Because the number of available IP Addresses on the Internet is limited, many factors must be considered in the determination of address space allocations. Therefore, IP address space is allocated to ISP's using a slow-start model. Allocations are based on justified need, not solely on a predicted customer base.

Utilization rate of address space is a key factor, among others, in determining address allocation. IP address allocations are valid as long as the utilization and other relevant criteria continue to be met, and the yearly fee is submitted. ARIN may invalidate any IP allocation if it determines that the requirement for the address space no longer exists. In the event of address space recall, ARIN will make every reasonable effort to inform the organization that the addesses are being returned to the free pool of IPv4 address space.

Reassigning Address Space to Customers:
ISP's are required to apply a utilization efficiency criterion in providing address space to their customers. To this end, ISP's should have documented justification available for each reassignment. ARIN may request this justification at any time. If justification is not provided, future receipt of allocations may be impacted. In extreme cases, existing allocations may be affected.

The most important factor in evaluating requests for additional address space is the current utilization of address space by the requesting ISP as well as its downstream customers. ISP's must have efficiently utilized all previous allocations, and at least 80% of their most recent allocations in order to receive additional space. This includes all space reassigned to their customers. Therefore, it is important that ISP's require their downstream customers to follow the efficient utilization practices desrcibed in this and other ARIN guidelines.