[arin-ppml] Policy Proposal: IPv4 Recovery Fund

[Leo Bicknell]

In a message written on Sun, Nov 23, 2008 at 09:28:45PM -0600, Robert Bonomi wrote:
> > I'm not quite sure how much money is needed here.  One of the things
> > this enables is somewhat decoupling supply from demand.  That is,
> > let's say ARIN burns a /14 per week, and someone comes along with
> > a /8 they want to release.  Rather than wait for 64 weeks for enough
> > /14's to pile up ARIN could go get the /8 and then provide it over
> > the next 64 weeks.
> 
> "yeahbut" applies.  How do you know what a 'fair price' is to offer for
> that /8, when you have no idea what the buyers will be willing to pay, over
> the next year forward?
> 
> Get a blip of people with 'extremely urgent' need, willing to pay top-
> dollar early, and you could grossly overestimate what you can recoup for
> the rest of the block.  Pay the returner based on the short-term anomolous
> top-dollar bids you have, and you may have real problems moving the rest
> of the space.

I was thinking about it this morning and realized I chose an
excessively poor example.  Let me try again on the point of seed money.

I expect ARIN will hold some small amount of resources for the following
reasons (and I'm sure I missed some):

- The space returned is not fully demanded yet.  For instance, ARIN
  receives a /19, but has two requests in the queue for a /20 and a /21,
  so ARIN will end up holding a /21 until another requestor comes along.

- ARIN knows they receive requests of a specific size every 3-5 days,
  say for a /16.  ARIN has someone willing to return a /16, but no
  request in the queue for that size.  ARIN should complete the transaction, 
  not making the person wait knowing they will be able to get rid of it soon.

- Checks take time to cash (bank float).

- ARIN my have an operational practice of holding onto the space for a 
  short period of time before giving it back out, as they do today.
  Perhaps a week or two, to insure the party returning the space has
  removed all routes and such prior to the new user using it.

- Last, but not least, ARIN may see opportunities to aggregate blocks.
  A prime example may be in the "swamp", where huge numbers of /24's
  were given out.  ARIN may see locations where there is only one or
  two /24's keeping a /19 from being available, and may choose to
  pro actively contact the holders and make them aware of this program.
  If there were for instance two, and one returned quickly and the other
  took some time ARIN may choose to sit on the one for some number of
  weeks in an effort to get a whole block.

Note in the last case, this policy does not specifically allow or
prohibit ARIN paying a recovery fee for someone to move.  That is,
if there was a single /24 holding up a /19 that could be made
available, and demand was for /19's, then ARIN could pay the /24
person to renumber into a new /24 in an area of space unlikely to
make larger blocks.  I suspect this is a rare case, but it is
something enabled by having ARIN be in the middle of the system.

Obviously ARIN should be making no "long term investments" due to
the potential volatility of the market.  However, because of the
change in price any of the actions may lead to small losses or gains
in the short term.  That's why the policy can't specify this as a strict
zero sum game.

-- 
       Leo Bicknell - bicknell at ufp.org - CCIE 3440
        PGP keys at http://www.ufp.org/~bicknell/
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