[sig-policy]Proposal prop-014-v001.txt - Lowering minimum allocation size andcriteria

[Anne Lord <anne@apnic.net>]

Dear colleagues,

Attached below is a proposal for the upcoming APNIC Open Policy 
Meeting in KL, Malaysia. It is being circulated one month before 
the meeting to give time for feedback.  

The proposal can also be found at:

http://www.apnic.net/docs/policy/proposals/prop-014-v001.html

Your comments on this proposal are greatly appreciated and should
be sent to this mailing list.

Best wishes,

Anne

_____________________________________________________________________

A proposal to lower the IPv4 minimum allocation size and initial 
allocation criteria in the Asia Pacific region [prop-014-v001.txt]
_____________________________________________________________________


Proposed by: APNIC Secretariat
Version:     draft 1.0
Date:        January 2004


1 Summary and motivation
------------------------

For more than 10 years, the RIR system has applied initial allocation 
criteria and a minimum size for IPv4 address allocations to Local 
Internet Registries (LIRs). This is done to limit address space 
fragmentation and encourage aggregation and it ensures that only ISPs 
with sufficiently large address needs are able to receive portable 
address space.

The size of the minimum allocation in the APNIC region has changed 
previously in response to concerns and the consensus of the community.
In late 2000, the APNIC community approved a proposal to lower the 
minimum allocation from /19 to /20.

In December 2001, the APNIC community approved new criteria for 
initial allocations. Those criteria are consistent with the /20 
minimum allocation and include (among others) a requirement to have 
used a /22 from an upstream provider and a plan to use a /21 within
a year.

Nevertheless, members of the APNIC community have expressed concern 
that the barrier to entry remains too high, preventing many smaller
ISPs from obtaining portable address space.

This document proposes lowering the minimum allocation size and
initial allocation criteria, in the interests of fairness and equity
of access to addresses.

Further, many in the community have argued that the goal of 
aggregation has reduced in importance in recent years, due to 
developments in router technology and routing protocol. It is argued
that it is now possible to sustain reasonable growth in the 
Internet's routing tables without performance or stability problems.

Please note that the minimum allocation size and the initial 
allocation criteria affect only the first allocation made to an ISP.
Changing either of these factors would have no impact on the size of
subsequent allocations.


2 Background and problem
------------------------

The APNIC Secretariat receives feedback from members and the wider AP
community through channels including training events, the helpdesk 
and hostmaster services, and seminars and workshops.  Consistently,
small ISPs express concern at the difficulty of obtaining address 
space from APNIC under current policies.

As noted above, under current policies, to be eligible for an initial 
/20 allocation, an ISP must (among other requirements):

    - have used a /22 from their upstream provider or demonstrate an
      immediate need for a /22;

    - demonstrate a detailed plan for use of a /21 within a year.

This proposal adopts a quantitative approach to analyse the impact of
the current policies by comparing the number of APNIC members (ISPs 
which have qualified to receive portable address space) with the 
number of ISPs actually operating in various economies of the region.

The total number of APNIC members broken down by economy (excluding 
NIRs) is shown below.  (Note that the totals here also include 
associate members and members who have received portable assignments).

	AU	195
	HK	110
	IN	104
	PH	48
	JP	44
	SG	44
	NZ	37
	PK	34
	TH	33
	MY	31
	CN	30
	AP	29
	BD	25
	TW	25
	Other	84

The total number of ISPs operating in an economy can be obtained where
a licensing or registration regime is in place, or where other survey 
data is available.  The following countries were examined.

  India (104 APNIC members)
  
  Data for India obtained at http://www.dotindia.com/isp/ispindex.htm 
  shows that for 39 A, B, and C licenses issued, 191 ISPs had started
  business as of August 2003[1]. APNIC has 104 members in India. It
  can be concluded that approximately half of the ISPs operating in
  India have not obtained portable address space allocations from 
  APNIC.


  Hong Kong (110 APNIC members)

  At http://www.ofta.gov.hk/tele-lic/operator-licensees/opr-isp.html#s4
  it states that in Hong Kong, there were 216 licensed ISPs in August 
  2003 (there are many more ISPs which are not licensed). Of these, 110
  are APNIC members. Again approximately half of the ISPs in Hong Kong
  have not obtained portable address space allocations from APNIC.


  Australia (195 APNIC members)
  
  In Australia, 964 ISPs are registered with the Telecommunications 
  Industry Ombudsman (http://www.tio.com.au/) and 195 of these are 
  registered APNIC members.


  Indonesia (96 APJII members)
  
  According to information supplied by APJII, the NIR for Indonesia, 
  there are two types of ISP licence in Indonesia: 'initial' and 
  'secondary' licences. Both are required before an ISP can operate.
  The 'secondary' licence requires portable address space from APNIC.

  According to the Department of Post and Telecommunications, 83 ISPs 
  hold initial licences only. These ISPs do not have any portable 
  address space. A further 96 ISPs are operating with both initial and
  secondary ISP licences. Therefore, just under half of Indonesian 
  ISPs have not obtained portable allocations from APNIC.


3 Other RIRs
------------

3.1 RIPE NCC

In the RIPE region, following consensus at RIPE 46, from 1 January 
2004, the minimum allocation size was lowered from a /20 to a /21. 
Further, it is no longer necessary to demonstrate efficient 
utilisation of a /22 to request an initial allocation.

The motivation for the proposal was that it was difficult or 
impossible for many start-up LIRs to get a PA allocation. As explained
in the proposal:

    "..startup LIRs that do not already hold address space cannot get 
    an initial PA allocation (which would be a /20 as of today, or 
    bigger), because in many cases, they cannot demonstrate immediate 
    need, or prior utilization of sufficient address space."


3.2 ARIN

The ARIN community has made no change to the /20 minimum allocation 
size. However, at ARIN XII, there was consensus on changing the 
multihomed networks policy as follows:

    "Multi-homed organizations may justify and obtain a block of 
    address space with prefix length extending to /22 directly from
    ARIN. When prefixes are longer than /20, these micro-allocations 
    or micro-assignments will be from a reserved block for that 
    purpose."

Although there was no change to the minimum allocation size, the 
multihoming policy now allows smaller allocations to be made, to a 
minimum of /22.

The ARIN community also reached consensus on allowing an exception for
organisations located in the AFRINIC region, which now have a minimum
allocation of /22.


3.3 LACNIC

The minimum allocation size is a /20.


4 Discussion
------------

4.1 Lowering the minimum allocation size and initial allocation 
    criteria

A possible response to concerns about the barrier to entry for small 
ISPs is to lower the minimum allocation size and initial allocation 
criteria. The following discussion considers the effect of lowering 
the minimum allocation size from a /20 to a /21.

Of a total of 734 current open APNIC members, 468 (63%) of those have
received one allocation only. Further, of those 468 members, 378 have
had their allocation for longer than one year. In other words, more 
than half (51%) of all APNIC members have held a single allocation for
longer than one year, without returning to APNIC for additional 
address space.


4.2 Impact on routing tables

Lowering the barrier to entry would have some impact on the size of 
the routing tables. The number of discrete allocations will be 
increased as more entities are able to receive portable prefixes. 
However, it is argued that the impact to the routing table will not be
significant. The survey of ISP numbers in a number of economies in the
region (see section 2 above) indicates that the total number of 
additional allocations at the /21 level would number in the hundreds,
and the incremental impact on the global routing table, currently 
carrying some 130,000 entries, would be negligible.

This conclusion is based upon data analysis of the 3 December 2003
routing table report[2] which shows that /19 prefixes account for 6%
of the global routing table, /20 prefixes account for 7%, whereas /24s
account for almost 55%. Policy changes in recent years (in particular
the move from a /19 to a /20) have not resulted in significant changes
to this profile. The largest factor contributing to routing table 
growth remains the advertisement of /24 prefixes, either from legacy 
allocated space or from more specific prefixes of portable space.


4.3 Impact on conservation

Recent research work[3] (which extrapolated allocation practices and
demand, using an exponential growth model derived from the best of 
2000-2003 data) concluded that RIRs could continue making IPv4 
allocations on the current basis for the next two decades.

There are many factors that could affect this prediction. Changes in
RIR allocation policies are one such factor. However, analysis 
suggests that this policy impact is not highly significant. For 
instance, global rates of RIR consumption have been: 4.47 /8s per year
in 2000; 5.47 /8s per year in 2001; and 3.08 /8s per year in 2002. 
During this preiod the minimum allocation was changed from a /19 to a
/20 in all regions.

Based on this previous experience of the effect of policy change on
address consumption, the current proposal is not expected to conflict
with the RIR goal of conservation.


4.4 Impact on RIR operations

A lower minimum allocation would require some changes to RIR 
hostmaster operations. Specifically, to be able to support contiguous
allocations, hostmasters would need to reserve address space for a 
longer period. Currently, reservations are held for 12 months, 
extending to 15 months in some cases.


4.5 Impact to NIRs

It is anticipated that the NIRs will conduct their Open Policy 
Meetings with a view to adopting a consistent minimum allocation size
and allocation criteria.


5 Proposal
----------
It is proposed that the current size of the minimum allocation should
be lowered from a /20 to a /21. It is also proposed that the 
respective criteria for an initial allocation should be amended such 
that the LIR must:

    - have used a /23 from their upstream provider or demonstrate an
      immediate need for a /23; and

    - demonstrate a detailed plan for use of a /22 within a year;

All other aspects of the policy would remain unchanged.


6 Implementation
----------------

If consensus is reached, it is proposed to implement this policy three
months after the policy has been approved by the APNIC Executive 
Council (EC).


Notes and references
--------------------

1 ISPs are not the only type of organisation who become APNIC members
  and receive allocations of portable address space.
  
2 The Routing Table report is archived at 
     http://www.apnic.net/mailing-lists/bgp-stats/

3 IPv4 Address Lifetime Expectancy - 2003, Geoff Huston
     http://www.apnic.net/community/presentations/docs/ietf/200307/35


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