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

Jay Sudowski jay at handynetworks.com
Tue Jun 24 01:55:10 EDT 2008

Ted Mittelstaedt wrote:
>> -----Original Message-----
>> From: arin-ppml-bounces at arin.net 
>> [mailto:arin-ppml-bounces at arin.net] On Behalf Of Jay Sudowski 
>> - Handy Networks LLC
>> Sent: Friday, June 20, 2008 11:21 AM
>> To: Owen DeLong; Stephen Sprunk
>> Subject: Re: [arin-ppml] Q1 - ARIN address transfer policy: 
>> why thetriggerdate?
>> 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.
> So what?  People don't view the US IRS in a positive light either
> and lots would sign on to a movement to get rid of it.
> It's a given that a lot of people are stupid, so what?
If you monkey around with the IRS, they will come audit you, and you 
will either end up owing substantial monies to them, end up in jail, or 
both.  Last time I checked, ARIN does not have the ability to fine 
anyone and send people to jail. 

ARIN does have the ability to stymie organizations who perceive that 
they have a need for IPv4 address space.  Instead of dealing with ARIN, 
they deal with a black market IP address seller or hire a consulting who 
does dubious things to get their client an allocation.  Doing so is not 

The "so what" is that ARIN's policies already foster an underground 
blackmarket and there are decidedly few consequences for partaking in 
that market.  This is drastically different to your IRS analogy. 

The "so what" is that this black market is going to take off when IPv4 
depletion occurs.

The "so what" is that even dual stacked orgs with growing networks will 
have a need for more IPv4 address space.

The "so what" is that you will have the business people running 
organizations packing conference rooms and they aren't going to care 
that the RIRs are out of address space.  They will leave no stone 
unturned trying to find more of a resource that they need.  Keep in mind 
that even a growing, dual stacked network will need more IPv4 space.

>> 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.
> Once more, so what?
> The brokers out there who are selling IP space won't last long.
> When an org that needs IPv4 buys it, they will use it.  It will
> then no longer be available for resale.
> Imagine it this way.  There's a lot of bad citizens out there
> who get flood damaged cars, spruce them up, then sell them to
> victims as new.  One day, all the automakers announce that they
> are running out of cars, and there won't be any after 2011.
> So by 2020 or so, all the cars will be in service or used up
> or in wrecking yards.  There won't be any left and these
> nasty people will have to find some other scam.
You openly admit here that a black market will exist.  Given the chance, 
why wouldn't you want to try to regulate these transactions?  Why not 
craft reasonable, logical policy that protects the interests of the 
community, the buyers and the sellers? 
>> 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.  
> And when all the IPv4 is tied up, then what will these 
> people do?
They will continue to trade in IP allocations.  The trading will 
eventually take on the feel of M&As, though.  Companies that extract 
higher revenue per IP will buy companies that have less revenue per IP.
>> 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.
> I've already come to the realization that the existing IP address
> marketplace, which exists in the hidden corners of the Internet,
> will continue to function.  But I've also come to the realization
> that it won't function very long after the RIR's run out of IPv4.
> So why should we help it out any?
> Once again, how does it help me to assist in stretching out IPv4?
> Everything you have said simply tells me that the more effort I
> put into helping prolong IPv4 post-runout, the more power and
> authority I give into the hands of these bad people who you seem
> to think are going to run IPv4 allocations in the hidden corners
> of the Internet.

I disagree.  I made several distinct points that illustrate what people 
are doing today to obtain IP space in unsavory ways.  In some cases, the 
companies that ultimately end up using the IP space have a legitimate 
need for that space; they just cannot convey it to ARIN in terms ARIN 
finds acceptable under current policy.  And clearly, in other cases 
people are obtaining IP space for non legitimate reasons (hoarding, 
speculative purchasing, etc).  Regardless, my overall statement is 
simple: the blackmarket for IPv4 space will escalate drastically when 
IPv4 depletion becomes reality.  ARIN can  proactively implement polices 
and frameworks that attempt to provide a legitimate marketplace for the 
trading of IP allocations.  Or ARIN can sit by idly, watching helplessly 
on the sidelines, while business do what they have to do to continue 
growing their networks.  I see far more harm in the later than the former
> Ted
-Jay Sudowski

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