[arin-ppml] ARIN-prop-165 Eliminate Needs-Based Justification

[Astrodog]

On Fri, Feb 17, 2012 at 3:30 PM, Owen DeLong <owen at delong.com> wrote:
> Why in such a circumstance would the seller not choose one of these alternatives:
>
> 1.      Fragment the space, sell the /20 to the original buyer and move on to looking for
>        additional buyers.

Any sale will have administrative overhead. The value realized from a
/20 may not cover the costs incurred to get it sold. As the space is
fragmented, it requires more and more administrative overhead to sell.
This makes attempting to sell the space less attractive in the first
place, given the risk that the transfer may not be approved.

>
> 2.      Find a buyer that does have legitimate need for a /16 (If there's value to not carving it up,
>        isn't that defined in terms of market demand for the space as a whole?)

The seller is not ARIN. Presumably in the hypothetical, they believed
that their original buyer had a legitimate need and ARIN disagreed.
The seller has no way to be sure of which way such a determination
would go, and incurs all of the administrative cost of attempting a
sale again, while still having the risk that the transfer would be
rejected.

> 3.      Return the /16 to ARIN so that it can be used elsewhere.

While I believe that this is the "right" thing to do in this case, it
is unlikely that most organizations would choose this path. It offers
no return, and still has administrative overhead, both in returning
the space, and in ensuring that they really do not use any of the
space. It also precludes them from attempting to use the space in the
future, and does not offer them any direct return.

> Sorry, but, I just don't buy your argument that the seller would rather keep the /16 in inventory making no money than selling it in pieces or selling it to a different buyer that does have need for the full amount. It's illogical in the extreme.

Because the sale requires spending money to work out terms and
potentially, significant quantities of time to locate the buyer and
wait for them to go through the need test, there is a point at which
selling the addresses in pieces is no longer economical and the seller
is left with oddly fragmented space based on which transfers were
approved by ARIN.

--- Harrison