[arin-ppml] Policy Proposal: IPv4 Recovery Fund

Member Services info at arin.net
Mon Nov 24 12:09:34 EST 2008

> The AC will assign shepherds in the near
> future. ARIN will provide the names of the shepherds to the community
> via the PPML.

AC shepherds are Cathy Aronson and Bill Darte.


Member Services
American Registry for Internet Numbers (ARIN)

Member Services wrote:
> ARIN received the following policy proposal. In accordance with the ARIN
> Internet Resource Policy Evaluation Process, the proposal is being
> posted to the ARIN Public Policy Mailing List (PPML) and being placed on
> ARIN's website.
> The ARIN Advisory Council (AC) will review this proposal at their next
> regularly scheduled meeting. The AC will assign shepherds in the near
> future. ARIN will provide the names of the shepherds to the community
> via the PPML.
> In the meantime, the AC invites everyone to comment on this proposal on
> the PPML, particularly their support or non-support and the reasoning
> behind their opinion. Such participation contributes to a thorough
> vetting and provides important guidance to the AC in their deliberations.
> The ARIN Internet Resource Policy Evaluation Process can be found at:
> http://www.arin.net/policy/irpep.html
> Mailing list subscription information can be found at:
> http://www.arin.net/mailing_lists/
> Regards,
> Member Services
> American Registry for Internet Numbers (ARIN)
> ## * ##
> Policy Proposal Name: IPv4 Recovery Fund
> Author: Leo Bicknell
> Proposal Version: 1
> Submission Date: 21 November 2008
> Proposal type: New
> Policy term: Permanent
> Policy statement:
> (Create new section in section 4, which would be 4.10 based on the
> current NRPM):
> 4.10 IPv4 Recovery Fund
> 4.10.1 Implementation Timing
>        Upon receiving a valid request for a block larger than ARIN
>        can satisfy from its existing free pool, or, by obtaining
>        additional space from IANA, ARIN shall begin offering monetary
>        incentives for returned IP blocks according to this policy.
> 4.10.2 Recovery of IPv4 Space
>        ARIN still believes that organizations should voluntarily
>        return unused and/or unneeded IP resources to the community.
>        However, upon implementation of this policy, ARIN will offer
>        monetary incentives for the return of IPv4 resources to ARIN.
> 4.10.2 Distribution of Recovered Space
>        Once approved for IPv4 space ARIN will ask the requester to
>        specify an amount they are willing to pay for a block or the
>        specified size.
>        ARIN will use this bid in determining what incentives  ARIN
>        may offer for return of space. If ARIN recovers space and
>        offers it to requester at or below the specified price, the
>        bid shall be binding on requester.
>        If space becomes available from ARIN at a higher cost, ARIN
>        shall still offer the space to the requester(s) in the order
>        of approval of the requests, but, requester shall have the
>        right to refuse any offer at a price higher than bid.
>        ARIN shall match bidders first on best prefix length, but,
>        in no case shall ARIN provide a partial-fill offer.
> 4.10.3 Transparency
>        ARIN staff shall make public the current and historical
>        prices of asks, bids, and executed transactions.  ARIN staff
>        must regularly report on the amount of address space obtained
>        and distributed via this mechanism.
> 4.10.4 Cost Recovery
>        It is anticipated that ARIN may need to provide some seed
>        money to obtain space before it can be given out.  The money
>        raised through successful bids will fund the purchase of
>        additional blocks to supply any ongoing demand.  While there
>        may be a surplus of money or of IPv4 resources at any one
>        time, asking prices should be managed in such a way as to
>        be revenue neutral to ARIN.
> Rationale:
> Many have recognized that in order for unused or poorly used IPv4
> resources to be returned to the free pool that monetary compensation
> will be required.  This is particularly the case in poorly used
> assets where the current holder may have to expend time and money
> to renumber in order to free the blocks.
> This proposal sets up a fund administered by ARIN to encourage the
> return of space.  Effectively ARIN will offer monetary incentives to
> return unused or poorly used IPv4 resources and place them back into the
> IPv4 free pool.
> The intention is for this activity to be revenue neutral to ARIN.  To
> achieve that goal those requesting IPv4 resources will be requested to
> bid on a one-time payment to the recovery fund to cover the cost of the
> resources they have received.
> The proposal is intentionally vague on the exact implementation details
> to staff because:
>   - Transactions with those returning space and obtaining space may
>     occur in any order.
>   - The bidding process may need to evolve over time, and may not
>     be as simple as highest bidder wins.  It may include aspects such
>     as a dutch auction style format (all winners pay the lowest winning
>     price), or may include other factors such as which size blocks
>     ARIN has free in an effort to limit deaggregation.
>   - ARIN will have to develop contracts and procedures around this
>     activity that are better suited for staff and legal than the
>     policy process.
> Compared to other "transfer proposals", this proposal has the following
> benefits:
>   - Maintains that IP addresses are not property.
>   - Maintains the concept that unused addresses should be returned to
>     the free pool.
>   - Maintains need based addressing.
>   - Removes the need for those with excess resources to find those
>     without resources.  There is no need for any sort of listing
>     service, eBay, etc.
>   - All transactions are two party transactions with ARIN as one of
>     the parties.  The potential for multi-party legal disputes is
>     reduced.
>   - ARIN can absorb spikes in supply or demand, creating more level
>     prices over time.
>   - ARIN can provide transparency across all transactions in this
>     system.
>   - Reduces confusion to new entrants over where they should go to
>     receive address space.
> To illustrate the intent of section 4.10.2, let's say that ARIN has
> the following requests in the following order:
> 1.      a /22 for XYZ Corp. ($300)
> 2.      a /15 for BIll's Bait and Hosting Megacorp. ($2500)
> 3.      a /19 for John's Host Hideaway ($2000)
> 4.      a /21 for Piner Klerpin's New Net ($800)
> Example 1:
> ARIN receives a /18 from someone, but, pays an incentive of
> $2200 for that /18.
> ARIN would offer a /19 to John's Host Hideaway for $1100
> ARIN would then satisfy Piner Klerpin's request for $225
> ARIN would then satisfy XYZ Corp's request for $112.50
> ARIN would still have a /20, /21, and /22 for future requests.
> Example 2:
> ARIN receives a /19 from someone, but, pays an incentive of $2500
> ARIN would offer the /19 to John's Host Hideaway for $2500.
> If John's turned down the $2500 price, they would remain in
> the queue, but, ARIN would subsequently satisfy request 4
> at 625 and offer a /21 to requester 4 for 312.50.
> Finally an example of what happens with several requests
> for the same size:
> 1.      a /20 for DEF Corp. ($1800)
> 2.      a /20 for Frank's Swizzler ($1500)
> 3.      a /20 for Jim's Compushop ($2100)
> ARIN manages to obtain a /19 from someone, but, pays $4200
> for it.
> ARIN would first offer a /20 to DEF for $2100.
> ARIN would also offer a /20 to Frank's for $2100.
> If either of them refused, Jim's would receive their /20 for $2100.
> Timetable for implementation:
> Staff should begin developing procedures and updated templates
> immediately.  Policy would not go into effect until the criteria
> listed occurs.
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