[arin-ppml] 2008-6: Emergency Transfer Policy for IPv4 Addresses
Tom Vest
tvest at pch.net
Mon Sep 29 16:24:56 EDT 2008
On Sep 29, 2008, at 3:56 PM, Scott Leibrand wrote:
> Kevin,
>
> Can you outline a proposal of how you think ARIN should effectuate
> such
> transfers?
>
> Thanks,
> Scott
I can. In fact I did on September 4. Summarizing again below:
> ...Imagine that at the end of the free pool, annual renewal fees
> start incrementing per /32, but that ARIN offers a "bounty" equal to
> 100% of the new fees to any signatory that agrees to voluntarily
> return some scale-sensitive quantity of IPv4.* For the sake of
> "simplicity" I'll illustrate using $1 per IP, rounded up to the
> nearest classful bit boundary for the renewal fee, and define the
> address return required to earn the "bounty" as equal to the next
> smallest classful address block, but many numbers/ratios would
> probably work equally well.
>
> So, for example, the mechanism I'm imagining would oblige a /8
> holder to return one /16 per year in order to qualify for the
> bounty, which would also effectively make this approach revenue
> neutral. ARIN would never have to handle one penny more than it does
> today. To make the effects consistent across the smaller end of the
> address distribution spectrum, maybe additional fees and bounties
> are phased out for members that retain a /20 or less, until all
> members are down to roughly equivalent sized IPv4 endowments.
>
> *less any added administrative costs, which should be modest.
>
> What would this approach accomplish?
>
> 1. Incremental, inevitable, but (more) predictable effects: No
> matter what, everyone is facing the same reality of doing more with
> less IPv4, or much much more expensive IPv4, and/or perhaps with
> some IPv6. No one should be imagining that making a windfall on the
> transition, or pushing most or all of the costs of transition onto
> future new entrants are sustainable options; they aren't. By the
> same logic, no one should be significantly harmed by parting with
> 1/256 of their existing IPv4 reserves every year, especially if
> everyone is facing the exact same constraint. Given the mechanism's
> scale-sensitive uniform effects, even operators who grudgingly
> support the idea while still hoping/expecting to NEVER make a full
> transition to IPv6 could find comfort in the knowledge that they
> might have hundreds of years to be proven right.
>
> 2. Recover liquid legacy IPv4 address space: Nothing in this
> approach requires or assumes that ARIN members will return address
> space that they received directly from ARIN, and everyone is already
> assuming the emergence of some kind of gray market (at least) under
> any/all future scenarios. If quietly purchasing IPv4 in a gray
> market looks like a better deal than returning RSA-covered addresses
> and perhaps adopting some IPv6 on the margin, then nothing would
> explicitly prevent people from doing that. Thus legacy/surplus
> address space holders are not absolutely precluded from capitalizing
> on their early efforts / good fortune, but sales do not have to be
> formally condoned, and the whole system does not have to be
> jeopardized in order for that option to be preserved.
>
> 3. Minimize speculative pricing: Nothing short of militarization of
> the process is likely to eliminate all speculation/profiteering, but
> this approach would define an implicit "official price" for IPv4
> that could help to establish a firm ceiling on speculative pricing.
>
> 4. Avoid wholesale privatization: By leaving ARIN in place as the
> sole official mediator for IPv4 "recirculation" -- not transfers --
> the risk of full privatization (intentional or unintentional) is
> reduced to zero.
>
> 5. Back out IPv4 now, or later, or never: IPv4 recovered by ARIN
> could be warehoused permanently, e.g., to assure an eventual return
> to address space homogeneity somewhere down the line, and to send a
> signal to non-participants that IPv4 *will* be obsolete sooner or
> later (reinforcing 3, above). Alternately, the address space could
> be put to other uses (e.g., made available for subsequent
> allocations to those willing to pay the same $1 per acquisition and
> renewal fees, with the proceeds returned as dividends to the entire
> community, or selectively and proportionately, e.g., for accelerated
> IPv4 returns).
>
> 6. Preserve of industry openness: Regardless of how the majority of
> recovered IPv4 is disposed of, enough will always remain available
> -- ideally through 2008-5 style transitional allocations -- to
> clearly demonstrate to all internal and external stakeholders that
> all segments of the industry will remain open to new entry in
> perpetuity.
>
> 7. Mitigate antitrust risks: In the absence of (6, above) large IPv4-
> based service providers will be perpetually at some risk of
> antitrust action. The proposed policy might conceivable redirect
> some of that risk in the RIR's direction, but it seems to me that
> given the pro-open access orientation, a community consensus-
> supported approach like this would probably provide the strongest
> possible defense against any/all antitrust concerns.
>
> 8. Enable IPv6 integration/migration: This approach should help to
> squelch any bets/competitive strategies that an IPv6 transition will
> never happen. Once people get over the psychological hurdle that
> IPv6 really *is* coming, and understand that the transition is not
> going to be complicated by radical uncertainties, high risk second
> guessing, or any other new competitive traps, expectations about the
> future will be aligned in ways that might accelerate the pace and
> reduce everyone's pain of migration.
>
> 9. Minimize routing table expansion: This approach would assure that
> at, over time, progressively more growth will be accommodated by
> IPv6 rather than through de-aggregation. Doesn't solve the IPv6
> routing scalability issue, but it does preserve the RIR as a
> potentially self-sustaining administrator for any ongoing/future
> number resource-related needs verification, as maintainer of the
> registration database, provider of whois, and a potential anchor for
> resource certification, et al. -- and as a viable mechanism for
> continuing policy deliberation in the event that future routing
> scalability requirements require the same kind of coordinated action
> that helped to mitigate the last such crisis.
>
> 10. Clean, easiest possible reversability: Unlike the 2008-2 and
> 2008-6, if this approach turns out to have perverse unanticipated
> consequences, it could be terminated or even reversed with a
> (relative) minimum of disruption.
>
> Potential Downside: if IPv4 is permanently warehoused, then any
> potential revenue arising from IPv4 sales would be foregone. If IPv4
> prices are expected to be modest (e.g., modest enough to avoid
> antitrust scrutiny), then perhaps any loss would be equally modest.
> Alternately, the foregone one-time sales revenues could be thought
> of as investments toward a better, NAT free (or NAT-vonlutary-only)
> future. If those future payoffs are deemed to be insufficient,
> returned address space along with cash proceeds from ongoing IPv4
> "recirculation" could be redistributed to community members, but
> this would probably impose substantial new administrative burdens
> and risks on ARIN. However, the second option is neither required
> nor recommended.
TV
> Kevin Kargel wrote:
>>
>> Thank you Micheal for your common sense explanations. I certainly
>> agree
>> that the only legitimate way to transfer IP addresses is through the
>> services of the RIR. Anything else would breed chaos.
>>
>>> -----Original Message-----
>>> From: arin-ppml-bounces at arin.net
>>> [mailto:arin-ppml-bounces at arin.net] On Behalf Of michael.dillon at bt.com
>>> Sent: Monday, September 29, 2008 2:25 PM
>>> To: arin-ppml at arin.net
>>> Subject: Re: [arin-ppml] 2008-6: Emergency Transfer Policy
>>> for IPv4 Addresses
>>>
>>>> This is nonsense. Literally. IP address transfer markets are not
>>>> derivative markets,
>>> A derivative is essentially a contract. It is used to buy or
>>> sell something, that normally cannot be bought or sold. Yes,
>>> it is true that the most common types of derivative contracts
>>> are options and futures, but there are many others.
>>>
>>>> IP
>>>> address transfers as proposed by various RIR policy changes
>>> directly
>>>> transfer a valuable but intangible asset from one party to another.
>>>> There is no redistribution of risk.
>>> Given that the RIR policies and registration
>>> agreements(contracts) all state clearly that IP addresses are
>>> not property, I don't see how you can buy or sell the right
>>> to use them other than through a derivative contract. So far,
>>> I have seen no policy proposals to change IP addresses into
>>> property, and if they are not property, then they cannot be
>>> an asset and cannot be bought or sold.
>>>
>>> As for redistribution of risk, that is insurance (or
>>> reinsurance) and is not an essential component of a
>>> derivative contract.
>>>
>>>> Let's keep in mind that transfers of IP addresses already
>>> happen. Are
>>>> you suggesting that they all be stopped?
>>> Yes, they should all be stopped. The only legitimate way to
>>> acquire the right to use an IP adress block is to show
>>> technical justification to an RIR. The only legitimate
>>> transfer of right to use an address is one that transfers
>>> network assets, or one that has an RIR as one of the two parties.
>>>
>>> --Michael Dillon
>>>
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