[ppml] Policy Proposal 2008-2: IPv4 Transfer Policy Proposal - Revised Text

[Scott Leibrand]

Here's a list of changes we made between 1.0 and 1.1:

  - Removed undefined "M&A" from the new title of the existing policy, 
and retitled it "Transfers as an Artifact of Change in Resource Holder 
Ownership"
  - Per staff suggestion, renumbered existing 8.3 to 8.2.1, to make it 
clear it goes with the other existing policy, and is separate from the 
new policy.
  - Per staff suggestion, renumbered all of the new policy text under a 
single policy section, 8.3.
  - At staff request, defined IANA exhaustion (when IANA allocates its 
last unallocated unicast IPv4 address block) in 8.3.
  - Per thread with Jason on PPML, added clarifying statement in 8.3 
that "These conditions apply only to Simple IPv4 transfers, not to 
transfers performed according to section 8.2."
  - At staff request, defined transferor in 8.3.1 and transferee in 8.3.2.
  - Per PPML discussion, added "The transferee may request and receive a 
contiguous CIDR block large enough to provide a 12 month supply of IPv4 
addresses." under 8.3.2.
  - In response to staff comment, added "through this Simple Transfer 
process" to clarify the 8.3.2 condition that "The transferee may only 
receive one IPv4 address transfer through this Simple Transfer process 
every 6 months."
  - In order to avoid having an inadequate supply of smaller blocks, 
added section 8.3.6 to allow limited deaggregation of transfered blocks 
at ARIN discretion, to the level required to "ensure an adequate supply 
of small blocks while minimizing deaggregation."
  - Re-worded the 8.3.7 Safe Harbor statement for clarity.
  - In response to staff comment, added clarification to 8.3.8 that 
"Participation in the listing service is voluntary."

-Scott


Member Services wrote:
> Policy Proposal 2008-2, IPv4 Transfer Policy Proposal, has been revised.
> This proposal is open for discussion on this mailing list and will be on
> the agenda at the upcoming ARIN Public Policy Meeting in Denver.
> 
> The current policy proposal text is provided below and is also available
> at: http://www.arin.net/policy/proposals/2008_2.html
> 
> Regards,
> 
> Member Services
> American Registry for Internet Numbers (ARIN)
> 
> 
> ### * ###
> 
> 
> Policy Proposal 2008-2
> IPv4 Transfer Policy Proposal
> 
> Author: ARIN Advisory Council
> 
> Proposal Version: 1.1
> 
> Date: 7 March 2008
> 
> Proposal type: modify
> 
> Policy term: permanent
> 
> Policy statement:
> 
> Replace the current NRPM section 8 with the following --
> 
> 8. Transfers
> 
> [8.1. Transfers – retain as is:
> 
> Number resources are non-transferable and are not assignable to any
> other organization unless ARIN has expressly and in writing approved a
> request for transfer. ARIN is tasked with making prudent decisions on
> whether to approve the transfer of number resources.
> 
> It should be understood that number resources are not "sold" under ARIN
> administration. Rather, number resources are assigned to an organization
> for its exclusive use for the purpose stated in the request, provided
> the terms of the Registration Services Agreement continue to be met and
> the stated purpose for the number resources remains the same. Number
> resources are administered and assigned according to ARIN's published
> policies.
> 
> Number resources are issued, based on justified need, to organizations,
> not to individuals representing those organizations. Thus, if a company
> goes out of business, regardless of the reason, the point of contact
> (POC) listed for the number resource does not have the authority to
> sell, transfer, assign, or give the number resource to any other person
> or organization. The POC must notify ARIN if a business fails so the
> assigned number resources can be returned to the available pool of
> number resources if a transfer is not requested and justified.]
> 
> [8.2 – remove the word “only”, and retitle to “Transfers as an Artifact
> of Change in Resource Holder Ownership”:
> 
> 8.2. Transfers as an Artifact of Change in Resource Holder Ownership
> ARIN will consider requests for the transfer of number resources upon
> receipt of evidence that the new entity has acquired the assets which
> had, as of the date of the acquisition or proposed reorganization,
> justified the current entity's use of the number resource. Examples of
> assets that justify use of the number resource include, but are not
> limited to:
> • Existing customer base
> • Qualified hardware inventory
> • Specific software requirements.]
> [Renumber existing 8.3 to 8.2.1 and retitle to “Documentation
> Requirements for Transfers as an Artifact of Change in Resource Holder
> Ownership”:
> 
> 8.2.1. Documentation Requirements for Transfers as an Artifact of Change
> in Resource Holder Ownership In evaluating a request for transfer, ARIN
> may require the requesting organization to provide any of the following
> documents, as applicable, plus any other documents deemed appropriate:
> • An authenticated copy of the instrument(s) effecting the transfer of
> assets, e.g., bill of sale, certificate of merger, contract, deed, or
> court decree
> • A detailed inventory of all assets utilized by the requesting party in
> maintaining and using the number resource
> • A list of the requesting party's customers using the number resource.
> If further justification is required, the requesting party may be asked
> to provide any of the following, or other supporting documentation, as
> applicable:
> • A general listing of the assets or components acquired
> • A specific description of acquisitions, including:
> o Type and quantity of equipment
> o Customer base
> • A description of how number resources are being utilized
> • Network engineering plans, including:
> o Host counts
> o Subnet masking
> o Network diagrams
> o Reassignments to customers]
> 
> 8.3. Simple Transfer of IPv4 Addresses
> 
> After the exhaustion of the IANA IPv4 free pool (when IANA allocates its
> last unallocated unicast IPv4 address block), ARIN will also process
> IPv4 address transfer requests subject to the following conditions.
> These conditions apply only to Simple IPv4 transfers, not to transfers
> performed according to section 8.2.
> 
> 8.3.1 Conditions on the transferor (the organization providing addresses
> for transfer):
> • The transferor resides in the ARIN service area.
> • The transferor has signed an RSA and/or a legacy RSA covering the IPv4
> addresses transferred.
> • The transferor has no outstanding balances with ARIN.
> • The transferor has not received any IPv4 allocations or assignments
> from ARIN (through ordinary allocations or assignments, or through this
> Simple Transfer policy) within the preceding 24 months.
> • The transferor may not request any IPv4 allocations or assignments
> from ARIN (through ordinary allocations or assignments, or through this
> Simple Transfer policy) within the subsequent 24 months.
> 
> 8.3.2 Conditions on the transferee (the organization receiving the
> transferred addresses):
> • The transferee resides in the ARIN service area and intends to use the
> transferred IPv4 addresses within the ARIN service area.
> • The transferee has no outstanding balances with ARIN.
> • The transferee’s need is confirmed by ARIN, according to current ARIN
> policies, including but not limited to confirmation of utilization rate
> of any prior IPv4 allocations, assignments, or previously transferred
> IPv4 addresses held by the transferee.
> • The transferee signs (or has previously signed) an RSA covering the
> IPv4 addresses transferred.
> • The transferee has not provided any IPv4 addresses for transfer
> through this Simple Transfer process within the preceding 24 months.
> • The transferee may not provide any IPv4 addresses for transfer through
> this Simple Transfer process within the subsequent 24 months, except in
> the case of business failure.
> • The transferee may request and receive a contiguous CIDR block large
> enough to provide a 12 month supply of IPv4 addresses.
> • The transferee may only receive one IPv4 address transfer through this
> Simple Transfer process every 6 months.
> 
> 8.3.3 Conditions on the IPv4 address block to be transferred:
> • The IPv4 block must comply with applicable ARIN requirements,
> including minimum allocation size (i.e. NRPM 4.2.2., 4.2.4., 4.3.2.,
> 4.3.6.). However, an IPv4 allocation or assignment of /24 or larger, but
> smaller than the current minimum allocation size, may be transferred as
> a whole resource, but may not be subdivided.
> • The IPv4 block must currently be registered for use within the ARIN
> service area, either as part of an address block assigned by IANA to
> ARIN, or as part of a legacy address block allocated within the ARIN
> service area.
> • There must exist no dispute as to the status of the IPv4 block or
> regarding the allocation or assignment of such block to the transferor.
> • The transferor may retain one contiguous address range out of their
> original allocation or assignment for their own use, and transfer the
> other contiguous address range. If the address range to be transferred
> consists of multiple non-aggregatable CIDR blocks, each may be
> transferred to a different transferee. The retained address range may
> not be further subdivided or transferred for a period of 12 months.
> Notwithstanding the preceding, the block may be subdivided as provided
> in section 8.3.6.
> 
> 8.3.4 Fees
> • Completion of a transfer requires payment of a transfer fee according
> to ARIN’s schedule of fees.
> • The transferee will be subject to all future ARIN membership and
> service fees according to the transferee’s total address holdings.
> 
> 8.3.5 Pre-qualification
> 
> • An interested transferee must seek pre-qualification from ARIN to
> confirm its eligibility to receive a transfer (including satisfaction of
> need according to current ARIN policies) before making any solicitation
> for transfer. Upon pre-qualification, ARIN will provide the transferee
> with documentation of the pre-qualification, including the size (CIDR
> prefix length) of the largest IPv4 address block the transferee is
> eligible to receive, and the expiration date of the pre-qualification.
> • An interested transferor must seek pre-qualification from ARIN to
> confirm its eligibility to offer a transfer (including lack of
> outstanding balances and having signed an RSA) before offering IPv4
> address resources for transfer. Upon pre-qualification, ARIN will
> provide the transferor with documentation of the pre-qualification,
> including the network block and the expiration date of the
> pre-qualification.
> 
> 8.3.6 Deaggregation when Permitted by ARIN
> 
> If ARIN determines that there is an inadequate supply of small blocks,
> ARIN may allow transferors to subdivide network blocks beyond the
> limited subdivision permitted under 8.3.3. ARIN will attempt to ensure
> an adequate supply of small blocks while minimizing deaggregation.
> 
> 8.3.7. Safe Harbor for IPv4 Transfers through this Simple Transfer Process
> 
> When an IPv4 address resource is made available for transfer, it shall
> be deemed exempt from ARIN utilization audit until 90 days after its
> transfer pre-qualification or until the transfer is completed, whichever
> comes first.
> 
> In the event that a transfer is not consummated within the
> prequalification time period, the block may be immediately
> re-prequalified for transfer. Notwithstanding the current offered state
> of the address resource, however, the audit exemption period shall
> expire untolled 90 days after the expiration of the first
> pre-qualification period. After the expiration of any utilization audit
> exemption period, ARIN shall have 90 days in which to initiate a
> utilization audit. In no event shall non-exempt time be construed to
> extend the end of the next exemption period.
> 
> 8.3.8. Simple IPv4 Transfers to or from Organizations Under Common
> Ownership or Control
> 
> If an IPv4 transferor or transferee is under common ownership or control
> with any other organization that holds one or more IPv4 blocks, the IPv4
> transfer request must report all such organizations under common
> ownership or control.
> 
> When evaluating compliance with IPv4 Simple Transfer conditions, ARIN
> may consider a transferor’s transfer request in light of requests from
> other organizations under common ownership or control with the
> transferor. Similarly, ARIN may consider a transferee’s request in light
> of requests from other organizations under common ownership or control
> with the transferee. In evaluating requests from other organizations
> under common ownership or control, ARIN staff will consider the
> relationship between the organizations, the degree of coordination
> between the organizations, and the bona fide use of the addresses at
> issue to determine whether all appropriate conditions are met.
> 
> 8.3.9. Record-keeping and Publication of Simple Transfers of IPv4 Addresses
> 
> ARIN will develop and operate a listing service to assist interested
> transferors and transferees by providing them a centralized location to
> post information about IPv4 blocks available from prequalified
> transferors and IPv4 blocks needed by prequalified transferees.
> Participation in the listing service is voluntary.
> 
> After completion of the transfer, ARIN will update the registration
> records pertaining to the IPv4 block at issue. ARIN will adjust its
> records as to the holdings of the transferor and transferee.
> 
> After the transfer, ARIN will publish WHOIS data that reflects the
> current allocation or assignment of the transferred block. ARIN will
> also make available information about any prior recipient(s) of such
> block. ARIN will also publish a log of all transfers, including block,
> transferor, transferee, and date.
> 
> 
> 
> Rationale:
> The ARIN Board of Trustees asked the Advisory Council to consider a set
> of questions around the depletion of the free pool of IPv4 addresses,
> the transition to IPv6 for Internet address needs in the future, and
> ARIN's possible role in easing the transition.
> 
> Over the past few years the AC has spent a great deal of time reflecting
> on these issues — as a group, as individuals, and in consultation with
> the community. One outcome of this process is this policy proposal,
> which the AC is submitting for consideration at the next meeting. We are
> proposing some changes to existing ARIN policy regarding the transfer of
> IP address block registrations between subscribers, which will allow for
> the emergence of trade in IPv4 address space, with ARIN to provide a
> listing service for address blocks available for transfer under the
> liberalized policy. We are aware that this proposal, if adopted, will
> mark a major change in ARIN's role in the community and the Internet.
> 
> This policy proposal would create a transfer mechanism for IPv4 number
> resources between those who have excess resources and those who have a
> need, thereby allowing ARIN to continue to serve its mission after IANA
> free pool exhaustion. This proposal would also set conditions on such
> transfers intended to preserve as much as possible the existing policy
> related to efficient, needs-based resource issuance, and would leverage
> ARIN's extensive control systems, audit trails, and recognized position
> as a trusted agent to avoid speculation and hoarding and diminish the
> likelihood and extent of an uncontrolled 'black market' where the risk
> and potential for fraud is immeasurably higher.
> 
> Many of the transfer conditions are self-explanatory, but some worth
> highlighting are that:
> • To discourage speculation, a waiting period (proposed at 24 months) is
> required before a transferee (or ordinary resource recipient) can become
> a transferor, or vice versa.
> • Transferees must qualify for IPv4 space (just as they do today when
> getting it from ARIN) before they can receive address space by transfer,
> or solicit space on a listing service.
> • To discourage unnecessarily rapid growth of routing tables, an
> allocation or assignment may not be arbitrarily deaggregated. To allow a
> transferor to downsize within their existing space, they may split off a
> contiguous address range, once every 12 months, and transfer the
> resulting netblock(s), which are subject to ARIN’s minimum allocation
> size, to one or more transferee(s).
> • A transferee may receive one transfer every 6 months, so they’ll be
> incented to transfer a block appropriately sized for their needs, which
> will further discourage deaggregation and keep smaller blocks available
> for smaller organizations.
> The proposal would also have ARIN develop and operate a listing service
> to facilitate transfers and provide an authoritative central source of
> information on space available and requested for transfer. It would not
> prohibit private party transactions, but would require that potential
> transferors and transferees be pre-qualified first, so that neither
> party will encounter any unexpected surprises when they ask ARIN to
> process the transfer.
> 
> Timetable for implementation: Immediately, with most aspects of policy
> taking effect upon IANA exhaustion, per the policy text.
> 
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