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

[Astrodog]

On Fri, Feb 17, 2012 at 7:31 PM, Owen DeLong <owen at delong.com> wrote:
>
> 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.
>

Just looking at the legal side of things, at many organizations,
they'd be looking at spending a few thousand dollars to work out a
sale. Plus whatever time is involved with the rest of their staff to
make it happen. (Making sure they really don't use any of the space,
finding someone to sell it to, etc, etc.)

>>>
>>> 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.

STLS does appear to address some of the concerns with buyers. I do
have a couple of concerns with how it works, though. Primarily that an
STLS approval does not appear to expire and that any transfer to an
organization on STLS regardless of size will require another
assessment. That's a whole other discussion, though, so, for the
purposes of this one, lets stick with STLS addresses a big part of my
concern.

>
>>
>>> 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.
>

Given how well this option actually solves  the problem, it's
unfortunate that I'm guessing almost no one does it.

>>> 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
>

STLS, as implemented, does address some of my concerns with buyers.

--- Harrison