[arin-ppml] Draft Policy ARIN-2014-14: Removing Needs Test from Small IPv4 Transfers

[ARIN]

Below is a staff and legal assessment for ARIN-2014-14: Removing Needs 
Test from Small IPv4 Transfers.

The draft policy text is below and available at:
https://www.arin.net/policy/proposals/2014_14.html

Regards,

Communications and Member Services
American Registry for Internet Numbers (ARIN)


##*##


ARIN STAFF ASSESSMENT
Date of Assessment: 22 Sept 2104
Policy Proposal:  2014-14 “Removing Needs Test from Small IPv4 Transfers”


1. Summary (Staff Understanding)

This policy would make the following changes to the recipient of 8.3 and 
8.4 transfers:

An organization must demonstrate the need for a 24-month supply of IPv4 
addresses only if the transfer is more than a /16 equivalent OR the 
recipient has received IPv4 addresses via an 8.3 transfer without needs 
assessment within the past 12 months.

2. Comments

A.    ARIN Staff Comments

•	Thus far, ~85% of completed 8.3 transfers have been of a /16 or less.
o	Needs based assessment would be removed from the majority of 8.3 
transfers with this policy
o	This policy has the potential to significantly lessen the amount of 
time it takes an analyst to process these types of 8.3 transfers when 
requested by organizations already established with ARIN

•	This policy could be implemented as written


B.    ARIN General Counsel - Legal Assessment

I examined the proposed amendments to Policies 2014-14 and 2014-20 
together, because both are ostensibly intended to solve the same 
problem: difficulties experienced by new entrants and smaller entities 
that may be unable to obtain addresses they need due to current policy 
limits at time when ISP IPV4 issuance to such downstream entities may be 
limited. Counsel believes that 2014-14 presents significantly less legal 
concern than 2014-20. Policy 2014-14 creates greater efficiency by 
removing a showing of need, and allowing a transfer of a /16 or smaller 
bloc. Exceptions to needs based review can be justified because the 
smaller size of the blocs does not provide a significant vehicle 
to ‘game’, ‘hoard’, or ‘speculate’ sizable IP resource blocks of size. 
The exception would address approximately 85% of 8.3 transfers, and thus 
be efficient for administration.

Policy proposal 2014-20 as described would permit new end users to 
obtain a /24 maximum assignment and new ISPs to obtain a new /21 maximum 
assignment without needs-based assessments.  These proposed exceptions 
to needs based review, like similar but different provisions in 2014-14, 
  do not provide a significant vehicle to ‘game’, ‘hoard’, or 
‘speculate’ for IP resource blocks of significant size. Those aspect of 
2014-20 raise no meaningful legal issue.  However, the 2014-20 proposal 
does cause some legal concern in its treatment of large volume resource 
holders. It would permit an existing end user or ISP to “receive via 
transfer as much space as they currently hold in total without any need 
assessment, OR a 24-month supply based on their monthly utilization 
rate.”  This exemption from the needs-based assessment provides a very 
significant exemption that benefits the largest resource holders the 
most, when that is not the articulated problem to be solved.  Although 
both proposals are intended to solve a problem of access for new 
entrants and small entities, this aspect of the proposed language in 
policy 2014-20 has the unfortunate side effect of increasing inequality, 
as the largest resource holders in the ARIN region currently hold the 
majority of all number resources, and exempting them from the needs 
requirement up to the amount they already hold permits such entities the 
right to obtain large quantities of additional resources without any 
evaluation of needs.
(Rather than creating such a broad exemption that essentially reduces 
the needs-based requirement to a shadow, it would be more rational to 
remove the needs requirement altogether, if the community believes that 
is the appropriate case than approving this broad exemption proposal. 
Counsel takes no position on the need to either retain or repeal the 
needs based requirement, as this issue is not before us in this policy).


3. Resource Impact

This policy would have minimal resource impact from an implementation 
aspect.  It is estimated that implementation would occur within 3 months 
after ratification by the ARIN Board of Trustees. The following would be 
needed in order to implement:
·      Updated guidelines and internal procedures
·      Staff training


  4. Proposal/Draft Policy Text Assessed
Draft Policy ARIN-2014-14
Removing Needs Test from Small IPv4 Transfers
Date: 16 May 2014
Problem Statement:
ARIN staff, faced with a surge in near-exhaust allocations and 
subsequent transfer requests and a requirement for team review of these, 
is spending scarce staff time on needs testing of small transfers. This 
proposal seeks to decrease overall ARIN processing time through 
elimination of that needs test.

Policy statement:
Change the language in NRPM 8.3 after Conditions on the recipient of the 
transfer: from "The recipient must demonstrate the need for up to a 
24-month supply of IP address resources under current ARIN policies and 
sign an RSA." to "For transfers larger than a /16 equivalent or for 
recipients who have completed a needs-free transfer in the prior year, 
the recipient must demonstrate the need for up to a 24-month supply of 
IP address resources under current ARIN policies and sign an RSA."
Change the language in the third bullet point in NRPM 8.4 after 
Conditions on the recipient of the transfer: from "Recipients within the 
ARIN region must demonstrate the need for up to a 24-month supply of 
IPv4 address space." to "For transfers larger than a /16 equivalent or 
for recipients who have completed a needs-free transfer in the prior 
year, recipients in the ARIN region must demonstrate the need for up to 
a 24-month supply of IP address resources under current ARIN policies 
and sign an RSA."

Comments:
Needs testing has been maintained for transfers largely because the 
community wishes to ensure protection against hoarding and speculation 
in the IPv4 market. This proposal seeks a middle ground between the 
elimination of needs tests for transfers altogether, and the continuance 
of needs tests for every transfer. This should help ARIN staff to reduce 
transfer processing time, since most transfers have been smaller than /16.
Timetable for implementation: Immediate





On 5/16/14, 4:20 PM, ARIN wrote:
> On 15 May 2014 the ARIN Advisory Council (AC) accepted "ARIN-prop-204
> Removing Needs Test from Small IPv4 Transfers" as a Draft Policy.
>
> Draft Policy ARIN-2014-14 is below and can be found at:
> https://www.arin.net/policy/proposals/2014_14.html
>
> You are encouraged to discuss the merits and your concerns of Draft
> Policy 2014-14 on the Public Policy Mailing List.
>
> The AC will evaluate the discussion in order to assess the conformance
> of this draft policy with ARIN's Principles of Internet Number Resource
> Policy as stated in the PDP. Specifically, these principles are:
>
>    * Enabling Fair and Impartial Number Resource Administration
>    * Technically Sound
>    * Supported by the Community
>
> The ARIN Policy Development Process (PDP) can be found at:
> https://www.arin.net/policy/pdp.html
>
> Draft Policies and Proposals under discussion can be found at:
> https://www.arin.net/policy/proposals/index.html
>
> Regards,
>
> Communications and Member Services
> American Registry for Internet Numbers (ARIN)
>
>
> ## * ##
>
>
> Draft Policy ARIN-2014-14
> Removing Needs Test from Small IPv4 Transfers
>
> Date: 16 May 2014
>
> Problem Statement:
>
> ARIN staff, faced with a surge in near-exhaust allocations and
> subsequent transfer requests and a requirement for team review of these,
> is spending scarce staff time on needs testing of small transfers. This
> proposal seeks to decrease overall ARIN processing time through
> elimination of that needs test.
>
> Policy statement:
>
> Change the language in NRPM 8.3 after Conditions on the recipient of the
> transfer: from "The recipient must demonstrate the need for up to a
> 24-month supply of IP address resources under current ARIN policies and
> sign an RSA." to "For transfers larger than a /16 equivalent or for
> recipients who have completed a needs-free transfer in the prior year,
> the recipient must demonstrate the need for up to a 24-month supply of
> IP address resources under current ARIN policies and sign an RSA."
>
> Change the language in the third bullet point in NRPM 8.4 after
> Conditions on the recipient of the transfer: from "Recipients within the
> ARIN region must demonstrate the need for up to a 24-month supply of
> IPv4 address space." to "For transfers larger than a /16 equivalent or
> for recipients who have completed a needs-free transfer in the prior
> year, recipients in the ARIN region must demonstrate the need for up to
> a 24-month supply of IP address resources under current ARIN policies
> and sign an RSA."
>
> Comments:
>
> Needs testing has been maintained for transfers largely because the
> community wishes to ensure protection against hoarding and speculation
> in the IPv4 market. This proposal seeks a middle ground between the
> elimination of needs tests for transfers altogether, and the continuance
> of needs tests for every transfer. This should help ARIN staff to reduce
> transfer processing time, since most transfers have been smaller than /16.
>
> Timetable for implementation: Immediate