[arin-ppml] The case against need based justification

Milton L Mueller mueller at syr.edu
Mon Apr 8 21:00:41 EDT 2013

I found his arguments quite interesting. They provide a useful and well-documented look at what is ordinarily taken for granted. The extreme variance in addresses per organization in particular should be raising eyebrows.

While it is true that he hasn’t looked at the engineering plans of each applicant, neither have you, Heather, so you are in no better position to defend the result as plausible. The facts are perfectly consistent with both your view AND his view that some organizations know how to work the system better than others. We would need more information to decide which is correct. But this is one of the key flaws of the needs-based allocations in a climate of scarcity – you have to base allocations on highly commercially sensitive information, and thus the plans and criteria cannot be transparent.

Please note, however, that the rationale for RIPE’s impending abandonment of needs-based is a bit different from cb.list6’s. They are basically just saying that while needs assessment makes sense when you have a free pool, it doesn’t make any sense when the free pool is gone. Moreover, I suspect that this idea is getting huge support in RIPE because people who support IPv6 are coming around to the realization that prolonging the life of v4 through ever-more-stringent allocations is actually covering up the real cost of sticking with v4 – if we only would let the market govern the price of v4 blocks the transition to v6 might be hastened.

From: arin-ppml-bounces at arin.net [mailto:arin-ppml-bounces at arin.net] On Behalf Of Heather Schiller
Sent: Monday, April 08, 2013 11:34 AM
To: cb.list6
Cc: arin-ppml at arin.net
Subject: Re: [arin-ppml] The case against need based justification

 I find much of your argument flawed -- you seem to have chosen a conclusion and then tried to wrap theories around it.

Re-read the nrpm... for a transfer to be recognized by ARIN, the criteria of justified need still applies.  The "substantial market buys" you referenced still had justified need applied to them ---- the only difference between getting space directly from ARIN and getting it on the secondary market [aside from cost] is the window of time you can justify need for.  Directly from ARIN you can get 3 months justified need and on the secondary market you can request up to 24 months need.

Unless you participated in the engineering and design of each of the networks you reference, you can not have first hand knowledge of how addressing policy affected their decisions.  You are making guesses from the outside, based on the size of their customer base and what you see today.  In atleast one mobile provider you reference, I can say -with direct knowledge- that your conclusion is wrong.  The move to CGN has nothing to do with justified need and everything to do with whether it is financially responsible to continue investing in a finite resource.  Sure providers could buy up space on the secondary market for another year or 2 - and then what?  The price for v4 could rise exorbitantly, to the point where the cost of an address becomes a significant cost toward offering the service.  You will be stuck in the same place and out a bunch of cash.  Or you can have multiple customers share an address, recover a bunch of space and continue to grow your business without investing in the secondary market.  Its the expense of the secondary market itself, that makes CGN more appealing.

With regard to use of RFC1918 space - again - unless you were involved in making the decision at those companies - you can not authoritatively say why they made the decision they did.  You are speculating that they chose to use 1918 space because they were unable or unwilling to justify need - and that is very unlikely to be the case.  Network Engineers tend to be reasonable, logical folks who give great thought to where public address space is necessary and where it isn't, as well as the pros and cons of using both.  They may have chosen to respect a shared resource and conserve space, or been unsure how large the network would grow, or been unable to justify [to their mgr, themselves or whoever] the additional ARIN fees for being in a larger allocation category.

Fair does not mean that every organization gets the same thing.  The NEEDS of every organization are different.  This is why ARIN takes the time to read through the request and help ensure that what the organization gets, meets their needs... not their competitor or neighbor's needs.


Where I do empathize with you, is the problem you described about getting v6 address space from your provider for a lab and they wouldn't give you more than a /56.  However, that is a business decision by your ISP.  As of today, there is no mandatory minimum IPv6 assignment size for ISP's to their customers, only a small reference to a recommendation.  In fact, justified need is not a requirement in making reallocations to customers in IPv6, so abolishing justified need would not affect the v6 assignment size your ISP offers.   If you would like to see that changed - then read up on how we got there and submit a proposal to change it (https://www.arin.net/policy/pdp_appendix_b.html)  Otherwise, it is an issue between you and your provider and should be taken up with them directly.


On Mon, Apr 8, 2013 at 1:13 AM, cb.list6 <cb.list6 at gmail.com<mailto:cb.list6 at gmail.com>> wrote:
Need-based justification is being reviewed in RIPE [1]

That spurred me to review need based justification in ARIN for both
IPv4 and IPv6.

I would like to present some facts for review so that the ARIN
community can judge the success of need-based justification and
consider the role it will have in future policy.

First, as of this writing, ARIN still has  2.47 /8s free [2].
Excluding the last /8 which is locked in a way by policy, that leaves
approximately 24 Million addresses in the free pool.  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.  This is a relevant sum on nearly any
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.

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
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.  I do not speak
for Metro PCS, i just found their case interesting.

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
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.

So far, i hope we have seen that the free pool as of today is relevant
and that need-based is not strictly "fair" in how the distribution
happens, and that there are winners and losers.  Winners invest more
time and effort, and sometimes time and effort is from lawyers not

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
market buys.  These companies are obviously not getting what they want
from a need-based policy, and i assume they made cogent business case
to close these deals.  The difference is they have the money to work
the policy like Comcast, but instead they worked a different angle
also applying money.  But, need-based is not a about money.  Is it?
It is about justified need, or the appearance of such.  It would
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
transfer policy and how need is, for some reason, a different standard

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.

Here is another symptom of something broken.  The largest internet
growth engine is mobile.  Mobile contributes a huge amount of traffic,
growth, and "stuff" on the Internet.  If Zuck does not mention mobile
20 times in an earnings call, FB stock dives.  AT&T wireless and
Verizon Wireless both have close to a 100 million subscribers each.
And, just about every one of those subscribers uses RFC 1918 space.
What about those 2 smaller players, Sprint and T-Mobile.  Both of them
use squat space.  Despite spending time and money on outreach, this
HUGE part of the internet is not part of the ARIN numbering system
(unless you count the ARIN addresses on the CGN).  At least, not part
of ARIN's need-based policy.   Mobile uses CGN because ARIN's policies
have not and will not fit with the growth of these networks and their
architectures.  Not today, but also not in 2003.  I would like that
that to change [7].  Speaking for myself, what i saw was a network was
designed to best fit the business needs.  That network design did not
fit ARIN policies for efficiency, and so ARIN would not provide
addresses and CGNs were rolled in to close the gap between the best
network design and the ARIN policies.

Speaking more for myself, in 2000 i worked for an ISP, and one of my
job roles was assigning addresses to T1 and T3 customers of the ISP.
It was a painful process for me and my customers.  We lived in world
where people just wanted a /24 to turn up their LAN, but i could not
just give it to them.  It was a world of scarcity of addresses, emails
full of made up justifications, and that persist today.

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.

It is not just mobile doing CGN.  AT&T has deployed CGN to landline
DSL [8], and now Verizon DSL too [9]

As previously noted, the ARIN free pool is a non-trivial sum of 24
million IPv4 addresses.  Yet, companies continue to buy addresses and
/ or deploy CGN.  And they do it at massive scale.  We are talking
about the biggest cloud and access network providers can't seem to get
what they need from ARIN whether it be IPv4 addresses or effective
IPv6 deployment advocacy.

My conclusion from all this is that need-based policy did not help
IPv4 and is actively hurting IPv6.

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
internet.  I say this because "we" did not transition to IPv6 and the
market for IPv4 and the technology known as CGN is seen as more
effective solution than ARIN or IPv6

That brings me to policy changes that i would like feedback on.

1. Should ARIN continue to administer need-based policy now and after
run-out?  Please note the discussion of winners and loser with data
points [3] and [5]. Who is ARIN serving with the need-based policy?

2.  I have made the claim that ARIN's need-based policy has negatively
impacted system design, the specific system being the internet.  The
squat / CGN internet that is on your phone [7] and coming to your DSL

3.  By moving away from need based policy from ipv4, we accept reality
that the market rules [6].  IPv4 addresses are part of the means of
production in a capitalist society.  IPv4 addresses should not be
acquired by playing some logic game with people  via ARIN tickets or
intellectual thumb-wrestling and posturing on PPML.

4.  IPv6 is designed without need in mind, there is no reason for ARIN
to import the notion that need is factor when each LAN is given 2^64
addresses.  Organizations that want PI should get an ASN (existing
policy) and a minimum /32 and be done. End of story.  There is no
logic for conservation of a limitless resource (in this case, it is
bounded by ASN).  Growth beyond a /32 should just be a simple written
justification, not gear and subscriber logs showing 80% use.

5.  These simplifications can be reflected in a rate structure that
results from such simplification.

[1] https://www.ripe.net/ripe/policies/proposals/2013-03/
[2] https://www.arin.net/resources/request/ipv4_countdown.html
[3] http://www.nanog.org/meetings/nanog57/presentations/Tuesday/tue.lightning3.howard.ipv4%20buyers.pdf
[4] http://investor.metropcs.com/phoenix.zhtml?c=177745&p=irol-newsArticle&ID=1789168&highlight=
[5] http://whois.arin.net/rest/net/NET-65-91-116-0-1.html
[6] http://www.bbc.co.uk/news/technology-12859585
[7] https://www.arin.net/policy/proposals/2013_2.html
[8] http://www.broadbandreports.com/forum/r27139468-Uverse-wants-me-to-change-my-network-address-
[9] https://www22.verizon.com/support/residential/internet/highspeed/networking/troubleshooting/portforwarding/123897.htm
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