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2009-4 Previous Version

View the current policy proposal text.

The following version was archived on 9 April 2009.

Draft Policy 2009-4
IPv4 Recovery Fund

Date: 23 March 2009

Policy statement:

(Create new section in section 4, represented by "4.X".)

4.X IPv4 Recovery Fund

4.X.1 Implementation Timing

      Upon receiving a valid request for a block larger than ARIN
can satisfy from its existing free pool, or, by obtaining
additional space from IANA, ARIN shall begin offering financial
incentives for returned IP blocks according to this policy.

4.X.2 Recovery of IPv4 Space

      ARIN believes that organizations should voluntarily return
unused and/or unneeded IP resources to the community.  However,
upon implementation of this policy, ARIN will offer financial
incentives for the return of IPv4 resources to ARIN
relinquishment of any future claims to those resources.  ARIN
will continue to accept voluntary returns.

4.X.3 Allocation of Recovered Space

      Once approved for IPv4 space ARIN will ask the requester to
specify a bid of how much they are willing to pay for
reclamation of address space.  ARIN will use this bid in
determining what incentives to offer for return of space.
The requester may make a higher bid at any time, which is
treated as a brand new bid replacing their old bid.

      If ARIN recovers space and offers it to requester at or below
the specified bid within 60 days of the time the bid was
made then the bid shall be binding on requester at the price
ARIN offers the space.

4.X.4 Address Block Management

      ARIN may not offer a partial fill, that is provide a block
smaller than the one for which the requester was approved.

      ARIN may split recovered blocks into multiple smaller blocks
at the staff's discretion using the following principals:
- It is unlikely a request will be made for the address
block size involved in the next 60 days.
- The block is divided into as few parts as practical.
- There are enough bids to allow the entire block to be
allocated.

4.X.5 Transparency

      ARIN staff shall make public the current and historical
prices of asks, bids, and executed transactions in a manor
that facilitates the bidding process.  ARIN staff must
regularly report on the amount of address space obtained and
distributed via this mechanism, number of blocks subdivided,
as well as aggregate financial numbers.

4.X.6 Cost Recovery

      ARIN shall manage the address space recovery program with a
goal of cost recovery.

      ARIN may:
- Use ARIN funds to reclaim blocks when there is no specific
demand; if such reclamation is deemed in the best interest
of the community and there is a significant likelyhood of
future demand.
- Use a portion of the funds collected under this program
to pay for the implementation of this program.

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 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 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 deaggregation.
- 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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