[arin-ppml] IPv4 Transfer Policy Change to Keep Whois Accurate

[Owen DeLong]

On May 18, 2011, at 8:23 AM, Mike Burns wrote:

> I wanted to take a second to provide some clarity on this particular email thread to ensure that everyone's expectations are the same. ARIN Staff touched base with the Proposal Originator (Mike Burns) and it was confirmed by Mike that his intent on sending this to PPML was not to formally submit it but to get feedback from the community prior to formally submitting. With that in mind, this proposal has not been assigned a Policy Proposal number as yet and AC shepherds have not been assigned.
> 
> 
> 
> 
> Hi John,
> 
> I will send it to policy at arin.net today.
> 
> The objections I have noted seem to fall in three categories:
> 
> 1. That's not the way we have historically dealt with addresses.

That is not my impression of any of the objections raised, so, I think perhaps you misunderstand
what some of the people were trying to get across to you.

> 2. It could lead to disaggregation
> 3. Hoarders and speculators will appear and will unfairly manipulate price.
> 

These are both accurate and virtually guaranteed outcomes of the proposal as it was discussed.

You also left off:

4.	It might actually reduce whois accuracy rather than increase it.
5.	Markets without additional controls inevitably lead to manipulation and dysfunction
	which requires later regulation to correct. These later corrections are rarely (if ever)
	effective at making the original victims of the manipulations and dysfunction whole.

> As far as 2, this danger seems to be manageable, and there haven't been too many objections related to this lately. I have argued that the stewards of the APNIC region, led by Geoff Huston, considered this problem when deciding whether to have needs requirements on transfers, and decided the benefits to Whois accuracy outweighed the potential disaggregation problems. This cost is borne most by network operators, who presumably can make decisions on minimum block size which will allow them to run profitably. Those decisions will likely shape the transfer market, so nobody expects there to be much value in a /32 netblock, because network operators find this size unprofitable to route today. This ability of network operators provides a constraint on disaggregation in the transfer market.
> 

People haven't been repeating what they already said. That does not mean that it is not still a factor, merely that we didn't
think we needed to repeat ourselves on a topic already covered.

In what way do you believe this danger would be manageable and/or managed under the proposed policy?

Your belief that the ability of network operators will place a constraint on disaggregation in the transfer market
presumes a number of facts not in evidence. Namely that:
	+	There is some direct correlation between what people will buy and what they can get routed.
	+	There is some correlation between what engineers can profitably route and what sales people
		will actually sell.
	+	The feedback mechanism on these factors is fast enough that the market can keep pace with
		the effect the market is having on them.
	+	There actually is a feedback mechanism by which the market and disaggregation will regulate
		each other to some livable equilibrium.

In order to believe that this is not an issue, I think you would have to demonstrate that each of those
assertions has at least a reasonable chance of being correct.

> And as far as 3, I have argued that speculators provide a value to free markets, that most attempts to corner markets fail, that supply uncertainty and IPv6 deployment provide a poor environment for speculators. But inasmuch as this forum is populated by technical types who are making decisions here based on their understanding of, and philosophy of, economics, I have decided to take David Farmer's advice and add an anti-speculator, anti-hoarder protection in the form of a limit of a /12 equivalent for needs-free transfers per 12 month period. If more transfers than that are desired, the recipient will have to demonstrate need.

Actually many attempts to corner markets in the case of a truly finite market with players that have effectively unlimited
resources _AND_ motivations other than direct profit from the value of the market commodity succeed. While attempts
to corner relatively large, and especially dynamically elastic markets (such as finished goods) by relatively small (value
of player as compared to overall value of market) players are, in fact, doomed, that is not an accurate description
of the likely IPv4 address market.

> 
> As a whole, then, my policy seeks to recognize that there are transfer transactions which provide incentives for buyers and sellers of addresses but which transactions may not meed the needs requirements which ARIN mandates for transfers.

There are thefts of automobiles which meet the needs of car thieves and the resellers who purchase the stolen
cars from them. That does not make the legalization of car theft attractive. The question is whether removing
the needs basis benefits the ARIN community as a whole, not just the individual participants in any particular
transaction. ARIN does not need to make policy to the benefit of individual participants in a transaction. Our
role as stewards is to make policy to the benefit of the community as a whole. Individual participants in a
transaction are quite capable of looking out for their own immediate interests without involving ARIN policy.

> Additionally, I pointed out that network operators, in my experience, will route addresses whose Whois record does not reflect that the network operator's customer is the registrant. The network operator, in my experience, will normally check to make sure that nobody else is advertising the addresses, and will solicit from the customer some documentary evidence that the customer has the right to the route the addresses, and then the network operator will route the addresses.
> 

This is not my general experience. Most reputable operators will refuse to route addresses unless they have
some reason to believe that the customer asking them to route them has some legitimate registration of those
resources. Sure, there are ISPs that specialize in routing hijacked space to the benefit of snowshoe spammers
and the like, but, they are relatively rare and tend to get de-peered over time.

I agree that ARIN should get more aggressive about removing registrations for addresses which are no longer
being held by the original resource holder or its legitimate successor through some form of section 8 transfer.
ARIN should then reissue those available resources to organizations with documented need in a timely manner.

> The net effect of these types of transactions is a lack of trust in the Whois table as an accurate source to check for authoritative routing rights. My proposal seeks to reduce the harm to Whois accuracy by extending the range of allowable transactions, providing additional incentive to have transfers reflected accurately by ARIN's updating of Whois to reflect the transfer.
> 

There is no evidence whatsoever that this newfound range provides any incentive whatsoever for those
transactions to be registered. Yes, it might actually remove some small amount of disincentive, but, I believe
it would be better for ARIN to provide incentive for accurate whois through a more active audit and
reclamation process as that would also better serve the community by reducing the probability of hijacked
space being invisibly routed as well as making some abandoned resources available to the ARIN community
for reuse.

> As we move into a trading world, which will happen whether or not my proposal passes, conflicts over address control are likely to increase, and the value of trust in Whois as the routing authority will also increase. Rather than sit back and watch Whois decay, I urge ARIN stewards to consider making these changes to foster accuracy in Whois.
> 

There is no proof these changes will foster accuracy in Whois.

Owen