[arin-ppml] ARIN-prop-151 Limiting Needs Requirements for IPv4 Transfers

Mike Burns mike at nationwideinc.com
Tue May 24 16:11:45 EDT 2011

Hi John,

>>Hi Mike,
>>On Tue, 24 May 2011, Mike Burns wrote:
>>>Please understand that although I do think addresses will be more 
>>>efficiently used in the future when they have monetary value than 
>>>currently, or in the past, when they didn't, I am not making this 
>>>the crux of my proposal.
>>OK, how about the idea of making this a one crux proposal?
>>>What I am saying is that needs testing was a requirement for free 
>>>pool allocations, and that is why we imposed needs tests on 
>>>applicants for address space. Actually some kind of constraint was 
>>>required, as it always is, for the distribution of unpriced but 
>>>valuable resources.
>>One thing that I have seen a lot of lately is asserting that 
>>something happened _for_a_particular_reason_, and then using that 
>>_reason_ as a launching pad. WRT the above, I agree that needs 
>>testing was imposed, but saying that it was a requirement, which is 
>>why we imposed it seems circular.

I have tried to show that having some constraint was an absolute 
minimum requirement, and that a needs-based justification was the 
steward's softest touch which would meet the goals of conservation 
and aggregation.

>>>So the stewards chose needs-testing of applicants, with the idea 
>>>that we want allocated addresses put into actual and efficient 
>>>use, and this method of constraint would serve those goals.
>>>Now, however, we do not need needs-testing to drive addresses 
>>>towards efficient use, because we are allowing them to be priced, 
>>>and that is a fundamental difference.
>>Not so much check. We could restate this in reverse with equally 
>>valid effect: We have needs testing to drive addresses toward 
>>efficient use, so we don't need to be allowing them to be priced.

You could say exactly that.
Indeed, we did have needs testing to drive addresses toward efficient 
use, so we did not need to price them.
Except that only works for allocations from the free pool, and we 
have already decided to price them for transfers.
My proposal is meant to be considered in an environment with priced 
addresses, like our current one.

>>>Maybe I haven't made clear why we didn't just give addresses out 
>>>first-come-first-served, from the free pool.
>>>I have referred to the Tragedy of the Commons, and if you  are 
>>>unfamiliar with this concept, you can google it.
>>Thanks for the tip!
>>>Basically, the British used to refuse villagers from allowing 
>>>their sheep to graze on the commons, a publicly held land usually 
>>>at the center of the village.
>>>Then it was decided to open the Commons to the villagers for this 
>>>purpose. Since the villagers would have had to pay any other 
>>>landholder to allow their sheeps to graze on their land, all the 
>>>villagers herded their sheep on to the freely available Commons.
>>>Whereupon the sheep ate all the grass and destroyed the Commons.
>>Man, that does not sound good.
>>>Whether this actually happened is immaterial, it instructs us as 
>>>to what happens when a valuable commodity is not contrained by 
>>>price. The commodity is almost immediately consumed.
>>>So the stewards were wise in choosing to constrain allocation by 
>>>some mechanism. They could have chosen price, as the government 
>>>does when it auctions spectrum, for example.
>>>I think there would have been many problems with that choice.
>>>But instead they chose a needs-test, which to me was an excellent choice.
>>The ARIN stewards, I presume, not the sheep stewards.
>>>Now, however, whether with or without my policy, the stewards at 
>>>ARIN chose to allow individuals to buy and sell addresses, and 
>>>thus for addresses to have a price.
>>Don't think so. I know you keep saying so, but IIRC the STLS allows 
>>the right to transfer the right to use, presumably, but not 
>>necessarily for a consideration. Seems to me there is a lot of care 
>>exercised to be sure that the phrasing does not give even the 
>>appearance of sell and buy.

I agree the text looks like the tortured work of a group nearly 
evenly split between allowing transfers for money and not allowing them.
Yes, clearly there is no requirement for payment for transfers.
But we already have a $7.5 million dollar example of an ARIN-blessed 
8.3 transfer.
Which I take to mean that we are already in the trading-for-money world.

>>>The price is the constraint on wasteful use that the needs test used to be.
>>Would be. Maybe. Among other things. Happy to talk about it.

OK, my assertion is that holding other conditions constant, raising 
the price of a commodity leads to more efficient use of it.
Like, I figure that there is less left uneaten on the plate at Ruth's 
Chris than there is at Sizzlers, in general, because people don't 
like to waste expensive things.
(There must have been some psychological test run at some point to 
test my hypothesis, I will see if I can find one.)
(And I suppose the taste of a Ruth's Chris steak is not constant with 
the taste of a Sizzlers steak.)

>>>So maintaining the needs test is not a requirement for 
>>>stewardship, as other forces outside of our control will work 
>>>towards the same ends of efficient usage that the needs test was 
>>>designed to incentivize.
>>Maybe not, if we were absolutely determined that at all costs the 
>>needs test had to go. But we have not so determined. You propose 
>>that this is desireable and are experiencing some discussion. Not 
>>everyone agrees.

I guess I should say if  you accept the general notion that increased 
value leads to decreased waste, then address space will trend towards 
meeting the goal of conservation as it obtains monetary value.

>>>I think some stewards have gotten it into their heads that their 
>>>role is to decide the best, or at least better, use of addresses, 
>>>but I argue that was never a goal of stewardship.
>>Here again: some stewards _MAY_ be considering that it might be 
>>better if existing uses of addresses be prefered to proposed and 
>>possibly undesirable uses. I would think YOU have to justify 
>>convincingly the advantages of previously prohibited practices, not 
>>just assert repeatedly those advantages.

Yes, I agree the proposer of a policy change has the burden of having 
to justifiably convince others before any change should be effected.

>>>Now on to your analogy.
>>I don't intend to spend a lot of time defending the details of the
>>>There is simply no granary in control of the addresses. The food 
>>>has already been allocated from the granary into the hands of a 
>>>bunch of individuals.
>>>In our case, tens of thousands of individual ARIN allocants. (I 
>>>just made up tens of thousands maybe it's just thousands.)
>>>But in your famine scenario, they would be selling, buying, 
>>>stealing, and donating to each other.
>>>Unless and until some third party came in to say they could not 
>>>engage in certain of  these transactions.
>>>Which would make that third party a lightning rod for conflict, 
>>>and a very potential source of corruption.
>>>I know that you are presupposing that some speculator or hoarder 
>>>will come and buy up everybody's available grain.
>>>So your objection comes down to fear of speculators and hoarders, 
>>>once again.
>>That's me, crippled with fear, repeatedly. OTOH, I also think 
>>speculators and hoarders may be odious. My outward appearances to 
>>such can be similar.

It's just that the same basic objection, speculation, seems to be 
presented in many ways. I have tried to illustrate the inherent risks 
which would disincentivize speculation in this market.

>>>What about the /12 limit in my proposal, specifically designed to 
>>>prevent speculation and hoarding?
>>>In your analogy, I guess you could say that everybody had a limit 
>>>to the size of their storage silo, which would prevent them from hoarding.
>>No opinion so far, seems kinda large.

The /12 is open for negotiation, but I think it seems too small to 
hope to corner a market to the point you could affect price.
But I suppose that depends on how large and vibrant a market we expect.

>>>Thanks for your thoughtful consideration of the matter, though, 
>>>and your belief that this is a proper topic for the AC to discuss.
>>Pleasure, likewise,
>>John Springer

Regards and thanks for replying to the right Subject line,

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