[arin-ppml] Q1 - ARIN address transfer policy: why the triggerdate?

Jay Sudowski - Handy Networks LLC jay at handynetworks.com
Fri Jun 20 14:21:10 EDT 2008

For those of you who don't think a rational transfer policy is
necessary, please consider the following:

1. In the real world, many people do not view ARIN postively.  Business
people (CEO types) who run companies that require portable IP space view
ARIN as overly punative, prohibitive gatekeepers to a important resource
that they need access to.  Technicians in that have to deal with ARIN
infrequently for initial IP allocations, additional allocations, etc
hold ARIN in the same light.  Due to this, if it often easier, far less
stressful, and far less expensive in time/opportunity cost to "purchase"
IP space or hire someone to interact with ARIN for you.  Put simply and
bluntly, ARIN is a pain in the ass to deal with.

2. I have been aware of people have been buying, selling and using
subterfuge to obtain IP allocations for as long as I have been been in
the industry (the past 8 years).  Some examples:

2a. Three companies merge into one.  For many months after they merged,
they continued to interact with ARIN as separate entities, obtaining far
more IP allocations than they would have been able to as a single
entity.  Even today, this single entity (which has now recently merged
again), interacts with ARIN using two separate, but related entity names
and two separate ORG IDs.

2b. Every month I run into people who are willing to sell me their /18,
/19, /20 for a fee.  It is my understanding that such transactions are
usually structured so that other [usually worthless] assets or an entire
shell entity are included in the sale to pass ARIN scrutiny.  

2c. For a time, I did work for an entity that had previous bad blood
with ARIN (see point 1) and managed to obtain 3 /18s on the after
market.  From what I gather, this is not all that unusual.  

2d. There are consultants out there who, for a fee, guarantee you will
get an IP allocation from ARIN.  They are able to accomplish because
they control a large amount of IP space for entities that they work for,
and they SWIP out space from those entities to the entity paying them
for the direct allocation.  Bogus data is submitted to ARIN, the SWIP'd
space supports the bogus allocation, and the allocation is granted.

2e. ARIN members continue to report IP usage by customers that have long
since left their network, inflating their actual need and utilization
percentages, allowing them to obtain unneccesary allocations from ARIN.

For those of you who want to maintain the status quo, think about the
above and then think about how the bad actors will multiply once IPv4
becomes truly scarce.  It's one thing to be idealistic, it's another to
be ignorant about what's happening _today_ and what will happen _in the

The academics on this list can continue to disucss the parallels between
IPv4 depletion and Ivory, if there will even be a market for IP space,
etc.  Meanwhile, people operating in the real world, will do what they
have to do to put food on their table and gas in their cars.  As such,
they will continue to do what they are doing today [see 2a-e] and will
do so with increasing frequncy and neccessity as IP depletion becomes

The choice should be to either create a framework that attemps to
define, regulate and bring some transparency an IP allocation
trading/transfer market or simply come to the realization that the
existing IP address marketplace, which exists in the hidden corners of
the Internet, will continue to function and evolve as depletion comes
closer and closer to reality.
-Jay Sudowski

-----Original Message-----
From: arin-ppml-bounces at arin.net [mailto:arin-ppml-bounces at arin.net] On
Behalf Of Owen DeLong
Sent: Friday, June 20, 2008 10:09 AM
To: Stephen Sprunk
Subject: Re: [arin-ppml] Q1 - ARIN address transfer policy: why the

> However, with the possibility of that financial incentive tomorrow,  
> who
> in their right mind would voluntarily return space today for free?  If
> we start allowing folks to put their blocks on the market now, even if
> there is no demand yet, then we prime the pump for when ARIN no longer
> has any "free" space to hand out and the demand suddenly materializes.
> We may also get a preview of what the market price is, which may  
> provide
> interesting input to the policy process to fine-tune things before
> crunch time hits.
The policy proposal talks about IANA freepool exhaustion, not ARIN
freepool exhaustion.  The thinking was that would prime the pump
prior to ARIN runout, but, not too early so as to create other problems.

When we started the process of developing this policy, I regarded
the ability to do these kinds of transfers as a potential necessary
but undesirable thing that would have to be tolerated during
the post-runout and pre-ipv6 time gap.

Having observed all of the discussion and attempts to tweak the
policy to avoid speculators, gaming the system, etc., and also
believing that this policy has the strong potential to create
a class system that I consider highly undesirable on the
internet, I have become more and more convinced that there
is no way to implement such a policy without doing more
harm than good.

As such, I, personally am of the opinion that we should simply
live with the existing mechanism until there are no addresses
to allocate/assign and then move to IPv6 for all future allocations
or assignments from ARIN.

I do not take this lightly, nor do I necessarily expect this to be
a popular opinion widely shared by my colleagues (although
I hope they will eventually come to similar conclusions).
However, I see a trading market in address space as having
a great potential to change the characteristic of the internet
in very harmful ways.

I do not believe that allowing address space to flow only to
those with the greatest financial resources is in the best
interests of the internet.  That is one predictable outcome
of an address trading market.

I do not believe that speculation will improve the distribution
of IP addresses, but, I do not believe a market without
speculation/speculators is possible without burdensome
regulations which make the market somewhat impractical.

I question ARINs ability to enforce such regulations, and, I
expect that there would be a constant struggle against these
regulations in the policy process until the controls were eroded
and a speculative market evolved.

I think that the subprime mortgage and oil futures markets are
examples of how professionally regulated markets fail
to do the right thing, and I cannot imagine that we will
somehow miraculously do better than the regulators in
those markets.

Finally, I do not believe that this proposal has very much
potential to do actual good.  I do not believe that the amount
of address space which would be made available by
enacting this policy proposal will make a significant
difference in the date at which IPv4 scarcity becomes a
serious problem, and, I don't see the market as making
much in the way of resources available to the community
until people start to turn down their IPv4 networks after
having migrated to IPv6.  By then, the lack of IPv4
addresses will be virtually irrelevant anyway.


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