Below is a staff and legal assessment for ARIN-2014-20: Transfer Policy
Slow Start and Simplified Needs Verification.
The draft policy text is below and available at:
https://www.arin.net/policy/proposals/2014_20.html
Regards,
Communications and Member Services
American Registry for Internet Numbers (ARIN)
##*##
ARIN STAFF ASSESSMENT
Policy Proposal: 2014-20 “Transfer Policy Slow Start and Simplified
Needs Verification”
Date of Assessment: 22 Sept 2014
1. Summary (Staff Understanding)
This policy makes significant changes to 8.3 and 8.4 transfers that will
affect both new and existing end-users and ISPs.
1. New end users – currently can request up to a 24-month supply of
IPv4 address space via an 8.3 or 8.4 transfer. This policy will allow
new end users to receive a /24 maximum assignment via an 8.3 or 8.4
transfer without a needs-based assessment of projected future usage.
2. New ISPs – currently can request up to a 24-month supply of IPv4
address space via an 8.3 or 8.4 transfer. This policy will allow new
ISPs to transfer up to a /21 maximum allocation via an 8.3 or 8.4
transfer without a needs-based assessment of projected future usage.
3. Existing end users and ISPs – currently can request up to a
24-month supply of IPv4 address space via an 8.3 or 8.4 transfer. Under
this policy, an existing end user or ISP with 80% overall utilization
can receive via transfer as much space as they currently hold in total
without any need assessment, OR a 24-month supply based on their monthly
utilization rate.
2. Comments
A. ARIN Staff Comments
· This policy will significantly reduce the total amount of IPv4
address space that new end users or ISPs can obtain via an 8.3 or 8.4
transfer due to the removal of forward-looking needs-justification that
is replaced with justification based on current need with a set maximum
size limit.
· This policy will significantly increase the total amount of IPv4
address space that existing end users or ISPs can obtain via an 8.3 or
8.4 transfer.
· This policy creates more options for approval of transfers, which
may make it more difficult for the community to fully understand.
· Based on staff’s reading of the problem statement, it appears
that there may be some misconceptions about some of the current 8.3
evaluation processes. Here are some clarifications:
o The assessment of the 24-month need is based on both projected
growth and demonstrated utilization
o Slow start is not used to assess 8.3 transfers
o A current mechanism exists (pre-approval) for an organization to
receive pre-approval of their 24-month need. They can then conduct
multiple 8.3 transfers during that 24-month period in order to fulfill
the pre-approved amount without having to re-justify their need each time.
· This policy could be implemented as written.
B. ARIN General Counsel - Legal Assessment
I examined the proposed amendments to Policies 2014-14 and 2014-20
together, because both are ostensibly intended to solve the same
problem: difficulties experienced by new entrants and smaller entities
that may be unable to obtain addresses they need due to current policy
limits at time when ISP IPV4 issuance to such downstream entities may be
limited. Counsel believes that 2014-14 presents significantly less legal
concern than 2014-20. Policy 2014-14 creates greater efficiency by
removing a showing of need, and allowing a transfer of a /16 or smaller
bloc. Exceptions to needs based review can be justified because the
smaller size of the blocs does not provide a significant vehicle to
‘game’, ‘hoard’, or ‘speculate’ sizable IP resource blocks of size. The
exception would address approximately 85% of 8.3 transfers, and thus be
efficient for administration.
Policy proposal 2014-20 as described would permit new end users to
obtain a /24 maximum assignment and new ISPs to obtain a new /21 maximum
assignment without needs-based assessments. These proposed exceptions
to needs based review, like similar but different provisions in 2014-14,
do not provide a significant vehicle to ‘game’, ‘hoard’, or
‘speculate’ for IP resource blocks of significant size. Those aspect of
2014-20 raise no meaningful legal issue. However, the 2014-20 proposal
does cause some legal concern in its treatment of large volume resource
holders. It would permit an existing end user or ISP to “receive via
transfer as much space as they currently hold in total without any need
assessment, OR a 24-month supply based on their monthly utilization
rate.” This exemption from the needs-based assessment provides a very
significant exemption that benefits the largest resource holders the
most, when that is not the articulated problem to be solved. Although
both proposals are intended to solve a problem of access for new
entrants and small entities, this aspect of the proposed language in
policy 2014-20 has the unfortunate side effect of increasing inequality,
as the largest resource holders in the ARIN region currently hold the
majority of all number resources, and exempting them from the needs
requirement up to the amount they already hold permits such entities the
right to obtain large quantities of additional resources without any
evaluation of needs.
(Rather than creating such a broad exemption that essentially reduces
the needs-based requirement to a shadow, it would be more rational to
remove the needs requirement altogether, if the community believes that
is the appropriate case than approving this broad exemption proposal.
Counsel takes no position on the need to either retain or repeal the
needs based requirement, as this issue is not before us in this policy).
3. Resource Impact
This policy would have minimal resource impact from an implementation
aspect. It is estimated that implementation would occur within 3 months
after ratification by the ARIN Board of Trustees. The following would be
needed in order to implement:
· Updated guidelines and internal procedures
· Staff training
4. Proposal/Draft Policy Text Assessed
Draft Policy ARIN-2014-20
Transfer Policy Slow Start and Simplified Needs Verification
Date: 19 September 2014
Problem Statement:
As IPv4 depletion occurs, it will become difficult for organization to
get IP addresses. This will impact an organization as follows:
1. New organizations will have difficulty qualifying for the initial
slow start as it may become difficult to get IP space from an upstream
provider
2. New organizations that are growing rapidly will have difficulty
growing by doubling under slow start, because it will require a
succession of many transfers, and hence many commercial agreements (each
with its own financial overhead), and finding the right succession of
ever increasing block sizes.
3. Existing organizations with regular growth may have difficulty
getting the right sized block to transfer, and may require multiple
transfers to meet their needs, making justification and deployment
challenging.
4. Existing organization with an unprecedented growth rate have a
similar challenge to new organizations with rapid growth where they will
need to double, and therefore require a succession of many transfers,
and hence many commercial agreements (each with its own financial
overhead), and finding the right succession of ever increasing block sizes.
Policy statement:
Replace the following section 8.3 text:
“The recipient must demonstrate the need for up to a 24-month supply of
IP address resources under current ARIN policies and sign an RSA.”
with
"Recipients will be subject to current ARIN policies and sign an RSA for
the resources being received"
Remove the following section 8.4 text:
“Recipients within the ARIN region must demonstrate the need for up to a
24-month supply of IPv4 address space.”
Add:
8.3.1 New ORGs
8.3.1.1 End-Sites
End-user organizations which do not currently hold IP addresses, and can
demonstrate 50% immediate utilization by currently held equipment, will
immediately qualify for a non-M&A transfer between the minimum
assignment size and a /24, inclusive.
8.3.1.2 ISPs
ISP organizations which do not currently hold IP addresses, and can
demonstrate 50% immediate utilization by currently held equipment,
current customers, or customer orders will immediately qualify for a
non-M&A transfer between the minimum allocation size and a /21, inclusive.
8.3.2 Existing ORGs
8.3.2.1 Minimum requirements
Prior to qualifying for non-M&A address transfers, an organization must
demonstrate an average of 80% utilization, as measured under section 4,
across the aggregate of all addresses that are currently allocated,
assigned, reallocated, or reassigned to, or otherwise in use by, the
organization.
8.3.2.2 Transfer Approval
An organization which qualifies for transfers under one of the criteria
in 8.3.2.3 shall be approved for the transfer in of an aggregate amount
of address space as determined by the relevant section. An organization
with such an approval may then complete one or more transfers, with a
cumulative total not exceeding the approved amount, without submitting
additional justification. An organization will be ineligible for
additional non-M&A transfers until it can again demonstrate that it
meets the minimum requirements in section 8.3.2.1.
8.3.2.3 Qualifying Criteria
8.3.2.3.1 Stable Growth
Organizations may be approved for the non-M&A transfer of additional
address space equal to the amount of address space they were holding at
the time of approval.
8.3.2.3.2 Rapid Growth
Organizations may be approved for the non-M&A transfer of additional
address space equal to 24 times the organization’s calculated monthly
average use rate.
8.3.2.3.2.1 Calculation of Monthly Average Use Rate
An organization may choose a look-back window of any number of months
between 3 and 12, inclusive, from the date of the current request. ARIN
will calculate the total amount of new addresses acquired, during the
look-back window, by the organization from non-M&A transfers, direct
allocations or assignments from ARIN, or reallocations or reassignments
from an ISP. That total will be divided by the number of months in the
look-back window to calculate the organization’s monthly average use rate.
8.3.2.3.2.2 Returned IP space
If addresses are returned or transferred out within the look-back
window, then those addresses will be subtracted from the total amount of
new addresses acquired for the purposes of the monthly average use rate
calculation.
8.3.2.3.2.3 M&A activity
If M&A transfer activity occurs during the look-back window, the
addresses acquired through M&A transfers will only be counted in the
total amount of new addresses acquired if the pre-M&A organization had
acquired the resources during the post-M&A organization’s look-back window.
8.4.1 -- Same text as 8.3.1
Timetable for implementation: Immediate
On 9/19/14, 4:03 PM, ARIN wrote:
Draft Policy ARIN-2014-20
Transfer Policy Slow Start and Simplified Needs Verification
ARIN-2014-20 has been revised.
Draft Policy ARIN-2014-20 is below and can be found at:
https://www.arin.net/policy/proposals/2014_20.html
Regards,
Communications and Member Services
American Registry for Internet Numbers (ARIN)
## * ##
Draft Policy ARIN-2014-20
Transfer Policy Slow Start and Simplified Needs Verification
Date: 19 September 2014
Problem Statement:
As IPv4 depletion occurs, it will become difficult for organization to
get IP addresses. This will impact an organization as follows:
1. New organizations will have difficulty qualifying for the initial
slow start as it may become difficult to get IP space from an upstream
provider
2. New organizations that are growing rapidly will have difficulty
growing by doubling under slow start, because it will require a
succession of many transfers, and hence many commercial agreements (each
with its own financialoverhead), and finding the right succession of
ever increasing block sizes.
3. Existing organizations with regular growth may have difficulty
getting the right sized block to transfer, and may require multiple
transfers to meet their needs, making justification and deployment
challenging.
4. Existing organization with an unprecedented growth rate have a
similar challenge to new organizations with rapid growth where they will
need to double, and therefore require a succession of many transfers,
and hence many commercial agreements (each with its own
financialoverhead), and finding the right succession of ever increasing
block sizes.
Policy statement:
Replace the following section 8.3 text:
The recipient must demonstrate the need for up to a 24-month supply of
IP address resources under current ARIN policies and sign an RSA.
with
"Recipients will be subject to current ARIN policies and sign an RSA for
the resources being received"
Remove the following section 8.4 text:
Recipients within the ARIN region must demonstrate the need for up to a
24-month supply of IPv4 address space.
Add:
8.3.1 New ORGs
8.3.1.1 End-Sites
End-user organizations which do not currently hold IP addresses, and can
demonstrate 50% immediate utilization by currently held equipment, will
immediately qualify for a non-M&A transfer between the minimum
assignment size and a /24, inclusive.
8.3.1.2 ISPs
ISP organizations which do not currently hold IP addresses, and can
demonstrate 50% immediate utilization by currently held equipment,
current customers, or customer orders will immediately qualify for a
non-M&A transfer between the minimum allocation size and a /21, inclusive.
8.3.2 Existing ORGs
8.3.2.1 Minimum requirements
Prior to qualifying for non-M&A address transfers, an organization must
demonstrate an average of 80% utilization, as measured under section 4,
across the aggregate of all addresses that are currently allocated,
assigned, reallocated, or reassigned to, or otherwise in use by, the
organization.
8.3.2.2 Transfer Approval
An organization which qualifies for transfers under one of the criteria
in 8.3.2.3 shall be approved for the transfer in of an aggregate amount
of address space as determined by the relevent section. An organization
with such an approval may then complete one or more transfers, with a
cumulative total not exceeding the approved amount, without submitting
additional justification. An organization will be ineligible for
additional non-M&A transfers until it can again demonstrate that it
meets the minimum requirements in section 8.3.2.1.
8.3.2.3 Qualifying Criteria
8.3.2.3.1 Stable Growth
Organizations may be approved for the non-M&A transfer of additional
address space equal to the amount of address space they were holding at
the time of approval.
8.3.2.3.2 Rapid Growth
Organizations may be approved for the non-M&A transfer of additional
address space equal to 24 times the organizations calculated monthly
average use rate.
8.3.2.3.2.1 Calculation of Monthly Average Use Rate
An organization may choose a look-back window of any number of months
between 3 and 12, inclusive, from the date of the current request. ARIN
will calculate the total amount of new addresses acquired, during the
look-back window, by the organization from non-M&A transfers, direct
allocations or assignments from ARIN, or reallocations or reassignments
from an ISP. That total will be divided by the number of months in the
look-back window to calculate the organizations monthly average use rate.
8.3.2.3.2.2 Returned IP space
If addresses are returned or transferred out within the look-back
window, then those addresses will be subtracted from the total amount of
new addresses acquired for the purposes of the monthly average use rate
calculation.
8.3.2.3.2.3 M&A activity
If M&A transfer activity occurs during the look-back window, the
addresses acquired through M&A transfers will only be counted in the
total amount of new addresses acquired if the pre-M&A organization had
acquired the resources during the post-M&A organizations look-back window.
8.4.1 -- Same text as 8.3.1
Timetable for implementation: Immediate
On 9/3/14, 4:55 PM, ARIN wrote:
On 28 August 2014 the ARIN Advisory Council (AC) accepted "ARIN-prop-212
Transfer policy slow start and simplified needs verification" as a Draft
Policy.
Draft Policy ARIN-2014-20 is below and can be found at:
https://www.arin.net/policy/proposals/2014_20.html
You are encouraged to discuss the merits and your concerns of Draft
Policy 2014-20 on the Public Policy Mailing List.
The AC will evaluate the discussion in order to assess the conformance
of this draft policy with ARIN's Principles of Internet Number Resource
Policy as stated in the PDP. Specifically, these principles are:
* Enabling Fair and Impartial Number Resource Administration
* Technically Sound
* Supported by the Community
The ARIN Policy Development Process (PDP) can be found at:
https://www.arin.net/policy/pdp.html
Draft Policies and Proposals under discussion can be found at:
https://www.arin.net/policy/proposals/index.html
Regards,
Communications and Member Services
American Registry for Internet Numbers (ARIN)
## * ##
Draft Policy ARIN-2014-20
Transfer Policy Slow Start and Simplified Needs Verification
Date: 3 September 2014
Problem Statement:
As IPv4 depletion occurs, it will become difficult for organization to
get IP addresses. This will impact an organization as follows:
1. New organizations will have difficulty qualifying for the initial
slow start as it may become difficult to get IP space from an upstream
provider
2. New organizations that are growing rapidly will have difficulty
growing by doubling under slow start, because it will require a
succession of many transfers, and hence many commercial agreements
(each with its own financialoverhead), and finding the right succession
of ever increasing block sizes.
3. Existing organizations with regular growth may have difficulty
getting the right sized block to transfer, and may require multiple
transfers to meet their needs, making justification and deployment
challenging.
4. Existing organization with an unprecedented growth rate have a
similar challenge to new organizations with rapid growth where they will
need to double, and therefore require a succession of many transfers,
and hence many commercial agreements (each with its own
financialoverhead), and finding the right succession of ever increasing
block sizes.
Background on current policy
--------------------------------------
For ISPs to get an initial allocation from ARIN, they must demonstrate
efficient utilization of a /20 (or between a /23 to a /21 for
multi-homed) from their upstream ISP. ISPs may also qualify under the
exceptional process of immediate need. Once an ISP gets its first ARIN
allocation it can repeatedly double under slow start assuming the usage
of IP space is growing and all of the available IPs are efficiently
utilized in less that 1.5 months.
Subsequent allocations are based on the past one year utilization rate
and demonstration of efficient utilization of all previously held space,
as well as 80% utilization of the most recent block. ARIN will provide
addresses up to a 3 month supply based on the previous one year run
rate. Transfers up to a two year supply based on the previous one year
run rate are also permitted.
End users can qualify for an initial assignment based on their
anticipated one year projection so long as they can put 25% of the
addresses in use immediately (30 days) and have over 50% utilization
within one year.
Subsequent assignments must first demonstrate 80% utilization of all
previous assignments, and then are again based on their anticipated one
year projection so long as they can put 25% of the addresses in use
immediately (30 days) and have over 50% utilization within one year.
Issue with current policy when IPv4 is depleted
-------------------------------------------------------------
IPv4 depletion may make if difficult for ISPs to be able to get an
allocation from an upstream provider creating a barrier to entry.
Additionally, slow start for an ISP would require frequent and small
IPv4 transfers. This is costly in that it leads to address
fragmentation, and requires multiple transfer agreements to be
negotiated and signed.
For end users, the easiest way to demonstrate immediate need is to
already be using IP space from an up stream provider, and promise to
renumber into the newly provided IP space (although this may actually
take more than 30 days to execute). This approach may be limited if an
end user has difficulty getting an assignment from an upstream ISP.
Additionally, the 25% immediate (30 day) need and 50% one year
utilization rates are completely future looking projections. It may be
difficult to verify these claims prior to transferring the address
space, and a required return of the address at the 30 day or one year
make may make the financial transaction complicated. The 30 day
utilization provision is problematic for larger end sites who may have
hosts that can use the addresses immediately, but require more that 30
days to fully deploy the addresses.
Policy statement:
Remove the following section 8.3 text:
The recipient must demonstrate the need for up to a 24-month supply of
IP address resources under current ARIN policies and sign an RSA.
Remove the following section 8.4 text:
Recipients within the ARIN region must demonstrate the need for up to a
24-month supply of IPv4 address space.
Add:
8.3.1 New ORGs
8.3.1.1 End-Sites
End-user organizations which do not currently hold IP addresses, and can
demonstrate 50% immediate utilization by currently held equipment, will
immediately qualify for a non-M&A transfer between the minimum
assignment size and a /24, inclusive.
8.3.1.2 ISPs
ISP organizations which do not currently hold IP addresses, and can
demonstrate 50% immediate utilization by currently held equipment,
current customers, or customer orders will immediately qualify for a
non-M&A transfer between the minimum allocation size and a /21,
inclusive.
8.3.2 Existing ORGs
8.3.2.1 Minimum requirements
Prior to qualifying for non-M&A address transfers, an organization must
demonstrate an average of 80% utilization, as measured under section 4,
across the aggregate of all addresses that are currently allocated,
assigned, reallocated, or reassigned to, or otherwise in use by, the
organization.
8.3.2.2 Transfer Approval
An organization which qualifies for transfers under one of the criteria
in 8.3.2.3 shall be approved for the transfer in of an aggregate amount
of address space as determined by the relevent section. An organization
with such an approval may then complete one or more transfers, with a
cumulative total not exceeding the approved amount, without submitting
additional justification. An organization will be ineligible for
additional non-M&A transfers until it can again demonstrate that it
meets the minimum requirements in section 8.3.2.1.
8.3.2.3 Qualifying Criteria
8.3.2.3.1 Stable Growth
Organizations may be approved for the non-M&A transfer of additional
address space equal to the amount of address space they were holding at
the time of approval.
8.3.2.3.2 Rapid Growth
Organizations may be approved for the non-M&A transfer of additional
address space equal to 24 times the organizations calculated monthly
average use rate.
8.3.2.3.2.1 Calculation of Monthly Average Use Rate
An organization may choose a look-back window of any number of months
between 3 and 12, inclusive, from the date of the current request. ARIN
will calculate the total amount of new addresses acquired, during the
look-back window, by the organization from non-M&A transfers, direct
allocations or assignments from ARIN, or reallocations or reassignments
from an ISP. That total will be divided by the number of months in the
look-back window to calculate the organizations monthly average use
rate.
8.3.2.3.2.2 Returned IP space
If addresses are returned or transferred out within the look-back
window, then those addresses will be subtracted from the total amount of
new addresses acquired for the purposes of the monthly average use rate
calculation.
8.3.2.3.2.3 M&A activity
If M&A transfer activity occurs during the look-back window, the
addresses acquired through M&A transfers will only be counted in the
total amount of new addresses acquired if the pre-M&A organization had
acquired the resources during the post-M&A organizations look-back
window.
8.4.1 -- Same text as 8.3.1
Timetable for implementation: Immediate
_______________________________________________
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