[arin-ppml] Internet Fairness

[Mike Burns]

  How do we change to the Capitalistic model from what we got now?
>
> Steven L Ryerse


Thanks for the interesting discussion.
Might I say in answer to your question above that a step towards that change 
would be 2014-14?
Small operators could purchase a /24 without a needs test, yet the needs 
test remains in place for large transfers which some feel could imperil the 
market.

And in this discussion there was suprising accord between Steven and Owen 
relating to the proposal to impose annual needs testing on all resource 
holders. I would suggest that the trading market imposes the most effective 
ongoing needs-test of all.  By their nature, corporations who recognize 
unused but valuable and perishable assets in their possession will seek to 
monetize them. The gimlet eye of the corporate accountant works unceasingly 
to bring IPv4 addresses into efficient use through the transfer market in a 
way that vague ARIN threats never could. We should work to make that market 
more predictable and robust in order to best harness those efficiencies.


Long version of above, feel free to ignore:

2014-14 would remove much of the uncertainty in the market, since it would 
cover most transactions and allow the buyer and seller to particpate without 
the uncertainty introduced by third-party veto in the form of a failed 
needs-test. IPv4 transactions are still a novel idea outside a small group 
of people. Many international transactions have built-in levels of FUD which 
are high even before considering the novelty of the core transaction and the 
natural reluctance to wire an up-front international payment for an asset so 
virtual in nature.

Likewise for sellers, who are asked to initiate the transfer request with an 
entity (ARIN) which may or may not consummate the transaction, at its sole 
discretion. There is policy and procedure for the transfer of IPv4 resources 
when the request follows policy, but what procedure and policy is available 
to the seller if the transfer succeeds, but some contractual breach occurs 
between buyer and seller whose penalty is the reversion of rights to the 
Seller? Can the Seller sell his address rights under Net 30 terms, confident 
that ARIN (and potentially and coordinatedly APNIC) would revert Whois 
records to their original state if the breach could be demonstrated? Would 
that breach have to be demonstrated to a judge first, would ARIN respond 
only to a judge's order? Would ARIN respond to an Asian judge's order, or 
vice versa? FUD.

Can an IPv4 asset possibly function as security if it can not be reliably 
and predictably transferred? I know a small business that wanted to borrow 
some money and secure it with their IPv4 stock, and use the funds to grow 
their business (thus utilizing their IPv4 stock). But who would make the 
loan if they could never collect on the secured asset?

As a broker it would make transactions simpler and smoother for buyers if I 
could purchase a /16,  have it as inventory, and then sell in, say, /24s. 
Today, when buyers want a very small block it is hard for them to find a 
broker interested, because the size makes it not worth the broker's time. 
And when a seller comes to broker and wants to sell a /24, the same logic 
applies. Few sellers with /16s are willing to endure 256 transactions in 
order to monetize their block. Net result is wasted space and unmet need. 
But if the broker had /16 in inventory and could eliminate all costs 
involved with a Seller's participation, selling individual /24s might be 
profitable,  allowing the need of the smallest operator to be met. With 
2014-14 it could at least be attempted.

If all involved knew that the RIRs would be passive registrars of the 
transfers, FUD would be reduced and the market made more vital in my 
opinion.

Regards,
Mike