Alignment of Transfer Requirements for IPv4 Allocations

Summary of Proposal

According to the RIPE Document, “IPv4 Address Allocation and Assignment Policies for the RIPE NCC Service Region”, it is not possible to reallocate (transfer) complete or partial blocks of the same address space to another LIR within 24 months of receiving a reallocation. However, any /22 allocation received from the RIPE NCC can be transferred immediately with no restriction.

This allows speculators to open a new LIR, receive a /22, transfer it and start the process again. Some organisations are currently making a financial profit from this activity. 156 /22 allocations have been transferred between September 2012 and January 2015. Around 50% of these were transferred in the last three months.

The goal of this policy proposal is to prevent speculating organisations from abusing the IPv4 transfer policy to make a financial profit. An additional goal is to allow new organisations to get a /22 for the foreseeable future; by discouraging speculation, the last /8 will last longer.

Policy Text

[The following text will update section 5.5 in the RIPE Document ripe-623, “IPv4 Address Allocation and Assignment Policies for the RIPE NCC Service Region”, if the proposal reaches consensus.]

a. Current policy text 

5.5 Transfers of Allocations

[...]

LIRs that receive a re-allocation from another LIR cannot re-allocate complete or partial blocks of the same address space to another LIR within 24 months of receiving the re-allocation.

[...]

b. New policy text

5.5 Transfers of Allocations

[...]

LIRs that receive an allocation from the RIPE NCC or a re-allocation from another LIR cannot re-allocate complete or partial blocks of the same address space to another LIR within 24 months of receiving the re-allocation.

[...]

Rationale

a. Arguments supporting the proposal

• The goal of this policy change is to close the loophole which allows companies to setup LIRs and immediately transfer the /22(s) received from the RIPE NCC, thus making a financial profit by using the existing IPv4 marketplace.
• The “Allocations from the last /8” policy proposal aimed to ensure that no organisation lacks real routable IPv4 address space during the transition to IPv6. It also aimed to ensure that new entrants have the chance to get some IPv4 space before it totally runs out.

b. Arguments opposing the proposal

• This policy proposal will not prevent organisations from setting up one or more LIRs and hoarding the /22s. It will only add a two-year restriction before a /22 from the last /8 can be transferred and thus will only create a bigger financial cost for the company that wants to speculate.

Note: In order to provide additional information related to the proposal, details of an impact analysis carried out by the RIPE NCC are documented below. The projections presented in this analysis are based on existing data and should be viewed only as an indication of the possible impact that the policy might have if the proposal is accepted and implemented.

A. RIPE NCC's Understanding of the Proposed Policy

It is the RIPE NCC's understanding that IPv4 allocations made by the RIPE NCC would not be able to be transferred to another LIR for 24 months from the date the allocation was made. This restriction would only apply to transfers made according to section 5.5 of "IPv4 Address Allocation and Assignment Policies for the RIPE NCC Service Region".

This would bring IPv4 allocations made by the RIPE NCC in line with allocations that were transferred from another LIR, which currently have this same 24-month restriction. For all new transfer requests, the RIPE NCC would check that 24 months had passed since the allocation was made.

The proposed policy would not affect existing procedures for mergers and acquisitions. The transfers of resources related to ownership changes of networks would remain possible at any time. The process of becoming a RIPE NCC member would not be impacted.

B. Impact of Policy on Registry and Addressing System

Address/Internet Number Resource Consumption

We looked at the number of allocations that could potentially be affected by this proposal. On 1 May 2015, we found that 241 /22 allocations from 185/8 had been transferred since the last /8 policy came into effect. From these, 230 were transferred within 24 months of the allocation date, and most of these (179) were transferred within the last eight months.

In 2015 so far, an average of 24 allocations each month have been transferred within a 24-month timeframe, which would result in around 290 such transfers per year. This indicates a rising trend in the number of these “early” transfers of allocations by LIRs.

To put this into perspective, the RIPE NCC has allocated about 6,100 /22s from 185/8. In the past six months, the average rate has been around 245 allocations per month. Therefore, the transfers which the policy proposal tries to discourage constitute about 10% of the total allocations in recent months.
If the allocation rate remained at the rate of the past six months, the RIPE NCC's pool of available IPv4 would last another five and a half years. However, if new LIRs continue to join in ever-larger numbers and /22 transfers from last /8 also gain more popularity, that lifetime may be reduced significantly.

Fragmentation/Aggregation:

After analysing the data that is currently available, the RIPE NCC does not anticipate that any significant impact will be caused if this proposal is implemented.

C. Impact of Policy on RIPE NCC Operations/Services

Registration Services:

After analysing the data that is currently available, the RIPE NCC does not anticipate that any significant impact will be caused in if this proposal is implemented. 

Billing/Finance Department:

In the previous 12 months, 75 LIRs closed shortly after transferring their /22 allocations according to section 5.5 of "IPv4 Address Allocation and Assignment Policies for the RIPE NCC Service Region".

A RIPE NCC Executive Board resolution on 20 March 2015 requires that LIRs pay one full annual service fee before commencement of a merger, transfer or closure procedure. The proposed policy change would require LIRs to keep their IPv4 allocation for at least 24 months before it could be transferred and pay the annual fee during this time.

Considering the overall size of the membership, the RIPE NCC does not anticipate a significant impact will be caused if this proposal is implemented.

RIPE Database:

After analysing the data that is currently available, the RIPE NCC does not anticipate that any significant impact will be caused if this proposal is implemented.

D. Legal Impact of Policy

After analysing the data that is currently available, the RIPE NCC does not anticipate that any significant impact will be caused if this proposal is implemented.

E. Implementation

The RIPE NCC estimates that if this proposal is accepted the implementation would have a low impact.

The RIPE NCC would update existing processes, supporting software and documentation to extend the 24-month holding period for re-allocated IPv4 allocations to also include IPv4 allocations made by the RIPE NCC.