[arin-ppml] ARIN-prop-151 Limiting needs requirements for IPv4transfers

Mike Burns mike at nationwideinc.com
Wed Nov 23 13:12:29 EST 2011

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.

>> 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.

>> 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 

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.

>> 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.



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