[ppml] Proposed Policy: Adding an HD ratio choice for new IPv4 allocations

Tom Vest tvest at pch.net
Mon Feb 21 23:43:25 EST 2005

The proposed language for uses the terms "ISP" and "all  
previous allocations" to suggest how the denominator for the HD ratio  
should be calculated. However, "ISP" is not defined in the NPRM. This  
is not especially problematic for the current language, which  
applies the HD ratio only to an institution's most recent allocation.  
However, does ARIN possess the means to make such calculations for  
established ISPs that have grown/changed through M&A, selective  
divestiture, implementation of new autonomous systems, etc.?


On Feb 18, 2005, at 3:04 AM, Member Services wrote:

> Policy Proposal Name: Adding an HD ratio choice for new IPv4  
> allocations
> Author: Michael Dillon
> Policy term: permanent
> Policy statement:
> That section of the NPRM (Number Policy Resource Manual) be
> replaced with the following text:
> Utilization Efficiency
> ISPs must have efficiently utilized all previous allocations in order  
> to
> receive additional space. This includes all space reassigned to their
> customers. The reassignment information section of the ARIN ISP Network
> Request Template should be completed for all address blocks that have  
> been
> allocated to your organization. In the template, line 1b. Assigned:
> information will be verified via SWIP/RWHOIS and 1c. Reserved: should  
> be
> used to indicate internal network information. Please note that until  
> your
> prior utilization is verified to meet the requirements of section  
> and its subsections, ARIN can neither process nor approve a request for
> additional addresses.
> Capping the Utilization Percentage - In no case will an
> organization be required to show greater than 80% utilization of their
> most recent allocation.
>  Electing the use of HD Ratio - Any organization whose total
> IPv4 allocation is equivalent to a /20 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.
> Simplified HD Ratio table - When electing to use the HD  
> ratio
> calculation, the applicant may elect to use these simplified tables  
> rather
> than calculating the actual ratios:
> Total Alloc.    Total Perc.
> <  /20               80%
>> = /20 and < /18     75%
>> = /18 and < /16     70%
>> = /16 and < /14     66%
>> = /14 and < /12     62%
>> = /12 and < /10     59%
>> = /10               55%
> Recent Alloc.   Recent Perc.
> <  /19               56%
>> = /19 and < /18     51%
>> = /18 and < /17     49%
>> = /17 and < /16     46%
>> = /16 and < /15     44%
>> = /15 and < /14     42%
>> = /14               40%
> In these tables the percentage columns refer to the percentage  
> utilization
> of the address block represented by the first column.
> HD ratio threshold for all previous allocations - All  
> requests
> for additional IPv4 address space subject to the HD Ratio shall require
> the efficient utilization of the sum total of all existing IPv4
> allocations. The HD Ratio on the sum total of all existing IPv4
> allocations must be greater than or equal to .966.
> HD ratio threshold for the most recent allocation - In
> addition, the HD ratio of the most recent IPv4 allocation must be  
> greater
> than or equal to .930.
> HD ratio calculation defined - The HD ratio is calculated as
> log(utilized IPv4 addresses) divided by log(total addresses in all
> previous IPv4 allocations). In this formula, log refers to the natural
> logarithm.
> Rationale:
> The existing fixed 80% threshold does not recognize that address
> management efficiency decreases for large address blocks and imposes an
> unreasonable management overhead on larger organizations. The HD ratio
> floating threshold makes allowance for hierarchical management. As
> hierarchy increases in a network, the need for maintaining spare  
> addresses
> in a larger number of address blocks requires an ISP to have a lower
> overall utilization rate for addresses. This effect is caused by both
> increasing depth in addressing hierarchy and the increased breadth  
> enabled
> by the deeper hierarchy, e.g. larger number of PoPs. We cannot measure
> depth and breadth of hierarchy directly so we approximate this by
> measuring the total quantity of IP addresses allocated to the ISP.
> The existing fixed threshold imposes a limited growth rate on larger  
> ISPs
> which is inconsistent with restraint of trade legislation in USA,  
> Canada
> and other countries. This growth rate limit has been masked in previous
> years by two factors. One is that many, many new ISPs were starting up  
> and
> therefore the growth of the Internet was not limited by the growth  
> rate of
> a single company. The second factor is that in the recent past, many
> companies experienced shrinkage and churn. When the growth of new  
> business
> required new IP addresses, they could either apply to ARIN or mine the
> required addresses from these churned customers. Today we have a  
> situation
> where many companies have cleaned up their internal inefficiencies and  
> the
> Internet is growing once again, but the number of independent network
> operators is much reduced. There is a real danger that the fixed  
> threshold
> imposed by ARIN will, in fact, limit the ability of one or more network
> operators to grow their Internet services.
> This limiting effect kicks in when an organization's rate of growth
> exceeds their 6 month predictions and the time required to run internal
> network change management processes is longer than the time required to
> use up the last 20% of their most recent allocation. The Internet has
> become a critical infrastructure in the world economy and prudent  
> network
> management practices require that any change to a network should be
> checked, tested and carefully rolled out during narrow change windows
> which may be as little as 20 hours per week. Many smaller networks who  
> do
> not provide mission critical network services can accommodate the fixed
> threshold with little problems. However, ARIN's policies apply to all
> organizations in the region regardless of business model, it is  
> important
> for these policies to allow a variety of business models to compete on  
> a
> level playing field.
> Because this requires ISP to make fundamental changes in their  
> addressing
> process it is made entirely optional. There are three possibilities. An
> ISP can do everything in the same way as they always have and
> ensures that they continue to adhere to ARIN's policies. An ISP can  
> elect
> to apply the HD ratio to their address management systems by using the
> percentage tables from At any point in time an ISP needs to  
> be
> concerned with only two table entries, and this should be easy to
> incorporate into percentage-based management systems. Or, an ISP can  
> elect
> to implement the HD ratio formula into their management systems and use
> the same framework for both IPv6 and IPv4 allocations.
> RIPE will be discussing a similar proposal from Alain Bidron of France
> Telecom at their meeting in Stockholm May 2 - 6, 2005. In Europe, the
> largest ISPs are telecom companies and are members of the ETNO  
> (European
> Telecom Network Operators Association). The ETNO has recently  
> published an
> expert opinion document in which they strongly support applying the HD
> ratio to IPv4 addresses. This document is available in PDF format at  
> this
> <http://www.etno.be/pp/EC064%20- 
> %20NANI%20EC%20on%20IPv4%20AD%20ratio.pdf>.
> 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 made a presentation of this to last year's RIPE 48 meeting in
> Amsterdam. PDF slides of his presentation are here
> <http://www.ripe.net/ripe/meetings/ripe-48/presentations/ripe48-ap-hd- 
> ratio.pdf>.
> Paul and some others use the term 'AD ratio' to refer to the HD ratio  
> when
> it is applied to IPv4 addresses. I have kept the original term used in
> ARIN's IPv6 policy for the sake of simplicity.
> Timetable for implementation: 30 days after ratification by the board

More information about the ARIN-PPML mailing list