[arin-ppml] An article of interest to the community....

Mike Burns mike at nationwideinc.com
Wed Aug 31 18:33:33 EDT 2011

My hunch is that the small college would, in fact, be using NAT for all but 
server connections.
I think the rest of Joe's message below is bang on.
The decision all address holders will have to make is  how to properly time 
this market.
Sell too soon and you may not realize maximum value and be forced to buy 
back later at higher prices.
Sell too late and risk losing the opportunity to monetize these assets if 
IPv6 takes off.
Illiquidity in the market will disincentivize transactions as people hoard 
what they have for fear addresses cannot be easily replaced in the future.
A free market will reduce the FUD that is palpaple in the current "market".
Following the lead of Nortel, other bankrupt entitles like Circuit City and 
Borders are publicly selling legacy space out of bankruptcy courts.
We don't need to pretend that we are allowing these 8.3 "sales" as a form of 
remuneration to finance renumbering anymore, we should just admit openly 
that this is a potential profit opportunity, and address holders are like 
any other asset owners who have to make these sorts of decisions.
I think we could use more concrete protections from section 12 reviews of 
sellers than the bland assertions of the current leadership that such 
reviews will not happen. Lawyers for the sellers will want more than that, 

Mike Burns

----- Original Message ----- 
From: "Joe St Sauver" <joe at oregon.uoregon.edu>
To: <jcurran at arin.net>
Cc: <arin-ppml at arin.net>
Sent: Wednesday, August 31, 2011 4:41 PM
Subject: Re: [arin-ppml] An article of interest to the community....

> John asked for thoughts on the scenario:
> #   Hypothetical Small College received a /16 from ARIN in order
> #   to put all their offices and dorms on the Internet in 1998.
> #
> #   Recently, they've realized that they probably requested too
> #   much space long ago, and have also not used in efficiently
> #   (due to reserving significant fixed sized address blocks for
> #   each and every building on campus.)  The good news is they've
> #   figured  out how to overlap multiple address blocks on single
> #   network segments (which they had to learn one the first huge
> #   building appeared), and have a plan which would let them redo
> #   the entire campus to fit in single /19 address block, or maybe
> #   an /18 total (with another /19 reserved for long-term growth.
> Distinguish two case:
> -- the campus runs NAT/PAT, and uses private addresses internally
> -- the campus uses public IP addresses throughout
> I will assume that we're *not* talking about the first of those two
> scenarios. In the case of sites using public IP addresses throughout,
> I'd argue that even a /19 could go pretty quickly, even for a
> relatively small institution (like a prototypical liberal arts college
> with a few thousand students).
> The old days, when users had one device per person, are gone. These
> days it is far more common to see multiple devices: laptop, smart
> phone, tablet, game console, TV digital VCR device, VoIP phone
> device, etc., etc., etc. Some of those devices may be NAT'd by the
> user, or run on private airgapped networks, but at least some of those
> devices may also move around. Giving them addresses via DHCP with
> moderately persistent lease times can result in even a single device
> (like a laptop) potentially tying up multiple addresses across multiple
> subnets, at least for periods of time when the user is moving around.
> Sites also need to anticipate and cope with shifting peaking user loads.
> For example, residence halls might be largely empty when classes are
> in session, while classroom buildings with large lecture halls might
> need many IPs during that period of time; in the evening, the reverse
> may be true. Nonetheless, DHCP pools need to be sized to accomodate
> those peaking loads (and dynamically resizing those DHCP pools would
> likely be an exercise in folly, as would attempting to run an
> unsegmented "flat" network architecture).
> I'd also note that as sites move to smaller blocks, their ability to
> multihome and get those smaller aggregates announced and accepted will
> decrease. That may or may not also be a consideration for some sites.
> #   Is their space unused?
> For all the reasons described above, no, their space is not unused (or
> even "underutilized") in many cases (in my opinion).
> #   They can't possibly free it up
> #   without first doing a significant amount of effort, but
> #   they have every reason to list some portion of their IP
> #   block for auction (as long as they are clear about the
> #   timing on delivery.)
> I don't think it's correct to say that they have "every reason to list
> some portion of their IP address block for auction."
> I'd characterize that as an ultimately self-defeating "auto-canibalistic"
> "eating of one's seed corn" strategy, potentially prematurely disposing of
> an irreplaceable core asset in a way that's kin to selling "excess" real
> estate at a campus that is surrounded on all sides by other growing and
> long term tenants. Once an asset of that sort is gone, you're never going
> to be able to get it back, and by disposing of that asset you've just
> capped your ability to grow. Yes, you got some cash, but you paid for it
> in flexibility and long term options, and those may be major "expenses."
> I'm delighted when people are altruistic, and do their best to return
> community assets that they don't need, but I'm not surprised when people
> act in economically rational ("selfish") ways that maximize their own
> benefit to the potential detriment of the community.
> For those users, the economically rational folks who ARE thinking about
> selling resources (rather than simply returning unneeded resources to
> ARIN for reuse), selling an asset such as "excess" IPv4 address space
> now, before the market has fully exhausted available resources and thus
> before market prices have had a chance to reach well
> understood/predictable levels, strikes me as a potentially unsound choice.
> Put another way, "timing's everything" and I'm not sure now's the right
> time if you're a wanna-be IPv4 address seller or broker.
> While it's possible that IPv6 will suddenly become universally deployed,
> and the market value of IPv4 addresses will slump, I don't think that's
> a very likely scenario. I think that it's more likely that IPv4 address
> space will continue to become more scarce, continue to be in demand,
> and thus IPv4 addresses will continue to appreciate in value.
> If ARIN wants to incent liquidity in the IPv4 address market space, I
> think it needs to address that (perceived) reality. That would imply
> convincing people that new sources of IPv4 address space will come on
> line soon, so that those who are currently holding excess assets (with
> an eye towared longer-term appreciation) decide to "move" those assets
> now, rather than waiting.
> While we all know that Class E IPv4 addresses cannot currently be
> usefully deployed, if there was movement to try to correct that, that's
> the sort of thing that might incent some who are currently "holding
> onto" IPv4 address assets to move their "inventory" while there's
> still a potential resale market. (And yes, I know, bringing on Class
> E addresses might not buy much more than eighteen months of breathing
> room, but sometimes even "small" perturbations can have large
> *perceptual* impacts to systems as complex as the potential resale
> market for IPv4 address space).
> Alternatively, consider how cities make sure that real estate gets
> highest and best use: taxes. You could grow soybeans in Manhattan,
> but if you tried, the taxes would kill you. Taxes are a potentially
> important tool for signaling that soybeans work better in sparsely
> populated great plains, and skyscrapers are a higher and better use
> of limited real estate in the city.
> Currently, the "tax" imposed on IPv4 address space per year
> (https://www.arin.net/fees/fee_schedule.html) is arguably too low
> to motivate a resource holder to dispose of assets that aren't
> needed, and therefore aren't being put to highest-and-best
> productive use. Complicating that, at least some "assets" are
> "tax exempt," anyhow. :-;
> All in all, it's a fascinating economic system and set of questions
> to consider, I think.
> Regards,
> Joe
> Disclaimer: all of the above is just my POV, and you'd have to be crazy
> to rely on these thoughts for anything with potential economic or
> operational impacts. :-)
> _______________________________________________
> You are receiving this message because you are subscribed to
> the ARIN Public Policy Mailing List (ARIN-PPML at arin.net).
> Unsubscribe or manage your mailing list subscription at:
> http://lists.arin.net/mailman/listinfo/arin-ppml
> Please contact info at arin.net if you experience any issues. 

More information about the ARIN-PPML mailing list