ARIN-2019-7

Draft Policy ARIN-2019-7: Elimination of the Waiting List

Status: Under Discussion

Staff and Legal Review: 29 April 2019

Advisory Council Shepherds: Alyssa Moore, Amy Potter

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History:

ARIN Advisory Council Meetings:

Presented at:

Latest Version: 26 March 2019

Problem Statement:

The ARIN “Unfulfilled Requests” policy (NRPM 4.1.8 et seq) creates an opportunity for an ARIN member to claim need for number resources, wait for those resources to become available via returns or reclamations, acquire them, wait a year and a day, and then profit from them via a Section 8.3 transfer.

In a post-depletion environment in which needs for additional number resources are met via the secondary market, this policy provides valuable number resources essentially for free, creating an opportunity for windfall profits and incentivizing various kinds of misrepresentation or manipulation of registration services.

ARIN can avoid this problem by abolishing the waiting list and transferring returned and reclaimed resources to organizations that have qualified via the existing 8.3 process.

Policy Statement:

Delete section 4.1.8. Unmet Requests as well as sections 4.1.8.1. Waiting List and 4.1.8.2. Fulfilling Unmet Needs

Add policy section: 4.1.10 - Returned and Reclaimed Resources

ARIN will auction returned and reclaimed IPv4 number resources to recipients qualified under Section 8.3. Revenues realized from this activity will be allocated for purposes as directed by the Board of Trustees.

Comments:

Timetable for implementation: Immediate

Anything Else

The specific auction methods and implementation details used to distribute the returned address pool are outside of the purview of the Public Policy Process; they are intentionally left to the Board to sort out.

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ARIN STAFF & LEGAL ASSESSMENT
Draft Policy ARIN-2019-07
Elimination of the Waiting List

https://www.arin.net/participate/policy/drafts/2019_7/

Date of Assessment: 29 April 2019


  1. Summary (Staff Understanding)

Draft Policy 2019-07: Elimination of the Waiting List, deletes sections 4.1.8, 4.1.8.1 and 4.1.8.2 of the ARIN NRPM thus effectively eliminating the current process for issuing IPv4 addresses held by ARIN to organizations requesting IPv4 address space from ARIN. These resources could be held by ARIN through a number of actions such as returned/revoked/currently on hold due to other actions/issued from IANA or any other action resulting in the resources being returned to ARIN’s inventory. Instead ARIN would hold an auction, that anyone qualified as a recipient under section 8.3 of the NRPM could participate in. It is not clear from current text if the participants would need to be approved for the exact block sizes being auctioned or if they could bid on several blocks up to their preapproved size. It is actually unclear if they would need to hold a preapproval or if they could bid and then seek approval once they are determined to be the high bidder. These details seem to be left to the Board of Trustees to determine. It clearly states that revenues realized by ARIN through such auctions would be allocated for purposes as directed by the Board of Trustees.


  1. Comments

A. ARIN Staff Comments

  • Draft Policy 2019-07: Elimination of the Waiting List as written, the policy directs ARIN to conduct an auction and it is unclear if it allows for utilization of third-party services for this purpose. Unless otherwise changed, ARIN would conduct the auction as specified in policy - appropriately contact ARIN parties that have qualified under 8.3 to receive resources in order to solicit bids for address blocks as they become available. This would include all waiting list parties and any other parties who request such qualification

  • The interaction between this policy and ARIN’s Specified Transfer Listing Service is unspecified. In particular, it is unclear if parties that would bid on address blocks should be required to qualify and be put on the STLS list as a qualified recipient or whether a new list of “recipients qualified under Section 8.3” is being proposed by policy.

  • The policy statement precludes auction to parties in other regions, due to reference to 8.3 transfer policy and not 8.4. ARIN would implement as written.

  • The use of proceeds of any auction of resources is beyond the scope of ARIN number resource policy, but would require consideration of the Board of Trustees.

B. ARIN General Counsel – Legal Assessment

This policy requires legal comment. ARIN’s Articles and Bylaws do not specifically prohibit ARIN from monetizing returned or revoked resources by selling those resources into the transfer market, as an alternative to allocating some amended version of the wait list policy. Fraud underlying any waiting list policy issuance is an appropriate policy concern. However, ARIN revokes address resources from those who fail to make required payment s to ARIN which makes up almost all revocations; and in the rare cases of breach of the RSA or fraud in the obtaining the allocation. Today, ARIN does not financially benefit in any material way from such revocations. Adoption of this policy would for the first time allow the party in a contested revocation situation to argue that ARIN seeks to financially benefit. Avoiding that concern is also significant.


  1. Resource Impact

Implementation of this policy would have an extremely large resource impact. It is estimated that this policy could possibly be implemented 12 months after ratification approval of the processes by the ARIN Board of Trustees.

  • It is estimated that CMSD will require at least 6 months to accomplish all required tasks associated with communications and member services.

  • It is estimated that RSD will require at least 6 months to accomplish all required tasks associated with conducting the auctions once the process has been defined and approved by the Board of Trustees.

  • FSD will require new documentation and processes in order to support the new service of “auctions” and will need time to educate and train their staff. It is estimated that this could be accomplished within the same timeframes as the RSD and CMSD work is done.

  • Extremely large engineering effort will be required. Work to remove the current waitlist is minimal. Work to create an auction site is a MAJOR effort. - it should be outsourced Even with outsourcing, there will be moderate effort in supporting escrow and syncing requirements between ARIN and an outsource auction house. There will likely be moderate work supporting RSDs needs. There will likely be moderate work supporting FSDs needs. In summary, without more detailed requirements there is no way to provide an accurate estimate of effort.


  1. Proposal/Draft Policy Text Assessed Latest Version: 26 March 2019

Problem Statement:

The ARIN “Unfulfilled Requests” policy (NRPM 4.1.8 et seq) creates an opportunity for an ARIN member to claim need for number resources, wait for those resources to become available via returns or reclamations, acquire them, wait a year and a day, and then profit from them via a Section 8.3 transfer.

In a post-depletion environment in which needs for additional number resources are met via the secondary market, this policy provides valuable number resources essentially for free, creating an opportunity for windfall profits and incentivizing various kinds of misrepresentation or manipulation of registration services.

ARIN can avoid this problem by abolishing the waiting list and transferring returned and reclaimed resources to organizations that have qualified via the existing 8.3 process.

Policy Statement:

Delete section 4.1.8. Unmet Requests as well as sections 4.1.8.1. Waiting List and 4.1.8.2. Fulfilling Unmet Needs

Add policy section: 4.1.10 - Returned and Reclaimed Resources

ARIN will auction returned and reclaimed IPv4 number resources to recipients qualified under Section 8.3. Revenues realized from this activity will be allocated for purposes as directed by the Board of Trustees.

Comments:

Timetable for implementation: Immediate

Anything Else

The specific auction methods and implementation details used to distribute the returned address pool are outside of the purview of the Public Policy Process; they are intentionally left to the Board to sort out.