[arin-ppml] ARIN-prop-151 Limiting needs requirements forIPv4transfers

[Kevin Kargel]

> -----Original Message-----
> From: Mike Burns [mailto:mike at nationwideinc.com]
> Sent: Wednesday, November 23, 2011 1:12 PM
> To: Kevin Kargel; 'Owen DeLong'
> Cc: arin-ppml at arin.net; Mike Burns
> Subject: Re: [arin-ppml] ARIN-prop-151 Limiting needs requirements
> forIPv4transfers
> 
> Hi Kevin,
> 
> This proposal only deals with 8.3 transfers, not with free pool
> allocations,
> which will continue to require a demonstrated need.
> You can request a /12, but you would have to find a seller and pay his
> price.
> 
> Regards,
> Mike

[kjk] Thank you for the clarification Mike.  It will all be a lot easier to
swallow if it applies to both in and out of region recipients equally.
If there is to be any inequity then ARIN's scales should tip toward ARIN
members, not away from them.  


> 
> 
> -----Original Message-----
> From: Kevin Kargel
> Sent: Wednesday, November 23, 2011 2:02 PM
> To: 'Owen DeLong' ; Mike Burns
> Cc: arin-ppml at arin.net ; Mike Burns
> Subject: RE: [arin-ppml] ARIN-prop-151 Limiting needs requirements
> forIPv4transfers
> 
> I have a side question..
> 
> If we allow transfers without needs requirements to non-arin customers can
> I
> now request my very own /12 as an ARIN customer without proving need?
> 
> I am wholeheartedly opposed to any policy that provides easier access for
> non-members than it does for ARIN members.  That is just wrong on a number
> of levels.
> 
> Perhaps I am missing the whole point here.
> 
> Kevin
> 
> 
> 
> 
> > -----Original Message-----
> > From: arin-ppml-bounces at arin.net [mailto:arin-ppml-bounces at arin.net] On
> > Behalf Of Owen DeLong
> > Sent: Wednesday, November 23, 2011 12:54 PM
> > To: Mike Burns
> > Cc: arin-ppml at arin.net; Mike Burns
> > Subject: Re: [arin-ppml] ARIN-prop-151 Limiting needs requirements for
> > IPv4transfers
> >
> >
> > On Nov 23, 2011, at 10:12 AM, Mike Burns wrote:
> >
> > > Hi Owen, responses inline.
> > >
> > >
> > >
> > >>> Second, it caps needs-free transfers at the size of a /12, which
> Owen
> > helpfully points out is just 1/4096th of unicast space. With a cap like
> > this in place, cornering the market is not feasible and total potential
> > profits are limited, making this kind of speculation unsound because the
> > high risk of speculating in this market can not be outweighed by
> oversized
> > returns.
> > >
> > >> Capping needs-free transfers at a /12 is absurd. That's virtually
> > equivalent to no cap whatsoever. If you want me to consider the needs-
> free
> > cap meaningful, then, move it to some more rational place like a /22. At
> > /22, I'd still think this was a bad idea, but significantly less
> damaging
> > than the current proposal would be.
> > >
> > > I am open to reviewing that number, I don't really think there will be
> > many large transfers to those who cannot justify them.  The number was
> > initially suggested by David Farmer and I don't think it absurd, rather
> a
> > good middle which would limit market cornering while allowing most
> > transfers to flow smoothly into Whois.
> > >
> >
> > I think it's useless at best and I think that large transfers without
> > justification to speculators are the inevitable conclusion of this
> policy.
> > A /12 is an incredible number of addresses. It's more than 1/4000th of
> the
> > total unicast address space. ARIN has less than 1% of members that
> qualify
> > for such vast resource holdings through the current justification
> process.
> > That's hardly a middle... It's the far extreme top.
> >
> > >>
> > >>> And Prop-151 seeks to recognize what Owen and others fear, that
> people
> > will see monetary value in IPv4 addresses, and will act accordingly.
> That
> > means in addition to greed, IPv4 address value will naturally cause
> people
> > to use this valuable resource efficiently, to an extent that ARIN
> > justification policies simply can not match.  My own opinion, based on
> the
> > size of allocated but unrouted address space (less the smidgen used only
> > internally) is that there is a great deal of efficiency still to be
> wrung
> > out of the pool of prior ARIN allocations, not to mention the pool of
> > legacy space. Whether or not you agree, it is axiomatic that valuable
> > assets are used more efficiently than free ones.
> > >
> > >> Do not attribute your ill-conceived conclusions to me. Nowhere have I
> > stated that value of IP addresses would, in fact, cause them to be used
> > efficiently. In fact, I have argued quite the opposite that value
> without
> > policy will lead to speculation and artificial pricing not dissimilar
> from
> > the Tulip Mania of the 1600s. You continue to use this fallacy of
> > "allocated but unrouted" as if route announcements visible to your
> > perspective are somehow an accurate measure of utilization. They are
> not.
> > There are many addresses in perfectly legitimate use that are not
> > advertised in routing tables visible to you. I won't disagree that more
> > efficiency could be obtained from the pool of prior ARIN allocations,
> but,
> > I'm not convinced that it is as big a gain as you seem to think. As to
> > your claim that it is axiomatic that valuable assets are used more
> > efficiently than free ones, I am unconvinced. Unless you define
> efficiency
> > solely in terms of the assets landing in the hands of the highest bidder
> > and not based on them serving the highest societal purpose, your axiom
> can
> > be shown to break down many times throughout history.
> > >
> > > You misunderstand what I said. What I meant was that  you fear the
> > monetary value of IPv4 addresses will lead to hoarding and speculation,
> > you have clearly stated that before.  My point was that if you recognize
> > that a monetary value on IPv4 addresses could drive behaviors like
> > hoarding and speculation, you must also agree that it will drive
> behaviors
> > like utilizing them more efficiently and selling un- or under-used
> space.
> > Absent any real data, it's only a matter of opinion as to what the
> > difference between allocated and advertised space represents. In my
> > opinion it represents waste for the most part, as the 10/8 block is
> > available for private use. As to your last point, addresses will land in
> > the hands of the highest bidder no matter what we do.
> > >
> >
> > I may not have properly understood your meaning initially, but, I did
> not
> > misunderstand what you said.
> >
> > I wouldn't say that I "fear" the monetary value of IPv4 addresses, but,
> > rather that I recognize that absent appropriate policy to the contrary,
> > these things will happen. They have historically happened in every
> > unregulated market of scarce resources, so, they are likely inevitable
> > here absent contrary regulation. As such, I believe it is our duty to
> > impose that regulation to prevent these negative consequences.
> >
> > Why does the fact that monetary value will drive hoarding and
> speculation
> > (horribly inefficient uses of IP addresses) have any automatic
> > relationship to a belief that it will drive efficiency?
> >
> > Finally, some of us have some real data on how at least some of those
> > addresses you don't see in routing tables are being utilized and I can
> > tell you at least this much about some of them:
> >
> > 1. 10/8 doesn't work in all applications. In some cases, private
> networks
> > talk to other networks even though they don't talk directly to the
> > internet. There is the potential that those networks need addresses
> which
> > are unique across the other internetworks that they do talk to, some of
> > which may be connected to the global internet. As such, globally unique
> > unicast addresses may be completely justified and necessary in those
> > applications.
> > 2. Many of those networks are as efficiently utilized (80+%) as any
> policy
> > requirement in the modern ARIN structure.
> >
> > Just because it isn't in a routing table you can see doesn't mean it
> isn't
> > in a routing table or that it is wasteful. Continuing to pretend that it
> > does will not make it so.
> >
> > I would much rather see us use policy that leads to results such as how
> > droughts have been handled in California (current policy text) rather
> than
> > policy that leads to events like Tulip Mania and/or Enron. Proposal 151
> > represents a huge step in the direction towards Enron/Tulip Mania for
> the
> > IPv4 address market.
> >
> > >
> > >>> By allowing all transfers to be needs-free, we remove an artificial
> > and un-needed market restraint whose existence will only serve to drive
> > transfers off the books, with Whois accuracy diminished.
> > >>
> > >
> > >> That market restraint is, IMHO, neither artificial nor unnecessary,
> > but, rather very real and vital to preventing speculative hoarding of
> > addresses placing the interests of greed over the efficient utilization
> of
> > address resources. That is why I believe the entire premise of 151 is so
> > completely flawed.
> > >
> > > Back to speculative  hoarding even though the hoarder is faced with an
> > uncertain transition time, uncertain market conditions, uncertain
> > governance, and a hard cap of controlling a maximum of .024% of total
> > space. And of course none has ever been shown to exist, yet you risk
> Whois
> > accuracy to maintain unnecessary roadblocks to natural transactions.
> > >
> >
> > Hoarders are always faced with uncertainties such as the ones you
> > describe. As to the hard cap, that's not a meaningful analysis of the
> > situation. First, let's look at the total likely market of available
> > addresses. The most generous estimate I've seen says that as many as 14
> > /8s might come available through market processes. That's only 6.3% of
> > total address space to begin with. Of that, a /12 represents 1.7% of the
> > total market, assuming the market reaches that most optimistic level of
> > supply. Given that, the mere creation of 24 organizations would be more
> > than enough to hoard enough resources to command 35%+ of the total
> market
> > under proposed policy.
> >
> > >
> > >>> I simply remind you of where this proposal started. It was seeking
> to
> > answer the question "What would have happened in the MS/Nortel deal had
> > not MS justified the transfer to ARIN?"
> > >
> > >> The transfer would not have been recognized in the ARIN database
> absent
> > a court order to the contrary. No such court order has ever been granted
> > and I have no reason to believe that one necessarily would have been
> > granted in this case.
> > >
> > > Absolutely correct, ARIN would not have updated Whois, but Microsoft
> > would own the address rights to blocks listed in Whois as belonging to
> > ancient and defunct prior acquisitions of the defunct Nortel. This is
> not
> > a desirable outcome, IMHO.
> > >
> >
> > What rights? What are these alleged address rights? What do those rights
> > mean?
> >
> > You have no right to tell me that I can't use a number on my network no
> > matter what the ARIN database or anyone else says.
> > You have no right to tell an ISP that you are not paying to route
> packets
> > with those numbers in the destination field that they
> > must route those packets to you.
> > Address rights are, for the most part, a myth for all practical
> purposes.
> >
> > What you have, instead, is a set of ISPs and others that generally
> > cooperate based on a centralized registry of what the
> > community has chosen to recognize as authoritative information on who
> > should be allowed to use particular numbers
> > for a particular purpose. Take away that agreement and the whole system
> > devolves into chaos. The court cannot force
> > changes to that agreement, at least not easily, because it is generally
> > out of scope for the court to make rulings forcing
> > entities that are not parties to a case to take actions in support of
> the
> > case.
> >
> > Let's suppose in the hypothetical situation that you describe, ARIN
> > recognized that the previous address holders were
> > obviously defunct (through bankruptcy) and returned the addresses to the
> > ARIN free pool. Since we're going hypothetical
> > here, instead of using a company name for the address usurper, let's
> call
> > them Brand G.
> >
> > ARIN now issue some of the addresses to Brand L, but, at the time
> informs
> > Brand L that they might face issues with
> > Brand G as a result and explains the history. Brand L is sufficiently
> > desperate for IP addresses that they choose to
> > accept the risk.
> >
> > Brand L takes their whois registration and goes to their ISP and starts
> > advertising these routes. ISP gets a call
> > from Brand G, whom ISP has no business relationship with. ISP can do one
> > of two things:
> >
> > 1. Tell Brand G. to take it up with ARIN, they're not registered in
> > whois.
> > 2. Stop advertising the routes for Brand L.
> >
> > My guess is that it's a bit of a toss up here and depends largely on the
> > relative size and fear factors of
> > pissing off Brand G. vs. Brand L. as to which way said ISP is likely to
> > go.
> >
> > In the case where Brand G gets told to go away, a lawsuit likely ensues
> > where Brand G names ARIN,
> > Brand L, and the ISP as defendants.
> >
> > In the case where Brand L gets screwed, a lawsuit likely ensues where
> > Brand G and the ISP get
> > named as defendants with Brand L as plaintiff.
> >
> > What would happen in either lawsuit is virtually anyone's guess. I think
> > that the probability of Brand G
> > getting injunctive relief protecting their rights in an unrecognized and
> > unregistered transfer may
> > be pretty slim in most possible cases. In the case where the transfer
> was
> > done by the bankruptcy
> > court, they might stand a somewhat better chance, but, even there, it's
> > hard to see where ARIN,
> > the ISP, or Brand L would have any obligation not to engage in
> conflicting
> > use of the addresses
> > under any existing statute.
> >
> > That's the fundamental thing most people seem to miss about the
> internet.
> > It all depends on everyone
> > cooperating about these things. Take out cooperation and the system
> > rapidly devolves into chaos.
> > Nothing takes out cooperation like greed. Hence my desire to keep greed
> as
> > much removed from
> > address policy as possible.
> >
> > Frankly, I think that the market will likely destroy the IPv4 operating
> > environment and lead to its
> > rapid disintegration. I think it may be one of the most traumatic and
> one
> > of the biggest motivators
> > for IPv6 deployment. However, in spite of the fact that I think an
> > unregulated market has great
> > potential to advance the interests of IPv6, I think the damage it would
> do
> > is too great and should
> > be mitigated as much as possible.
> >
> > Again, these thoughts are entirely my own and I alone am responsible for
> > them. I am not a lawyer
> > and nothing above should be construed as legal advice or a legal
> opinion.
> > It is just my observations
> > based on what I have seen and read.
> >
> > Owen
> >
> > _______________________________________________
> > PPML
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