[arin-discuss] IPv6 as justification for IPv4?

Michael Tague tague at win.net
Mon Apr 22 15:29:57 EDT 2013

In watching this conversation go on for some time, it seems to me the
driving issue behind it is that the current and proposed ARIN fee schedules
appear (especially to us little guys) to be rather strong weighted in favor
of large resource holders in two ways (that is, unfair):

1.  The scale is not linear: under the current scale a /21 holder pays 569
times as much per IP as a /8 holder.  While the proposed scale is better,
still under it, a /21 pays 256 times as much per IP as a /8 holder.  That
means a /8 holder is saving 99.6% over a /21 (proposed) per IP - that is a
pretty steep discount!

2.  The scale goes flat at the top making the difference in cost per IP even
greater.  A /8 holder pays the same as a /13 (current) or /11 (proposed).
And, by John's PDF, there are even a couple of /7's out there who would be
paying the same.

3.  (I would add), though not much talked about, there is the entire
category of legacy holders who pay next to nothing.

How do other organizations do it?    In the telephone world there is NPAC
which handles number porting.   They are an ARIN like group funded by the
phone companies and most of their funding comes from a quarterly assessment
that is based upon how many ported numbers a carrier has.   NAPC literally
takes the organization's cost, and divides it by the total ported numbers
and figures each carrier's pro-rata share.

NPAC only has one exception: small carriers with fewer than a few thousand
number ports are not charged anything at all.

So the question it seems to me is:  what is fair?   ARIN's proposed schedule
has fees double every time the allocation quadruples (then it goes flat at
the top).    NPAC, by comparison, is strictly linear:  Carriers who use
twice as much pay twice as much. 

What should ARIN's be?


-----Original Message-----
From: arin-discuss-bounces at arin.net [mailto:arin-discuss-bounces at arin.net]
On Behalf Of Jesse D. Geddis
Sent: Saturday, April 20, 2013 7:49 AM
To: arin-discuss at arin.net
Subject: Re: [arin-discuss] IPv6 as justification for IPv4?

So I think it's been established that quite a few folks think the past,
current, and proposed fee structure doesn't adequately deal with the /14 and
larger organisations. The next question is what should that fee structure
look like? How should it be scaled on IPv6? Is it better to substantially
lower the fees for the smaller orgs or to instead plow the revenue into
keeping initial /32 IPv6 allocations free until X threshold has been
reached? Maybe it's possible to do both.

A couple ideas have been suggested that include:
1. Doubling the fees for every 2 bits
2. Going based on the number of total /24's 3. Increasing fees for every /x
you go up 4. Creating more tiers at the top

I think #1 & #3 may be the two most interesting ones as they can be
translated directly to the IPv6 fee schedule.

What are some suggestions on what that fee structure would look like?

My sense is that there should be a floor for costs but this isn't rooted in
anything in particular other than $8 seems hardly worth billing.

Should there be a ceiling? It seems like that's at the root of what several
are unhappy with. John, can you please tell us what the current
smallest/largest ISP allocation is so we can have an ideas as to what we are
dealing with here?



Jesse Geddis
LA Broadband LLC

On Apr 20, 2013, at 12:22 AM, "Drake Pallister"
<drake.pallister at duraserver.com> wrote:

> To any interested,
> What Owen says is true and has been the way forever.
> Once an ISP grows beyond a certain size, everything else (resources) is
free, so to speak.
> That sort of reminds me of the USA Income tax System in many aspects.
> I've been a proponent the I.R.S. and States, having a Flat Tax, based upon
exactly what you earn (less deductons, of course).
> My analogy of  tonight will be one of a fuel filling station and tractor
> If I was a single owner-operator of my big rig Kenworth, I'd be paying for
every gallon of diesel fuel I filled up with.
> Then as my truck fleet grows (or compare to a different, but larger
fleet), they also pay for the gallons of fuel they put in the tank.
> However, once my truck fleet, or some other trucking fleet reaches the 
> purchase and consumption of (let's say 300K Gallons a month)---- Imagine a
dollar cap, where if they consume 300K gallons, 500K, or even a Million
gallons of fuel per month--- they are capped at the 300K gallons "bought"
regardless of how many gallons burned on the roadways,  charging whatever
per mile for freight transport..
> Now, back to the smaller fleets of 1, 3, or 5 tractor trailers are still
having to pay for the gallons they actually optain at the truck stop / gas
> That's the end of the analogy. It may partially relate to our industry and
IP's resources, or it may get the smack-down by others smarter and more
experienced than me.
> However,  I "won't" pass an opinion either way with my comparison of a
I.R.S. Flat tax idea, or the Diesel fuel analogy, as it might relate to flat
rate billing for IP numbers allocation.
> Well, maybe I will pass a a vague opinion, that the billing brackets 
> gor asset holders maybe ought to "not" have that point of everything 
> after X is no additional fee. I would bet you lunch that the asset 
> holders in those "big block clubs" are absolutely billing every last 
> stinking customer 10, 15, or 20 dollars per IP (v4 for this 
> conversatin) per month if the customer wants or needs an additional IP 
> number for whatever reason (if they will even allow additional IPs 
> onto the account)
> That is connectivity provideres, but compare to  hosted services
providers, they also usually charge the customer for more IPs. It takes
extra configuration and might or --not mean the consumption of more
bandwidth and data transfer. A hosting customer msy simply wish to have mail
on a different IP from a web site, and still different from some subdomains.
I cou;dn't say because every scenario in hosting can be different.
> I happen to know of  big connectivity provider who will sell a business
connectivity package with a /29 for xxx per month. But wait--- If the
customer needed maybe 5 extra IPs for random independent purposes, the
provider could just increase the customer to a /28 of IPv4 without adding
any additional routers, cables, fibers, cablemodems, bandwidth, monthly data
transfer, etc. Yet,Yet,Yet, the provider would outright refuse to just
increase the size of the IP net from a /29 to a /28 (ok even for a small
fee)---- But Nope---  they will make the customer purchase and pay monthly
$xxx for a complete second account of a second /29 which might not even be
in a contiguous block with the first /29.  I'm asking myself if that kind
super-duper connectivity should keep getting more IP numbers at no
additional fee past the ARIN fees cutoff point.
> Something doesn't smell like fresh morning mountain air and blossoming
flowers with those kinds of business practices.
> I'm simply tossing my thoughts out there and not demanding one procedure
or another, as it will end up however it does anyhow.
> Aside from all that, I can not foresee the future when everything
electrical has a v6 IP number, even my toaster or refrigerator. That will be
an interesting ride to watch. Just think about a publicly addressable
microwave oven.
> ~Drake
> ----- Original Message ----- From: "Owen DeLong" <owen at delong.com>
> To: <jdaniels at forked.net>
> Cc: <arin-discuss at arin.net>
> Sent: Friday, April 19, 2013 3:20 AM
> Subject: Re: [arin-discuss] IPv6 as justification for IPv4?
>> On Apr 18, 2013, at 08:52 , Jon Daniels <jdaniels at forked.net> wrote:
>>>> Yes, the fee structure tops out at XXL. Once you reach a certain size
and are paying $32,000/year, you don't have to pay more even as you get more
>>>> In reality, extending that pricing linearly beyond XXL wouldn't change
pricing at the lower tiers by much. Further, it is very unlikely that those
organizations are actually creating costs for ARIN that would come even
close to doing so.
>>>> Let's assume, for a moment, that an ISP existed that held </4, ?/6. 
>>>> By your argument, said ISP should, instead of $32,000/year, pay 
>>>> $256,000/year instead of $32,000/year. To the best of my knowledge, 
>>>> there is no such ISP and there are probably fewer than 5 ISPs in 
>>>> the </6, ?/8 category at $128,000/year, so your maximum additional
yield there is $480,000/year. Of the remaining 48 organizations in the XX-L
category, I have no idea where the split would fall between the $64,000
bracket you would establish at </8, ?/10  vs. the existing $32,000 bracket.
My best guess would be a ~50/50 split, so let's say 24 organizations.
>>>> So, you would increase costs for top-end organizations as follows:
>>>>       5       * 96,000
>>>>       24      * 32,000
>>>> ===============
>>>>               $1,248,000
>>>> If we were to spread that evenly across the X-S, S, and M registrants
(total 3818->3306 organizations), you would save each of those organizations
less than $400 per year.
>>>> I simply don't buy that it's somehow more fair to inflict 64k and
128k/year pricing on to a small number of organizations at the top end to
subsidize $400 discounts to 3300 other organizations.
>>> As a percentage of the involved organizations annual expenses, it 
>>> could in fact be *more* fair.  I don't know all the XX-Large orgs 
>>> involved, other than an example of my own company paying $2000/year 
>>> on the upcoming fee schedule with $60k in annual expenses and a /8 
>>> holder paying $32,000/year with $1 billion in expenses (quickly 
>>> looking at a list of /8 holders, a significant portion have annual 
>>> expenses way over $1 billion / year).
>> Most of the /8 holders you're looking at are:
>> 1. Legacy and don't pay ARIN fees.
>> 2. Not ISPs.
>>> XX-large:
>>> $32,000 is 0.0032% of $1 billion.
>> Red herring.
>>> My company:
>>> $2000 is ~3.3%of $60,000.
>>> As a percentage of operating expenses my small company pays 1031
>>> (101,031%?) times more for IP address space (or registration services
>>> - depending on how you want to look at it).    The number would be
>>> similar for net income, gross income, and virtually any other 
>>> comparable.
>> So far, ARIN doesn't base fees on gross revenues or annual expenses. 
>> If you would like to see ARIN start collecting the information 
>> necessary to do so and switch to a fee structure based on that, you 
>> should submit a suggestion to the board.
>>> I would not call this 'inflicting' fees upon on XX-Larges.  I would 
>>> call it paying a fair share that everyone else has been paying, but
>>> somehow XX-Larges have been avoiding.   Adding $128,000 per year to a
>>> $1 billion dollar budget is more like a fly landing atop a mountain 
>>> than an infliction.
>> Again, I don't think this is an accurate reflection of the actual 
>> XX-L organizations paying the actual fees.
>>> Saving $400 per year would be significant to my company.   I've been
>>> reading this ongoing debate with much interest and so far I have not 
>>> heard any good arguments for not increasing the fees for holders of 
>>> aggregates larger than /14 all the way to /8.
>>> The more I've watched this discussion the more I've noticed the fact 
>>> that small and medium companies are subsidizing the large companies 
>>> with free lunches via ARIN fees.
>> Not when you consider how their activities impact ARIN's costs.
>> Owen
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