[arin-ppml] quantitative study of IPv4 address market

[Steven Ryerse]

I think some of the comments below by Paul Vixie - and the study done by Milton Mueller (and associates) – clearly point out that the policies that have been put in place to slow the exhaustion of IPv4 are extremely out of synch with general business practices.   No organization - profit or not – uses a 3 month planning horizon.  Many use 30 year horizons since they purchase real estate and either have a 30 year mortgage or depreciate the property over 30 years.  These horizons have been built into the US & state tax codes for many decades.  This community, it appears in large part because of IPv4 exhaustion – has decided a 3 month horizon is acceptable in certain cases.  No company big or small is going to risk the significant capital it takes to build a data center or build an ISP if they can only be sure of 90 days’ worth of IP addresses that they need to run their business.  In fact, even a year’s worth isn’t enough to take on a big risk either.  Would you spend 400 million dollars or more on a super duper data center if you could only GUARANTEE that you would have 90 days’ worth of addresses or even only a years’ worth.  No sane person or organization would do that.

In Milton’s study he clearly outlines that Microsoft chose to purchase a large number of addresses thru bankruptcy court, even though ARIN has plenty to allocate.  According to Milton’s numbers, Microsoft made a business decision to pay over seven million dollars when they could have gotten the same number of IPv4 addresses from ARIN for less than a hundred thousand dollars.  Microsoft is not a dumb company and they certainly don’t waste over seven million dollars  for no reason.  It is pretty obvious that Milton is right that they did it because they wanted to secure plenty of addresses so that the capital they are investing in their various businesses isn’t at risk for lack of IPv4 addresses.  They did what any sane organization would do and minimized their risk – and it was worth it for them to do that even at the cost of seven million dollars more than what ARIN charges.

While I would concur that with the realities of IPv4 exhaustion, the horizon built into various ARIN policies should not be 30 years – I think a strong case can be made to increase it to at least one and probably two or even five years.  Yes I know that the effect of that might cause IPv4 to be exhausted earlier than with present policies, but I think it is clear from ARIN’s mission statement that ARIN should allocate in conjunction with real world reasonable business practices and not in the make believe world of 90 day or even one year horizons.  If ARIN and this community choose not to align policies with the real world then the real world will just make ARIN mostly irrelevant by creating a separate IPv4 market - which in case you haven’t noticed is already beginning to happen.   I would note here that any organization who has already gone around ARIN, or will choose to in the future, are part of this Community too.  This Community if it wants to stay relevant should take their needs into consideration as well – even if they never participate directly in this community!  ARIN’s mission is to allocate prudently and I reiterate that it isn’t to NOT allocate.

Steven L Ryerse
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From: arin-ppml-bounces at arin.net [mailto:arin-ppml-bounces at arin.net] On Behalf Of Paul Vixie
Sent: Tuesday, September 04, 2012 3:36 PM
To: Owen DeLong
Cc: arin-ppml at arin.net
Subject: Re: [arin-ppml] quantitative study of IPv4 address market

On 9/4/2012 6:57 PM, Owen DeLong wrote:

On Sep 3, 2012, at 08:24 , Joe Maimon <jmaimon at chl.com<mailto:jmaimon at chl.com>> wrote:


...

The allocation policy is relevant only so long as ARIN has an allocation pool. Which I want to see last as long as possible, since it is certain not to last long enough.

This is where we utterly and completely disagree. Making the free pool last artificially longer by disadvantaging legitimate uses of the address space today is not a win and is contrary to ARIN's mission statement, IMHO.

i've now sat with several arin members who have told me privately that their business needs for ipv4 growth are measured in half-decades not years, and so they were optioning future address space through a grayish transfer market even before arin went to a three month regime. i say "grayish" because the option agreements are a private matter not subject to arin rules, and the space in question will inevitably be transferred to the recipient upon demonstrable need. i've been told that the directed transfer rule whereby resources can be transferred between parties without first returning it to arin and then reallocating it, was the only instrument they needed.

to me this says arin has a workable system even at three months, and that unless this community chose to forego any needs basis at all, there is no way to ensure that addresses are available to those whose real demonstrated need -- which will be demonstrated in terms of capital for the network and also capital for the options and ultimately the resources.

this community has reached consensus on three month allocation windows. that consensus could be changed by debate. i welcome such debate.

but in no sense is non-needs-based allocation (within the community's chosen window, currently of three months) definitionally a "legitimate" use, such that "disadvantaging" such use is "not a win". nor would any of us enjoy an internet in which policies of this kind are set in any way other than by community consensus.

paul
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