[arin-ppml] ARIN-prop-165 Eliminate Needs-Based Justification on8.3 Specified Transfers

[Astrodog]

On Sun, Feb 19, 2012 at 5:59 PM, George Bonser <gbonser at seven.com> wrote:
>> It's time to inculcate a free transfer market by removing ARIN
>> transactional impediments like needs requirements, when those
>> requirements were designed solely to foster conservative stewardship of
>> free pool addresses, not already allocated addresses, on a transfer
>> market where the addresses have a monetary value.
>
> They have monetary value only to the extent that they may be transferred.  One must exist to create the other.  These are not property.  Resource allocations are a finite global resource and people have been designated a certain amount of that resource according to need.  I believe it is also the desire that unused resources be returned for re-allocation or transferred also according to need.  While I am an ardent support of free markets, this is one of the exceptional cases where a free market in the resource would do harm to a larger free market (operations on the internet in general).  It would allow an exceptionally deep-pocketed individual or organization to hoard address space and drive up market values or engage in malicious depriving of the market of address resources.

Unfortunately, regardless of the policies involved, IP addresses *are*
an asset for those who already hold them. Even if, hypothetically,
ARIN provided no mechanism to transfer address space from one
organization to another, it is easy enough for one organization to
route some portion of it's IP space to another, and at some point,
financial incentives would exist to make this sort of arraingement. A
malicious actor can operate along these lines, regardless of ARIN's
transfer policy. In as far as driving up the price of address space
goes, through speculation or hording, this can only occur while the
entity in question is actively purchasing address space. Once they
stop, the prices return to whatever the organizations trading the
space agree to. Further, as IPv6 deployment moves forward, IPv4
address lose value, meaning that such an actor would not be inclined
to hold the space for any length of time, as driving up prices pushes
deployments to IPv6, and further weakens demand for the asset they're
holding.

>
> Unlike gold or any other commodity, these addresses can not be added to by mining or improvements in production, etc.  The pie is of a fixed size and can not change in size.  This is at the same time the demands on those resources are increasing.

Commodities have generally predictable production rates. Over the near
term, demand for IPv4 space is increasing, however the long term trend
will be IPv6 migration, as the price of IPv4 space becomes
prohibitive. As move organizations migrate to IPv6, the demand for
IPv4 space becomes limited to legacy applications where IPv6 is not
feasable.

>
> This is a very short-sighted notion if looked at in the context of stewardship of the overall internet.  One might make a short term killing on IP address space yet do a huge amount of harm to the Internet as a whole.
>

I do not see how short-term speculation can do a huge amount of harm
to the internet as a whole. Exhaustion is already a problem that
organizations are facing. The difference with needs-based allocation
is that as things stand today, ARIN determines how much address space
an organization is approved for, instead of the organization itself.
This promotes organizations overestimating need in discussions with
ARIN, and attempting to obtain the largest possible allocation.

>> Fear of bogeymen like speculators and market-cornerers may be mitigated
>> by the knowledge that huge blocks are available, and huge dollar
>> amounts would be required to corner this market.
>
> And there are plenty of people around with huge piles of idle cash.  The Warren Buffets of the world come to mind but even state actors could get into the fun.  A government could, through innumerable third parties, accumulate huge amounts of address space if the desire is to simply do harm to the economies that are more reliant on such space than theirs.

This is the same argument as before with malicious actors. ARIN's
policies do not prohibit this behavior anyway.

>
>> Speculators. Let's wait until we at least have a whiff of their
>> existence before we strangle a market still in it's cradle
>
> This is one place where a "free market" is not desirable, in my opinion.
>

The problem is that it already exists. There's just a layer of
paperwork on top of it now, that rewards who can play "ARIN
Policy"-opoly. Instead of resources going to who is willing to pay the
most for them, they will go to who has the best I.T. Legal department.
I don't see how this is more "fair" than the existing system, given
that organizations with long-standing interactions will be much better
at this than newcomers.

--- Harrison