[arin-ppml] Revised -- Policy Proposal 2009-4: IPv4 Recovery Fund

[Ted Mittelstaedt]

We are neutral to this proposal with the exception of 4.X.5

We don't believe any purpose would be served by listing the
dollar amounts, and can think of many scenarios where revealing
them would compromise the bid system, and leak sensitive
internal company data of "bidders"  If all mention of "pricing"
was struck from this section we would be neutral on it as well.

Ted

> -----Original Message-----
> From: arin-ppml-bounces at arin.net 
> [mailto:arin-ppml-bounces at arin.net] On Behalf Of Member Services
> Sent: Thursday, April 09, 2009 10:33 AM
> To: arin-ppml at arin.net
> Subject: [arin-ppml] Revised -- Policy Proposal 2009-4: IPv4 
> Recovery Fund
> 
> Policy Proposal 2009-4: IPv4 Recovery Fund 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.
> 
> The current policy proposal text is provided below and is 
> also available
> at: http://www.arin.net/policy/proposals/2009_4.html
> 
> 
> Regards,
> 
> Member Services
> American Registry for Internet Numbers (ARIN)
> 
> 
> ## * ##
> 
> 2009 -4: IPv4 Recovery Fund
> 
> Date: 9 April 2009
> 
> Proposal type: New
> 
> Policy term:  Permanent
> 
> Policy statement:
> 
> (Create new section in section 4, represented by "4.X".)
> 
> 4.X IPv4 Recovery Fund
> 
> 4.X.1 Implementation Timing
> 
>       ARIN shall begin offering financial incentives for the return
>       of IPv4 number resources as specified in section 4.X when
>       IANA announces that the last full /8's in the IANA free pool
>       have been allocated to RIR(s).
> 
>   4.X.2 Recovery of IPv4 Resources
> 
>       Organizations should voluntarily return unused and/or unneeded
>       number resources to ARIN based on ARIN's current utilization
>       guidelines.  ARIN will provide instructions on how to
>       voluntarily return number resources on the ARIN web site.
> 
>       After the conditions in section 4.x.1 are met, ARIN will
>       offer financial incentives for the return of IPv4 number
>       resources to ARIN and relinquishment of any future claims
>       to those resources.  ARIN will use the bids from section
>       4.X.3 to determine the value of returned resources.
> 
> 4.X.3 Allocation of Recovered IPv4 Resources
> 
>       After a requester has been approved for IPv4 number resources
>       via any policy in section 4 or section 11 of the NRPM, ARIN
>       will ask the requester to specify a binding bid of how much
>       they are willing to pay for reclamation of number resources
>       to satisfy their request.  The requester may make a higher
>       bid at any time, which is treated as a brand new bid replacing
>       their old bid.
> 
>        Requesters may choose to bid $0, in which case they would
>       only be eligible for number resources that were voluntarily
>       returned to ARIN.
> 
>        IPv4 number resources recovered by ARIN under section 4.X.2
>       will be offered to those who have been waiting the longest
>       with bids high enough to cover ARIN's cost to recover the
>       resource.  If ARIN offers IPv4 number resources at or below
>       the requesters bid the requester will be required to take
>       the space at the offered price.
> 
> 4.X.4 Management of Recovered IPv4 Resources
> 
>       ARIN may not fill a request with multiple smaller blocks.
>       ARIN must offer recovered number resources in the largest
>       possible contiguous blocks.  Recovered IPv4 number resources
>       should be broken into smaller blocks only if there are no
>       bidders for the larger sized blocks, and ARIN believes there
>       are unlikely to be bidders for the larger sized block in the
>       next 30 days.  When sub-diving the block ARIN shall divide it
>       into as few pieces as possible to satisfy existing bids.
> 
>       ARIN should take all practical steps to aggregate returned
>       address blocks.
> 
> 4.X.5 Transparency
> 
>        ARIN must post statistics updated as frequently as practical
>       but not less than monthly on the ARIN web site regarding all
>       activity taking place under section 4.X.  ARIN must report
>       the following items at a minimum, and is encouraged to report
>       as much additional data as is practical and useful:
> 
>         - The amount of number resources recovered under 4.X.3.
>         - The amount of number resources allocated under 4.X.4.
>         - The min, max, median, and average prices for number 
> resources
>           recovered under 4.x.3.
>         - The min, max, median, and average prices for number 
> resources
>           allocated under 4.x.4.
>         - The min, max, median, and average prices for all 
> bids received
>           under 4.x.4, as well as the number of outstanding bids not
>           yet satisfied.
>         - How many address blocks were de-aggregated, and the 
> resulting number
>           of blocks.
>         - How many address blocks were aggregated, and the 
> resulting number
>           of blocks.
> 
> 4.X.6 Cost Recovery
> 
>       ARIN shall use the payments made in 4.X.4 to pay for any
>       work done under section 4.X as well as for any payments made
>       in section 4.X.3.  ARIN must base payment offers made under
>       4.X.3 on the binding bids made in section 4.X.4.
> 
>        The Board may set aside a portion of ARIN's general funds
>       to provide financial liquidity to the activities taking place
>       under section 4.X, provided there is a clear mechanism and
>       time frame to return those funds to the general fund.
> 
> Rationale:
> 
> Many have recognized that in order for unused or poorly used 
> IPv4 resources to be returned to the free pool that financial 
> 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 
> financial incentives to return unused or poorly used IPv4 
> number 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 number 
> 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 de-aggregation.
>  - 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.
> 
> Change Log:
> 
>   - Changed "monetary" to "financial" to allow for the possibility
>    of ARIN offering things other than direct payment (like fee
>    credits).  Credit: Robert Bonomi.
> 
>  - Updated numbering so there were not two 4.10.2's.  Also changed
>    to using a place holder for section.  Credit: Robert Bonomi
> 
>  - Changed the cost recovery language to be more clear and provide
>    some additional flexibility.
> 
>  - Clarified 4.10.2 about future claims.  Credit: Ted Mittelstaedt
> 
>  - Split 10.X.3 into 10.X.3 and 10.X.3 with better titles.
> 
>  - Left the exact algorithm to staff.  Removed examples as a result.
> 
> 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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