[ppml] Proposed Policy: IPv4 Countdown

Ted Mittelstaedt tedm at ipinc.net
Mon Mar 19 14:38:26 EDT 2007

>-----Original Message-----
>From: ppml-bounces at arin.net [mailto:ppml-bounces at arin.net]On Behalf Of
>Howard, W. Lee
>Sent: Saturday, March 17, 2007 7:51 AM
>Subject: Re: [ppml] Proposed Policy: IPv4 Countdown
>> -----Original Message-----
>> From: ppml-bounces at arin.net [mailto:ppml-bounces at arin.net] On 
>> Behalf Of Ted Mittelstaedt
>> Sent: Friday, March 16, 2007 5:05 PM
>> The problem is that so far ARIN's policies say that the fees 
>> cover the cost of maintaining allocation information.  This 
>> assumes that ARIN cannot use fees as a tool to modify address 
>> consumption - although the fact that ARIN has maintained a 
>> wavier of IPv6 fees is basically an attempt to use fees as a 
>> tool to modify address consumption.
>ARIN's membership directed the Board to set fees at a level to
>recover expenses.  If the members would like to set a different
>goal, the Board they elected will listen.
>> Since ARIN is a non-profit, if it raises fees in order to 
>> modify how organizations consume addresses, you then have a 
>> situation where ARIN is now a profit-making organization.  
>> (or you have to find something to spend all the additional 
>> money on)  If it's a profit-making company you then cannot 
>> disallow other profit-making companies from selling IP addresses.
>Not exactly.  ARIN's status as a non-profit does not preclude
>it from having revenues be higher than expenses.  The IRS does
>prohibit certain kinds of activity, including what can be done
>any surplus.
>ARIN is classified as a 501c6 by the IRS.  
>> Basically the end result of all of this is that it is 
>> difficult to make lots of ARIN fee changes in order to 
>> attempt to enforce policy.  It's not impossible, but it is 
>> difficult.  And certainly, the fee changes that you can make 
>> will not be significant enough to modify the behavior of most 
>> organizations with large allocations.
>> The best way to approach fees is to make other policy changes 
>> then let ARIN decide what to do about the fees.  For example 
>When you say, "Let ARIN decide," do you mean the public, the
>members, the Board, or the staff? 

I mean ARIN.  You have a formula you use to arrive at the fee dollar
amount that sets the fee equal to recover expenses.  Presumably
you review this periodically to see if the fee structure is still
generating enough money to cover your expenses.  If you have to
do more work to reclaim addresses then your expenses go up and you
raise fees.  If you recover more IPv4 then there are more people
paying fees and thus economies of scale should cause fees to drop.

I would presume that at the beginning of an agressive IPv4
reclamation project that a lot of unused IPv4 would come back
with little effort, so when it gets reallocated, more money in
fees would come back than was spent on labor recovering IPv4.
Whereas at the end of an agressive IPv4 reclamation project 
a lot of labor would be required to get very little reclaimed
IPv4 (law of diminishing returns) back, so less money would
come in on fees for reallocated reclaimed space than labor
to get the reclaimed space.  Presumably those would balance out
and the net effect would be little change in fees.


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