[arin-discuss] Reminder that ARIN = US - was Re: Suggestion 2010.1 -- Initial Fee Waiver for IPv6 assignments to LRSA signatories

[Ted Mittelstaedt]

Owen DeLong wrote:
> On Feb 8, 2010, at 12:44 PM, Ted Mittelstaedt wrote:
> 
>> Keith W. Hare wrote:
>>
>> "...it doesn't cost ARIN anything...."
>>
>> Keith, I don't mean to single you out because Owen said exactly
>> the same kind of thing, as did others, but I am taking this
>> opportunity to mention that ARIN is NOT a profit-making entity,
>> they CANNOT take a financial loss, there are no stockholders
>> to deny dividends to, no owners.
>>
>> A fee waiver is a COST the same as paying for the electric
>> bill for the WHOIS servers, and a lease on the
>> building ARIN is in, and the cost of the chairs in that building
>> that the ARIN staff's butts are sitting on.
>>
> A fee waiver is only a COST if someone takes advantage of said
> fee waiver.  The portion of Keith's sentence (and mine, IIRC) that
> you left off was "If nobody uses it, then..." as in
> 
> "If nobody uses it, it doesn't cost ARIN anything".
> 
> Yes, ARIN is us. What costs ARIN costs us.  Agreed.
> 
>> ALL MEMBERS OF ARIN that pay ANYTHING to ARIN - even if it's
>> nothing more than a nominal $100 a year fee - are paying for those
>> costs.
>>
> And the theory behind this proposal is to increase the number of
> participants that would be paying ARIN $100 on a continuing annual
> basis at the equivalent cost of 12.5 years of service.
> 
>> The CORRECT SENTENCE is NOT  "cost ARIN anything"
>>
>> The CORRECT SENTENCE is "cost YOU AND ME AND THE REST OF US anything"
>>
> Respectfully, I disagree.  While ARIN is funded entirely by its
> resource holders (note: resource holders != members although
> there is significant overlap).  You can be an ARIN member without
> resources and you can be a resource holder without being a member.
> 
> Anyway, ARIN is funded by its resource holders, but, from a liability
> perspective, it is an independent entity. If ARIN absorbs too many
> costs and does not collect sufficient fees from its resource holders,
> the resource holders do not become liable for ARIN's debts. ARIN
> becomes insolvent.
> 

A non-profit like ARIN would have to be extraordinarily
mis-managed to become insolvent like this.  In fact it would literally
take criminal mismanagement.  To do it would mean ARIN would have
to run at an enormous budget deficit for decades.  ARIN would
quite literally have to become a government agency to manage this.

If ARIN runs at a loss in year 2011 then at years end it can
raise fees for 2012 high enough to cover not just the expected
increased costs of 2012, but pay back any debt incurred in 2011.
Yes, it is true that some orgs who were members of ARIN in 2011
may themselves go insolvent in 2012, and yes some new orgs can
join in 2012 who never had ARIN incur expenses in 2011.  BUT,
the ARIN members in 2012 are all gonna pay those debts from
2011 EVEN IF they never had a hand in incurring them, and
EVEN IF some of the orgs who incurred them get out of paying for
those expenses in 2012.

The only possible legitimate way ARIN can go insolvent is if there are 
debts from prior years and all of the sudden there's no need for ARIN
services on the Internet, and ARIN never has any chance of expectation
of receiving enough funding in the future to pay back old debts.

If you can imagine such a scenario, spit it out, I cannot.

This is exactly why we use the non-profit corporate structure
for orgs like ARIN.

A private company with fiduciary duty to it's stockholders would
be obligated to raise IP number registration fees as high as they
possibly could do so - meaning for as long as orgs would pay them.
And I think a lot of deep-pocket orgs out there would be able
to pay millions of dollars a year in registration fees.  In such
a case it becomes economically viable for a 3rd party to enter
into the picture and produce competition that COULD cause such
a collapse.  But with the current structure, since ARIN makes no
margin, a competitive org simply cannot afford to get traction.

Internet consumers learned from the mess that was made with the DNS
system when it was privatized that the customer gains nothing
when this is done, and as long as the DNS system stays as it is,
privatization of the IP numbering registries is going to remain
an ultraconservative's wet dream.  Anytime anyone brings it up,
there's so many examples of DNS messes that it will be shot down.

>> I think sometimes people get the feeling that there's this
>> mythical pot of money at ARIN that has no connection to their
>> wallets, I will remind everyone here that ARIN's expenses are
>> OUR expenses.
>>
> Sure, just like an ISP's expenses are passed along to its customers.
> 
> ARIN = US from a policy perspective.  From a funding perspective, it's
> a bit more indirect.
> 
>> The question we need to be asking is will spending the money on
>> a fee waiver get more flies to the IPv6 pot than spending the money
>> on something else like outreach or education, or another Team ARIN
>> comic? ;-)
>>
> Well, the answer is that if it doesn't, then, we didn't spend the money.
> If it attracts 5 flies, then, it only costs $6,250. If it attracts 10 flies, then,
> it costs $12,500 in uncollected fees.  However, most of those
> organizations would not be paying anything currently and still receiving
> services from ARIN for their IPv4 and ASN resources. So, the usual
> net is that we pay out $1,250 per fly attracted and receive $100/year
> from each attracted fly for a likely long time.  We also gain the ability
> to reclaim said fly's space if they stop paying $100/year, which, I would
> argue is an even greater value proposition.
> 

In my humble opinion Owen, it is exactly this kind of financial
speculation/discussion that was missing from your original suggestion,
which is why this discussion went down the "is it Moral" discussion
path.

I would encourage you to expand on this aspect of your suggestion.  I
definitely would prefer that the ARIN Board make a decision on
this suggestion based on it's financial impact, instead of the
moral/political aspects.

> To address some specific corner case concerns from Leo, I'd even
> be willing to see the BoT modify the suggestion so it only included
> LRSA signatories that could qualify for IPv4 under existing policy at
> the time of their IPv6 application. I'm really not trying to create an
> end-run around the process or give away free slots in the DFZ. I'm
> really looking for a way to strengthen ARIN by embracing and
> encompassing as many legacy holders into the LRSA as possible
> and simultaneously promoting IPv6 adoption.
> 
> FWIW, I could have been in a position to benefit strongly from this
> policy,

suggestion, not policy

> but, I already signed the LRSA, already justified my existing
> space, and, already qualified, paid for, and received an IPv6 /48 which
> is actively routed and used.  IOW, I'm not looking for a freebie, I'm
> looking to address a situation which I regard as detrimental to ARIN
> as an organization... The vast number of legacy holders who have
> not yet signed the LRSA and for whom we cannot account for the
> status of their resources.
>

I wonder if they even know they are legacy holders?

Ted

> 
> 
> Owen
> 
>