Here is the InternetNZ position on the second policy for discussion in
Singapore.
The original policy text can be found here:
http://www.apnic.net/__data/assets/text_file/0009/56871/prop-106-v001.txt

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InternetNZ position on
prop-106-v001: Restricting excessive IPv4 address transfers under the
� � � � � � � �final /8 block

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Authors: � �Dean Pemberton dean@internetnz.net.nz



1. Executive Summary
--------------------

Prop-106 suggests that based on observations of �APNIC IP resource
transfer history records, some LIRs seems to be collecting IPv4
address blocks from the �final /8� (103/8). �It also suggests that
this is being accomplished through the use of multiple accounts to
apply for individual /22s, and then transferring these blocks to a
single account and that this kind of behaviour is against the spirit
of the final /8 policy (prop-088). �Prop-106 intends to restrict IPv4
address transfers which were allocated/assigned from the final /8
block.

In assessing whether Iupport, oppose, or adopt a position of
neutrality on a particular policy proposal, three questions are
considered:

1. Does this policy seek to address a well-defined, well-accepted problem?
2. Will the solutions outlined within the proposal effectively
mitigate the stated problem?
3. Does the policy proposal fit with InternetNZ policy principles?


After consideration the questions above, InternetNZ believes that:
1. Based on information provided by the APNIC secretariat, there is no
evidence supporting a threat to exploit any perceived loophole in the
APNIC transfer policy. �As such this proposal does not address a
well-defined, well-accepted problem.
2. The options presented within this policy proposal will have no
material effect on the sorts of IP resource hoarding activity being
suggested to occur in the problem statement.
3. This policy proposal does not fit within several of InternetNZ
policy principles, namely those of: Openness, Market competition,
Working with the architecture of the internet and accessibility of the
internet for all.

As such InternetNZ opposes the adoption of APNIC prop-106 as presented
in version 001.


2. Does this policy seek to address a well-defined, well-accepted problem?
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Prop-106 states:

"The current APNIC IPv4 address transfer policy allows to obtain a
maximum of /22 distribution(s) per each APNIC account holder. We
propose add a restriction to IPv4 address transfer policy to
restricting excessive IPv4 address transfers under the final /8
block."

This proposal looks to close a perceived loophole in APNIC's transfer
policy that is suggested would allow a single actor to obtain, through
mergers and acquisitions (M&As), more than their allowed /22 from the
final /8. �Prop-106 suggests that this activity has already been
observed and as such a policy is required to close the perceived
loophole.

In considering if this perceived loophole exists and is actually being
exploited, InternetNZ has used information provided by the APNIC
secretariat. �There are 16,384 /22 blocks available from 103/8. �APNIC
has made 2,110 (12.9%[1]) delegations so far. �Of those delegations,
32 (1.5% of allocations, or 0.2% of the total available) have been
transferred. �This consists of 24 standard transfers and 8 M&A
transfers. �15 APNIC members have more than a single /22 from 103/8
associated with their account. The highest number is 5 x /22s in one
account. �These five /22 blocks represent 0.03% of the address space
within 103/8.

It would appear, based on this information, that there is not
currently a large amount of activity looking to exploit any perceived
loophole in existing APNIC transfer policy. �As such, InternetNZ does
not believe that this proposal seeks to address a well-defined,
well-accepted problem.


3. Will the solutions outlined within the proposal effectively
mitigate the stated problem?
------------------------------------------------------------------------

Prop-106 suggests two options that claim to close the perceived
loophole in APNIC's transfer policy:

Option 1: Restrict IPv4 address transfers under the final /8 address
block for two years.
Option 2: Set a deposit for transfers under the final /8 range. �Pay
ten years of APNIC's annual fees for transferred address block[s] in
advance when receiving the final /8 address range by address transfer
or account name change.

Both of these options seek to dissuade an actor from transferring
103/8 addresses from multiple shell companies to a single APNIC
account.

It should be noted however, that there is nothing to stop such an
actor from registering and using the same addresses and wilfully
failing to notify APNIC. In such a scenario the actor would have
access to multiple /22s from the 103/8 block, but the APNIC
registration database would reflect that these were held by different
entities.

The options presented in prop-106 are intended to influence the
behaviour of actors that are operating outside the intent of the last
/8 policy. �InternetNZ suggests that if such actors exist, and are
seeking to operate outside APNIC policy, they are unlikely to comply
with the proposed policy presented here. �As such, InternetNZ believes
that this proposed policy will have no material effect on the sorts of
IP resource-hoarding activity that is suggested in the problem
statement.

4. Does the policy proposal fit within InternetNZ policy principles?
------------------------------------------------------------------------

A set of eight policy principles[2] underpin the work of InternetNZ
and help ensure that our approach to Internet-related public and
technical policy is transparent and predictable. Internally, the
principles guide the development of policy positions and statements.
Externally, they explain the basis of InternetNZ�s views to our
stakeholders and to the general public. Any proposal that InternetNZ
takes a position on is evaluated against these principles. Six of the
eight principles apply with respect to prop-106. They are the
following:

** Principle No. 1 The Internet should be open and uncapturable. **
In considering a policy proposal using this principle, InternetNZ
looks to see if there will be a material effect to openness and/or non
capturability.

Openness
--------
As stated above, there is a material concern that one outcome of this
policy would be to discourage actors to from interacting with APNIC
during merger & acquisition activity (regardless of their intentions
for procuring the addresses). �Such a move would have a material
effect on the openness of the Internet through an erosion of trust in
the ability of the APNIC database to accurately represent the
ownership of IP resources.

Uncapturable
------------
There is a small chance that an actor could register multiple
companies, gain /22 resources and then acquire them. Information
provided by the APNIC secretariat shows that this situation is either
not occurring, or is occurring at such a low level as to not pose a
material threat to the capturability of the Internet. �It is accepted
that should this situation change in the future that intervention may
be required and a watching brief should be kept on the situation.

** Principle No. 2 Internet markets should be competitive. **
For a market to be competitive it must not place any significant
barriers on new entrants, nor should it place significant barriers on
the natural growth of organisations through M&As.

As stated above, prop-106 proposes to place barriers on any entity
looking to complete M&A activity involving IP resources from 103/8.
If these actors have benign intent and wish to operate within APNIC
policies, these barriers will place an undue burden on them. �If on
the other hand the actors have malicious intent, there are numerous
ways for them to avoid the burdens imposed by these policies and
achieve their outcomes.

As such InternetNZ believes that this policy will have a negative
impact on the competition within the Internet market.

** Principle No. 3 Internet governance should be determined by open,
multi-stakeholder processes. **
APNIC has an open, multi-stakeholder policy development process. �This
proposal does nothing to alter that.

** Principle No. 4 Laws and policies should work with the architecture
of the Internet, not against it. **
By placing barriers in the way of all M&A activity, APNIC may
discourage actors from updating IP resource usage in the APNIC
database. �This would cause a loss of trust in the integrity of the
information in the APNIC database. �As this information is used to
make decisions related to security, incident response and even routing
decisions on the Internet, InternetNZ believes that the effects of
this proposal could act against the architecture of the Internet.

** Principle No. 6 The Internet should be accessible by and inclusive
of everyone. **
The Internet is undergoing a significant period of growth, especially
in developing markets (such as BRIC[3]). �While it is an established
fact that IPv4 addresses have all but been exhausted and IPv6
represents the only sustainable future direction, access to IPv4
resources is currently a major requirement for the rapid deployment of
Internet access throughout these growing economies.
InternetNZ believes that placing barriers such as those proposed by
prop-106 on M&A activities may have a negative effect on Internet
deployment and growth within developing economies in the region.

** Principle No. 7 Technology changes quickly, so laws and policies
should focus on activity. **
There is clear evidence of significant activity in terms of Internet
growth within the region. �This is shown through the allocation of
11-12% of the final /8 in a relatively short period of time. �Given
that IPv6 is accepted as the only clear future deployment direction
for the Internet, yet there is a clear short-term demand for IPv4
resources, InternetNZ believes that barriers should not be placed in
the way of getting these resources to those who require them to
provide solutions to current technical problems.


5. Summary
----------

After consideration of the material above, InternetNZ believes that:
1. Based on information provided by the APNIC secretariat, there is no
evidence supporting a threat to exploit any perceived loophole in the
APNIC transfer policy. �As such this proposal does not address a
well-defined, well-accepted problem.
2. The options presented within this policy proposal will have no
material effect on the sorts of IP resource hoarding activity being
suggested to occur in the problem statement.
3. This policy proposal does not fit within several of InternetNZ
policy principles, namely those of: Openness, Market competition,
Working with the architecture of the internet and accessibility of the
internet for all.

As such InternetNZ opposes the adoption of APNIC prop-106 as presented
in version 001.


Dean Pemberton
Policy Advisor
InternetNZ
dean@internetnz.net.nz






________________
[1] Some delegations are of smaller size (/24 or /23) so the
utilisation is actually closer to 11%.


[2] https://internetnz.net.nz/content/Policy-Principles
[3] http://en.wikipedia.org/wiki/BRIC