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 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
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