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

[Chris Grundemann]

On Fri, Jun 20, 2008 at 12:21 PM, Jay Sudowski - Handy Networks LLC
<jay at handynetworks.com> wrote:
> 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
> future_.
>
> 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
> reality.
>
> 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.

You are saying that these things happen today when IPv4 space is
freely available.  I will not (because I can not - I have seen some of
these things as well) contest that fact.  So that means that people /
organizations are willing to break (bend) the rules today simply to
avoid the "pain in the ass" that is the ARIN allocation process.
Which leads me to ponder; why does a transfer policy change this in
any way?

People who are willing to break the rules do not care what rules you
put in place.   IMHO, a transfer policy actually has a greater chance
of making this black market larger and stronger than it does of
curbing it. This is because the public trade will help establish value
and cause confusion.  If IP number transfers are strictly prohibited,
it is harder to mask a transfer and harder to set a value.
Furthermore, any black market that does exist will mostly solve itself
as IPv6 adoption occurs; the more of the Internet that becomes IPv6,
the less v4 space will be worth. Therefor, the most effective way to
stop the black market is to speed IPv6 proliferation, not allow
transfers.

~Chris

>
> -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
> Cc: ARIN PPML
> Subject: Re: [arin-ppml] Q1 - ARIN address transfer policy: why the
> triggerdate?
>
>> 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.
>
> Owen
>
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-- 
Chris Grundemann
www.linkedin.com/in/cgrundemann