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.










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    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.















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                                       RIPE NCC Charging Scheme 2000
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                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 <billing@ripe.net>.


    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
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                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.















































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    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.

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                                       RIPE NCC Charging Scheme 2000
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                1 Jan 2000
                     New charging scheme in effect for new local
                     registries.


















































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                                       RIPE NCC Charging Scheme 2000
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    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.


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    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.



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