[arin-ppml] Draft proposal that needs some wordsmithing

Mike Burns mike at nationwideinc.com
Fri May 6 17:02:27 EDT 2011

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.

  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
  If I concede that, will you concede that a market with a continued justified needs policy would lead to a less reliable whois?

      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. 

      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.

  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.
  It has also been free from unnecessary psuedo-government rules put in place by existing Internet governance systems.
  After all, these Internet governance systems could have done more to mandate IPv6, but conservative stewardship left the matter to individual choice.
  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 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.
  But your request for examples leads me to analogies which is a road I am trying to avoid.

        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 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?

      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.

  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 reseller of vanity addresses, like

      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.

      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?

  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.

    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?

    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.

    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.

    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.

      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

  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.

      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.

      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.

      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.

      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?

      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 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.

      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 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.

      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.

      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.

      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?

      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

      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.
  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.

  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.

  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.


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