[arin-ppml] Policy Proposal: IPv4 Recovery Fund - Revised

[Member Services]

Policy Proposal
IPv4 Recovery Fund

This proposal is in the first stage of the ARIN Policy Development
Process.

The proposal originator submitted a revised version of the proposal.

ARIN staff will perform the Clarity and Understanding step of the Policy
Development Process. Staff does not evaluate the proposal itself at this
time, their only aim is to make sure that they understand the proposal
and believe that the community will as well. Staff will report the
results of this step to the ARIN Advisory Council (AC) within 10 days.

The AC will review this proposal at their next regularly scheduled
meeting (if the period before the next regularly scheduled meeting is
less than 10 days, then the period may be extended to the subsequent
regularly scheduled meeting). The AC will decide how to utilize the
proposal. The decision will be announced to the PPML.

In the meantime, the AC invites everyone to comment on this proposal on
the PPML, particularly their support or non-support and the reasoning
behind their opinion. Such participation contributes to a thorough
vetting and provides important guidance to the AC in their deliberations.

The ARIN Policy Development Process can be found at:
http://www.arin.net/policy/pdp.html

Mailing list subscription information can be found at:
http://www.arin.net/mailing_lists/

Regards,

Member Services
American Registry for Internet Numbers (ARIN)


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Policy Proposal Name: IPv4 Recovery Fund

Proposal originator: Leo Bicknell

Proposal Version: 4.0

Date: 1/8/2009

Proposal type: New

Policy term: Permanent

Policy statement:

(Create new section in section 4, represented by "4.X".)

4.X IPv4 Recovery Fund

4.X.1 Implementation Timing

       Upon receiving a valid request for a block larger than ARIN
       can satisfy from its existing free pool, or, by obtaining
       additional space from IANA, ARIN shall begin offering financial
       incentives for returned IP blocks according to this policy.

4.X.2 Recovery of IPv4 Space

       ARIN believes that organizations should voluntarily return
       unused and/or unneeded IP resources to the community.  However,
       upon implementation of this policy, ARIN will offer financial
       incentives for the return of IPv4 resources to ARIN
       relinquishment of any future claims to those resources.  ARIN
       will continue to accept voluntary returns.

4.X.3 Allocation of Recovered Space

       Once approved for IPv4 space ARIN will ask the requester to
       specify a bid of how much they are willing to pay for
       reclamation of address space.  ARIN will use this bid in
       determining what incentives to offer for return of space.
       The requester may make a higher bid at any time, which is
       treated as a brand new bid replacing their old bid.

       If ARIN recovers space and offers it to requester at or below
       the specified bid within 60 days of the time the bid was
       made then the bid shall be binding on requester at the price
       ARIN offers the space.

4.X.4 Address Block Management

       ARIN may not offer a partial fill, that is provide a block
       smaller than the one for which the requester was approved.

       ARIN may split recovered blocks into multiple smaller blocks
       at the staff's discretion using the following principals:
         - It is unlikely a request will be made for the address
           block size involved in the next 60 days.
         - The block is divided into as few parts as practical.
         - There are enough bids to allow the entire block to be
           allocated.

4.X.5 Transparency

       ARIN staff shall make public the current and historical
       prices of asks, bids, and executed transactions in a manor
       that facilitates the bidding process.  ARIN staff must
       regularly report on the amount of address space obtained and
       distributed via this mechanism, number of blocks subdivided,
       as well as aggregate financial numbers.

4.X.6 Cost Recovery

       ARIN shall manage the address space recovery program with a
       goal of cost recovery.

       ARIN may:
          - Use ARIN funds to reclaim blocks when there is no specific
            demand; if such reclamation is deemed in the best interest
            of the community and there is a significant likelyhood of
            future demand.
          - Use a portion of the funds collected under this program
            to pay for the implementation of this program.

Rationale:

Many have recognized that in order for unused or poorly used IPv4
resources to be returned to the free pool that financial compensation
will be required.  This is particularly the case in poorly used
assets where the current holder may have to expend time and money
to renumber in order to free the blocks.

This proposal sets up a fund administered by ARIN to encourage the
return of space.  Effectively ARIN will offer financial incentives to
return unused or poorly used IPv4 resources and place them back into the
IPv4 free pool.

The intention is for this activity to be revenue neutral to ARIN.  To
achieve that goal those requesting IPv4 resources will be requested to
bid on a one-time payment to the recovery fund to cover the cost of the
resources they have received.

The proposal is intentionally vague on the exact implementation details
to staff because:

  - Transactions with those returning space and obtaining space may
    occur in any order.
  - The bidding process may need to evolve over time, and may not
    be as simple as highest bidder wins.  It may include aspects such
    as a dutch auction style format (all winners pay the lowest winning
    price), or may include other factors such as which size blocks
    ARIN has free in an effort to limit deaggregation.
  - ARIN will have to develop contracts and procedures around this
    activity that are better suited for staff and legal than the
    policy process.

Compared to other "transfer proposals", this proposal has the following
benefits:

  - Maintains that IP addresses are not property.
  - Maintains the concept that unused addresses should be returned to
    the free pool.
  - Maintains need based addressing.
  - Removes the need for those with excess resources to find those
    without resources.  There is no need for any sort of listing
    service, eBay, etc.
  - All transactions are two party transactions with ARIN as one of
    the parties.  The potential for multi-party legal disputes is
    reduced.
  - ARIN can absorb spikes in supply or demand, creating more level
    prices over time.
  - ARIN can provide transparency across all transactions in this
    system.
  - Reduces confusion to new entrants over where they should go to
    receive address space.

Change Log:

  - Changed "monetary" to "financial" to allow for the possibility
    of ARIN offering things other than direct payment (like fee
    credits).  Credit: Robert Bonomi.
  - Updated numbering so there were not two 4.10.2's.  Also changed
    to using a place holder for section.  Credit: Robert Bonomi
  - Changed the cost recovery language to be more clear and provide
    some additional flexibility.
  - Clarified 4.10.2 about future claims.  Credit: Ted Mittelstaedt
  - Split 10.X.3 into 10.X.3 and 10.X.3 with better titles.
  - Left the exact algorithm to staff.  Removed examples as a result.

Timetable for implementation:

Staff should begin developing procedures and updated templates
immediately.  Policy would not go into effect until the criteria
listed occurs.