[arin-ppml] Policy Proposal: IPv4 Recovery Fund

Milton L Mueller mueller at syr.edu
Sun Nov 23 11:11:14 EST 2008

> -----Original Message-----
> If we reach a situation where there is one block and 30 people need
> it (not even talking ARIN's need criteria, just they believe they
> need it) then we've reached a failure situation, independent of any
> of these transfer proposals.

Don't agree - you haven't reached a failure, you've reached a situation
that prevails for 90% of all material resources in society. Anyway, I
suspect we are near that situation now. (It's a guess, of course)

> That level of people walking away empty handed will drive a widespread
> IPv6 turnover.

Yes, it probably will, indeed that is what some of us think
economically-based pricing of available ipv4 ought to do. A feature not
a bug.

> No, the interesting case for all of these transfer proposals is
> when the supply can meet the demand, that is enough people are
> willing to give up space to meet the needs of people who want space.

What you may not see is that supply and demand is always relative to
price and never absolute. That is, the concept of "wanting space"
depends on "what do I have to give up to get the space" just as the
concept of giving up space is contingent on "what benefits do I get (or
forego) by giving it up"? if you tell people that the price of a /8 is
$30, I guarantee you you will have 5 times more applicants for it than
there are /8s. 

> That is where these transfer proposals are doing any good.  What
> people care most about when that is happening is price and safety.
> They wants systems that insure they pay as little as possible, and

I don't think regulating the price of transfers is a legitimate concern

> they want assurances they are getting useful goods and not being
> swindled by a crook.

I think that is a very relevant, and critical concern of ARIN, within
its mission. It is the title agency function, which it performs now. 

> The existing proposals, like 2008-6, fail on both grounds.  Prices
> can be kept secret.  One need look no further than our current wall
> street mess to see what is able to happen when financial people can
> keep information hidden from the market and regulators.

Huh? I don't think this is a very good diagnosis of the current
financial problems, nor is it applicable in any way I can see to the
ipv4 address situation. The public does not need to know the price two
parties pay each other for a transfer market to work properly. It does
need to know that the seller has a legitimate right to exchange the
resource, and that the registration function will accurately and
effectively reflect the change of user

> Further, it
> allows people to raise prices.  There is also no protection from

To repeat: I don't think regulating the price of transfers is a
legitimate concern of ARIN. And I think protection from crooks was an
aspect of 2008-2 or could be added to 2008-6.

> I think perhaps you misread the first come first serve section of the
> proposal, or that we didn't explain that clearly.  First come first
> serve is used as a auction criteria to help determine the winning bid,
> similar to how the dutch auction uses the order in line to set the
> winning bid at the lowest bid that would still get part of the goods.
> It's not that being first in line means you automatically win, you
> have to bid, and you'll be passed up if you don't.

OK, perhaps I did misread that. Will have to re look at it. Auction
design is important and on my first reading it did not look like an
auction at all, but will take another look

> I would love to hear some opinions from others on this aspect of
> the proposal.  Obviously how the "winner" is determined is a critical
> point.
> I'd also specifically ask you, since 2008-6 is the other proposal
> currently on the table if this proposal was amended to have something
> like the dutch auction idea would you be more likely to support this
> or 2008-6, and why?

I am deeply concerned about the degree to which your proposal seems
designed to maintain ARIN's control just for the sake of maintaining
ARIN's control. I would prefer a bilateral transaction based regime in
which ARIN is limited to a title office function. 

That being said, if you're going to keep the monkey in the middle, then
the monkey better have a simple, nondiscretionary algorithm for
distributing the resources when there are competing demands for it among
multiple claimants. So an auction or some other simple market oriented
method would make your proposal preferable to administrative

I have always had trouble with 2008-6, not for the reasons you do, but
because it was so obviously inferior to 2008-2. Since it is
incomprehensible to me why 2008-2 was rejected, it is hard for me to
know what to "support" in this context or what difference supporting
anything will make.

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