[arin-ppml] About needs basis in 8.3 transfersarin-ppml at arin.net List (arin-ppml at arin.net)<arin-ppml at arin.net>;

Mike Burns mike at iptrading.com
Mon Jun 9 14:36:37 EDT 2014

Hi Owen,

Thanks for your reply. Fears of hoarding and speculation don't apply to 
2014-14, unless you think that ARIN staff would be unable to discern a 
series of spun-up holding corps with hidden ownership.  In any case, our 
different perspectives of the risks involved are not applicable to 2014-14, 
which I know was not the context of your earlier post. And I would like to 
move the discussion towards 2014-14 and away from fears of an unregulated 

APNIC reinstated their needs test only because ARIN supply was held hostage, 
I believe  you may have been involved?

What's more, like ARIN's previous CEO and unlike ARIN's current CEO, RIPE 
never took the position that RIPE policy applies to legacy space. So there 
has always been a needs-free market for RIPE ERX space, but that market 
remains untapped by speculators, both before and after RIPE exhaust. And, of 
course, since needs are no longer tested for RIPE transfers, we can use RIPE 
as our experiment to see if speculators attempt to take advantage of that. 
RIPE publishes transfer statistics. Would you consider a review of those 
statistics a reasonable way to discern the presence of speculators?

The idea that somebody would contact /23 and /24 holders in order to 
speculate fills me with mirth. I kind of think a speculator would be more 
efficient if he called a couple of brokers.


-----Original Message----- 
From: Owen DeLong
Sent: Monday, June 09, 2014 1:30 PM
To: Mike Burns
Cc: lar at mwtcorp.net ; Steven Ryerse ; arin-ppml at arin.net List 
(arin-ppml at arin.net)
Subject: Re: [arin-ppml] About needs basis in 8.3 transfers

On Jun 7, 2014, at 07:15 , Mike Burns <mike at iptrading.com> wrote:

> Hi Owen,
> Finding 4 actors who want to corner the market probably wouldn’t be very 
> hard. Since 25% is 1/4 of the projected market size, I would say that the 
> rest of your argument is on pretty shaky ground.
> It's not nearly so simple. First you would have to find four players 
> willing to risk $8 billion dollars. Second you would have to have them 
> create an inherently unstable cartel. Third  you would have to find 
> sellers with that much space, and this would likely mean hundreds of 
> sellers at the least and a years-long endeavor. Fourth you would have to 
> process those sales in a transparent market where your purchases are 
> recorded for all to see. Fifth you would have to believe that there would 
> be no reaction to this public information vis a vis price. Sixth you would 
> also have to believe that these four billionaires ignored any risk of 
> driving the IPv6 transition which would make their efforts worthless. 
> Seventh you would have to ignore the fact that there are already methods 
> of acquiring space without need which to my knowledge have not been used 
> by speculators, and in fact there is zero evidence that speculators even 
> exist.

Nope, this doesn't have to be a cartel. It only has to be 4 or more actors 
each willing to invest an average of $2b and each of whom wants to see as 
many of their competitors as possible put at a substantial disadvantage in 
the near term future of the access market.

Now I realize that large $TELCOS and large $CABLECOS and such would never 
engage in such anticompetitive practices and are staunch defenders of all 
good things like network neutrality, free and open peering policies and 
fantastic customer service with good bandwidth and fair prices. However, 
since pretty much everything in that last sentence has been repeatedly 
proven false, I don't think I'm on quite so shaky a ground after all.

Your third item is absurd. If they don't find sellers with that much space, 
then it means the market isn't as large as described and the problem is even 
worse and market capture is even easier. Without a needs test or the other 
restrictions in 8.3, it would not take years, it would take days. Address 
space would be swept away as fast as it came available on the market. It 
would be IP lotto for the uber-wealthy corporations.

As to fourth, yes and no. What's so transparent if $MEGACORP spins up lots 
of $IP_ADDRESS_HOLDING_CORPS just waiting to pounce on available space, much 
like the test-the-waters orders placed in various markets and dark pools 
looking for high-frequency trading victims? The stock market is allegedly 
just such an open market and is rife with just this kind of gouging.

As to 6, no, they just have to decide that the risk of said transition 
occurring in less than time_T where T is their idea of investment recovery 
time given the expected advantage is relatively low. That's not so far 
fetched, since the average F500 corporation hasn't really started any sort 
of transition in earnest and will likely need 2 or more years to actually 
achieve a complete transition.

Speculation in the face of an existing free pool is pretty nonsensical. 
Further, the entities I would expect to engage in this kind of speculation 
would likely consider it not worth the risk unless they can get the 
addresses registered to them in the recognized registry.

>> We are three years into the open, post-Microsoft/Nortel market and there 
>> is no evidence of hoarding in my experience. I have never fielded a phone 
>> call or email from any company or individual seeking addresses they 
>> didn't plan to utilize at some point, although I have fielded plenty from 
>> people seeking addresses that for whatever reason ARIN policy would 
>> prohibit them from registering. Perhaps other brokers on the list might 
>> report on their experiences.
> Address space is still available nearly for free from ARIN, especially for 
> smaller organizations, so this isn’t a real test of what will happen post 
> runout and any claim that it is is absurd.
> Are you saying that my claim of never having heard from a speculator is 
> absurd? Have you forgotten that APNIC and RIPE ran out years ago? (after 
> which point they both dropped the needs test for transfers).

Shortly after dropping the needs test, APNIC reinstated it.

While you may not have heard from a speculator, others have. I have, in 
fact, received offers from speculators even for my tiny little /23 and /24.

>> Little guys benefit from the dropping of needs test for small transfers. 
>> No need to navigate the ARIN process if you just need a /24 and you can't 
>> get one from your upstream, or not at a reasonable cost, or because you 
>> feel more secure with your own space, or because you don't wish to game 
>> the system. Support of 2014-14 would allow small companies to  have this 
>> option while preventing hoarding or speculation through limits on size 
>> and number of transfers.  Perhaps you care to comment on whether you 
>> might consider support of 2014-14 at the current size of /16 or at 
>> another size that you might feel more appropriate?
> Again, this is your perspective, but it’s not necessarily entirely true. 
> It’s only true if you assume that the market will have a continuous supply 
> and demand will be lower than supply. I would argue that the number of 
> inter-RIR transfers to the APNIC region which have already been processed 
> would indicate that after exhaustion, this is unlikely to be a persistent 
> state or even last very long at all.
> Owen I have brokered more transfers to APNIC than anybody in the world. 
> Nothing I said requires that there be a continuous situation where demand 
> is lower than supply. However I can report without much understanding that 
> there is indeed more supply than demand in the transfer market today, 
> based on my own experiences and those I have heard from other brokers.

I don't doubt that today as there remains a free pool in the ARIN region. I 
do not see that persisting more than a year or so with needs basis in place 
and even faster if needs basis is removed once the ARIN and LACNIC free 
pools are exhausted.


More information about the ARIN-PPML mailing list