[arin-ppml] Policy Proposal: IPv4 Recovery Fund

Ted Mittelstaedt tedm at ipinc.net
Mon Nov 24 16:13:06 EST 2008

Unnecessairly complicated implementation of what is a simple
idea.  I have made some changes and observations to simplify it
that are inline.

> -----Original Message-----
> From: arin-ppml-bounces at arin.net 
> [mailto:arin-ppml-bounces at arin.net] On Behalf Of Member Services
> Sent: Friday, November 21, 2008 12:12 PM
> To: arin-ppml at arin.net
> Subject: [arin-ppml] Policy Proposal: IPv4 Recovery Fund
> 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.

"return of IPv4 resources to ARIN and relinquishment of any future claims
to them"

> 4.10.2 Distribution of Recovered Space

strike this entire section.  ARIN needs to set a fee schedule of the return
incentives and go by that.  ARIN is not Ebay.

> 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

Strike this section.  There should be no effort to manage this in such
a way as to be revenue neutral.  If it is, great.  But, reclamation of
abandonded IPv4 resources is also costly.  Paying bounties for returned
IPv4 is likely going to be cheaper than reclamation efforts in many cases.

The community must understand that any policy modification other than
just ignoring it and letting IPv4 die by itself, will cost ARIN more money.
By sanctioning these policy changes the community is making a statement
that it wants to spend money on making sure IPv4 is more fully utilized 
before IPv4-runout.

> 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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