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

Mike Burns mike at nationwideinc.com
Wed Nov 23 14:12:29 EST 2011

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 


-----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 

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.


> -----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
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