[arin-ppml] Fee Philosophy (was: Re: Draft Policy ARIN-2013-3: Tiny IPv6 Allocations for ISPs)

[John Curran]

On Apr 7, 2013, at 2:02 AM, Michael Sinatra <michael+ppml at burnttofu.net> wrote:

> On 04/06/13 19:31, John Curran wrote:
>> On Apr 6, 2013, at 12:00 PM, Michael Sinatra <michael+ppml at burnttofu.net> wrote:
>> 
>>> The second issue is that it's not even clear what the goals of the fee
>>> schedule are.  
>> 
>> <https://www.arin.net/fees/faq_fee_schedule.html>
>> "   
>>   ARIN adopted the new Fee Schedule in order to:
>>       • Ensure members receiving comparable services are paying comparable fees where feasible
>>       • Meet the community's expectations for new and future services such as RPKI
>>       • Maintain and reduce, where possible, cost for smaller ISPs
>>       • Provide a revenue model based on long-term expenses
>> "
>> (This is also very similar to the information in community 
>> consultation held in October 2012 on the Revised Fee schedule.)
>> ...
> 
> That doesn't really answer my question.  My question revolves around the
> following *types* of questions:
> 
> o Is the fee schedule intended to be based on fairness?
> o Is the goal to reduce complexity at a (reasonable?) cost of fairness?
> Or increase fairness at a reasonable cost of complexity?  If I suggest
> that we tweak the fee schedule, am I going against one of the
> fundamental goals of not making it "too complex" by some definition thereof?
> o Is fairness determined in terms of revenue, capitalization, or just
> address space?
> o How do we define terms like "comparable service."  Given that ARIN
> provides registration services, not addresses, how *should* "comparable
> service" be defined.

All excellent questions, and while the Board has expressed a desire 
for a simple and fair fee schedule, there is no hard and fast rules
for how these factors should be balanced.  There was discussion of 
some of these considerations at the Dallas meeting presentation on 
the Revised Fee Schedule, with the general desire that a simpler
fee schedule with less exceptions is preferred, and that ARIN should
continue to lower fees as much as possible.
<https://www.arin.net/participate/meetings/reports/ARIN_XXX/ppm.html>

>> ARIN has always had fees based on relative size of organizations,
>> generally based on the total address space held.  This is the case
>> with both the present fee schedule and the Revised Fee Schedule. 
> 
> That may be true, but where is that codified and/or hashed out?  What is
> that basic philosophy discussed and reviewed?

The ARIN Board establishes fees, and there are both public consultations
and public discussions at the ARIN meetings when changes are proposed.

> I am not saying it needs
> to be right now, but I have a hard time understanding why we need to
> contort the NRPM to patch over bad incentives in the fee schedule.

No NRPM change is needed because of the Revised Fee schedule; fees under 
the new schedule will be lower for smallest ISPs in any case.

The question is whether the community also provide support for a xx-small 
category which is even lower ($500/year) but distinguished by only a /40 
IPv6 allocation.  This is being discussed in Draft Policy ARIN-2013-3, and 
while it is enabled by the Revised Fee schedule, it is an independent item
for the community to consider and can be adopted or not based on its merits.

> Moreover, that standard is called into question by the fact that ARIN
> charges based on the larger of the two address family allocations, with
> no regard to the situation where there are radical differences between
> IPv4 size and IPv6 size.

Correct, and this has been covered on this mailing list before
<http://lists.arin.net/pipermail/arin-ppml/2013-March/026396.html> -

  "that is precisely the benefit of the revised fee schedule;
   every size ISP category now includes both IPv4 and IPv6, so every
   ISP can add an IPv6 allocation and see _no_ change in fees at all.
   (This does mean that we can get ISPs for whom there is a "mismatch"
   between their IPv4 and IPv6 allocations, and they end up in a higher
   category, but to be truly fair we'd need to have distinct proportional
   fee for each of IPv4 and IPv6, and that's exactly what you don't want:
   any addition of IPv6 means an additional fee.)"

The advantage of the current approach is that every ISP with an IPv4
allocation can obtain a corresponding IPv6 allocation with no change 
in fees.  It works against those with "radical differences" as you note
above, but the only way to be 100% equitable in all cases would be to
charge completely separately for IPv4 and IPv6, with the result being
we would always have to have some fee associated with issuing IPv6.
Given the community's indications in the past, having a fee schedule
which provides for some IPv6 allocation in each category with no change
in fees seems to better meet expectations.

Thanks!
/John

John Curran
President and CEO
ARIN