levied based in part on the amount
                of address space held by a registry. All of the mod-
                els charge for new registry services and coordina-
                tion services in the same way, notwithstanding minor
                variations due to differing overheads. The key dif-
                ference between the models is the way that registra-
                tion services are charged for.

                For all models a sign up fee is charged which will
                cover the cost of providing services to a new reg-
                istry.  For 1997, the sign-up fee will remain 2000
                ECU, as discussed in Section 5.1.

                In model 1 a combined flat subscription fee will be
                charged for the provision of coordination services
                and registration services. This subscription fee
                will differ according to the size of the registry.
                The fee for a large registry is 7000 ECU; for a
                medium registry, 4550 ECU; and for a small or enter-
                prise registry, 2550 ECU. A more detailed descrip-
                tion of model 1 is given in Section 5.2.






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                              +-----------------------+
                              |       Model 1         |
                              |RIPE NCC Fees for 1997 |
                              +---------------+-------+
                              |Registry Size  |  ECU  |
                              +---------------+-------+
                              |         Large |  7000 |
                              |        Medium |  4550 |
                              |         Small |  2550 |
                              |    Enterprise |  2550 |
                              +---------------+-------+

                           Table 2: Model 1 Fees for 1997


                In models 2 and 3, a subscription fee is charged for
                coordination services and is stratified according to
                the size of the registry. The charges will be 5800
                ECU for a large registry, 3350 ECU for a medium reg-
                istry, and 1350 ECU for a small registry. These
                charges will be justified in detail in Section 5.3.

                In model 2, the variable fee charged for registra-
                tion services is based on the number of each request
                type sent in by a registry, and the inherent costs
                that a request incurs. This charge is therefore dif-
                ferent for all registries. However, the charges per
                service are detailed in Section 5.4.1, and the
                resulting fees for some example registries are given
                in Appendix B.

                The variable fee for registration services in model
                3 is based on the amount of address space held by a
                registry, as well as the length of time the registry
                has held the address space. The fees are based on
                the assumption that the more (and newer) address
                space held by a local IR, the greater the workload
                it generates for the RIPE NCC.  As with model 2 the
                fee differs per local IR. The detailed charges are
                described in Section 5.4.2., with the charges for
                example registries being compared with those for
                model 2 in Appendix B.

                In Table 3, we present a summary of the charging
                models 2 and 3.








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           +-------------------------------------------------------------+
           |                Models 2 & 3 - Fees for 1997                 |
           +--------------+----------------------------------------------+
           |              | Subscription             Variable            |
           +--------------+----------------------------------------------+
           |Registry Size |     ECU        Model 2       Model 3         |
           +--------------+----------------------------------------------+
           |        Large |     5800       service fee   allocation fee  |
           |       Medium |     3350       service fee   allocation fee  |
           |        Small |     1350       service fee   allocation fee  |
           |   Enterprise |     1350       service fee   allocation fee  |
           +--------------+----------------------------------------------+


                Table 3: Model 2 & 3 Fees for 1997: Variable service
                charges in Model 2 are outlined in Table 4, and
                variable allocation charges in Model 3 are outlined
                in Table 5.

                All subscription fees are to be paid annually in
                advance.  A registry who joins part way through a
                year will pay only for the quarter in which they
                join and all subsequent quarters, with each quarter
                carrying one fourth of the annual charge.  Variable
                fees are to be paid quarterly in arrears after
                receipt of an invoice from the RIPE NCC.  A Superna-
                tional registry will be billed as a multiple large
                registry with the same conditions as in 1996 (see
                ripe-134).


    5.1.  Sign-up Fees

                The cost of supporting new registries in 1996 and
                that forecasted for 1997 is detailed in Table A.1 in
                Appendix A.

                Since 1995, the charge for setting up a new local IR
                has been fixed at 2000 ECU. This price both covers
                the cost of setting up a new registry, and discour-
                ages those not serious about performing local reg-
                istry services from starting up. This is essential
                in preventing address space wastage and fragmenta-
                tion, and therefore directly benefits the conserva-
                tion and aggregation aims of the registry system.
                Since this fee has proven successful and has never
                raised complaints among the contributors, we propose
                to keep the sign-up fee of 2000 ECU in 1997, though
                the actual costs will be reduced.  Doing so will
                produce a contribution of about 490 kECU towards the
                "+" required for 1997 (see Table A.2 in Appendix A).


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    5.2.  Model 1 - Flat Fee Based

                As mentioned at the start of Section 5, a combined
                flat fee for coordination and registration services
                is charged using model 1. Charges for coordination
                services are the same for models 1, 2 and 3, and
                amount to 5800 ECU for a large registry, 3350 ECU
                for a medium registry, and 1350 ECU for small and
                enterprise registries. These charges are described
                in detail in Section 5.3.

                Added to the coordination services fee is the charge
                for registration services. In this model, this is a
                flat fee and is independent of the actual use that
                is made of registration services.  The fee is the
                same for all registries irrespective of size,
                because in the study performed on usage-based cost-
                ing, it was determined that the level of service
                required by a registry does not depend on its size.

                Because registration services are charged for based
                on their cost, the charge for 1997 will be approxi-
                mately 1200 ECU per registry, resulting in total
                charges of 7000 ECU, 4550 ECU, 2550 ECU and 2550 ECU
                for large, medium, small and enterprise registries
                respectively.

                The advantages that this charging model offers are:

                o    Each local IR knows in advance what its charges
                     for 1997 will be.

                o    Administrative costs for the RIPE NCC are lower
                     than with the other models.

                o    The charges are not service dependent which
                     encourages local IRs to request services as
                     needed, and not to circumvent the system to
                     avoid paying extra fees.

                A key disadvantage of this charging model is:

                o    It is not a fair way of splitting the RIPE NCC
                     costs as some registries incur more costs than
                     others, resulting in a degree of cross-
                     subsidisation.


    5.3.  Subscription Fees

                Because the coordination services, as detailed in
                ripe-act are agreed to by all contributing local IRs
                on an equal basis, the costs for those services
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                should be shared among the contributors on an equal
                basis.  The costs for these services during 1997
                will be about 875 ECU per local IR (as detailed in
                Table A.3 in Appendix A).

                As will be discussed in Section 5.4, the fees for
                registration services should be kept at an absolute
                minimum. Therefore, the "+" described in Section 3
                must be retrieved from the sign-up fees together
                with the subscription fees for coordination ser-
                vices, which means the remaining "+" for 1997 must
                be earned from coordination services.  ,LP We pro-
                pose, however, that this remaining plus not be
                earned from all local IRs on an even basis. As with
                the charging model applied in 1995 and 1996, a
                weighting system will be applied so that large reg-
                istries pay a proportional amount more than mediums
                which in turn pay more than smalls. Using this sys-
                tem, large, medium, small and enterprise registries
                will pay roughly 5800, 3350, 1350 and 1350 ECU
                respectively for coordination services in 1997.
                Details are shown in Table A.4 in Appendix A.


    5.4.  Variable Fees

                In this section, we describe two alternative models
                for variable charging for registration services.
                They both share the property with model 1 that the
                revenues they generate cover only the costs of reg-
                istration services.  This is to encourage use of
                these services as needed, in order to further the
                aims of the Internet Registry system.

                Model 2 is a detailed usage-based charging system,
                and model 3 introduces charges based on the amount
                and the age of address space held by each registry.


    5.4.1.  Variable Fees - Model 2

                This model is a detailed usage based charging sys-
                tem. In this model, registries pay for exactly those
                services they receive and thus there is no cross-
                subsidisation of registration services as may occur
                with Model 1.  The exact costs were derived from the
                study on usage-based costing and the forecast budget
                for 1997.  The charges to be set for an individual
                registration activity will be no more or less than
                the cost of that activity. In this way charges for
                registration services will be kept as low as possi-
                ble thereby negating (to the extent possible), the
                tendency for registries to alter their registration
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                policies in order to save money. However, the ten-
                dency to avoid using services to avoid paying for
                them will surely arise, and may lead to practices
                that conflict with global Internet registry poli-
                cies.

                Table 4 shows the individual charges for registra-
                tion activities forecast for 1997.


                    +------------------------------------------+
                    |Model 2 - 1997 Registration Service Fees  |
                    +------------------------------------------+
                    |                       Service        ECU |
                    +-------------------------------+----------+
                    |               Initial Request |      123 |
                    |    Assignment Window Exceeded |       91 |
                    |                 PI Assignment |       98 |
                    |            Address Allocation |       84 |
                    |          AS Number Assignment |       68 |
                    |            Reverse Delegation |       33 |
                    +-------------------------------+----------+



                Table A.4: Charges for registration services if
                                Model 2 is applied.


                An advantage that this charging model offers is:

                o    It is a fair usage-based model that prevents
                     cross-subsidisation.


                Some disadvantages that are found with this model
                are:

                o    It will encourage avoidance of useful registra-
                     tion services.

                o    It may encourage practices that conflict with
                     Internet registry policies.

                o    It is difficult for registries to forecast
                     exactly what their charges for the forthcoming
                     year will be.

                o    The administrative overhead to maintain this
                     model is higher than for the other two models.



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    5.4.2.  Variable Fees - Model 3

                Charging based on this model is based on the amount
                of address space allocated to a registry and the
                time it was allocated.  Because the primary activi-
                ties performed in registration services are control-
                ling and evaluating past and proposed address space
                usage, the amount of work generated by a specific
                local IR depends on the amount of address space that
                has been allocated to it, and the time the alloca-
                tions were made.  In other words, the more address
                space a registry has, and the more recently it has
                been acquired, the more work it will generate for
                the RIPE NCC.

                In order not to penalise those registries who have
                in the past received address space not knowing reg-
                istration thereof could eventually be charged for, a
                weighted scale of charging will be used.  The result
                of this scale is that the charge for an address
                becomes progressively more expensive as the date of
                allocation nears the present day. This also reflects
                the work level. Old allocations generate less work
                for registration services than new ones do.  The
                mathematical model used to calculate the figures for
                this charging model is described in Appendix C.

                To maximise fairness, without introducing monthly
                charges, charging for address space will be carried
                out per quarter.  Finally to minimise the potential
                side effects this model might have on aggregation,
                the charges will be accompanied by a small per allo-
                cation request fee of 200 ECU. This is sufficient to
                discourage registries from repetitively taking
                smaller allocations than actually needed to minimise
                registration costs (which would be bad for aggrega-
                tion). The resulting income reduces the charges per
                quarter for address space held.

                For an indication of the charges that would be
                levied, see Table 5, which shows the prices that
                would be charged per quarter in 1997 for a /16 that
                was allocated at a given time.  (Note that the
                charges for a /17, /18, and /19 can be computed by
                dividing by 2, 4, and 8 respectively.)  Please note
                that these are draft figures and that the actual
                prices will be about 10% lower, and will include
                minimal charges for address space acquired before
                1994.




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                 +-------------------------------------------------+
                 |               Charges for a /16                 |
                 +------------+------------------------------------+
                 |Acquired in |           To be paid in            |
                 |            |                                    |
                 |Quarter     | 1997-1   1997-2   1997-3   1997-4  |
                 +------------+------------------------------------+
                 |1994-1      |  42.21    29.96    21.66     16.07 |
                 +------------+------------------------------------+
                 |1994-2      |  84.42    59.92    43.33     32.15 |
                 +------------+------------------------------------+
                 |1994-3      | 126.63    89.88    64.99     48.22 |
                 +------------+------------------------------------+
                 |1994-4      | 168.84   119.84    86.66     64.29 |
                 +------------+------------------------------------+
                 |1995-1      | 211.04   149.79   108.32     80.37 |
                 +------------+------------------------------------+
                 |1995-2      | 253.25   179.75   129.98     96.44 |
                 +------------+------------------------------------+
                 |1995-3      | 295.46   209.71   151.65    112.51 |
                 +------------+------------------------------------+
                 |1995-4      | 337.67   239.67   173.31    128.59 |
                 +------------+------------------------------------+
                 |1996-1      | 379.88   269.63   194.98    144.66 |
                 +------------+------------------------------------+
                 |1996-2      | 422.09   299.59   216.64    160.73 |
                 +------------+------------------------------------+
                 |1996-3      | 464.30   329.55   238.30    176.81 |
                 +------------+------------------------------------+
                 |1996-4      | 506.51   359.51   259.97    192.88 |
                 +------------+------------------------------------+
                 |1997-1      | 548.72   389.46   281.63    208.95 |
                 +------------+------------------------------------+
                 |1997-2      |   0.00   419.42   303.29    225.02 |
                 +------------+------------------------------------+
                 |1997-3      |   0.00     0.00   324.96    241.10 |
                 +------------+------------------------------------+
                 |1997-4      |   0.00     0.00     0.00    257.17 |
                 +------------+------------------------------------+


                Table 5: Example allocation charges based on the model
                in Appendix C - actual charges will be about 10%
                lower.



                From Table 5 it becomes apparent that the overall
                price per address unit goes down over time.  This is
                due to the economies of scale obtained by stable
                costs and a rapid increase in the allocation of
                address space.

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                The advantages of this model are:

                o    It encourages conservation because it is
                     cheaper for registries to wait on requesting
                     address space and to maximise usage of their
                     allocations.

                o    It is a fair usage based charging model.

                o    It improves the stability of the RIPE NCC,
                     because the revenue generated does not depend
                     directly on the number of registries.

                The disadvantages that this model has are:

                o    It has an increased administrative overhead in
                     comparison to model 1 (but which is much lower
                     than model 2).

                o    Registries do not know exactly what their
                     charges in the forthcoming year will be.


    6.  Recommendation

                Because the revenue generated with model 3 does not
                depend directly on the number of local IRs serviced,
                it improves the long term stability of the RIPE NCC.
                Although the number of local IRs has grown at an
                exponential rate in the last two years, it is not
                known how long this expansion will continue, or
                whether a consolidation may occur at some point. A
                charging model in which the income of the RIPE NCC
                depends directly on the number of registries, will
                leave the RIPE NCC unstable in case of market
                changes, and for this reason, we prefer model 3 in
                comparison to model 1.

                Moreover, with model 3, the registration service
                fees paid by a local IR are determined in part by
                the rate that it distributes address space.  This is
                by far the most objective measure that can be used
                to evaluate the usage rate of a local IR. As such
                this model is extremely fair.

                We strongly recommend that Model 2 not be applied.
                Whereas it may be considered fair in that it applies
                strict measures of service usage, it has a number of
                essential disadvantages. Implementation of model 2
                would probably encourage registries to carry out
                practices which conflict with global Internet
                address registration policies.  This would be detri-
                mental to the fair, efficient, and co-operative
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                registration system that now exists. In fact, it
                threatens the very aims the Internet registry system
                was implemented to uphold.

                Both in terms of stability and fairness, model 3 is
                to be preferred in comparison to model 1. Meanwhile,
                model 2 may endanger the Internet registry system.
                For these reasons, we recommend that model 3, allo-
                cation based charging be implemented for the RIPE
                NCC in 1997.  However, because model 1 is easy to
                administer and has proven to work in the past, we
                consider this to be an acceptable alternative for
                1997.


    Acknowledgements

                The authors would like to thank Daniel Karrenberg
                for his critical input in the preparation of this
                document. He read and commented on several drafts.
                In addition, we appreciate the efforts of Mirjam
                Kuehne, Ambrose Magee, and Roderik Muit who reviewed
                it carefully and made useful comments.






























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    Appendix A: Charging Details


                Note that in all tables, the forecast figures for
                1997 differ depending on the charging model chosen.
                This is because the administrative overhead intro-
                duced effects all charges.


    +-----------------------------------------------------------------------------+
    |                        New Registry Services Costs                          |
    +----------------+------------------------------------------------------------+
    |   Activity     |          Cost           1996              1997             |
    |                |          per                   Model 1   Model 2   Model 3 |
    +----------------+------------------------------------------------------------+
    |Initial contact |     new local IR         244       139       139       139 |
    |Local IR course |       attendee           544       293       296       295 |
    |    Total       | 2 attendees + contact   1332       725       731       729 |
    +----------------+------------------------------------------------------------+


                Table A.1: New Registry Services Costs with costs
                for 1996 based on model 2 only.



                   +--------------------------------------------+
                   |     Revenue Earned with Start Up Fees      |
                   +--------+-----------------------------------+
                   |        | Cost   Charged   Total "+" earned |
                   |        |                      in 1997      |
                   |        | ECU      ECU           KECU       |
                   +--------+-----------------------------------+
                   |Model 1 | 725     2000           489        |
                   |Model 2 | 731     2000           487        |
                   |Model 3 | 729     2000           488        |
                   +--------+-----------------------------------+


                Table A.2: 1997 revenue to be earned with start up
                fees












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                     +-----------------------------------------+
                     |Coordination Services Costs per Local IR |
                     +------------+----------------------------+
                     |Activity    |  Cost 1996     Cost 1997   |
                     |            |     ECU           ECU      |
                     +------------+----------------------------+
                     |Model 1     |     384           868      |
                     |Model 2     |     384           875      |
                     |Model 3     |     384           871      |
                     +------------+----------------------------+


                Table A.3: Coordination services costs per local IR,
                with costs for 1996 based on charging model 2.


                         +---------------------------------+
                         | Coordination Services Charges   |
                         +-----------+---------------------+
                         |           | Cost   Plus   Total |
                         |           | ECU    ECU     ECU  |
                         +-----------+---------------------+
                         |   Model 1 |                     |
                         +-----------+---------------------+
                         |     Large |  868   4826    5694 |
                         |    Medium |  868   2413    3281 |
                         |     Small |  868    483    1351 |
                         |Enterprise |  868    483    1351 |
                         +-----------+---------------------+
                         |   Model 2 |                     |
                         +-----------+---------------------+
                         |     Large |  875   4959    5833 |
                         |    Medium |  875   2479    3354 |
                         |     Small |  875    496    1371 |
                         |Enterprise |  875    496    1371 |
                         +-----------+---------------------+
                         |   Model 3 |                     |
                         +-----------+---------------------+
                         |     Large |  871   4892    5764 |
                         |    Medium |  871   2446    3317 |
                         |     Small |  871    489    1361 |
                         |Enterprise |  871    489    1361 |
                         +-----------+---------------------+



                Table A.4: Charges to be levied for coordination
                                 services in 1997.





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    Appendix B: Charging Examples



             +----------------------------------------------------------+
             |               RIPE NCC Charging Examples                 |
             +----------------------------------------------------------+
             |                  |                      1996             |
             |Registry     Size | Current   Model 1   Model 2   Model 3 |
             |                  |     ECU       ECU       ECU       ECU |
             |       A    small |    1500      2550      3839     2401  |
             |       B    small |    1500      2550      3849      1611 |
             |       C    small |    1500      2550      2031      1474 |
             |       D   medium |    4500      4550      3994      5658 |
             |       E   medium |    4500      4550      5151      5404 |
             |       F   medium |    4500      4550      4386      3460 |
             |       G    large |    8500      7000      6496      6679 |
             |       H    large |    8500      7000      6291      8616 |
             |       I    large |    8500      7000     10221      8218 |
             +------------------+---------------------------------------+


                Table B.1: Charges resulting from the alternative
                methods for example registries.





























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    Appendix C: Computing the Charges for Model 3

                In this appendix, we summarize the mathematical
                model which lead to the allocation based registra-
                tion charges presented for model 3 in Section 5.4.2.




                Unfortunately, it contains mathematical equations
                which are only viewable in Postscript. The
                Postscript version of this document is available on
                our FTP site at

                     ftp://ftp.ripe.net/ripe/docs/ripe-143.ps






































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