[arin-ppml] Draft proposal that needs some wordsmithing

[Ted Mittelstaedt]

On 5/6/2011 11:37 PM, Owen DeLong wrote:
>
> On May 6, 2011, at 2:02 PM, Mike Burns wrote:
>
>> Hi Owen,
>>
>>     It is my contention that the definition of waste is often in the
>>     eye of the beholder,
>>     *If we keep needs, only ARIN's definition matters. They are THE
>>     arbiters of need, and thus the corollary, waste.*
> In which case, by definition, the current policies are 100% waste free.
> I don't think
> that's what you intended to say. ;-)
>>
>>     but, if you define waste as addresses which are not assigned to
>>     machines or
>>     assigned to machines without a purpose considered useful by at
>>     least some
>>     person and related to the address being used to provide or consume
>>     a service
>>     over the network, then, it is my argument that the amount of waste
>>     allowed by
>>     a market with justified need would be less than that allowed by an
>>     unrestricted
>>     market.
>>
>>     *If I concede that, will you concede that a market with a
>>     continued justified needs policy would lead to a less reliable whois?*
> No, I think it will lead to a similarly reliable whois to what we have
> today. Neither
> less nor more. I believe a permissive market policy _COULD_ lead to a
> slightly
> more reliable whois, but, I tend to doubt this.
>>
>>>>     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.
>>>
>>     I have no reason to believe that a market without justified need
>>     requirements would
>>     somehow magically reduce waste vs. a market with the requirement
>>     that recipients
>>     have justified need for their resources. After all, any recipient
>>     with justified need for
>>     the resources they are receiving is non-waste almost by
>>     definition, where this
>>     remains largely undefined for a market with no such requirement.
>>
>>     An unrestricted market depends on the price of the address to
>>     reduce waste. However,
>>     unless you consider that tying addresses up to keep them from
>>     benefiting your
>>     competitors is not waste (I believe it is waste), there is no
>>     reason to believe that
>>     such an unrestricted market would not create exactly that type of
>>     transaction.
>>     *If competitors tried to do that, they would be taking a risk that
>>     their investment would be ill-advised, particularly if they drive
>>     Ipv6 adoption.*
>>     *And you are presupposing (a big leap to me) that other addresses
>>     would not come into the market to replace those purchased by the
>>     fictional competitor who is hoarding.*
>>     *They are fungible, after all. You are asking ARIN to make these
>>     kinds of business decisions as to what is a valid strategy and
>>     what isn't.*
>>     **
> Either you don't understand this industry, or, you are making some very
> interesting assumptions.
>
> Imagine for a moment that the 5 largest providers in the US are able to
> use an unrestricted
> transfer market to acquire enough addressing for their IPv4 needs for
> the next 10 years.
> This has the side effect of essentially eliminating the supply from the
> market.
>
> Now you have the incumbent {telco,cableco,etc.} continuing to provide
> uninterrupted IPv4
> services without LSN to their users while their competitors (all the
> small and medium sized
> ISPs) have no access to additional addresses and are forced to subject
> their customers
> to LSN and/or adopt IPv6.
>
> In this scenario, rather than a significant customer migration to IPv6,
> what you likely drive
> is a significant customer migration to the incumbent
> {telco,cableco,etc.} and the elimination
> of the competing smaller ISPs in most markets.
>

Not exactly.

What your doing is freezing the smaller ISP's at a specific customer 
level, they cannot take on a new customer unless an old one leaves,
and the large ISP's can continue to take on new customers.

This won't eliminate them just reduce their market share.

And yes I agree that this is a Bad Thing.

> I do not consider that to be in the community interest.
>>
>>
>>>>     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.
>>>
>>     The APNIC community decided that abandoning needs basis might
>>     serve their
>>     community better. The other four RIRs have elected to preserve
>>     needs basis.
>>     *The APNIC community is also the most active in terms of recent
>>     demand, and closest to exhaust.*
>>     *The sponsor of the needs-free transfer policy was a well
>>     respected member of the APNIC community, not a latecomer like me.*
>
> Yes... As you know, I am well aware of Geoff's thinking on this and well
> versed in his
> position on the subject. You are correct that Geoff is a well respected
> member of the
> APNIC community. However, there are a number of things that are unique
> to the
> APNIC region and policy process that lead me to believe that looking to
> them for guidance
> in this area will not lead to a good outcome for the ARIN community.
>
> How many APNIC meetings have you attended? How long have you been subscribed
> to the APNIC Policy SIG mailing list? I am not a latecomer, either, and
> I have good
> familiarity with both APNIC and ARIN. Indeed, I believe I am reasonably
> well known
> in at least 4 of the 5 RIR communities. I have been to at least one
> policy meeting of
> each of the 5 RIRs in the last year. LACNIC and RIPE are the only
> regions where
> I have not yet attended multiple meetings.
>>
>>
>>     My statements about the dangers of allowing unrestricted trade are
>>     well documented
>>     in other markets where they have occurred. Can you point to
>>     examples of completely
>>     unregulated markets where such misdeeds have not occurred over any
>>     substantial
>>     period of time?
>>
>>     *I wish I could point to more unregulated markets. I point to the
>>     Internet, which has developed largely because it has been free
>>     from government rules.*
> Well, if you want to use the internet as an example, I would say that
> the damage done
> by the deregulation of DNS and it's subsequent abandonment of
> stewardship in favor
> of policies preferred by WIPO is a classic example of a market gone
> wrong. The pollution
> of the TLD namespace in the name of ICANN earnings is another.
>>
>>     *It has also been free from unnecessary psuedo-government rules
>>     put in place by existing Internet governance systems.*
> For this to be true, you would have to give up on characterizing the RIR
> policies as being such rules.
> You cannot have your cake and eat it too.
>>
>>     *After all, these Internet governance systems could have done more
>>     to mandate IPv6, but conservative stewardship left the matter to
>>     individual choice.*
> I challenge you to cite feasible examples. Please make sure to include
> the alleged governance body and details of
> the steps they could have taken to mandate IPv6.

I will cite at least 1 - the IPv6 RFC 2460 is still in Draft status. 
This is inexcusible, it should have at least been moved to Proposed 
Standard status.

>>
>>     *I never said no "misdeeds" will occur in a free market. I claim
>>     that these are exceptions, and that you are judging markets by
>>     their exceptions.*
> I claim that while they may be exceptions, they may be of such magnitude
> as to define the market. You have offered
> nothing to counter that claim.
>>
>>     *I think free markets have moved the world forward immensely since
>>     the concept was elucidated by Adam Smith, and I point to the car
>>     you drove to work in as one positive result of free markets.*
> I point to our utter dependence on foreign oil, the limits of
> liabilities on oil companies for their environmental
> disasters, the lack of natural-gas powered automobiles and
> infrastructure to support them, and the limited
> investment in renewable energy until very recently as overwhelming
> counter-examples in that very field.
> Let us not also forget that it is not the free market, but, regulation
> and product liability law which brought about
> most of the innovations in automotive safety whereas the free market was
> perfectly happy to keep killing
> people as long as they made enough babies first to have more consumers
> to buy more cars.

To make the claim that the Free Market brought about the automobile is
insane, and shows a clear misunderstanding of what the automobile is.

The Free Market brought about the Model T.  The Model T could drive
anywhere, on or off road, it could ford streams, be turned into a
tractor and plow fields, it was repairable by common tools present in
every home and came with a manual to enable you to do so.

But almost every automobile since that time has depended heavily on
massive government interference, from everything from setting the width
of roads, the gentleness of turns, colors and candlepowers of lights, to
say nothing of the government infrastructure that had to be developed
to support automobile insurance companies, without which it would be
simply impossible for the average citizen to afford the risk of owning
and driving a car.

>>
>>     *But your request for examples leads me to analogies which is a
>>     road I am trying to avoid.*
>>     **
> I suppose that's your choice. I believe I have provided examples of
> market failures. You wish to dismiss
> them as exceptions, but, this would be such a constrained market that I
> do not see how you can
> dismiss the potential for these exceptions to be of such magnitude as to
> define the market. As such,
> I do not believe they can be so easily dismissed.

The very claim that there is such a thing as a free market is idiotic, 
no such market exists on the face of the Earth today, in any country,
and in any society.

Nobody can cite a single market anywhere that is not free of government
intrusion in some manner.

Even the Amish must submit to government regulation, they must wear
reflectors on their buggies.


>>
>>
>>>
>>>>
>>>>>     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?
>>>
>>     That isn't a need supported by policy. If he needs an aggregate
>>     acceptable
>>     to the operator community for his own use, OTOH, I think he could
>>     easily justify
>>     those multiple purchases to ARIN under current interpretation of 8.3.
>>     *But you would arbitrarily prevent him from providing that service
>>     to others through maintaining ARIN sayso over whether his business
>>     is justified. Even though that service would benefit the network
>>     operator community through aggregation, and the Internet as a
>>     whole via recovery of unroutable space.*
>>
> I don't believe his ability to aggregate space would, in any way, be
> superior to the
> ability of the end recipients of the space that need it. As such, I do
> not believe my
> dismissal of the business model is arbitrary. I believe the business
> model is largely
> fictitious in nature.

I agree.

>>
>>     I don't see where the reseller provides any benefit to the
>>     community over the
>>     end organization being the one to do the aggregation.
>>     *You don't think that somebody who specializes in that market
>>     would possibly be able to provide the service more efficiently
>>     than an end user?*
> No, I do not. For one thing, I'm not convinced it would be at all
> feasible for either.
> The general nature of addressing is that aggregation is hard and
> disaggregation
> is relatively easy. The universe tends towards entropy. Aggregation requires
> a substantial force acting against entropy.

I agree.

>>
>>
>>>>     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?
>>>
>>     Yes... The future of IPv4 is uncertain and will get progressively
>>     more uncertain as time progresses.
>>     This is the reality of betting your business on continued
>>     availability of IPv4.
>>
>>     Providing greater or longer durations of certainty to some
>>     organizations at the cost of denying it to others
>>     is contrary to good stewardship.
>>     *Who is denying anything to anybody? My contention is that you are
>>     denying two entities from engaging in a mutually satisfactory
>>     voluntary relationship through intervening with needs verification.*
>>
> If you accept the following postulates (which I do):
> 1.IPv4 address space is finite. (This is fact, there are roughly 3.8
> billion IPv4 unicast addresses)
> 2.The need for IPv4 addresses vastly exceeds their number
> (Consider 6.8 billion people and multiply by laptop+desktop+cellphone
> (20.4 billion).
> In my understanding of mathematics, 3.8 < 20.4. By the way, that 20.4
> figure ignores
> the need for servers, infrastructure, etc. all of which also need addresses.
>
> Now, if you want to claim that only 25% of the worlds citizens will be
> connected to
> IPv4, then, you can reduce 20.4 to 5.1 billion. Last I checked, 3.8 <
> 5.1 too.)
> 3.The transfer of addresses is a zero sum gain. There is no creation of
> new addresses
> accomplished by any transfer mechanism. (also mathematical fact).
>
> Then, it stands to reason that for party A to obtain addresses from the
> transfer market, those
> same addresses are denied to party B. For party B to obtain addresses,
> those same addresses
> are denied to party C. This continues until you reach some party <Z> who
> is unable to obtain
> addresses. Basically, the movement of addresses through the transfer
> policy amounts to a
> form of "musical chairs". If there are enough chairs for everyone, then,
> when the music stops,
> everyone sits. However, as I postulated above, there are not enough chairs.

Correct, however human history has not been free of these sorts of
transfers, the realistic expectation is that they will in fact, happen,
and the economically disadvantaged people in society will end up being
in the party Z

I suppose many content providers who are commercial only care about
marketing to party A-Y so that may be why they don't see this as a problem.

>>
>>     Good stewardship is keeping the cost playing field relatively
>>     level for all players over time.
>>     At least to the greatest extent possible.
>>
>>     *Doesn't a free market treat participants as equal? My proposal
>>     seeks to put legacy and RSA holders on a level playing field.*
>>     *
>>     *
> A free market inherently gives advantages to those with greater capital
> over those with less
> capital. With a sufficiently greater capital advantage, one can
> literally control the market.
> The IPv4 address market will be sufficiently constrained that this is
> not an unlikely outcome.

agreed

>>
>>>>     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?
>>>
>>     It is the community's role to decide this. As a member of the
>>     community, I have offered
>>     my opinion. Others may offer theirs. At the end of the day, ARIN
>>     policy should reflect
>>     the collective judgment of the community.
>>
>>     There is no history of volunteer private organizations making
>>     these decisions with
>>     respect to number resources on the internet and in places where
>>     number resources
>>     have been allowed to be managed in such a way, careful regulation
>>     has been required
>>     in each case to avoid substantial problems that have occurred in
>>     its absence. It is a
>>     complexity which I do not think we should take on, give its
>>     limited value to the community
>>     as a whole.
>>
>>     *If the community needs to decide this, what more open way for it
>>     to do this than allowing them to vote with their dollars? If it is
>>     a bad idea, he will go broke.*
>>
> The more open way, IMHO, is the public policy process where it is one
> person, one vote instead of using
> dollars where it becomes one dollar one vote. I favor people over
> capital when it comes to decision making.
>>
>>>>     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.
>>
>>     So?
>>
>>>     Why can't they look to a wholesaler for rapid, and maybe
>>>     temporary deployment?
>>
>>     In the APNIC region, under their policies, presumably they can. In
>>     the ARIN region, they cannot because policy
>>     prohibits such wholesalers. What policy does, however, allow, is
>>     "matchmakers" who could serve the same purpose
>>     without possessing the address registrations in the interim. I
>>     believe the STLS term for them is "Facilitators".
>>
>>     Given the ability to have facilitators, what need is there for
>>     wholesalers?
>>     *Facilitators cannot control supply in the way a wholesaler can.*
>>
> I see that as an advantage.
>
>>>     Surely you can understand that transfers will likely increase in
>>>     number, and ARIN's needs analyses could take longer?
>>
>>     I don't think that transfers will increase beyond current
>>     allocation/assignment request rates (modulo normal growth)
>>     unless the market is becoming excessively liquid which would
>>     indicate that we have some level of failure in policy.
>>     *So there is a limit to allowable market liquidity in your eyes?*
>>
> Perhaps I used the wrong term, but, unless the market is somehow
> perverted into a "day-trading" of addresses
> purely for the purpose of profiteering (which would have an obvious
> destabilizing effect on the network
> as a result), I don't see the potential for the transaction rate to
> become significantly higher than the current
> application rate.

The market could easily be perverted into an IPv4 "futures" market where
no actual transfer of the IPv4 takes place - just the promises of the
trade.

>>
>>>     But no such wholesaler can exist if you require him to
>>>     demonstrate need.
>>
>>     Nor is he needed or useful in my opinion.
>>     *Unless Microsoft wants to hold that symposium in North America.*
>>
> Micr0$0ft can get their addresses directly from the resource holders
> without need of
> a wholesaler in either region.
>
>>>     Think of a Quik-E-Mart for IP addresses. Are you certain there
>>>     would never be a call for that kind of convenience?
>>
>>     The visual of purchasing a Big-Gulp full of IP addresses at the
>>     local 7-11 is just too much for me to take seriously.
>>     *Not 7-11, Apu from the Simpsons will be doling out the address. I
>>     guess that doesn't help with the seriousness.*
>>
> No, it really doesn't.
>
>>>     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.
>>>
>>     How is a wholesaler with inventory different from a facilitator as
>>     defined in STLS in any meaningful way?
>>
>>     The facilitator can still make a buck on the deal. If there's a
>>     supply problem, it's because there isn't a supply,
>>     not because policy prevented people from providing supply.
>>     *This is not reasonable. Surely you could see, especially in the
>>     current slim pickings of the STLS, that the market may have a
>>     supply problem?*
>>     *If I thought this, and thought I could profit from being a
>>     reliable supplier by holding some inventory, your policy would
>>     prevent me from entering this business artificially, not through
>>     any economic reason.*
> The market _WILL_ have a supply problem no matter what. See my above
> statement about the total supply
> vs. the obvious demand. If there were no supply problem, then, we would
> not have bothered developing
> IPv6 in the first place. The supply problem is obvious and inherent in
> the situation which is leading to us
> even considering a market in the first place.
>
> What is not reasonable is any belief that it is possible for an IPv4
> market to exist without a supply problem
> for any length of time.
>
> Where would you get this inventory that others cannot get it from? Why
> would someone prefer to sell
> their addresses to you as a wholesaler than sell them directly to an
> organization that needs addresses?

A "wholesaler" has to inventory to sell.  Wholesalers exist by buying
10,000 of something from A, and selling 1-10 of those things to B-Z
over a period of time.

This has obvious advantages for a manufacturer who is "A" because they 
can setup an assembly line, crank out the 10,000 things, then shut the
line down and go on to other things after they have made their money.

No such paradigm exists with IPv4 because a wholesaler cannot accumulate
IPv4 that would violate the utilization requirements.

I suspect the transfer market will exist more as a "realtors" market
where you have a bunch of guys floating around trying to connect
party A to party B and getting a cut on the few times they are 
successful in doing that.

You might ask why people sell homes through realtors.  Well the fact is
that in hot housing markets THEY DON'T.  When my wife and I bought our 
first home it was in the hottest market in our city and just about every
home available was For Sale By Owner.  I never understood why this was
until years later, but once I did understand it, I resolved to never 
sell a home in a soft market.

The supply of IPv4 will continue to get so constrained to the point
that there will be no need of these "brokers" all that will be necessary
is to advertise that you have them.

The bankruptcy court for Nortel for example was rather dumb - they never
advertised that they had those numbers for sale.  If they had merely 
waited another year for ARIN runout, then advertised that block in an
open auction, the price they would have gone for would probably be 20-50
million range.

But I suspect the reason they did it this way is that they did NOT want
US to figure out what was going on and rush a bunch of restrictions -
such as making the recipient sign an RSA - into the NRPM.

>>
>>
>>>>     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
>>>
>>     After a long winded explanation of how he can cloud the definition
>>     of speculation to mean virtually
>>     any form of investing, he finally gets to the point of claiming
>>     that there is a benefit to the market if:
>>
>>     1.Prices adjust quickly
>>     -- In the case of speculators this almost always means "increase"
>>
>>     2.There is greater liquidity
>>     -- Though he makes no mention of how, exactly, speculation
>>     actually increases liquidity
>>
>>     3.The market fluctuations are minimized
>>     -- Which is interesting to attribute to speculators after
>>     attempting to attribute case 1 to them as well.
>>
>>     In my observations of various markets, speculators have had a
>>     destabilizing influence with a general
>>     tendency to increase prices, often far above and beyond rational
>>     levels.
>>
>>     Yes, the speculators at the end of that process when the bubble
>>     bursts usually get hurt badly, then, we
>>     the taxpayers get to pay to bail them out, too.
>>     *If you believe all that, then you should be a speculator. I
>>     certainly would never support taxpayer bailouts to speculators.*
>>
> I don't support taxpayer bailouts to speculators as a political
> position. Indeed, I'm quite tired of having my
> tax dollars used in that way. I'm particularly frustrated at the moment
> because they managed to:
> 1.Devalue my property to 33% of what it was once worth.
> 2.Force the government to create new stricter rules on refinancing which
> now preclude
> me from refinancing due to my Loan-to-Value ratio (which was perfectly
> fine until they
> devalued my house).
>
> Unfortunately, since I purchased responsibly and did not engage in
> speculation or dive head first
> into water over my head, I am not entitled to any of the government
> programs designed to help
> the people who caused the problem in the first place, so, here I sit
> paying almost 6% on a mortgage
> that I could refinance down to a little more than 3% if the speculators
> hadn't "rapidly adjusted the market".
>

You can make an extra payment on the principal only every month and
essentially reduce the 6% down by doing this.  You have to pay the
principal back anyway no matter what your interest rate is, so
it is not money lost.

>>>>     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.
>>>
>>     The resources belong to the community. The current resource holder
>>     is holding them in trust.
>>     They are not property.
>>     *Funny they appear on many asset sale documents I have seen along
>>     with other tangible and intangible property.*
>>     *And I can have the exclusive right to sell them according to
>>     MS/Nortel, even if they weren't allocated to me.*
>>     *Walks and quacks like rights ownership.*
>>     **
> As I said, this particular question has not yet received a direct
> ruling. I would not look to MS/Nortel as
> precedent setting so much as I think it is an irregularity.
>

Since MS signed an LRSA and accepting the LRSA means that you give up
any rights ownership, the only "precedent" that has been set is the
notion that Legacy addresses are property.

Meaning once a speculator arranges a sale, further "sales" cannot happen
since the recipient doesn't own then.

That won't lead to a sustainable speculators market.


>>
>>>
>>>>     An organization from another region?
>>>
>>     There is no policy to support inter-regional transfers currently
>>     and your proposed policy
>>     would not inherently create them.
>>
>>     *You are correct, but this is still a reason why somebody would
>>     seek to transfer without registering, Chris' original request.*
>>
> Such a transfer should, as I said, be voided by the respective RIR, the
> resources reclaimed, and
> reissued to someone acting within policy.
>
>>>>     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.
>>>
>>     I do not support using price as the sole measure of the need for
>>     addresses. There are many cases where I think
>>     that, for example, that providing services to <insert 501(c)3
>>     organization> is a far better use than insuring that
>>     <insert large monopolistic telco> can make sure that their
>>     competitors feel the pinch of address exhaustion
>>     well before they do.
>>
>>     Measured by money, <insert large monopolistic telco> is almost
>>     certain to win.
>>     *In this endeavor, I view ARIN as the large monopolistic entity.*
>>
> No, ARIN may be monopolistic when it comes to address management within
> their
> service region, but, my meaning above is the incumbent telcos, cablecos,
> etc. that
> mostly operate in either effective or actual monopolies or at best in
> some cases
> duopolies.
>
> I'm talking about the relative size of the market participants, not ARIN
> which would
> be sitting on the side lines of a market recording the events of the day
> as it were.
>>
>>>>     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.
>>>
>>     For a small transaction, the cost of a needs analysis is also
>>     small. As someone with rather
>>     extensive experience producing needs-basis justifications for
>>     submission to ARIN (and
>>     some experience with other RIRs), I can say with certainty that
>>     the needs-basis justification
>>     for a /24 is very simple and does not provide a significant cost
>>     to the equation.
>>     *Suppose it is some doctor's office that wants to multihome, do
>>     you think they would have the same view of that as a person with
>>     your experience?*
> None of my customers (some of whom have been small doctor's offices)
> have had a problem
> with my fee for preparing their justification. As such, I would say I
> have evidence that it is
> not.
>
>>
>>>>     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.
>>>
>>     Your opinion is noted, but, I don't concur with the
>>     characterization you make of the situation.
>>
>>     I think you state a number of assertions in that paragraph with no
>>     factual basis to back them up.
>>     *I don't make a single assertion in that paragraph without factual
>>     basis of backup. I invite you to read the original negotiated
>>     MS/Nortel asset sale document, and the one that was edited after
>>     ARIN became involved.*
>>     *Well, I take that back, I did allege shenanigans, but I did back
>>     that up last week with logical conjecture if not actual fact.*
>>     **
> I don't agree with your claim of shenanigans. I am inclined to believe
> John when he states that a
> full and legitimate needs-basis justification was provided and reviewed
> by the ARIN staff.
>
> I do not believe for one moment that ARIN was in any way more
> accommodating for Micr0$0ft than
> they would be for any other transfer recipient W.R.T. needs basis.
>
> I also am not convinced that you have any evidence that they "pointedly
> left ARIN agreements out"
> vs. it being a simple oversight.
>
>>
>>>
>>>>     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.
>>>
>>     Money does not insure efficient use by any definition of
>>     efficiency that I find acceptable.
>>
>>     Measuring efficiency by money is sort of like measuring electrical
>>     consumption of
>>     a house by measuring the temperature rise in the upstairs bedroom.
>>     Sure, the electrical
>>     consumption in the house will definitely contribute, but, you
>>     won't get anything near
>>     an accurate measurement.
>>
>>     *My measurement of efficiency is address utilization. We are near
>>     exhaust and there are a billion unrouted addresses.*
>>     *The current system displays obvious inefficiencies, although
>>     overall I think it did its job well.*
>>
> Measuring it by money virtually assures that a few large ISPs will
> remove all supply rapidly
> from the market in order to shut out smaller competitors and position
> themselves in a place
> of address affluence for years to come.
>
> I will take the current inefficiencies over that situation any day.
>
>>>>     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.
>>
>>     Yep.
>>
>>>     And yet a bankruptcy judge saw no problems with Microsoft buying
>>>     them from Nortel.
>>
>>     I agree that it is unfortunate that the bankruptcy judge did not
>>     see fit to consider the
>>     community with greater weight.
>>
>>>     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.
>>
>>     As I see it, this remains unclear. Each of the cases so far has
>>     carefully not decided this
>>     particular point.
>>
>>>     By removing needs requirements for transfers, we bring policy in
>>>     line with developing law, and this is sure to reduce future conflict.
>>>
>>     I would rather preserve conflict and try to develop the law in a
>>     more useful direction.
>>     I guess you can consider this part of my right to petition the
>>     government for redress of grievances.
>>
>>     *Fair enough, but you have to accede the cost to ARIN of that
>>     possibility of conflict with the law when it comes to future
>>     legacy transactions.*
>>
> I accept that ARIN must accept the judgment of the court no matter how
> flawed. Just
> as I accept that the current law effectively includes two seriously
> flawed supreme
> court rulings that established:
>
> 1.Money is a protected form of free speech.
> 2.Corporations are people entitled to the protections of the bill of rights.
>
> These two rulings combined essentially shifted us from capitalism to
> corporate
> socialism.
>

Read "The Space Merchants" Fredrick Pohl and Cryil Kornbluth you will 
love it.

Ted

>>>
>>>>     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.
>>>
>>     As I said, as these blocks which are being used by entities other
>>     than their legitimate holders
>>     are identified, ARIN should reclaim them and reissue the resources
>>     to organizations within the
>>     policy process.
>>
>>     That is reality. It is time for ARIN to start becoming more
>>     aggressive about identifying them
>>     in my opinion.
>>     *And we're back to FUD over section 12 processes for those seeking
>>     to bring addresses to the market.
>>     *
>>>
> Huh? If you bring the addresses to the (legitimate) market, I'm all for
> reasonable safe-harbour positions
> to remove FUD. I want ARIN going after the recipients of invalid
> transfers, not the ones bringing
> addresses to the market.
>
>>>>     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.
>>>
>>     No, I am taking the stance that the better way to ensure whois
>>     accuracy is by identifying
>>     blocks being hijacked by organizations to which they were not
>>     issued and reclaiming them
>>     and providing them to members of the community in compliance with
>>     policy.
>>
>>     *There is no legal process for reclaiming legacy space. You would
>>     be wasting ARIN's time and treasure in the legacy area, and
>>     increasing FUD for existing holders seeking to sell.*
>>     *I don't even think there is an ARIN process for recovering legacy
>>     space, except through voluntary donation from the holder.*
>>
> As I said above, I think you misunderstand... Once the addresses are
> transferred outside of policy, they are
> no longer legacy addresses. The legacy status is tied to the original
> legacy holder who received them
> for a specific purpose from one of ARIN's predecessor registries.
>
> I don't want ARIN going after the suppliers... I want ARIN going after
> the recipients. In fact, I don't really want
> ARIN so much going after the recipients as removing the records from
> whois and in-addr.arpa and recycling
> the addresses to other organizations working through the legitimate
> process with justified needs.
> It would be up to the fraudulent transfer recipient to come after ARIN
> in that case.
>
>>>
>>>>     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.
>>>
>>     So what. You're trying to trade in community resources that are
>>     held in the trust of the
>>     community for a particular purpose. The community has a right to
>>     audit your use of them
>>     and ensure that it is in compliance with the policies of the
>>     community.
>>
>>     The presence of police on the highway adds an element of
>>     uncertainty to my ability
>>     to drive at any speed I prefer. I don't necessarily see that as a
>>     bad thing, even though
>>     it was very inconvenient on several occasions in my younger years.
>>     *And the element of uncertainty slows your progress, correct?*
>>
> Not really, no.
>
>>>>     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.
>>>
>>     More often, I see how it is used to provoke incorrect or
>>     counterproductive action, such as the PATRIOT
>>     act.
>>
>>>>     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.
>>>
>>     Uh, APNICs current transfer policy was in place prior to 2009-1.
>>     *This page says February 2010, but even though it may have been in
>>     place, it was only activated as the exhaust phased in.*
>>     *http://www.apnic.net/policy/proposals/prop-050*
>>     *Back in 2009, many people were still thinking/hoping the
>>     transition would take off, but now we have years more evidence to
>>     the contrary, which may change some minds.*
>>     **
> I find this concept of "years since 2009" interesting. Please explain to
> me how you get from
> an event that occurred not more than 17 months ago to "years" in the
> same time scale.
>
> I think that APNIC amended their transfer policy, but, the base policy
> was, I believe, put in place prior to 2009-1.
> However, I suppose it is possible that APNIC didn't actually enact their
> policy and was talking about it. I know
> that the policy in a form substantially similar to its current form was
> definitely being discussed in the region
> well before we moved from 2008-2 to 2009-1.
>>
>>     If you're talking about their inter-regional
>>     transfer policy, that's new, but it doesn't really support a
>>     removal of needs basis from the ARIN region.
>>     If anything, it makes it even more vital.
>>
>>     I don't see how the continued failure to transition differs from
>>     the expectations that were considered at the time we were debating
>>     2009-1.
>>
>>     Finally, I don't really see that the MS/Nortel deal changes
>>     anything other than indicating that we may have been
>>     insufficiently specific
>>     with the restrictions expressed in 2009-1 (NRM 8.3) and might need
>>     to tighten the language so as to place better constraints on
>>     staff's action more
>>     in line with intended policy.
>>
>>     As I said, you are more than welcome to ask the question again.
>>
>>>
>>>>     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.
>>>
>>
>>     Yes, your argument that it is better entrusted to the market is
>>     precisely the point where I think we have the strongest disagreement.
>>     *But what about whois? Don't we absolutely require a believable
>>     registry for the integrity of the whole Internet? There is a
>>     connection between needs requirements and whois reliability that
>>     drove the APNIC decision.*
> There is an allegation of a connection which remains unproven.
>>
>>     *I would like to say that I will busy out of town this weekend,
>>     but this thread in particular has probably bored the readers to
>>     tears and they will be happy at my absence and their relatively
>>     empty inboxes. My plan is to take some of the proferred
>>     suggestions and resubmit a draft proposal on Monday for futher
>>     discussion. Have a nice weekend.*
>>
> LoL... I'll also be mostly not on email this weekend, so, no worries.
> I'm happy to continue the debate in private
> if you believe that would be better.
>
> Owen
>
>
>
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