[arin-ppml] Policy Proposal 2008-6: Emergency TransferPolicyfor IPv4 Addresses - Last Call

[John Schnizlein]

I think this message of Leo's is one of the most helpful in a thread  
that has produced some distinctly unhelpful remarks.

Attempted discussion of details embedded in context:

On 2009Jan1, at 3:45 PM, Leo Bicknell wrote:
>
> The status quo ends, however, when it does I have a markedly different
> view of the world than you do.  I believe that:
>
>  - IPv6 is deployed fairly rapidly, and with limited pain.

What would prompt this sort of radical change from the deplorably slow  
deployment over the last several years?

>  - There will be very few holders of IPv4 space willing to part with
>    their space at any price a black/white/grey market will offer.

The only way to find out is to register transfers.  Avoiding  
registration makes it hard to know.

> I also take a long term view; at this point IPv4 is walking dead.
> We can argue about if it lasts 5, 10, or 25 more years but almost
> everyone concedes an eventual move to IPv6.  Thus I am concerned
> that we have an allocation system for IPv6 that continues to function
> for the next 100 years.  If that goal requires some short term pain
> in IPv4 I believe that's an acceptable trade off.  I also believe
> that creating a system that accelerates the move to IPv6 will in
> fact result in a more stable, cheaper, faster expanding global
> Internet.

We agree that hastening the transition to IPv6 is in the global  
interest.

I am concerned that the lack of financial incentive to undertake the  
non-trivial effort of conversion from IPv4 to IPv6 has already spawned  
renewed and expanded interest in IPv4 address translation.  Unless  
something happens soon to change the current slow progress, I fear the  
IPv4-translation approaches might become so well entrenched that they  
become yet another obstacle to deployment of a network-layer Internet  
protocol with sufficient addresses for the globe.

> I have put forth back of the napkin calculations on the market
> multiple times before in this form.  I have never ONCE seen a
> pro-market supporter offer up any numbers of any kind.  As someone
> who likes to make decisions that are backed up by good data, science
> and reasoning I find that lack of input productive.

I have seen very few "pro-market supporter" positions, and fear this  
paragraph is a little too much like the p*@@*^% contests we have seen  
too much of in this thread.  What I have seen quite a bit more is the  
view that markets are inevitable when resources become scarce.  It may  
be that our community is split between those who believe this is an  
inescapable fact of economics and those who dispute it.  We should be  
able to find workable address policy that can accommodate whichever of  
these beliefs is correct.

> I get the economics, IPv4 will become more scarce, therefor it
> becomes more valuable, thus it is more likely to be traded on a
> white/grey/black market.  I also get that no regulation/rule/ 
> contractual
> provision works 100% of the time.  These seem to be the only "facts"
> that the pro-market forces put forward, and I'm willing to stipulate
> to them.
>
> The fact is, all this talk about IPv4 and markets is taking focus
> off the real issue, transitioning to IPv6.  Much of the IPv6 policy
> still assumes you have IPv4 as well, and we need to fix that.  Much
> of the IPv6 policy was predicated on an ivory tower view of the
> Internet, and now that we have some operational experience we should
> fix that.

We may agree that the "long period of coexistence" was not a feasible  
transition plan.  A real transition plan is still needed.

> We're going to get so caught up on allowing an extremely
> small number of people to legally profiteer off IPv4, and extend
> the life of IPv4 by 12-24 months that we'll totally blow having
> IPv6 ready for when people need it; making the problem worse.

I don't know that there are enough organizations holding enough spare  
IPv4 addresses to make much of a market.  Maybe we just agree on the  
"extremely small number of people" here.

I can imagine that some organization holding enough IPv4 address space  
to make a difference (don't have any idea how much that is, but legacy  
class-C holders certainly do not qualify) could plan a conversion from  
IPv4 to IPv6 well enough to contract with enough equipment vendors and  
service providers to enable giving up its IPv4 space at a specific  
future time.  It would cost this organization to modify its contracts  
with its providers and deploy IPv6.  One way to motivate them to  
actually carry out this effort would be if they could realize  
compensation for giving up the IPv4 addresses.

Just a few instances of large-enough organizations accomplishing the  
conversion to IPv6 might provide enough proof of feasibility to  
accelerate conversion by others. After all, the suppliers of those  
large-enough organizations would be interoperable over IPv6.  The  
chicken-and-egg dilemma that now seems to delay widespread deployment  
of IPv6 might be broken if this scenario is played out.

Compensation for giving up IPv4 addresses would be provided by  
organizations that choose to deploy more IPv4 rather than attempt  
conversion now.  We can justify that hey would have to pay for address  
space, in part because they are not doing the Right Thing.

If done right, the value of scarce IPv4 addresses increases enough to  
motivate conversion to IPv6, and then plummets to zero.  It is  
possible that some parties attempt to get rich trading in IPv4  
addresses, but they would be warned in advance that  IPv4 addresses  
are a perishable commodity, and that any purchase of address space  
might be hastening the radical devaluing of IPv4 addresses.

> And lastly, I've suggested an alternative method where by IPv4 space
> can be redistributed.  One which I think puts ARIN in a much better
> position with respect to the long term stability of ARIN and IPv6
> allocations.  To suggest I'm opposing a market when I put forth a
> proposal that creates one is rather silly.

It seems to me that operating a market for IPv4 addresses is a risky  
business.

Geoff Huston has made a (persuasive to me) argument that RIRs should  
not attempt to act as regulators, which is what the requirement that  
the recipient justify its need for IPv4 address space implies.  It is  
worth noting that RIPE has recently changed its policy to allow  
transfers, just after including this requirement, which it previously  
excluded as did APNIC.  I suspect that the economic events that spread  
across the globe since September 2007 will prompt real regulators to  
want to be involved wherever there is a market.  RIRs are not likely  
to withstand the attention of government regulators IMHO.  I would not  
oppose the regulatory implication of the recipient justification, but  
expect that it will be overtaken by events.

But if getting into the regulation business is risky, just imagine the  
risk of operating an address market as the target of regulators!   
Every price and transaction would be subject to scrutiny of its  
fairness by parties involved in the transaction and others.  During  
the time that governments appear to be pursuing greater regulation of  
already established markets, a new lucrative market in IPv4 addresses  
would likely draw attention.  What would risk the existence of RIRs  
less, and help preserve the stability of the Internet would be  
reliable registration of address authorization-to-use.

John