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

[Owen DeLong]

On Feb 17, 2012, at 1:59 PM, Astrodog wrote:

> 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.
> 

At $10+/address, if you're willing to give up even a /24, it pretty well
covers any likely administrative overhead, so, I have trouble believing
the increasing COGS argument.

>> 
>> 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.

STLS provides an ability for organizations to get ARIN pre-approved for block
sizes, so, this statement is not true. Sellers can choose to work with buyers
that have pre-approval for the size they need.

> 
>> 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.
> 

Agreed, but, I felt the list would be incomplete without this option.

>> 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.

Again, the option here is to work with pre-approved buyers and that is
one of the benefits provided by STLS.

Owen