[sig-policy] [Sig-policy][Draft announcement]prop-050: IPv4 addresstrans

  • To: "'APNIC Policy SIG List'" <sig-policy at apnic dot net>
  • Subject: [sig-policy] [Sig-policy][Draft announcement]prop-050: IPv4 addresstransfers
  • From: "zhangjian" <zhangjian at cnnic dot cn>
  • Date: Tue, 22 Jul 2008 15:36:03 +0800
  • Delivered-to: sig-policy at mailman dot apnic dot net
  • List-archive: <http://mailman.apnic.net/mailing-lists/sig-policy>
  • List-help: <mailto:sig-policy-request@lists.apnic.net?subject=help>
  • List-id: APNIC SIG on resource management policy <sig-policy.lists.apnic.net>
  • List-post: <mailto:sig-policy@lists.apnic.net>
  • List-subscribe: <http://mailman.apnic.net/mailman/listinfo/sig-policy>, <mailto:sig-policy-request@lists.apnic.net?subject=subscribe>
  • List-unsubscribe: <http://mailman.apnic.net/mailman/listinfo/sig-policy>, <mailto:sig-policy-request@lists.apnic.net?subject=unsubscribe>
  • Thread-index: AcjrzZfjisognmbqSXCL07JmKLnQoQ==

      Dear SIG members


      An updated version of the proposal 'IPv4 address transfers' has been sent to the Policy SIG for review. It will be presented at the Policy SIG at APNIC 26 in Christchurch, New Zealand, 25-29 August 2008.


      The proposal's history can be found at:





      This new version of the proposal has expanded commentaries in sections 2 and 5. Section 3 now includes a reference to the transfer proposal under discussion in the ARIN region.


      We invite you to review and comment on the proposal on the mailing list before the meeting.


      The comment period on the mailing list before an APNIC meeting is an important part of the policy development process. We encourage you to express your views on the proposal:


            - Do you support or oppose this proposal?


            - Does this proposal solve a problem you are experiencing? If so,

              tell the community about your situation.


            - Do you see any disadvantages in this proposal?


            - Is there anything in the proposal that is not clear?


            - What changes could be made to this proposal to make it more



      randy and jian




      prop-050-v003: IPv4 address transfers





      Author:    Geoff Huston

                  gih at apnic dot net


      Version:   3


      Date:      22 July 2008



      1.  Introduction



      This is a proposal to amend APNIC policy restrictions on the transfer of registration of IPv4 address allocations and IPv4 portable address assignments between current APNIC account holders. This proposal is a refinement of the historical resource transfer policy and applies to

      IPv4 resources held by current APNIC account holders.



      2.  Summary of current problem



      Current APNIC policies relating to the registration of transfer of address holdings limit the eligibility of registration of transfers to those relating to mergers and acquisitions of entities that are administering an operational network.


      It is currently anticipated that the IPv4 unallocated address pool will be exhausted in a timeframe of between 2009 and 2011. There is a very considerable level of investment in IPv4-based services in the Asia Pacific region, and a transition to IPv6-based service delivery is likely to take longer than the remaining period of unallocated address availability. Accordingly, it is likely that demand for IPv4 addresses will continue beyond the time of unallocated address pool exhaustion, leading to a period of movement of IPv4 address blocks between address holders to meet such continuing demand for IPv4 address blocks.


      It is the objective of the APNIC IPv4 address registry to accurately record current address distribution information.


      This proposal allows APNIC to recognise the transfer of IPv4 addresses between current APNIC account holders, and places some constraints on the parties to the transfer as a precondition for the registration of the IPv4 address transfer to be undertaken by APNIC.


      The underlying assumptions behind this policy proposal are:


          - There will continue to be need for additional IPv4 address

            resources in the AP region after the exhaustion of the APNIC

            IPv4 unallocated address pool


          - The amount of returned address space to APNIC will not meet

            those needs


          - Some IPv4 address holders will be in a position to release

            address space and convert to NAT or similar solutions if they

            are given some level of incentive


          - Some amount of transfer of address space will occur in the

            APNIC region following the exhaustion of the unallocated IPv4

            address pool


          - The registry of IPv4 addresses operated by APNIC is of general

            utility and value only while it accurately describes the current

            state of address distribution. If a class of address movement

            transactions are excluded from being entered in the registry,

            then the registry will have decreasing value to the broader



      This proposal's central aim is to ensure the continuing utility and value of the APNIC address registry by allowing the registry to record transactions where IPv4 addresses are transfered between APNIC account holders.


      It proposes that APNIC will recognise and register a transfer of addresses where the parties to the transfer are 'known' to APNIC and that the address block being transferred is part of APNIC's current

      (non-historical) address set


      The proposal does not:


          - Prescribe how such transfers may occur, nor


          - Impose any further constraints on the transfer or on the parties





      3.   Situation in other RIRs



      Proposals for address transfers similar to this proposal are being discussed at the following RIRs:




              2007-08: Enabling Methods for Reallocation of IPv4 Resources






              Policy Proposal 2008-2: IPv4 Transfer Policy Proposal




      4.   Details of the proposal



      APNIC will process IPv4 address transfer requests following the adoption of this proposed policy, subject to the following conditions:


      Conditions on the IPv4 address block:


          - Only IPv4 address blocks equal to, or larger than, a /24 prefix

            may be transferred.


          - The address block must be in the range of addresses administered

            by APNIC, either as part of a /8 address block assigned by the

            IANA to APNIC, or as part of a historically-assigned address

            block now administered by APNIC.


          - The address block must be allocated or assigned to a current

            APNIC account holder.


          - The address block will be subject to all current APNIC policies

            from the time of transfer. This includes address blocks

            previously considered to be "historical".



      Conditions on source of the transfer:


          - The source entity must be a current APNIC account holder.


          - The source entity must be the currently registered holder of the

            IPv4 address resources, and not be involved in any dispute as to

            the status of those resources.


          - The source entity will be ineligible to receive any further IPv4

            address allocations or assignments from APNIC for a period of 24

            months after the transfer.


          - In making any future IPv4 address resource requests to APNIC,

            for as long as IPv4 address resources are available from APNIC,

            following the expiration of this 24 month ineligibility

            period, the source will be required to document the reasons for

            the IPv4 address resource allocation.



      Conditions on recipient of the transfer:


          - The recipient entity must be a current APNIC account holder.


          - The recipient entity of the transferred resources will be

            subject to current APNIC policies. In particular, in any

            subsequent APNIC IPv4 address allocation request, the recipient

            will be required to account for all IPv4 address space held,

            including all transferred resources.


          - APNIC fees payable by the recipient will be assessed on the

            basis of all resources held.



      The address transfer process:


          After APNIC is notified of the transfer by both the source and the

          recipient of the transfer:


          1. APNIC will update the registration records relating to the

             transferred addresses.


          2. APNIC will adjust the source's address holdings as of the date

             of transfer.


             In terms of membership and/or service fee calculations this

             shall be processed in the same manner as a return of address

             holdings to APNIC as of that date.


          3. APNIC will adjust the recipient's address holdings to include

             the transferred addresses as of the date of the transfer.


             In terms of membership and/or service fee calculations this

             shall be processed in the same manner as an allocation or

             assignment of address holdings to the recipient as of that date.


             In order to preserve aggregation capabilities the transfer

             recipient may notify APNIC that the transferred address may be

             returned to the unallocated APNIC address pool, and a different

             address of the same size may be registered to the recipient of

             the transfer. This option would be available to the recipient

             of the transferred address, at the discretion of the recipient,

             and subject to availablility of an alternate address block from



          4. The following transfer details will be published by APNIC in a

             public log of resource transfers:


             - Source

             - Recipient

             - Address resources

             - Date of transfer



      Transfer fees:


          APNIC may charge the recipient a service fee on the transfer

          transaction. The transfer service fee may vary according to the

          total size of the address block being transferred.


          The transfer fee schedule shall be set initially by the APNIC

          Executive Council upon adoption of this policy.  The transfer fee

          schedule will be included as part of any future review of APNIC

          fees and charges.



      5.   Advantages and disadvantages of the proposal



      5.1 Advantages


      This proposal, by acknowledging the existence of address transfers and registering the outcomes, would ensure that the APNIC address registry continues to maintain accurate data about resources and resource holders. The proposal also ensures that those parties who currently rely on the accuracy of this registration information can continue to rely on the currency and accuracy of this information in good faith. In particular, it would:


          - Ensure that the APNIC registry continues to reflect the current

            actual status of IPv4 resource holdings by APNIC account holders.


          - Mitigate the risks to the integrity of the network, and its routing

            and addressing infrastructure in particular, associated with the

            unregistered transfers of IPv4 addresses.


          - Provide a stronger incentive for unused IPv4 address space to

            return to active use, helping to satisfy residual demand for IPv4

            address space across the IPv6 transition.



      5.2 Disadvantages (and responses)



      5.2.1 Altering the traditional concepts of IP addresses


             This proposal has the potential to alter a number of traditional

             preconceptions relating to addresses and their value, including

             challenging the concept that addresses are not in and of

             themselves assets and addresses do no in and of themselves have

             monetary value outside of the narrow constraints of use in

             networks for routing and end point identification. Changing these

             common percpetions about addresses and their use opens up the

             potential for a number of responses, including:


             - The loss of strong aggregation capability in the address space,

               with the consequent load being imposed on the routing system.


             - The significant shift away from a universal need-based address

               allocation model in the underlying policy framework.


             - The treatment of addresses as property with the associated legal

               ramifications in terms of corporate and contract law.


             - The imposition of taxes on addresses and their movement.


             - The potential for unfairness and inequities to be realized in

               terms of access to addresses for use by network service





                 A number of factors mitigate the risks above:


                 - As the transition to IPv6 gathers pace, any residual value

                   of IPv4 addresses would fall in line with the decreasing

                   value proposition of IPv4-based services in an increasing

                   IPv6 network.


                 - If this policy were to be adopted while IPv4 addresses are

                   still available from APNIC, APNIC's established IPv4 address

                   allocation process would continue to provide an alternative

                   source of supply of IPv4 addresses to the industry.



      5.2.2 Proposal diverts attention from address reclamation and resuse


             It has been argued that the proposal diverts attention from policy

             development that encourages IP address reclamation and reuse.




                 To date the level of return and reclamation of addresses has

                 been minimal. Aside from price-based mechanisms it is unclear

                 that further policy refinement would alter this situation.


                 Even if policy development encouraged address reclamation and

                 reuse, there is the distinct possibility that the amount

                 reclaimed addresses would be smaller than the amount needed

                 for APNIC to continue to allocate addresses on a needs-basis

                 after the unallocated address pool has been exhausted.


                 An open and significant issue is how APNIC could fairly ration

                 limited addresses when faced with a much larger set of

                 demands. In other words, concentrating on relamation and reuse

                 policies rather than transfer policies also contains

                 significant issues that may prove challenging to resolve as a

                 policy matter.



      5.2.3 Potential for APNIC to be cast as a regulator


             If APNIC adopted this policy, APNIC may be cast as a regulator

             of a secondary market in addresses. Concerns have been expressed

             that APNIC has no experience, expertise nor the authority to

             enforce regulatory actions. Such a role may also expose APNIC to

             additional litigation.




                 This proposal does not advocate such a role for APNIC. The

                 scope of this policy is explicitly limited to the conditions

                 that would allow APNIC to recognise and record a transfer of

                 addresses in its registry.


                 There is a general belief that adoption of this policy would

                 act as an incentive for a market in addresses. However, that

                 does not imply that markets would act outside existing

                 regulatory structures.  Nor does it mean that market

                 participants would be immune from existing regulatory measures

                 within their respective regimes.


                 The potential for additional liabilities associated with this

                 policy should be the subject of legal review by an

                 appropriately qualified party.



      5.3 Summary of comments on transfer proposals


      There are a number of views of this that have been noted in the various policy discussions on this topic in the various RIR policy forums. The APNIC policy proposal is broadly similar to a policy proposal under consideration in RIPE, which is referred to here as a "minimal' policy for address transfers. The address transfer proposal currently under consideration in ARIN has a larger set of constraints to be applied to determine if a transfer would be recognised by the registry. A summary of the discussion of the differences in these policy proposals follows.



      5.3.1 In favor of a 'minimal' policy


             - The policy places APNIC in the role of a 'title office' for

               addresses, and ensures that APNIC, as a registry operator, is

               neutral in terms of the means used by APNIC members to determine

               that they wish to proceed with a transfer of addresses.  As long

               as the criteria for a valid transfer are met, by whatever means

               agreed to by the parties involved, then the registry should

               allow the transaction to be duly recorded.


             - APNIC has no practical operational experience in the area of

               enforcing various constraints on parties as to how and why

               addresses may be transferred, and does not currently have any

               recognized authority to do so.  Making policy in the absence of

               a well understood and commonly accepted authority model calls

               into question the legitimacy and authority of outcome.


             - Regulation is a well understood and familiar concept in many, if

               not all, regimes. If there is a general desire to place

               constraint and regulate the actions of parties who wish to

               undertake a transfer of addresses, then it may be preferred to

               do so in the context of a broader framework that involves other

               bodies and authorities that have a greater level of experience

               and authority in this area of activity, and leverage from

               existing regulatory structures and enforcement mechanisms. In

               this manner the policy proposal does not attempt to create a

               novel, and potentially superfluous additional regulatory



             - APNIC has no experience in determining what actions by potential

               parties to a transfer may need to be constrained in some

               fashion. Attempting to create policy in anticipation of the need

               for such constraints is going to be a guessing game that has

               accompanying flaws, Irrespective of what constraints are

               initially specified in policy, it will be the case that as the

               levels of experience in this form of activity increases some

               iterations over the policy of constraints will be necessary in

               any case. This approach argues to start from a position that is

               relatively open and unrestricted, and recommend that APNIC

               impose additional constraints only when all other forms of

               constraint are inapplicable and there is a clear need and common

               desire for such constraints to be enforced by APNIC as distinct

               from using another party for such a role.



      5.3.2 In favour of applying a greater level on constraint in the policy


             - APNIC has no practical operational experience in address

               transfers, so we should take incremental steps form the current

               position rather than a complete relaxation of the entire set of

               constraints associated with the existing allocation

               framework. Recipients of a transfer should be qualified by the

               registry on the basis of demonstrated need in the same fashion

               as recipient of address allocations today. Address blocks should

               not be arbitrarily fragmented. Timing constraints should be

               applied to stop transfers of addresses occurring that are

               primarily motivated by reasons other than immediate need for use

               in deployed networks.


             - Constraints that are generally considered to be onerous and

               unnecessary can always be removed at a later date, while

               applying and enforcing additional constraints at a later date

               will prove to be a far harder task.


             - There are a number of technical risks associated with address

               trading. Unconstrained deaggregation will lead to a fracture of

               the routing system due to unconstrained and large scale

               expansion of the inter-domain routing table. This is an

               irreversible state.


      5.3.3  Discussions of the emergence of a market


              The various comments made on this and the related address

              transfer policy proposals provides grounds for the observation

              that there is a general perception that the recognition of

              address transfers leads to a de facto recognition of the

              emergence of a market or markets for IPv4 addresses. A related

              topic of discussion about the merits or otherwise of these

              proposals has been the consideration of the relative merits and

              risks of market behaviours when applied to this situation.


              The comments opposed to the emergence of markets include the



              - Markets in addresses are an inevitable consequence of a

                transfer policy, and unconstrained markets are prone to a

                number of risks of distortion. These risks include deceptive

                trading, margin trading, trading in market derivatives and

                futures, hoarding, and speculation. The utility of an address

                as a token for addressing a packet is devalued in a market



              - Operation of a market will lock out all but the largest of

                players in the network from access to further addresses, as the

                value of the address will be set by the bidder with the highest

                price and the ability to exploit the address to its maximal



              - The operation of a market in IPv4 addresses will lead to the

                erosion of the effectiveness of self-imposed policies in IPv6,

                and may lead to the emergence of a market in IPv6 addresses.


              - Markets are unfair in terms of the implicit bias of a market in

                favour of those parties who are in a position to set the market

                price, and inherently discriminating against those parties who

                do not have the capacity to pay. In an international context

                this is counter to the general objective of a generally

                available, neutral and non-discriminatory communications




              Comments in favour of the emergence of a market in IPv4 addresses



              - Address exhaustion poses an insoluble problem to the address

                registries in that for as long as there is a continuing demand

                for addresses the registries have no means to meet that demand.

                Markets create a means for addresses to be recycled, and create

                a means for the various levels of demand and supply of

                addresses in IPv4 to reach a balance through a market-based

                pricing mechanism.


              - At every stage there is always an alternative to bidding for

                IPv4 addresses in the context of a market transaction: namely

                the use of IPv6 within the network, and the use of an upstream

                protocol translation service to provide legacy access to other

                IPv4 networks. Given that substitutes exist, the potential

                price of IPv4 addresses in a market is capped by the cost of

                deployment of IPv6 and IPv4 transitional mechanisms.


              - This is a temporary measure during the dual stack phase of


                transition. The higher the market price for IPv4 addresses the

                greater the cost pressure placed on the industry to undertake

                the IPv6 transition, which in turn limits the lifetime of the

                market and the speculative potential of any such market.

                Players will have an incentive to act quickly in terms of

                releasing address resources into such a market given that

                withholding for too long will result in no return as the market

                will naturally terminate once IPv6 transition has reached a

                critical deployment mass.



              It should be noted that this address transfer policy proposal is

              mute on the topic of a market for address transfers, and neither

              advocates nor specifically opposes the emergence of any such

              market or markets. The policy constrains itself to enumeration of

              the set of constraints that would apply for APNIC to recognise

              and register a transfer of addresses between APNIC members. How

              those parties arrived at the decision to undertake the transfer,

              and the related issues concerning property, financial and legal

              frameworks and the emergence of markets, the need to regulate

              such markets and identification of the market regulator are

              specifically not encompassed by this policy proposal, nor does

              this proposal advocate that such a role be undertaken by APNIC.



      6.   Effect on APNIC members



      APNIC members will have the ability to register the transfer of IPv4 address resources between APNIC members.



      7.   Effect on NIRs



      This policy does not encompass IPv4 address holdings administered by NIRs, nor the transfer of resources where the source or recipient are NIR-serviced entities.



      Sig-policy-chair mailing list

      Sig-policy-chair at apnic dot net