[arin-ppml] The case against need based justification

[Jimmy Hess]

On 4/8/13, cb.list6 <cb.list6 at gmail.com> wrote:
> I would like to present some facts for review so that the ARIN
> community can judge the success of need-based justification and

There are some non-facts included  there as well;  opinions which have not
been proven nor substantiated through experiment.

> Excluding the last /8 which is locked in a way by policy, that leaves
> approximately 24 Million addresses in the free pool.
Correct

> Assuming a free market cost of $10 per IPv4 address, that is
> $240 million worth of IPv4 cost off-set from which one would
> have to pay the free ipv4  market for those addresses.

There are some errors here:
    o Unwarranted assumption of a supposed per-IPv4 address market cost.
    o Unsubstantiated assignment of value to an entire free IP pool.

    o To a large corporation,  $240 million is a nominal price.
       Supposing, there was no justified needs criterion,  that would
be a very attractive
       price for a speculator to pay in order to buy out the remaining
IPv4 free pool, and
       thereby get a license to print money.




> balance sheet.  So, it is not acceptable to say folks are turning away
> from it because ARIN is offering that space in a fair way.  The free
> pool is relevant.

The free pool is relevant to ARIN,  because it is a common resource
that it is ARIN's responsibility to manage.

You could say that it is relevant to ARIN, in the responsible
management of the resource,
for ARIN to impose costs, partitioning,  and requirements,  in order
for  registrations and delegations to be made from the community
resource to private individuals:

Otherwise;  if any network participant were allowed to register as
many free IP addresses as they like, you have a tragedy of the commons
situation,   where everyone's costs go up,  the number of participants
becomes limited,  and the total utility of the IPv4 address space is
reduced below its optimal level.


> There is a case that the need-based policy has done well, and it has
> done well for some.  Comcast, for example, has 18 million subscribers

One should first take note:  this is the effect of changing policy over time.
This is not a result of  needs-based policy in general,  it is a result of one
specific implementation of needs-based policy.

Furthermore,  at one time needs-based policy  included assignments of /8s,
to organizations that would in all likelihood go on to never utilize a
significant portion.

> and 70 Million IPv4 addresses [3].  For simple math, we can call that
> 3.8 addresses for every 1 customer.  Then, you have a network like
> Metro PCS who has 9 million subscribers (2.2 million of which are LTE)
> [4] on what i can tell is 1,024 IPv4 addresses.  Which is a
> 0.000113778 IPv4 addresses per subscriber from ARIN.

Yes;  different network operators, have designed  their networks with different
ratios of IP addresses per subscriber required,  through the use of IP address
sharing mechanisms.

This provides an increase in flexibility to the network operator,  with the also
potential benefit of requiring fewer IP addresses,  and therefore --
being a more
efficient consumer of IP address resources,

Which could serve them well,  after exhaustion,  when someone might like to
attempt to assign a dollar amount to the state of an IPv4 network
allocation existing.


> So, there are winners and losers in need-based.  Winners puts more
> time and money into the process, losers are busy optimizing other
> parts of their business instead of working the ARIN system.  Looking

The next error,  is characterization of more efficient users of IP
resources as losers.

Their networks have been around for a while,  and obtaining IPv4
resources an option.
We can infer that intuitively,  the most likely reason they require
few IPv4 resources
is primarily an engineering choice,  not exclusively any kind of
reflection on the quality
of ARIN policies.

The characterization of "loser"  presumes that they desired  more IPv4
resources,
and were forced to design their network in such way,  when in fact,
it may have been
a choice -- based on future predictions and perceived future risks of
IPv4 resource
shortages.


> back at [3],  winners are also big companies with a lot of resource
> and ... they probably send people to ARIN meetings and ... maybe they
> even send lawyers to ARIN meetings.  I don't know, i have never been
> to an ARIN meeting myself.

If you never attended an ARIN meeting;  one could infer that your
intuition is /not/ well-informed,  and therefore,  the chance that
your blind guess is erroneous is more likely than not.

Either way, the insinuation is unfair,  because you didn't see who
went to the ARIN meetings,   or  report any research showing any
bearing  or influence exactly 'big companies'    may have had on
policy development.


> Now, there is more.  Many organizations have found ARIN unsuitable for
> their address needs.  We know that in 2011 when the free pool was much
> larger than it is now (4+ /8s?), Microsoft bought IPv4 space from  a
> bankruptcy court [6].  Amazon among others has also made substantial

It should be noted,  that Microsoft's  acquisition of  networks
leading to them obtaining IPv4 resources,  was done within the ARIN
policy framework.

Microsoft obtained IP address resources from ARIN, after satisfying
ARIN, in regards to justified need;   they would not have been able to
purchase IP addresses directly,  although they essentially did that
indirectly.

ARIN provided the mechanism they used.    Furthermore,  by preserving
the free pool,  it was beneficial to the community that  Microsoft
used this mechanism to obtained the resources,  in order to preserve
the free pool,  by  clearing the demand from the market  (as well as
unused resources),  and therefore preserving the "liquidity" and ease
of small IPv4 allocations provided by the free pool.

> appear that Amazon and Microsoft could justify need, but the
> need-based policy does not appear to work for them.  I am aware of the

Did you consider that maybe it works for them just fine,  but  it was
easier to obtain the resources they wanted  in sufficient number
through the specified transfer process;  where the burden of review
practices (not just justified need) for a free pool allocation would
be just slightly higher enough,    that the bankruptcy presented a
little bit of an opportunity ?


> So, that is open market end of things, organizations pay millions of
> dollars instead of thousands of dollars to not use a need-based policy
> of the ARIN free pool.  Seems like the symptom of something broken.

You could say that the allocation from non-free-pool addresses could
have been perceived
as delivering additional value,  or the person responsible for bidding
could have made an error.

Perhaps they had reasons for entering the transaction that have
nothing to do with
a "difference" between free pool addresses and specified transfer addresses.

They may have preferred to /choose/  what IP addresses they would get,
through contract,  rather than virgin IP addresses  (that might be in
bogon filter lists) from a luck of the draw.

Or there might have been some other special reason they wanted traffic
towards what used to be Nortel IP addresses.

Either way,   the mechanism of the transaction cannot be safely
assumed to be a result of  a problem with justified needs policy.


> In fact, last year i tried to get a /48 of address space for a lab
> network attached to a T3 from TWT.  They would not give me more than a
> /56.  I heard from another guy that Internap would only give him a
> /64.  Need-based is a trickled down disease on network design.

That is not needs-based policy.
That is a braindead private policy of your network service provider
that has nothing to do
with justified need policy implemented by ARIN.

The criteria for IPv6  allocation is the "end site";  the /48.
And the allowed PA allocations are sized accordingly.

There is no such thing  as a network not having justified need for at
least 1  /48.

> As previously noted, the ARIN free pool is a non-trivial sum of 24
> million IPv4 addresses.  Yet, companies continue to buy addresses and

The next error is that  24 million IPv4 addresses is a non-trivial sum.
On the contrary,  this is substantially less than 2% of  the IPv4 address space.


> NRPM and ARIN should get out of the business of telling people how to
> number their networks, it has not helped the businesses or the

NRPM doesn't specify how you number;  it provides criteria for
determining how large of an additional allocation you need right now.

Anyways, of course... what ARIN should or should not do is non-fact.
Various arguments can be made about what ARIN should or should not do.


> 2.  I have made the claim that ARIN's need-based policy has negatively
> impacted system design, the specific system being the internet.  The

Your claim is abstract, and requires insinuation.

Now,  if you had interviewed someone at Microsoft or PCS, and obtained
an explanation from a competent engineer  about how ARIN rules
pressured them into designing their network in a manner that was less
than optimal, then that might be useful.

> 3.  By moving away from need based policy from ipv4, we accept reality
> that the market rules

Justified need is not a non-market situation.

> [6].  IPv4 addresses are part of the means of
> production in a capitalist society.

Only in the same sense that Telephone numbers or Social security
numbers are a means of production.    It doesn't matter who you ask,
you're only getting the one SSN that you need.

And NANPA won't give you an infinite supply of phone numbers either,
&  usage reporting and  allocation justification is required, even if
you have infinite cash.

> IPv4 addresses should not be  acquired by playing some logic
> game with people  via ARIN tickets or intellectual thumb-wrestling
> and posturing on PPML.

ARIN policies and logical are simple and trivial,  compared  to the
convoluted technical rules of most governments, and markets.

The idea that there is a situation of "no logic games"   in reality is an error.


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-- 
-JH