RIPE NCC Charging Scheme 1989
Karrenberg, Ridley
____________________________________________________
RIPE NCC Charging Scheme 1998
Daniel Karrenberg
Paul Ridley
RIPE NCC
Document: ripe-163
Updates: ripe-146
1. Scope
This document defines the 1998 RIPE NCC charging
scheme. It is based on the same model used in 1997;
"RIPE NCC Charging Scheme 1997" (ripe-146). This
model was approved at the 1996 contributors meeting
and has met with success.
Using the 1997 model we have developed the charging
scheme presented in section two below. Section
three details further steps to implement the scheme.
Section four provides details of the reasoning
behind this scheme both for the record and those
interested.
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2. Charging Scheme
The charges for 1998 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 1st 1997. Registries
can be assigned a size category higher than their
minimum category upon request. The categories will
be published. New local registries established dur-
ing 1998 will be charged a sign-up fee and 25% of
the yearly fee for each quarter that they are a
local IR; their initial minimum size category will
be SMALL. Enterprise registries are classed as small
registries for charging purposes. The amount of the
charges are as follows:
+-----------------------------------+
| Charge 1998 1997 1996 |
+-----------------------------------+
| Yearly SMALL 2450 2200 1500 |
|Yearly MEDIUM 3400 3000 4500 |
| Yearly LARGE 4500 4000 8500 |
| |
| Sign-Up 2000 1300 2000 |
+-----------------------------------+
Discussion
Due to inflation and increasing costs the yearly
charges for all registry types will have to rise by
approximately 10% in 1998. By increasing charges
evenly in percentage terms any cross subsidies are
prevented.
The costs of the services to be provided for local
IRs starting in 1998 is substantially higher than
that in 1997. The reasons for this are a planned
increase in the number of local IR courses given,
and an increased effort on the NCCs part to improve
the present web site documents and make new web site
help aids. In addition it is experienced that the
average number of questions a starting local IR asks
ha noticeably risen over the last 12 months , which
required more NCC resources to answer the questions.
In light of the substantially higher costs the sign-
up fee, from which these costs have to be covered,
has also been correspondingly risen. The new sign-up
fee of ECU 2000 will ensure that new registries
cover their own costs and no subsidising of new
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registries by old registries occurs.
We used the 1997 charging model algorithm to deter-
mine the minimum size category for each registry,
based on the address space allocations the registry
holds. We still consider this algorithm very fair,
because the distribution it generates clearly sug-
gests the three size categories. Also the total
number of registries per category is not dramati-
cally different from the current distribution.
There is however a trend that registries are growing
in size, which is a sign of healthy industry growth.
The following table compares the distribution of
current size categories with that of the minimum
size category determined from allocation data on
September 1st 1997:
+---------------------------------+
|Category New Minimum Current |
+---------------------------------+
| Small 71% 79% |
| Medium 21% 15% |
| Large 8% 6% |
+---------------------------------+
While the distributions themselves suggest that few
changes are happening, the breakdown of changes
below shows that 16.5% of all registries will have a
minimum size category that is larger than their cur-
rent one and 4.5 % will have the possibility to
change to a smaller category than they have cur-
rently chosen.
+--------------------------------+
| % Current New Minimum |
+--------------------------------+
| 66 SMALL SMALL |
| 13 SMALL MEDIUM |
| 8 MEDIUM MEDIUM |
| 5 LARGE LARGE |
| 4 MEDIUM SMALL |
| 3 MEDIUM LARGE |
| 0.5 SMALL LARGE |
| 0.5 LARGE MEDIUM |
+--------------------------------+
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 1st 1997. Up to this date the minimum size
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Karrenberg, Ridley
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category for all registries based on allocations
received before September 1st 1997 can be found at
ftp://ftp.ripe.net/ripe/local-ir/category and the
allocation data this is based on together with cur-
rent registry size can be found at
ftp://ftp.ripe.net/ripe/local-ir/allocs All reg-
istries are encouraged to check this data and report
any inconsistencies to <billing@ripe.net>.
Conclusion
We strongly believe that the charging model used in
1997 is fair, equitable and practical. Therefore the
1998 charging scheme follows exactly the same prin-
ciples. We are confident that this scheme as well
as being fair to all contributors will provide ade-
quate stability for the NCC, since it will generate
sufficient revenue to cover costs and planned for
surpluses.
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3. Steps to Implementation
8 Sep 97
1998 charging scheme published
Preliminary allocation listing per registry
published.
Preliminary minimum size category listing pub-
lished.
23 Sep 97
RIPE NCC Contributors meeting.
1998 Charging Scheme approved.
8 Sep-31 Oct 97
Registries can review preliminary data and
request any corrections.
The NCC will verify allocation time lines of
previous years.
1 Nov 97
Billing procedures (methods of payment credit
management
procedures) for 1998 published.
Complete allocation listing per registry pub-
lished.
Complete minimum size category listing pub-
lished.
15 Nov 97
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 1997.
25-29 Nov 97
Invoices and contracts for services in 1998
sent out.
31 Dec 97
Deadline for receipt of payment of invoice for
1998 services.
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1 Jan 98
New charging scheme in effect for new local
registries.
All registries are kindly requested to note and
abide by the time schedule.
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4. Detailed Reasoning of Charging Model
This section aims to describe the reasoning behind
the choice of the charging model laid down in
section 2. Since section 2 is intended as a stand
alone description of the charging scheme itself some
degree of repetition is inevitable in this section.
It should be noted that the basis document upon
which this reasoning is founded is ripe-143. To
that end this section should be read in conjunction
with ripe-143. The following three sub-sections
will expound in turn on the determination of a reg-
istry's size, the revenue required for 1998, 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 1997) 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, we could clearly identify three distinct groups
of registries. Those with:
N(reg) <= 10 (SMALL)
11 <= N(reg) <= 100 (MEDIUM)
110 < N(reg) (LARGE)
This algorithm provides a distribution quite similar
to the current distribution of size categories.
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4.2. Revenue Required for 1998
RIPE NCC's required revenue for 1998 consists of two
parts. Firstly enough revenue has to be generated
to cover the operating costs for 1998, which amount
to kECU 3457. Secondly surplus has to be earned in
order to build up sufficient reserves to cover any
RIPE NCC liabilities. At the 1996 annual NCC con-
tributors meeting it was agreed that the size of
these reserves should be equal to one years salary
costs. The period of time over which these reserves
should be built up has been adjusted to three years.
This leads to a surplus of kECU 285 which needs to
be earned in 1998.
Therefore in total 3457 + 285 = kECU 3742 of revenue
has to be generated.
With the expected growth in the number of local IRs,
as detailed in 'RIPE NCC Activity and Expenditure
Plan 1998' (ripe-162), combined with the charges
proposed in this document the target revenue of kECU
3742 will be achieved.
4.3. Charging Scheme Mechanics
The 1997 charging model ensured that every registry
regardless of size pays a high enough yearly contri-
bution to cover their own costs, and thus no cross
subsidies occur. The stratification of size by means
of charge that was the outcome met with approval and
was implemented. The aim of the 1998 charging scheme
is to again ensure that all registries cover their
costs and that the stratification of size by charge
stays. If as proposed all registries have their con-
tributions raised by approximately 10 % then these
aims will be achieved.
This does not however generate enough revenue to
cover any registry start-up fees or the majority of
the reserves to be built up in 1998. Therefore the
only variable that can be altered, if contributions
are only to be raised by 10 %, in order to increase
revenue is the sign-up fee. If the sign-up fee is
raised to ECU 2000 (the pre-1997 level), sufficient
revenue will be generated to cover all start-up
costs and the remaining reserve build up.
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