[arin-ppml] Use of the specified transfer policy (was: "Leasing" of space via non-connectivity providers)

[Benson Schliesser]

On Feb 7, 2011, at 10:27 PM, John Curran wrote:

>> I agree that this assurance has value.  But the value of ARIN's vetting is minimal unless ARIN 1) is able to represent itself as the sole legal "authority" in the matter of address allocations, as applied to the legacy address block, and/or 2) is willing to provide some form of insurance against loss (title insurance?) due to incorrect vetting.
> 
> With regarding to #1, ARIN is the sole maintainer of the ARIN WHOIS 
> database, and so based on the policies developed by the community.  
> I'm not aware of anyone offering such insurance, but then, that does
> not preclude someone from trying to sell such.

My comment was targeted at your statement about ARIN "vetting" address rights (or whatever you want to call it) associated with a legacy block.  You stated that there was value in such vetting, and I'm inclined to agree.  But the degree of value could be wildly different depending on the vetting process, associated authority or insurance, etc.

Take this hypothetical case as example:  ARIN receives a LRSA for a legacy block, vets the legacy address holder and accepts the LRSA, and then facilitates the transfer of addresses to a specified recipient.  The recipient and their ISPs are then hit with a court order instructing them, in whatever manner, to stop routing the addresses because they belong to somebody else.  This might have happened due to sloppy records, convoluted M&A and/or bankruptcy history, or whatever else you want to imagine including outright mistake or even fraud.  Maybe ARIN was consulted by the court, or maybe ARIN wasn't consulted - after all, ARIN is just one of the many possible Whois database sources that exist, and claims only to be self-referentially authoritative.  In this situation, does the recipient have any recourse?  Who pays their legal fees, and if they lose the address block who refunds their costs?  They can sue the "seller", but I'd also expect them to also sue ARIN for incorrectly "vetting" the original legacy block holder.

Now, this is completely hypothetical, but it's also plausible.  I don't think ARIN should shy away from vetting and facilitating these transfers - that's not my point in the least.  My point is that ARIN should establish the process in a legally defensible way, and back up the process with the sort of risk mitigation that businesses would expect.  Otherwise, your previous comment about LRSA value for transfer transactions is moot.


>> Further, the risks associated with the LRSA/RSA don't apply to legacy holders that have not signed the LRSA, making non-encumbered address blocks much more appealing.
> 
> Attempting to transfer a legacy block contrary to policy entails risk.

Absolutely.  But it's a risk that hasn't been tested: whether ARIN has any authority to reclaim legacy address blocks (especially from entities that it has no contractual relationship with) and/or whether ARIN is liable for damages if such a reclamation results in a negative outcome for any parties involved or third parties, etc.  Entering into an RSA and leveraging ARIN's services for transfer etc might remove the untested risk you've mentioned, but at the cost of the identifiable risks I described in my previous note.


>> Given my comments above, I hope you're recognize that there are concerns applicable to buyers other than "speculators or address squatters".
> 
> Absolutely, particularly with respect to the "uncertainty" regarding 
> changes to policy while post-LRSA.  I expect its a matter of outlook
> regarding transfer demand; I expect the period post-LRSA to be very
> brief given that every request for space in 6 to 9 months is going 
> to be a potential recipient.

What I think you're saying, in that last comment, is that demand will significantly outpace the supply - and that the demand/supply spread will result in very short durations of LRSA-to-transfer periods.  I think I agree with you, at least for a period of time in the near future, and especially if legacy holders can identify recipients before entering into the LRSA. (Perhaps ARIN would permit an LRSA for only part of a de-aggregated legacy block?)

But it doesn't mitigate the ongoing encumbrance to the recipient, relative to the original legacy allocation.  Admittedly, I think we disagree on this point; see my comments above.

Cheers,
-Benson