[arin-ppml] Microsoft receives court approval for transfer asagreed with ARIN

Jeffrey Lyon jeffrey.lyon at blacklotus.net
Fri Apr 29 17:46:11 EDT 2011

On Thu, Apr 28, 2011 at 1:00 PM, Mike Burns <mike at sum.net> wrote:
> If ARIN wants to change policy, may I suggest removing the justification
> requirements for ALL transfers, legacy and non-legacy?
> This would have the effect of removing the disincentive of legacy holders to
> sign an LRSA, would align ARIN with APNIC policy in advance of a global
> transfer policy, and would prevent ARIN from having to fudge a needs
> analysis in order to comply with policy, as I firmly believe happened with
> MS/Nortel.
> It would also increase whois reliability, as those who currently hold ip
> address space as the result of prior transfers could be fearless in
> approaching ARIN to have these transfers reflected accurately in whois.
> And those with addresses under RSA would not be afraid to sell their unused
> addresses through STS. Currently there is the fear that ARIN can audit the
> organization and take back unused addresses, so only those who can plausibly
> deny their lack of need feel brave enough to advertise to ARIN that they are
> not using their entire allocation.
> This discussion will no doubt mirror those of the past, and may expose some
> emotional response from prior participants, but I ask those participants to
> evaluate their current positions in the face of current realities.
> Reality shows that legacy holders have the right to transfer and sell
> address space without ARIN approval. Evidence of that fact is that the
> addresses Nortel sold were not originally registered to them, they were the
> possessions of Nortel's "predecessors in interest", bankruptcy parlance for
> Nortels prior acquisitions, who where the original legacy registrants. The
> court held that Nortel had the exclusive right to transfer the addresses.
> How did they get that right, unless upon acquisition, Nortel and the
> acquired company processed an 8.2 transfer?  Can anybody point me to the
> existence of a relevant 8.2 transfer processed for Nortel?
> Reality today also includes the fact that the IPv6 transition failed, we
> have reached the IPv4 exhaust point without the option for an orderly
> transition, and other stakeholder communities like APNIC have decided that
> the best stewardship role going forward is to allow IPv4 addresses to be
> bought and sold without a justification restriction.
> With or without the Global Transfer Policy, this will be a worldwide market,
> and addresses will flow to where market restrictions are fewest. I noted
> this community's angst when the subject of returning addresses came up, and
> the proposal was to send them out of the region, back to IANA.  Don't you
> think the same effect will happen when the world compares the markets for
> IPv4 transfers? Addresses will flow to Asia, unless we change ARIN policies.
> ARIN's policies are impediments to good stewardship, preventing the open
> sales of IP address space and leaving unused address space on the sidelines
> that would otherwise be put to use. Paradoxically, ARIN's attempts at
> stewardship in the form of justification requirements serve to restrict the
> efficient use of these limited resources. What may have been appropriate in
> a time before exhaust, and before the legal precedents set in the MS/Nortel
> deal, is no longer appropriate.
> It's not so bad, free markets are designed to use scarce resources most
> efficiently, and freedom from regulation has been a major driver in the
> growth of the Internet. The market will be the best steward now, and ARIN's
> role should be the title agency whose overarching goal is to maintain
> accuracy in whois and uniqueness of registration.
> And as a point of clarification, can a legacy holder who is not a member of
> ARIN, but who is registered with the PPML post in support of a proposal, or
> not?
> If so, consider this a post in support of ALL of Benson's proposals.
> Regards,
> Mike Burns
> ----- Original Message ----- From: "Michel Py"
> <michel at arneill-py.sacramento.ca.us>
> To: "John Curran" <jcurran at arin.net>
> Cc: <ppml at arin.net>
> Sent: Thursday, April 28, 2011 2:27 AM
> Subject: Re: [arin-ppml] Microsoft receives court approval for transfer
> asagreed with ARIN
>> John,
>>> If more than a handful actually feel that way to the point of
>>> participating, then the policies are easily enough to change.
>>> We have even made it so that remote participants in the Public
>>> Policy meetings can readily ask questions and be counted in
>>> the show of support for a given draft policy.
>> Based on what data? You're taking the problem backwards. There is a
>> widespread feeling that the non-public agreement between ARIN and
>> Microsoft has some issues with the current policies. It is clear that
>> the parties did not feel the need to talk to ARIN before the deal was
>> done. How do you expect someone to write a draft policy based on
>> suspicion, not on facts?
>> A precedent has been created. A court of law has ruled that legacy
>> prefixes were sellable assets (at least, in a bankruptcy context).
>> Unless ARIN plans to appeal the ruling (seems difficult to me), it is
>> necessary to implement new policies that take the new reality into
>> account. Part of designing these new policies requires a better
>> understanding of the problems that the current policies posed to the
>> current situation, which in turn requires a better understanding of what
>> legacy holders are willing to negotiate in return of staying within the
>> ARIN framework and what will trigger them to bypass ARIN.
>> Unless some details are provided, I predict that no significant change
>> to policies will be made in time for the next large, public trade
>> occurs, which will put you in the hot seat again and that time you won't
>> be able to say that you did not see it coming.
>> Michel.
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I would like to go on record and state my position in support Mike
Burns' idea that IPv4 resources be transitioned into an open market
exchange. Realizing that i'm making this recommendation without proper
data and generally going against the current what we should do is
charter ARIN to conduct a comprehensive study and:

- Conduct a survey of the public at large, PPML users, full members,
resource holders, and the AC to gain a clear understanding of
sentiment for or against an open market.
- In the survey, ask IPv4 resource holders to anonymously disclose
their true utilization rates and determine if companies are hoarding
resources either in hopes of future resale or to cover an arbitrary
future need.
- Determine the amount of participants that would come forward if told
they could resell their space on the open market and ultimately
determine how much unneeded space is being locked away in loosely
justified allocations.
- Determine how many companies actually have IPv6 migration plans and
ascertain road blocks, either legitimate or financial, that are
preventing migration.
- Determine the economic impact. Would resource holders be better off
selling their resources to more affluent companies who would be able
to put the space to better use? Might there be a host of struggling
small businesses who would like to put their /17 - /21 on the balance
sheet? Are there companies that would purchase IPv4 space at a premium
if allowed to do so?
- Determine if resource holders would be encouraged to tighten up
internal policies and free up more space if there were a fair market
value assigned to their space.
- Would resource holders support a model that allowed ARIN to take a
small commission on resource sales and then discontinue the practice
of charging an annual fee to its members who are not buying and
selling resources.

I'm sure I have colleagues here that could help refine what this study
would hope to achieve or provide ideas for other data that can be

Best regards,
Jeffrey Lyon, Leadership Team
jeffrey.lyon at blacklotus.net | http://www.blacklotus.net
Black Lotus Communications - AS32421
First and Leading in DDoS Protection Solutions

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