______________________________________________________________________

prop-022-v001: A proposal to abolish redundant charges in IPv6 
               allocations
______________________________________________________________________


Proposed by:    Izumi Okutani, JPNIC
                <izumi@nic.ad.jp>
Version:        1.0
Date:           4 August 2004



Introduction: 

This paper proposes to revise a method of calculating IPv6 per
address fee  so that multiple fees charged for the same address range will
be abolished.

Summary: 

"Per address fee" is the fee charged for allocations which NIRs or
NIR members receive. Therefore, per address fee should only be charged for
newly allocated ranges. 

However, the current per address fee scheme defined in APNIC-081 "APNIC Fee
Schedule: Membership Tiers, Fees, and Descriptions" ,leads to multiple
charges for the same address range in IPv6 allocations. The following how it
is defined in the document:

APNIC-081 "APNIC Fee Schedule: Membership Tiers, Fees, and Descriptions" 
  3.4.3  IPv6 address space

        For an allocation of IPv6 address space, the total per-
        address fee is calculated for the prefix allocated according
        to the number of addresses which should be utilised according
        to an HD-Ratio of 0.80.

        (snip..)

        In the case of an allocation which includes a previously
        allocated block of addresses, the total fee calculation is
        based on the size of the prefix allocated, regardless of the
        previous allocation.

Under this scheme, NIRs will be charged for the address space which had been
previously charged when they receive subsequent allocations which are
contiguous from previous allocations(see the chart below).

+-----+  
| /32 |
+-----+
 (new allocation)
 (charge)


+-----------+
|    /31    |
+-----------+
        (new allocation - /32)
 (charge)

+--------------------------+
|           /30            |
+--------------------------+
              (new allocation - /31)
 (charge)

As a result, NIRs must either come up with a way to cover the redundant
charge without charging their memebrs, or apply the same scheme to their
members. JPNIC applies the same scheme, but we are unable to make a
reasonable justification. 

Furtheremore, it  leads to LIRs which conserve address space(requesting for
small allocations as a start) have to
pay more fee than LIRs which request for large allocations  at once:

(case-1) /32 initially, then upgrade to /31, /30, until /29

 Initial allocation (/32)              : 7,132 * per address fee
 Second allocation (/32, /31 in total) : 12,417 * per address fee
 Third allocation (/31, /30 in total)  : 21,619 * per address fee
 Fourth allocation (/30, /29 in total) : 37,641 * per address fee
-------------------------------------------------------------------
 Fee total                             : 78,809 * per address fee


(case-2) /29 initial allocation

 Initial allocation (/29) : 37,641 * per address fee

Situation: 

N/A

Details: 

The proposal is to replace APNIC-081 as below;


  3.4.3  IPv6 address space

        For an allocation of IPv6 address space, the total per-
        address fee is calculated for the prefix allocated according
        to the number of addresses which should be utilised according
        to an HD-Ratio of 0.80.

        (snip..)

        In the case of an allocation which includes a previously
        allocated block of addresses, the total fee calculation is
        based on the difference in the number of /48s  corresponding
        to HD-ratio 0.8, between the previous allocation and the new
        allocation.

        For example, the total per-address fee payable for an
        allocation of /30 including previous /32 allocation to a "Very
        Large" member is calculated as:

           (21,619 - 7,132) x $ 0.03 = $ 434.61

        Note: The number of /48s for /32 under HD ratio 0.8:  7,132
              The number of /48s for /30 under HD ratio 0.8: 21,619

Pros/Cons: 

Adopting the proposed method of fee calculation would lead to:

Advantages
1) Multiple fees will no longer be charged for the same address range.

2) Same fee will be charged in total regardless of the size of past
allocations.

(case-1') /32 initially, then upgrade to /31, /30, until /29

 Initial allocation (/32)              : 7,132 * per address fee
 Second allocation (/32, /31 in total) : (12,417-7,132) * per address fee
 Third allocation (/31, /30 in total)  : (21,619-12,417) * per address fee
 Fourth allocation (/30, /29 in total) : (37,641-21,619) * per addless fee
-------------------------------------------------------------------
 Fee total                             : 37,641 * per address fee


(case-2') /29 initial allocation

 Initial allocation (/29) : 37,641 * per address fee 
                             = case-1'

Disadvantages:

None.

Effect on APNIC: 

No effect on APNIC members.

Effect on NIRs: 

NIRs(and indirectly, NIR members) are no longer required to
pay multiple per address fee for the same address range