The IPv4 landscape in Latin America and the Caribbean has shifted from a state of “tight supply” to one of structural limitation. Since LACNIC announced the formal exhaustion of its free IPv4 pool on August 19, 2020, the region has operated under a strict recovery-and-redistribution model. Today, the projected wait time for a new IPv4 request exceeds ten years - a timeframe that is effectively an eternity in the context of digital infrastructure and regional growth.

In response to this bottleneck, policy proposal LAC-2025-5, currently in its “Last Call” phase, represents a significant evolution in regional governance. By replacing the existing prohibition on third-party sub-assignments with a regulated, transparent framework, the proposal seeks to align policy with the operational realities of a region in dire need of connectivity.

Bringing the “Shadow Market” into the Light

For years, LACNIC’s Policy Manual has been clear: sub-assignments to third parties outside a recipient’s own infrastructure were not permitted. While intended to prevent the commercialization of public resources, this restriction has had an unintended side effect. As scarcity worsened, demand did not disappear; instead, it moved into a “grey market” of informal, unrecorded leasing arrangements.

These unrecorded transactions create a significant “visibility debt” for the region. When an IPv4 block is used without being updated in the registry, it leads to:

• Degraded WHOIS Data: Making it nearly impossible for network operators to identify the true source of traffic.
• Cybersecurity Blind Spots: Law enforcement and security researchers lose the ability to trace malicious activity to a responsible entity.
• Routing Inaccuracies: The lack of a clear “paper trail” complicates the implementation of RPKI (Resource Public Key Infrastructure) and other routing security protocols.

LAC-2025-5 addresses this by introducing a controlled exception under a new section (2.3.2.19). It recognizes that while IPv4 resources may be transferred under LACNIC’s established transfer policies, sub-assignments to third parties outside the recipient’s infrastructure have historically been prohibited. The proposal formalizes a framework where such sub-assignments can occur in a transparent, recorded, and auditable manner.

Strategic Guardrails: Protecting the Ecosystem

What distinguishes LAC-2025-5 from more permissive policies in other regions is its suite of “anti-speculation” controls. The proposal is designed to facilitate network growth, not to empower digital landlords.

The most significant guardrail is the three-year restriction. Any organization that chooses to sub-assign its space under this mode is prohibited from requesting new IPv4 allocations or receiving transfers for three years from the date of the last sub-assignment. This creates a self-regulating “choice” for operators: they must decide if they are in the business of building their own infrastructure or supporting the infrastructure of others.

Additionally, the proposal mandates a public movement log. This log would record every “start” and “end” event for a sub-assignment, including the block, the recipient’s Autonomous System Number (ASN), and the date. This level of transparency is a major step forward for regional accountability, ensuring that the movement of resources is as visible as the resources themselves.

Economic Impact: From CapEx to OpEx

Today, the only legal path for an operator who cannot wait a decade for an allocation is the IPv4 transfer market. However, the price of a /24 block - the smallest routable unit - has stabilized at a level that represents a significant capital expenditure (CapEx) barrier for small and medium-sized ISPs.

By allowing regulated sub-assignments, LAC-2025-5 introduces a “middle-tier” option. Smaller providers can now obtain the resources they need via an operational expenditure (OpEx) model. This lowers the entry barrier for new players in the market, fostering competition and digital inclusion in underserved areas.

Crucially, the proposal does not abandon the region’s commitment to the future. To be eligible for a sub-assignment, the receiving party must already hold an ASN and IPv6 space from LACNIC. This ensures that while IPv4 is used to bridge the current gap, it does not become a crutch that stalls the necessary transition to IPv6.

Operational Integrity and Enforcement

The success of LAC-2025-5 will ultimately rest on enforcement. The proposal shifts the burden of responsibility to the sub-assigning member. If a sub-assigned block is misused or the recipient violates policy, the member must terminate the arrangement or risk having their own resources revoked by LACNIC.

This “chain of responsibility” ensures that LACNIC does not have to police thousands of small sub-assignments directly; instead, it holds the primary resource holders accountable for the behavior of their downstream clients.

Conclusion: A Pragmatic Step Forward

LAC-2025-5 is a mature response to an intractable problem. It recognizes that in a post-exhaustion world, the goal of a registry is no longer just “allocation,” but “optimization.” By formalizing sub-assignments, LACNIC can clean up its WHOIS data, provide a compliant path for resource sharing, and support the continued growth of the Latin American internet ecosystem.