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A link monitoring system that records and reports to the sender the successful reception (or implied failure to receive) of each frame sent across the link is useful for two purposes: (1) as a building block for enhanced forwarding services that may use hop-by-hop ARQ (transfer of custody), and (2) as a rich source of data about the link's recent reliability as input to routing or configuration decisions. We propose a system that uses a new encapsulation of packets between two IP routers that can be automatically enabled when the routers sense that its neighbor is similarly capable. The new encapsulation will carry a transmission number, allowing the receiver to detect and report back which particular packets were and were not received. Traditionally hop-by-hop ARQ has been thought of as residing at the link layer. Our link monitoring system allows a variety of hop-by-hop retransmission schemes to be provided in a modular way at the network layer, avoiding the one-size-fits-all problem of traditional link-level ARQ schemes.