[arin-ppml] A Redefinition of IPv4 Need post ARIN run-out (was: Re:Against 2013-4)

[Mike Burns]

Hi David,

Responses inline.
> There were issues with your proposal as writen, but I think most of them 
> could have been worked out. Some of the ideas in your proposal have been 
> incoporated in to policy already.

Actually my draft proposal became policy with essentially the single change 
which was the removal of the /12 exclusion for needs tests.
Hence my original email to you, which was to pose the question of whether 
you might be willing to reconsider this exclusion in the light of your 
discussion with Mr. Ryerse, who has trouble receiving an allocation from 
ARIN.


> I think the more important issue is an appropriate criteria on the 
> lower-end and for new enterants, the current slow-start for IPv4 isn't 
> going to work, post-ARIN free pool.  Yes, I know eliminating need 
> alltogether eliminates that problem, but I'm not sure I can get myself all 
> the way there.  I'd like to see some minimal technical criteria that 
> entitles someone to be able to buy up to between a /16 and a /12 and more 
> than just that they have the money to do so.  Maybe its just as simple as 
> demonstrating efficient use of at least a /24.  If you can't do that then 
> you can only buy a /24, then you utilize it and you qualify for bigger 
> blocks.

Why not consider a proposal which you would acknowledge solves Mr. Ryerse's 
problem?
If you can't get all the way towards dropping needs tests (for transfers 
only), why not consider a half-measure?
Allow needs-free transfers, but cap them so as to protect against hoarding 
and market-cornering?

>
> The point is that's my opinion, what we need is to develop a community 
> consensus.  This require comprimise on both sides.  I think a much 
> liberlized defintion of need for IPv4 is possible.  But, when people 
> continually call for the elimination of need completely, the majory of the 
> community circles the wagons and we get nowhere.  My question to you and 
> others, is a signifigantly liberalized defintion of need for IPv4 good 
> enough?

There are obviously two PPML camps, the no-needs camp and the needs camp.
So in an attempt to bridge the gap in quest of the consensus you describe, I 
am directing my original question to the list at-large.
What about a needs-free transfer cap?
This would be a compromise which provides some of the free-market 
functionality the no-needs camp loves,
And it would limit the threat of hoarding and market manipulation which many 
in the needs camp feel is a requirement of reasonable market regulation.

Looking at the transfers on record, /12 is a very large size. Most transfers 
are much smaller, so most address-rights transactions will flow more easily 
from the perspective of buyers, sellers, and brokers, if I may presume to 
speak for them. For "corner cases" like Mr. Ryerse, this would solve the 
problem. For all but the largest of those whose planning horizons go beyond 
24 months, this would solve the problem. For those who wanted to keep a 
reliable inventory of available addresses at nearly every block size, this 
would solve the problem.

I am aware of a /8 which has been on sale for years, yet remains unsold. It 
is hard to argue that possession of a /12, or even several of them, would be 
enough to corner the market to the extent that price could be manipulated. 
Lest we forget, unlike other commodities, IPv4 address values will certainly 
go to zero if they are held forever, and nobody really knows how fast the 
IPv6 dominoes will fall when critical mass is reached. Nobody knows how many 
sellers there are, who they are, or how many addresses could be available. 
This uncertainty provides a natural limit to speculation, but we can impose 
a hard limit through the negotiation of an appropriately sized cap.

>
> My suggestion is we keep talking about what such a signifigantly 
> liberalized defintion of need for IPv4 looks like.  I think you and I have 
> similar ideas probablly not exactly the same, but you and I are not 
> enough, we need to develope more consensus around the idea before were 
> ready for a proposal.
>
> Thanks
>

Agreed that we should keep talking and trying for consensus.

I understand that you are suggesting some kind of liberalization or change 
to policies related to IPv4 need to address issues like access for new 
entrants and smaller enterprises.
I propose that removing the needs tests for transfers under the cap will 
lead to a vibrant market at the low end, where Bill Herrin correctly pointed 
out that finding and buying a /24 is very hard. Because of the needs 
requirement for all transfers, buyers are looking for relatively small 
blocks for which they think they will get approval. We get many requests, 
mostly from Asia, for blocks of /20 and smaller. But there are few sellers 
willing to shave off small blocks, due to the transactional costs and 
uncertainties. If I have a /16, why not hold out and wait for a single 
buyer, negotiate a single contract, and make one trip through the 
ARIN/APNIC/RIPE justification tunnel? After all, the sellers have never done 
this before, it will usually be a once in a corporate-lifetime kind of 
transaction. Shepherding a single transaction through to completion in this 
kind of environment is difficult enough, but a series of small ones, with 
overseas buyers, all dependent on a third party approval via a needs test? 
That's a tough sell.

On the other hand there are entities who are willing to enter this market, 
bear the risks of multiple smaller transactions, strive to standardize and 
normalize the market, and if successful, profit from their endeavors. Of 
course if they are successful, new entrants and small companies would have a 
reliable market from which to acquire addresses. And sellers of addresses 
would be able to offload their /16 to a single buyer in a single 
transaction, and get back to their core business. What is preventing this 
business venture in IPv4 address distribution is the needs-test for 
transfers.

I have tried to point out some of what I think could be the benefits of a 
cap for needs-free transfers, and of course I am from the no-needs camp. 
Maybe someone from the needs camp will keep the conversation going, or 
propose something else to try to address the points held by both sides?

Regards,
Mike