[ppml] Policy Proposal 2004-2: Use of HD-Ratio for IPv4 Allocations

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proposal in the weeks leading to the ARIN Public Policy Meeting 
in Vancouver, Canada, scheduled for April 19-20, 2004.

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Policy Proposal 2004-2: Use of HD-Ratio for IPv4 Allocations

Author: Michael Dillon

Author's Organization: Radianz, Inc.

Policy term: permanent

Policy statement: 

1. Anyone who has already been allocated 4096 IPv4 addresses or
   more may choose to have additional requests for IPv4 addresses
   evaluated using an HD (Host Density) Ratio calculation to determine 
   sufficient utilization instead of a fixed percentage threshold.

2. All requests for additional IPv4 address space subject to the HD 
   Ratio shall require the efficient utilization of the sum total of 
   all existing allocations. The HD Ratio on the sum total of all 
   existing allocations must be greater than or equal to .966.

3. In addition, the HD ratio of the most recent allocation must be 
   greater than or equal to .930.

4. The HD ratio is calculated as log(utilized IPv4 addresses) divided
   by log(total addresses in all previous allocations). In this
   formula, log refers to the natural logarithm.

Rationale: 

The HD ratio was proposed as a way to determine allocation usage 
thresholds for IPv6 address allocations. For more details on this,
please refer to RFC 3194 <http://www.faqs.org/rfcs/rfc3194.html>. There
is some detailed background discussion about applying the HD ratio to
IPv4 allocations in a proposal by Paul Wilson posted to the APNIC
mailing list on Aug 7, 2003 
http://www.apnic.net/mailing-lists/sig-policy/archive/2003/08/msg00000.html
and he presented the it to the annual APNIC policy meeting using these 
slides
http://www.apnic.net/meetings/16/programme/sigs/docs/policy/addpol-pres-wilson-hd-ratio.pdf
I am not suggesting that ARIN should adopt the APNIC proposal and
although Paul invents a new name for the HD ratio, I prefer to keep the
original term.

The basic thrust of this proposal is to replace the rigid 80% usage 
criterion by the more flexible HD ratio and to shift the emphasis away
from the last allocated block to include the total allocated address
space. To that end, the .930 criterion for the last block is a lot
looser than the existing requirements for the last block. This is
because the utilization threshold establishes a time buffer between
the beginning of an ARIN application for additional addresses and the
final deployment of new addresses in the operational network. By using
a looser criterion as network size grows, we are also expanding this
time buffer. This recognizes that the economy is more dependent than
ever on the smooth running of our networks and we should not
artificially force larger members to operate with virtually no safety
buffers for implementing new addresses. This safety buffer size is
important because larger networks have more involved processes for
changes to their network and these processes take time.

Paul Wilson's paper contains ample discussions of the technical 
justification for using the HD ratio. I have proposed that we use
the .966 number that he suggests, I believe there may be valid arguments
for reducing this slightly, perhaps to .960.

It would be good for ARIN to have more detailed discussion of the HD
ratio on file however I don't believe that needs to be in the policy
itself. However, I would suggest that the ARIN website should contain a
copy of RFC 3194, a copy of Paul Wilson's paper, and a summary of any
ARIN member discussions regarding application of the HD ratio to IPv4
addresses. I will also be preparing some slides with graphs and tables
that can be displayed on the ARIN website prior to the policy meeting.

Please note the following points.

a) This policy only applies to organizations that already have IP space
   equivalent to a /20 block or larger.

b) The policy does not specify the source of the 4096 or more addresses
   therefore it could apply to an ISP who comes to ARIN for the very
   first time and exchanges an upstream allocation for their own 
   PI space.

c) The policy does not use the term "ISP" therefore it can also
   apply to any other organization with a large network which
   is growing larger and therefore needs another allocation.

d) The policy only applies to organizations who opt-in. This means
   that if your IP address management tools can't handle the HD ratio
   you can ignore it. If you find the HD ratio confusing or complex
   then you can ignore it. If you are crafty and fund a study which
   finds that your organization would benefit in some way from the
   old rules about an 80% threshhold then you can ignore this new 
   policy. The new policy provides a benefit to those organizations
   which need it without penalizing those which do not.

e) This policy proposal cannot be understood in isolation. You do need
   to read the RFC and Paul Wilson's discussion paper.

f) The .966 calculation in point 2 covers the entire aggregate of
   address space including the block covered by the .930 calculation
   in point 3. You have to meet both targets to pass this policy's test.

Timetable for implementation: 30 days after ratification