[arin-ppml] ARIN Fact Check: /8 For Sale

[Jim Fleming]

ARIN Fact Check: /8 For Sale

Regarding:
http://blog.internetgovernance.org/
A whole /8 for sale
by Milton Mueller on Tue 14 Feb 2012 06:15 PM EST

ARIN POLICY QUESTION:

Is the following exchange verified to originate from the ARIN CEO John Curran ?

Governance of Internet number resources...
by John Curran on Tue 14 Feb 2012 08:37 PM EST |  Profile |  Permanent Link
Milton -

I was surprised that your article did not mention the more interesting
Internet governance aspects of the situation.

As you are aware, the Regional Internet Registries (RIRs) manage
Internet number resources based on policies developed in each region.
These policies are developed by the community in each region using
open and transparent processes. The participants in the policy
development efforts are predominantly service providers, but
individual end-users, governments, educational, and civil society
organizations are also common participants.

In short, the Regional Internet number registry system works well, and
is recognized by ICANN as a successful mechanism for the overall
technical coordination of Internet number resources.

The policies of the Internet number registry system change to reflect
the requirements of the community, and this includes adoption in many
regions of policies which support limited market-based mechanisms for
encouraging more efficient address utilization. These policies balance
a number of additional considerations, including both communities need
to reduce routing table impact from address deaggregation as well as
encouragement of IPv6 as the long-term solution to IPv4 runout.

Your article implies that ARIN's policies "obsolete", but I will note
these policies have been frequently updated by the community to
provide for reasonable address availability while still managing the
technical aspects of keeping the Internet running.

ARIN operates the registry according to the community developed
policy, and this includes all IP address blocks in the region
including "legacy blocks." We follow these policies when approving
transfers of address space because it respects the bottom-up policy
development that has occurred and that is the hallmark of good
Internet governance.

Are you suggesting the ARIN disregard the policies set by the
community when processing requests for transfers? How does that
reconcile with fair and open Internet governance? As ARIN was formed
"to give the users of IP numbers (mostly Internet service providers,
corporations and other large institutions) a voice in the policies by
which they are managed and allocated within the North American
region", I am uncertain how we can now ignore those policies, and am
curious why you are now advocating that doing so makes for good
Internet governance.

In http://blog.internetgovernance.org/blog/_archives/2010/4/20/4509826.html,
you wrote: "To sum up, we've had pretty open, focused and (with the
one exception noted) fair discussions here. For those with the
technical background to understand the Internet governance
implications of RIR decisions and policies, I'd encourage
participation and membership in ARIN. "

For those who heeded your call and have been participating, do you now
believe that their input (and the rest of the community's) should
simply be set aside to allow transfers outside of the system for
maximum financial gain?

Clarification on this point would be helpful.

Thank you,
/John

John Curran
President and CEO
ARIN





Reply
Re: Governance of Internet number resources...
by Milton Mueller on Wed 15 Feb 2012 08:50 PM EST |  Profile |  Permanent Link
Hello, John
You ask, "Are you suggesting the ARIN disregard the policies set by
the community when processing requests for transfers?" My answer: No.
I am, however, noting (as an objective fact) that ARIN policies do not
apply to entities that have not signed contracts with ARIN. ARIN
staff, and many of the people active within it, seem to have trouble
accepting that fact.
I would also note that ARIN has been warned repeatedly by people like
me that it should abandon or drastically liberalize needs assessments
for transfers because the nature of "need" for addresses (as any
economist will tell you) depends on the buyers' time horizons, future
prospects and other factors that cannot be "demonstrated" in a needs
assessment. What matters is how much the bidder values addresses, not
some arbitrary technical assessment. ARIN policies which set a 3 month
time horizon for proving need are simply going to drive anyone who can
legally avoid it outside of ARIN's transfer system. ARIN is
beleaguered by a small number of anti-market ideologues who never
wanted to allow transfers to begin with and, failing in their quest to
prevent them completely, have chosen to hobble 8.3 transfers as much
as possible. Therefore, transfers "outside the system" will in fact
take place because they are in the interests of both parties and there
is nothing to legally prevent them.
Reply
Re: Re: Governance of Internet number resources...
by John Curran on Thu 16 Feb 2012 09:29 AM EST |  Profile |  Permanent Link
Milton -

You should work on sharing your views on what makes for appropriate
transfer policies within the policy development process; all are
welcome to participate.

Regarding transfers "outside the system", I will note that ARIN
operates the registry for the community according to the policies that
they set. There is no obligation for ARIN to update the registry
contrary to these policies and doing so would be contrary to our very
reason for existence.

The rights that various parties have to address block registrations is
governed by policy set by the community, and we update those
registrations accordingly. If someone attempts to transfer the address
block in the registry, that requires putting in a request that meets
those policies.

ARIN has never had to make any change to the registry contrary to the
community's wishes. These policies fully govern updates to the
registry, and transfers of these registrations does not otherwise
occur. I imagine that there are many things that folks could claim to
sell in this world, but they do not relate to the rights that parties
have to address blocks in the registry unless they comply with the
community policy for the registry.

Best wishes,
/John

John Curran
President and CEO
ARIN


Reply
Re: A whole /8 for sale
by Charles Lee on Fri 17 Feb 2012 04:34 PM EST |  Profile |  Permanent Link
Dear Professor Mueller:

An open marketplace for the legitimate and legal sale of distributed
but unused “Legacy” IPv4 number blocks is good for access service
providers, content platforms and users, and it as well solves the
acute problems of a “hard” landing while the Internet transitions to
IPv6. This marketplace should be welcomed by everyone, including
ARIN’s Board of Trustees, members of its advisory council and members.
This marketplace can, and does, provide an essential service to enable
the continued growth of the Internet.

To that end, we can again confirm that one of Addrex Inc.’s clients is
offering for sale a “Class A” or “/8” number block.

Your article refers to “ARIN’s obsolete ‘needs assessment’ policies,”
which is a characterization that Mr. Curran, CEO of ARIN, objects to
on the basis of his belief that his members, who have voted for these
needs-basis “policies”, are reacting to the overall direction that the
“community” deems appropriate. In reality, it is not the “overall”
community but the controlling members of ARIN who are dictating
policy. This setting of rules for a marketplace, under the guise of
“governance”, is simply the buyers colluding to maintain access to low
price assets while the sellers, whom we represent, are not members and
have zero contractual relationship with ARIN, are financially harmed
due to this anti-competitive behavior.

Addrex’s position is that the marketplace should determine who has the
greatest need, instead of ARIN, or any other third party, picking the
winners and losers. We refer to your July and November, 2008 articles
found in the “newsroom” on our website . Such a marketplace offers a
pragmatic solution, global in scale, with legitimate participants,
unhampered by the bureaucratic disputes and ever-changing policies of
the current five RIRs. (“Policies”, we might add, voted upon by a
minority of interested “members” in this completely voluntary
association run by and for these members to the exclusion of
non-members. The concept of “need” becomes “relative need” rather than
some engineering-based calculation of absolute need, to use the
Professor’s own words.)

You, again, unfortunately are correct when you reference ARIN’s veiled
threats. One such threat is that ARIN might retaliate, against any of
their members who participate in the marketplace, by “reclaiming”
other number blocks which were distributed under a separate contract
to that member organization by ARIN. This threat effectively seeks to
deny the ARIN membership organizations the opportunity to compete in a
fair market. The consequence of such a threat is that it manipulates
the marketplace, to the detriment of sellers, by chilling potential
buyers, and therefore limiting competition, and artificially lowers
the price a seller might receive. Another threat is that ARIN might
discriminate against marketplace participants by refusing to update
the registry to reflect the newly-acquired number block(s). Mr.
Curran’s latest retort states that “There is no obligation for ARIN to
update the registry…”. This, too, limits competition and artificially
lowers the price a seller might receive. Both of these threats are
purportedly based on ARIN’s policy positions and/or contract
provisions. The entire concept that ARIN and its controlling members
can openly conspire in such a manner is rather surprising.

Your article, we respectfully suggest, however, is incorrect when you
state that “…such a trade would erode ARIN’s control over the IPv4
address space….” In point of fact, neither ARIN nor any of the other
regional Internet IP number registries (RIRs) has any jurisdiction or
control over Legacy IPv4 numbers given out by the federal government
or its contractors (of which ARIN is not and has never been one)
unless, of course, that Legacy number block holder has been convinced
to sign a contract with ARIN which then gives ARIN contractual
authority over that specific number block. ARIN is a Virginia,
non-stock (i.e., no stockholders) corporation, which later obtained
exemption from federal taxation, just like any other chamber of
commerce or business league. The concept of “jurisdiction” no more
applies to ARIN than your local chamber of commerce’s “authority” over
you. ARIN has no contract, written or otherwise, with the federal
government, the federal government’s contractor (ICANN), or, for that
matter, with the seller of the Legacy IPv4 number blocks. “Apparent
authority,” based on repeated self-declarations of authority is not
real authority, no matter how many times ARIN says it. In fact, recall
that the IANA, a function under ICANN’s contract with the federal
government (U.S. Department of Commerce), is the registry of record
for the Class A Legacy blocks. We would encourage your readers to
review the recent article published in the AIPLA by Ernesto Rubi, Esq.
which also is found in our newsroom, for more information on this
topic.

Mr. Curran, truly a master at not answering a direct question, has
continued to avoid a concrete answer to the question posed by the
Professor: Does ARIN have authority over Legacy IPv4 numbers and their
owners? Mr. Curran simply hides behind “buttoms-up policies”
(mentioned 15 times in his response to the Professor) and a
bewildering statement that “ARIN operates the registry according to
the community developed policy and this includes all IP address blocks
in the region including ‘legacy blocks’.” We have no idea what that
means and, perhaps, neither does anyone else, but it certainly doesn’t
answer the direct question. ARIN’s actual position, when it is sued,
is just the opposite. In sworn affidavits in federal district court by
Mr. Ray Plzak, then President and CEO of ARIN, he clearly states that:
“Like other ‘legacy’ address holder’s issued resources before ARIN
began, ARIN has never had an agreement with {the Legacy IPv4 owner}
that would give it authority over those specific resources.” ARIN
describes these “resources” (i.e. Legacy IPv4 number blocks) as “IP
Resources Not Issued Or Controlled By ARIN.” We will not speculate as
to why there is apparent reluctance to publically acknowledge and
reiterate what has already been sworn to in a federal court of law.

We believe and, through your published articles well before the
founding of Addrex in 2009, it would appear that you too believe that
this marketplace is good for the Internet. It will, in an efficient
and effective manner, enable the redistribution of needed IPv4 number
blocks. By unleashing the economic driving forces of supply and demand
from the artificial constraints of a third-party “needs assessment”,
the marketplace will enable underutilized number blocks to be
redistributed to entities which will put those number blocks into
actual use. Professor Mueller, you are far more persuasive and
articulate in the articles cited above and found on our website. We
encourage your readers to take the time to refresh their memories by
rereading those articles, especially in light of the clairvoyant
nature of your predictions. “Right On” comes to mind. This marketplace
will help the Internet “community” grow and prosper. Many in the
“community” mistakenly thought that the commercialization of Internet
transport services, and the monetization of domain name registrations,
would end the Internet. Instead, it created billions of dollars in
value, technology employment and a world connected, even in
revolutions, by a suite of Internet protocols, and ushered in an era
of broader Internet adoption and utility. The marketplace in Legacy
IPv4 number blocks will, despite the fears of a vocal few, help to
bridge the technology gap in timing, global distribution, and the
incompatibility with IPv6, while IPv6 gains favor and broader
adoption.

Finally, allow me to observe that this marketplace operates in
parallel with ARIN’s distribution of its contract-based IPv4 number
blocks. It is a marketplace which complements ARIN’s role and its
sworn objectives of competition and portability found within its
Articles of Incorporation. The marketplace is not, and does not seek
to be, a replacement for ARIN. It is a means to help achieve our
shared goals of continued Internet growth, stability and security.

Respectfully,

Charles Lee
President
Addrex, Inc.
Reply
Re: Re: A whole /8 for sale
by John Curran on Tue 21 Feb 2012 07:12 PM EST |  Profile |  Permanent Link
Several of Mr. Lee's remarks are well considered, particularly because
of the overlap in his positions and that of the ARIN community.

For example, it is recognized that a marketplace for IP address blocks
will enable underutilized number blocks to be redistributed to
entities which will put those number blocks into actual use, and the
ARIN community has developed transfer policies for this very purpose.
Another area of agreement is the purported goals stated by Mr. Lee of
Internet growth, stability and security - these are definitely
important goals held the ARIN community.

However, there are differences in perspective that are too large to be
done justice in a brief response, but I will outline some points for
reader's consideration:

- ARIN was specifically formed to take over these registration
services and (per NSF) "give the users of IP numbers (mostly Internet
service providers, corporations and other large institutions) a voice
in the policies by which they are managed and allocated within the
North American region." This was a conscious decision to change from
USG directed operations to multi-stakeholder community-led
self-governance (just as was done the ICANN formation which followed
several years later)

- How IP address blocks are maintained are of critical importance to
the entire Internet community, and has implications for global
routing, law enforcement, privacy, etc. ARIN provides a successful
forum for discussion and resolution of these issues in an open and
transparent manner. It is uncertain how these issues would be
addressed if registry were not operated according to community policy.

- There are ongoing public discussions regarding what transfer
policies are most appropriate for the marketplace. Most recently, this
has resulted in changes to policy including revising the
needs-assessment test and simplifying how address blocks may be
subdivided. These policies do have implications to the service
provider community, and we encourage discussion of any other changes
that will improve the marketplace.

ARIN operates as part of the Internet number registry system as
coordinated by ICANN, and while some of Mr. Lee's goals may be
achievable within that system, some clearly lie outside the present
structure. It remains an open Internet governance question as to what
process should be used in considering large scale structural changes
to the system itself.

Best,
/John

John Curran
President and CEO
ARIN
Reply
Does ARIN have authority over Legacy IPv4 numbers and their owners...
by _McTim on Fri 24 Feb 2012 04:56 AM EST |  Profile |  Permanent Link
Is perhaps the wrong question.

The more central question (to me) is, "Under what conditions was the
/8 allocated" In other words, was the block delegated by IANA to your
customer with any provisos about it's usage and what should happen if
the block was no longer needed?

Do you have a (redacted of course) copy of the document that granted
the use of the /8 to your customer that you can post online?

I know it is asking a lot in terms of transparency, but Milton is
correct when he talks about "the "exceptional" status of IP address
governance" in that IP address distribution is the most open,
transparent and bottom-up of all Internet governance processes. I
think the "marketplace" should uphold the same ideals.



Reply
Re: A whole /8 for sale
by E.W. on Sun 19 Feb 2012 11:58 AM EST |  Profile |  Permanent Link
Mr. Curran,

You’re saying that the Arin community is setup to create public
policies regarding the transfer of IP address space, and I see that.
In fact, that community welcomes all to participate and share their
thoughts and have a voice in the policy, and I see that too.

Now, Dr. Mueller seems to be saying that some of that IP address space
was given out before the Arin community even existed and the owners of
that IP space aren’t beholden to the well wishes of the community
regarding what they can do with their IP space, and I see that too.

Sometimes an analogy using not so technical comparisons can bring a
point to light and may help technical people like yourselves better
understand what each is trying to say so I’ll offer one here. Suppose
you’re a farmer with a hundred acres of good land that’s been in your
family for years, and that you’ve taken pride in cultivating crops on
that land, bringing them to market, and ensuring a livelihood for your
family while helping the people around you who buy your produce.

Now suppose, over the years, people start moving in around you and
what used to be open and free country becomes more crowded. The people
form a community. The community incorporates into a town. The town
forms a government – a well-meaning, democratic government where
everyone in it can come to town meetings, voice their opinions, and
vote on the issues of the day.

Because free land is starting to become scarce, the democratic
community passes a law that no one can just squat on free land and
grow their crops. The remaining free land is put under the stewardship
of the town, and if someone wants farmland, they have to apply for it
at Town Hall, and a Board of Commissioners will decide who needs the
land the most and how much each applicant can get. The applicant has
to sign a Community Land Agreement that says if they later want to
sell off some of their land, they have to get the Board’s permission
and the Board has to approve the Buyer to make sure the Buyer really
needs it.

Now, one day the farmer decides he’d like to sell his land and retire.
Or maybe he decides he just wants to give it away to his son who’s
learned the ways of farming under his father. Someone on the Board
gets wind of it and says, “No. You can’t do that. Only the Board
decides how much land anyone can get in a land transfer according to
our public policies.”

The farmer replies, “This is my land. I own it. I can do with it as I please.”

The Board member answers, “We appreciate all the work you’ve put into
the land, which helped make this area so prosperous. In fact, you’re a
part of our community too. Why don’t you come to the next town meeting
and have your voice heard by others in the community? Maybe you can
convince them to change public policy so you can sell your land to
whomever you like.”

Now the farmer isn’t a lawyer or a politician, but he has pretty good
horse sense about these kinds of things. So his answer to the Board
member is pretty clear. “You’ve invited me to participate in your
meeting, and maybe I’ll do that one day if I have something to say
about how the town is dividing up the land that it owns. But I own my
land and what I do with it is up to me. It’s not up to a politician or
a community, even if I’m part of the community.”

“Fine”, says the Board member. “It’s true it’s your land and isn’t
subject to the Community Land Agreement that others have signed and
you can do with your land whatever you please. But if you sell it or
give it to your son, we’re not going to recognize the sale in the
County Register. And you know a lot of people look at that Register to
recognize land ownership.”

It’s about then, I think, that the farmer decides he’s had enough of
community organizers and gets himself a good property attorney.

And that’s where we seem to be now, if you get my analogy.

- E.W.
Reply
Created and issued for a purpose...
by John Curran on Tue 21 Feb 2012 05:24 PM EST |  Profile |  Permanent Link
E.W -

An interesting analogy, but as with many analogies, somewhat of an
imperfect fit to the reality of the situation.

The point omitted is that the original "land" (to keep with your
analogy) was created by the Internet community for a particular
purpose, and was issued to parties by various predecessor registries
so that the parties could participate in the Internet and/or use of
Internet technologies. There were always rules and policies for how
such address space should be used, and these policies which were
refined by community discussion over the years.

Your farmer was brought to the new land by ship with the plan of
building a community, and it was agreed upon arrival that they should
each settle on some land to start that process.

The fact is that your farmer has forgotten how he got the land in the
first place doesn't relieve him of the obligations.

Best wishes,
/John

John Curran
President and CEO
ARIN
Reply
Re: Created and issued for a purpose...
by Ernesto Rubi on Wed 22 Feb 2012 10:37 AM EST |  Profile |  Permanent Link
What continues to trouble me is this concept of "community" - akin to
the incantations of the "proletariat" that many in the past have used
to quash free will, free markets and progress.

The first issue - which is an obvious one - is that the entire
proposition/argument rests on the assumption that "the community can
do no wrong."

The second is that ARIN's argument that "our authority comes from the
community" is devoid of any basis in reality. ARIN's election process
is open only to ARIN members - not to members of the Internet
community (broadly defined as all those folks who use the Internet,
have an interest in the Internet functions, or are affected by the
Internet). In fact, it's not clear how many ARIN members actually vote
in the ARIN election process. If participation is less than 5% then
how can ARIN claim to represent the "community", much less its own
members? And who counts the votes? ARIN? That's process is obviously
transparent right? =)

I think using your logic you would agree that Raul Castro and Hugo
Chavez are elected by their 'community' every 5 years...so...they're
not despots, thugs or ruthless dictators but rather - they are duly
'elected' in an 'open' process, in and they represent their
wonderful-yet-starved community - the "ploretariat."

Reply
open and transparent policy development
by John Curran on Wed 22 Feb 2012 01:31 PM EST |  Profile |  Permanent Link
Ernesto -

The community is anyone who has an interest in Internet number
resource policies. Anyone may participate, regardless of whether you
have a number number resources, are a service provider, or are a
member of ARIN.
Feel free to get involved - see
https://www.arin.net/participate/how_to_participate.html for details.

Regarding whether the community can do wrong, what we have established
a process by which everyone is equally able to participate by
expressing a position and its basis.
Policy proposals are considered in an open and transparent manner, and
go through several stages of refinement before being adopted as new
policy. We do utilize an elected advisory council to assist in policy
development, but provide a low-threshold online petition as a check
and balance on their actions.

This process results in policy which has been discussed extensively
before adoption, has had any concerns raised and considered, and still
enjoys support of the community.

To the extent that you have any suggestions for improvement of the
policy development process, I would welcome any input.

Thanks!
/John

John Curran
President and CEO
ARIN