ARIN-prop-165 Eliminate Needs-Based Justification on 8.3 Specified Transfers

[ARIN]

ARIN-prop-165 Eliminate Needs-Based Justification on 8.3 Specified Transfers

ARIN received the following policy proposal and is posting it to the
Public Policy Mailing List (PPML) in accordance with the Policy
Development Process.

The ARIN Advisory Council (AC) will review the proposal at their next
regularly scheduled meeting (if the period before the next regularly
scheduled meeting is less than 10 days, then the period may be extended
to the subsequent regularly scheduled meeting). The AC will decide how
to utilize the proposal and announce the decision to the PPML.

The AC invites everyone to comment on the 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.

Draft Policies and Proposals under discussion can be found at:
https://www.arin.net/policy/proposals/index.html

The ARIN Policy Development Process can be found at:
https://www.arin.net/policy/pdp.html

Mailing list subscription information can be found
at: https://www.arin.net/mailing_lists/

Regards,

Communications and Member Services
American Registry for Internet Numbers (ARIN)


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ARIN-prop-165 Eliminate Needs-Based Justification on 8.3 Specified Transfers

Proposal Originator: Jeff Mehlenbacher

Proposal Version: 1

Date: 16 February 16 2012

Proposal type: Modify

Policy term: Permanent

Policy statement:

Current Policy Statement:
8.3. Transfers to Specified Recipients
In addition to transfers under section 8.2, IPv4 number resources within 
the ARIN region may be released to ARIN by the authorized resource 
holder, in whole or in part, for transfer to another specified 
organizational recipient. Such transferred number resources may only be 
received under RSA by organizations that are within the ARIN region and 
can demonstrate the need for such resources in the amount which they can 
justify under current ARIN policies showing how the addresses will be 
utilized within 24 months.

Proposed Policy Statement
8.3. Transfers to Specified Recipients
In addition to transfers under section 8.2, IPv4 number resources within 
the ARIN region may be released to ARIN by the authorized resource 
holder, in whole or in part, for transfer to another specified 
organizational recipient. Such transferred number resources may only be 
received under RSA by organizations that are within the ARIN region and 
requires that an Officer Attestation be provided confirming the 
transferred number resources will be applied to enable current or 
planned business models.

Rationale:

Current policy acts as a major impediment to freeing up unused IPv4 
address and constrains trade in a free market economy. If a Company 
receives Board approval to spend between $11.25 and $12.00 per IP, this 
should suggest the business case is justified for the acquiring 
organization. The role of ARIN should be to encourage the freeing of 
IPv4 addresses that will otherwise remain dormant in the hands of 
companies who have no incentive to transfer them.

The objective of the Specified Transfer market should be to a) encourage 
source Companies to transfer their unused blocks thereby increasing 
supply of IPv4 address and b) encourage recipient Companies to acquire 
sufficient IPv4 addresses to support business plans rather than 
depleting the free pool.

Current policy of demonstrating need for specified transfers, be it 
based on 12 months or now 24 months, does not provide sufficient 
incentive for organizations to acquire unused IPv4 addresses in a 
financial transaction. Companies recognize they must still endure the 
rigors of the justification process regardless of free allocation or 
specified transfer…making it very difficult to justify a financial 
transaction when specified transfers will still be assessed by exactly 
the same techniques and algorithms applied for approval of free resources.

Eliminating needs-based justification has many benefits so long as all 
transactions continue to flow through ARIN for ratification:

a) Buyer executive attestation will ensure the IP’s are being used for 
business purposes. Failure to be truthful could result in punitive 
measures against corporate officers, and is a risk an officer would not 
be likely to take

b) Source Companies have an active market and financial incentive to 
transfer unused IPv4 blocks to Companies with need

c) IPv4 number resources will not be scarce if adequate incentive exists 
for Buyers to acquire unused blocks through specified transfer

d) Many Buyers express hesitation that confidential business plans must 
be disclosed through the justification process—no such disclosure would 
be required (under NDA or otherwise)

e) Legacy blocks will come under RSA in ever increasing numbers

f) Improves the accuracy, utility and value of the ARIN address registry

g) Effectively kills the black or gray IPv4 transfer market guaranteeing 
ARIN’s custodianship over number resources

h) Encourages source Companies to free up resources and recipient 
Companies to actively acquire available IPv4 blocks thereby eliminating 
speculation because supply is abundant. Only when a resource is truly 
scarce does capricious consumption (stockpiling) occur

i) The Free resource pool is best applied to small or new ISPs while 
medium to large corporations with greater financial wherewithal are 
encouraged to participate in specified transfers to acquire larger IPv4 
blocks

Timetable for implementation: Immediate