[arin-ppml] Draft Policy 2009-1: Transfer Policy ? Revised and forwarded to the Board

[Scott Leibrand]

Leo,

Thanks for bringing this up.  As we discussed at the AC meeting, I think 
this is something that can (and should/will) be dealt with by ARIN staff 
as they implement the transfer policy.  Here's how I see it working:


Billy goes to ARIN and says "Here's a /16, please give it to Suzie."

ARIN says to Billy, "Suzie hasn't yet been approved for a /16, so you 
may want to hold on to your /16 while we process her application."

Suzie goes to ARIN and says, "I'm here for Billy's /16".  In the 
process, ARIN checks Suzie's justification, and realizes Suzie can
only justify a /18.

ARIN tell Suzie and Billy that Suzie is only approved for a /18, and 
asks Billy if he still wants to return the whole /16, or do something else.


Now that you've raised this issue, I am confident that ARIN staff will 
create operational procedures to deal with it in such a way that no one 
ends up surprised.

-Scott



Leo Bicknell wrote:
> In a message written on Mon, May 04, 2009 at 12:21:01PM -0400, Member Services wrote:
>   
>> The ARIN Advisory Council (AC) met on 29 April 2009 and decided to send 
>> a revised version of 2009-1 to the Board for their consideration:
>>     
>
> This policy isn't in "last-call" per se, but given the PDP process
> I feel this is the only appropriate time for me to make these
> remarks.
>
> I am a member of the Advisory Council, speaking only for myself.
> During the various reviews and discussions the Advisory Council
> performs after the meeting a particular aspect of this policy was
> brought to (most of?) the AC's attention.  I would like to bring
> it to the community's attention as well.  I did not write notes on
> this at the time, so I am doing this from memory.  If I get it
> wrong, I hope someone corrects me.
>
> Billy has a /16, and he's using it for dial up services which is
> not paying the bills anymore.
>
> Suzie wants a /16 for her hot new social networking experiment.
>
> Billy and Suzie find each other and agree to transfer Billy's /16
> to Suzie under the result of 2008-6 + 2009-1.
>
> Billy goes to ARIN and says "Here's a /16, please give it to Suzie."
>
> Suzie goes to ARIN and says, "I'm here for Billy's /16".  In the
> process, ARIN checks Suzie's justification, and realizes Suzie can
> only justify a /18.
>
> My understanding of the current interpretation of 2008-6 + 2009-1
> is that ARIN would give Suzie a /18, and keep a /18 and /17 in the
> free pool.
>
> Billy has given up his /16, and Suzie only got a /18 of it.
>
> This ends up being an artifact of the legal requirement that transfers
> must occur through ARIN.  My own personal view on how this would
> work prior to finding this out was if Suzie couldn't receive Billy's
> /16 for any reason, Billy would retain the /16.  Thus my surprise,
> and I'm wondering if this isn't a surprise for others in the
> community.
>
> The recommended "fix", is that Suzie will be able to "pre-qualify",
> that is go to ARIN with all of her paperwork and get approved for
> a /18 before Billy and Suzie do a deal, so Suzie knows this will
> not happen.
>
> I think this ends up being bad for three distinct reasons:
>
> Technically:
>
>   This causes deaggregation.  In the example given a /16 was turned into
>   a /17 and two /18's.  However, because a /17 and /18 are both now in
>   the free pool they may be further subdivided into /20's (or smaller,
>   in some cases).
>
> Business:
>
>   It is likely Billy and Suzie exchanged something of value during this
>   transaction to make it happen.  Suzie has now "overpaid" for her /18,
>   and is likely to demand a refund from Billy, or challenge ARIN's
>   stance she can only justify a /18, or both.  Billy, of course, isn't
>   going to want to give a refund as he is out the entire /16, but he may
>   also be unhappy at ARIN for only approving her for a /18.  It sounds
>   like a good way to get all the parties in a transaction unhappy.
>
>   But also, it opens up an interesting fraud.  Alice could go to Billy
>   and offer to buy the /16 for a hundred million dollars.  Billy gets 
>   so excited over the idea of retiring from the dial up business that
>   he takes the deal.  Alice gives him a fake check, and Billy fills out
>   the ARIN paperwork.
>
>   But you see, it is a fake check, and Alice had no intention of ever
>   justifying the addresses to ARIN.  Billy figures out two weeks later
>   the check is fake from the bank, but he's already released the addresses
>   to ARIN and can't get them back.  What's Alice's motivation?  Well,
>   her alter-ego Janice is sitting near the front of the line of folks
>   waiting for space to end up in the free pool.  Good for her, a /16
>   just showed up.
>
>   But really this is all added risk, and what business wants to
>   participate in a system with extra risk?
>
> Politically:
>
>   This interpretation of the policy is likely to affect the most
>   vulnerable the most.  The savvy folks who are doing all sorts of
>   transfers are reading this post on PPML now, and will understand
>   the pitfalls of the system and work around these issues by doing
>   things like prequalifing.
>
>   This issue is much more likely to trip up the "one time" casual
>   transferor or transferee who last delt with ARIN in 1999 and
>   doesn't do this as a day job anymore.  They are the ones who will
>   accidently encounter this situation.
>
> Personally, I think ARIN should not let this happen.  The simplest
> fix I have come up with is to require Suzie to fill out the recipient
> paperwork first.  Billy should not be able to designate a recipient
> without having some assurance that end of the transaction is already
> approved from ARIN.  This could be as simple as Suzie giving Billy
> the ticket number under which Suzie was approved, and Billy having
> to provide that ticket number to release resources.  In this way
> an exact match could be insured, eliminating all of the problems
> listed above.
>
> The AC obviously moved this proposal on; so this was not seen as a
> show-stopper issue by the majority of the AC.  At a minimum, I
> wanted to get the issue out to the community so if nothing is changed
> the community is aware of the issue and will be able to avoid it.
> I would hope this would end up documented on the ARIN web site in
> fairly clear language as well; but given the accelerated timetable
> for this proposal I didn't want to wait for that to occur first.
>
>   
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