[arin-ppml] Draft proposal that needs some wordsmithing

[Mike Burns]

Hi Owen,
>> Because prior to exhaust there was no other mechanism to ensure addresses 
>> were allocated and used efficiently.

>If a market was the best mechanism, we could have adopted policy to auction
>IPv4 addresses off to the highest bidders before exhaustion. Exhaustion 
>would
>likely have come much earlier in such a case, but, it was possible, so, 
>your
>assertion that no other mechanism existed is false. No other mechanism was
>chosen, but, it did exist.

I think arguments about who would have kept the auction money would have 
ended that option pretty swiftly.


>> Prior to exhaust, without such a mechanism, I could have walked up and 
>> asked for a /2.

>What prevents you from doing so post exhaustion in an unmoderated market if 
>you think
>that purchasing all (or as much as you can) of the available address space 
>will have
>a sufficient negative impact on your competitors as to be worth the 
>investment?

Nothing prevents me from asking. In the prior case, I would have been turned 
down for lack of need.
In the post-exhaust case, I would have been turned down for lack of money 
(or supply, obviously).
I doubt that there will be a /2 for sale any time soon, but maybe in the End 
of Days for IPv4.
(When the value approaches zero.)

> The system that was devised and implemented was a needs analysis which 
> simply made allocations according to demonstrated need.
> The ensured that at least at the start, addresses would not be frivolously 
> wasted.

>It also ensured that address registrations did not become an artificially 
>valuable
>commodity. Exhaustion will force this artificial valuation on such 
>registrations, but,
>removing the justified need restriction from this forced market will not 
>help
>the situation as it would still have the same effect of allowing waste. 
>Admittedly,
>the degree of frivolity may be more a matter of perspective at that point, 
>but,
>waste through capture for competitive advantage is still waste as far as I 
>am
>concerned.

Is it your contention that the current system has not allowed waste, or just 
that a private market will allow for more waste?


> We know the needs requirement was not a perfect way to ensure 
> efficiencies.
> We know that from the number or allocated and not advertised space, if 
> nothing else.

>No, we do not. Allocated and not advertised DOES NOT mean underutilized.
>There are many legitimate reasons IP resources may be unadvertised while 
>still
>fully utilized (or more accurately, utilized but not visible in any routing 
>table to which
>you particularly have access).

I am of the opinion that there is a lot of waste in legacy space, and only 
slightly less waste in RSA space.
Everyone here can make their own decision on that using their own experience 
to guide them.
This is all space that has been allocated outside functioning market 
environments.

> A market will not be perfect either, but unlike the prior needs analysis, 
> we seem to be judging the free market by the exceptions.
>
>Since the misdeeds (which you claim will be "exceptions") in the market 
>have the
>potential to overwhelm the market, where no such risk existed in the needs
>analysis, I think that is  a legitimate approach.

The stewards of APNIC decided otherwise, and your assertions, like mine, 
about the dangers of allowing free individuals voluntarily engaging in 
trade, are unsupported.


>
>> 2) Why would any organization with need for unique IPv4 addresses
>> choose to not have those addresses recorded in the database which
>> guarantees their value in order to escape stating their need? (i.e.
>> What class of organization with legitimate need would be hurt by
>> having to demonstrate that need before receiving addresses?)
>>
>
> An aggregator buying unroutable bits to aggregate to a routable size?.

>I see no reason this couldn't be done by an organization with need just as 
>effectively
>as by some random aggregator intending to resell the result.

What if his need is to buy snippets of space in order to aggregate it into 
sizes acceptable to the network operator community and then sell them?
How would he describe that need to ARIN?

> Somebody who has a different view on the IPv6 transition timeframe and has 
> a longer planning horizon for IPv4?

>Then they come to the market multiple times.

Each time involves a cost of waiting, an uncertainty cost of the addresses 
in the future which some companies may find unacceptable, supply 
uncertainty,as well as transactional  and deaggregation costs.
Is good stewardship to result in increased costs for consumers of  ip 
address space?

> A reseller of vanity addresses, like 100.100.100.100?

>I see no reason to promote or create these. They offer no meaningful 
>benefit to the
>community at large.

Is it ARIN's role to decide this? Doesn't the history of the Internet 
suggest allowing volunteer private organizations to make these kinds of 
decisions?

> A wholesaler of addresses who caters to those who need instant 
> availability (needs analysis takes time)?

>My last needs analysis took less than 24 hours. The average of my last 5 
>needs analysis is less than 36 hours.
>That's real-time, not resource analyst or my hours.

Microsoft got turned down recently from APNIC for a temporary allocation for 
some technical symposium in Australia.
Why can't they look to a wholesaler for rapid, and maybe temporary 
deployment?
Surely you can understand that transfers will likely increase in number, and 
ARIN's needs analyses could take longer?
But no such wholesaler can exist if you require him to demonstrate need.
Think of a Quik-E-Mart for IP addresses. Are you certain there would never 
be a call for that kind of convenience?
What if there are supply problems on STLS? A wholesaler with inventory on 
hand is often a valuable resource in times like that, even though he is 
going to make a buck on the deal.

> A speculator, who could have a positive role in free markets?

>ROFL -- The concept of speculator in the same sentence with "positive role" 
>amuses me.

Suggested reading for when you arise from the floor
http://mises.org/daily/320

> An organization that does not want to undergo an ARIN analysis for fear it 
> will lead to a review and recovery procedure?

>An organization which has reason to fear this is an organization which 
>probably shouldn't
>be getting additional resources from the community.

They would be buying them from the rights holder, not getting them from the 
community.


> An organization from another region?

>You say this as if it is somehow a benefit.

I was asked by Chris why anybody would transfer addresses and fail to have 
them registered, and these were just examples.
I don't think this is a benefit, but I support a global free market for IP 
addresses, so they can flow to wherever they are needed most, as measured by 
their price.
In this way I feel I am extending the definition of community wider than the 
region of abode.

> A buyer of a /24 who thinks an ARIN needs analysis isn't worth the 
> expense?

>Again, not seeing the benefit to the community in providing this person the 
>opportunity to take
>that /24 out of the hands of some more deserving organization with 
>documented need.

You miss my point, they may have need, but for a small transaction, having 
to negotiate ARIN hurdles could be viewed as unworth the effort. Again this 
is in response to the request for examples of potential buyers who would not 
take the steps to register.

> Microsoft? They didn't seem to want or need a needs analysis until ARIN 
> began negotiating with them after the original asset agreement with Nortel 
> had been negotiated.
>

>This, also, strikes me as an indication that removing needs basis would 
>have a negative impact
>on the overall outcome.

ARIN ran in and got the transfer reflected in whois through shenanigans with 
the needs justification, in my opinion. If there were no needs requirement, 
I think Microsoft would have asked ARIN to make the updates to whois as the 
normal course of business, but without knowing how accomodating ARIN would 
be on a needs analysis, they pointedly left ARIN agreements out of the first 
negotiated asset sale with Nortel.


> I don't pretend to be able to able to identify all the types of 
> transactions for which an ARIN needs analysis seems an unnecessary 
> intrusion into a transaction between two private entities.
>
>What you call unnecessary, I call vital to the overall interests of the 
>community.

It was vital when there was no other free and voluntary mechanism to ensure 
efficient use, but I am trying to show that the needs mechanism is now 
outdated and poses a problem for whois.

> The point is that many prior transfers have taken place, particularly with 
> legacy space, that have not been reflected in whois.

>Hopefully as these can be identified, the space can be revoked and 
>reallocated
>to organizations that comply with policy. The original legacy holder has 
>some
>protections. A third party as a result of an unauthorized transfer should 
>not have
>any protections in this regard.

Microsoft was the third party here. Addresses were transferred to Nortel 
from their acquisitions, the original legacy holders here.
By your definitions, since ARIN was not involved, these transfers were 
unauthorized.
And yet a bankruptcy judge saw no problems with Microsoft buying them from 
Nortel.
I haven't stressed this, but the legal facts as I see them are that legacy 
holdings can be transferred without ARIN notice or needs requirements.
By removing needs requirements for transfers, we bring policy in line with 
developing law, and this is sure to reduce future conflict.


> One of the problems relates to the requirement for a needs analysis.

>No, the problem is the belief that community resources can be transferred 
>outside
>of community policy.

For legacy addresses, these transfers have occurred in reality, it's time 
for belief to catch up.


> If a holder of legacy space acquired through an asset sale approached ARIN 
> to reflect that transfer, ARIN would not update whois without a needs 
> analysis.

>As it should be.

You are arrogating needs requirements over whois accuracy by taking that 
stance.


> In addition, the requirement for ARIN to do a needs analysis and the 
> potential for review and recovery on either the buyer or seller increases 
> the FUD factor in the market.

>Only for those attempting to circumvent policies constructed by the 
>consensus of the community.

If I want to buy and the seller want to sell, and we have reached an 
agreement on price, then having to undergo an audit before we can process 
the sale, or being subject to one thereafter,  is most certainly an added 
uncertainty.

> For a market to function efficiently, Fear, Uncertainty, and Doubt need to 
> be assuaged, and this proposal does that.
>
>I have tremendous fear and uncertainty about the effects of this proposal. 
>I doubt that it will function as
>advertised. Indeed, I believe this proposal increases each of those things 
>from my perspective.

So you see how FUD works to prevent action.

> I copied liberally, almost entirely, from the APNIC policy to allow 
> needs-free transfers. The rationale which was most effective in that 
> regions's deliberations may have been the concern that by imposing the 
> needs requirement, transactions would be more likely to occur outside the 
> system, leading to a decay in whois reliability.
>
>That is the argument Geoff used which appears to have had sway in that 
>region.

>Geoff has repeatedly made that argument in the ARIN and RIPE regions (and 
>I'm not sure
>that he has not made it in LACNIC or AfriNIC as well). So far, it has not 
>been found to be
>convincing outside of APNIC.

> By structuring my proposal in this way, I am trying to get people to 
> consider whether the original and laudable needs requirement should be 
> maintained when keeping it could lead to whois degradation.

>This question has been asked and answered as part of the debate around 
>2008-2, its successor
>2008-15 (IIRC) and the boards reconstruction of that into 2009-1. You are 
>welcome to ask the
>question again, but, I'm not inclined to believe the answer has changed.

Things have changed since then in terms of continued failure to transition 
and the MS/Nortel deal, and APNIC reaching exhaustion and approving their 
new transfer policy.


> My argument is that  proper stewardship recognizes the existence of a 
> market which will fulfill the original stewarship role of ensuring 
> efficient use, and we can direct our stewardship best to policies which 
> help to ensure whois veracity.

>My argument is that the market alone is not a good steward and a regulated 
>market is necessary
>to ensure the vital interests of the community.

And I counter that the vital interest in address-use-efficiencies are better 
offloaded to the market, and the vital interest in maintaining whois 
veracity is retained.

Regards,
Mike