Dear SIG members
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
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
Date: 22 July 2008
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
- 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
- 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
2. APNIC will adjust the source's address holdings as of the date
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:
- Address resources
- Date of transfer
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
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)
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
- 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.
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
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
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.
- 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.
- 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
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
- 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.
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