[ppml] Policy Proposal: IPv4 Transfer Policy Proposal

[Scott Leibrand]

michael.dillon at bt.com wrote:
>
> I agree that there will be diverse scenarios playing out, but
> as I said, the pioneers of IPv6 deployment, not migration, wil
> be ISPs since network growth is at the core of their business
> model. This does not mean that they will be shrinking their
> IPv4 networks, and even if they do recover some IPv4 address
> space, there is no benefit to them to transfer it to someone
> else. In fact, the benefit to ISPs is to reuse those IPv4
> address to continue selling IPv4 services to the market segment
> which demands that.
>   

Of course there will be a benefit to transferring the IPv4 addresses to 
someone else: that someone else will pay you for them.  If they're 
willing to pay you more than you could make by continuing to sell IPv4 
services, you take the deal.  If not, someone else does.

> Given that this whole thing plays out at a time when there is
> a worldwide scarcity of IPv4 addresses, I can't see any reason
> for anyone to give up the IPv4 addresses that they have until
> they are absolutely sure that doing so does not risk serious
> business losses. That will take years after IANA runs out of
> IPv4 addresses.
>   

Is there a scarcity of land on Manhattan?  There certainly is a fixed 
pool of land there, which is fully utilized.  However, that doesn't stop 
developers from buying land and putting it to more productive use.  No 
one selling land on Manhattan is risking serious business losses, 
because they can lease or buy the land they need on the real estate market.

If, however, the transfer of land on Manhattan (or IPv4 addresses) were 
prohibited, then what you said would be very true.

> An then there is the technical issue of having a usable aggregate
> of IPv4 addresses to transfer and not scattered small blocks.
> An ISP has a number of ways of using scattered small blocks,
> including carrying many long prefixes in their iBGP, but in
> the global Internet, only large blocks/short prefixes are usable.
>   

Yes, which is why transferors will likely have an asking price high 
enough to fund the renumbering out of a block large enough to transfer.

>   
>> I suspect that after ARIN free pool exhaustion, all ISPs will 
>> offer some form of IPv6 service.  To do so successfully, and 
>> support dual-stack, however, there will be a continued need 
>> for IPv4 addresses.
>>     
>
> That's why I don't believe many ISPs will go to dual stack on
> any kind of scale. It is simpler to use MPLS with 6PE at the
> edge, or build an IPv6 mesh over GRE or PWE3 on an IPv4 core.
> This isolates the impact of IPv6 to the edge, and only to those
> edge routers which are needed for IPv6 services.
>   

You're missing my point.  It doesn't matter what the ISP does with their 
infrastructure: that's not the bulk of their addresses.  What matters is 
how they provide services to their customers, each of which needs IPv4 
and IPv6 addresses for decent interconnectivity.  I predict that many 
ISPs will offer their customers dual stack service at the edge, and that 
the IPv4 portion of that service will become a NAT'd private address in 
a lot of cases.

>
> As I have said in the past, you can't have a market without
> liquidity and a resource that is not only scarce, but has a 
> cap on supply, simply cannot provide that liquidity. I have
> no doubt that there will be a few sales of IP address blocks, 
> regardless of whether or not any RIR implements policies to
> allow it, but the prices will not follow a pattern, and
> will not be predictable. In general asking prices will be
> astronomically high, and some sales will actually take
> place at very high prices. But other sales will go through at
> a fraction of the asking price because the only reason the
> address block is on the market is because the seller genuinely
> has no use for them any more.
>   

It's possible that an IPv4 transfer market will be somewhat illiquid.  
That will certainly be true if it's a black market.  However, I think 
this proposed transfer policy moves us in the direction of improving the 
liquidity of the market, by legitimizing transfers and allowing a 
central listing service (order book) so that potential transferors and 
transferees can see prices and behave accordingly.  One such behavior, 
IMO, will be address holders freeing up additional addresses to transfer 
as a rising price makes it worth their while.  Therefore, I think the 
market created by this transfer policy would be sufficiently liquid to 
ensure a continued supply of IPv4 address resources at reasonable cost.

>> Yes, it is clear and simple, but it is not sufficient.  If a 
>> network has no incentive to go to the trouble of renumbering 
>> out of IPv4 addresses, they won't return them, and there 
>> won't be enough IPv4 addresses to meet the needs of those who 
>> need more addresses. 
>>     
>
> Since when is it our job to provide incentives to install NAT
> or IPv6? People have been warned by the RIRs and ICANN that IPv4
> is running out. There will be more warnings. Those who don't heed
> the warnings will get what they deserve. IPv6 and IPv4 are amazingly 
> flexible technologies and with the two to three years of advance
> warning there is no need for anyone to suffer. If an organization
> knows that they are absolutely dependent on IPv4 for some part
> of their network where inflexible devices are attached, they should
> begin now to make the rest of their network usable without IPv4.
>   

Our job is to provide responsible stewardship of Internet number 
resources.  In my opinion, denying organizations access to IPv4 
resources so they will "get what they deserve" is the antithesis of 
stewardship.  And don't forget that not all organizations who will need 
IPv4 resources in 2010 will have existing IPv4 assignments or 
allocations.  Any new business that wants to provide services to the 
general Internet will need to get IPv4 addresses: how do you propose we 
meet their needs?

> In the worst case, where an org needs a steady supply of globally
> unique IPv4 addresses, they can borrow a block like 126/8 by
> ensuring that they filter out any route announcements from Softbank
> Japan. Or similar with another /8.
>
> It is not against the law to use IP addresses allocated to another
> organization if you have no need to communicate with that other 
> organization. If you talk to systems integrators you will learn that
> this is common practice, not just in the enterprise, but you even run
> across it inside telecom companies.
>   

Ouch.  Do you really think such hacks are better than a policy allowing 
the transfer of IPv4 resources?  It seems to me we should be encouraging 
responsible behavior conducive to ensuring continued global uniqueness 
of uniquely assigned IPv4 addresses.

> Running out of IPv4 addresses is not like hitting a brick wall.
> It's more like colliding with a giant marshmallow and wondering how
> to get out of the sticky mess.
>   

And in this analogy this transfer policy is like a garden hose: an 
essential tool to allow everyone (not just those carrying water) to 
clean up the sticky mess.

-Scott