[arin-ppml] Draft Policy ARIN-2015-9: Eliminating needs-based evaluation for Section 8.2 and 8.3 transfers of IPv4 netblocks

[Jason Schiller]

Removing barriers would allow companies with enough money to out right buy
more than a two year supply of IPv4 addresses if they believed their
likelihood of needing a longer time horizon justifies the cost.  They could
complete the transaction, transfer the address space in whole, and use as
they desired over whatever time horizon they saw fit.


This is different to a buying a future where money is paid to hold IPv4
addresses, and make them available for sipping from in two year (or less)
sized increments under the ARIN transfer policy.  This requires
demonstrating efficient utilization of currently held resources, and then
only permits a maximum transfer of two year supply, after which a new
demonstration of efficient utilization of currently held resources, and a
new two year window can be established.

This second approach has much risk associated.  Risk of the transfer source
going bankrupt, risk of the transfer source breaching the contract, risk of
the transfer source finding more favorable terms and transferring the
remaining future to another party, risk of the transfer recipient having
underutilization and have an inability to get additional resources, risk of
transferring the resources to the wrong OrgID (realizing a new use case
under one OrgID evaporates, and a different new use case appears under a
different OrgID).

As such, the inherent risk of a future will likely limit the spend.
Reducing or eliminating this risk will encourage the behavior.


This is different than just paying money to get unlimited use of IPv4
resources outside of ARIN policy, with no transfer, and only a letter of
authority to route the space, a re-allocate or re-assignment SWIP, or a
public comment indicating who has the right of use.

This third approach has the risk of the source going bankrupt and the risk
that the source could easily revoke the LOA, SWIP or public comment, and
ask providers to not route the IP space.  It has the added reputation risk
that the recipient of the IP space is acting below board.

As such risk is even greater than the previous case and will likewise have
a greater limitation on the spend.


The final case is renting of IPv4 space.  This differs from the previous
case in that the spend is ongoing (e.g. monthly or yearly).
The risk is similar to the previous case except if the IPv4 addresses are
revoked payment is stopped.  While the recipient has not lost their future
spend, they also may find themselves suddenly out of IPv4 space.  With the
difficulty of renumbering, they may find they are forced to pay predatory
pricing from some period of time, and double rent new IP space while they
number out of the old (excessively high cost) IPv4 space. Furthermore, if
IPv4 space is not available for rent at a reasonable price, they will be
locked in to paying an unreasonable price.

Due to the uncertainty and possibility of lock in and predatory pricing I
would argue this arrangement is even more risky than the previous
arrangement if long term (think more than 2 years) use of IPv4 is desired.


___Jason



On Thu, Feb 18, 2016 at 11:29 PM, Randy Carpenter <rcarpen at network1.net>
wrote:

>
> Are you arguing that by removing the barriers that it would make it more
> difficult for Google to get more addresses? If not, then the point is moot.
>
>
> thanks,
> -Randy
>
>
> ----- On Feb 18, 2016, at 10:47 PM, Mueller, Milton L milton at gatech.edu
> wrote:
>
> > Really. Am I going to have to be the first to point out the irony of
> Google
> > employees complaining that companies with "deep pockets" and "the most
> > profitable services" will dominate the address market if we make minor
> > relaxations of need assessments?
> >
> >
> >
> >
> > What's wrong with this picture? Think, folks.
> >
> >
> >
> >
> > Isn't it obvious that companies like Google are in a very good position
> to get
> > the addresses they want - via less than transparent market mechanisms
> such as
> > options contracts and acquisitions? And isn't it possible that they
> might be
> > trying to prevent smaller companies from participating in the market by
> > throwing up artificial barriers?
> >
> >
> >
> >
> > All this talk of "fairness" overlooks the fact that it's more fair to
> have
> > simple, transparent bidding and less bureaucracy. Smaller bidders can
> easily
> > afford smaller chunks of numbers, and they benefit from the reduced
> > administrative burden and delays associated with pointless and
> restrictive
> > needs assessments. When I hear smaller ISPs who need addresses making
> Jason's
> > arguments, I might take them seriously. Until then, no.
> >
> >
> >
> >
> >
> > --MM
> >
> >
> >
> >
> > From: arin-ppml-bounces at arin.net <arin-ppml-bounces at arin.net> on behalf
> of Jason
> > Schiller <jschiller at google.com>
> > Sent: Thursday, February 18, 2016 3:11 PM
> > To: Vaughn Thurman - Swift Systems
> > Cc: ARIN PPML
> > Subject: Re: [arin-ppml] Draft Policy ARIN-2015-9: Eliminating
> needs-based
> > evaluation for Section 8.2 and 8.3 transfers of IPv4 netblocks
> > +1 to what MCTim, Owen, and Vaughn said.
> >
> > In general I oppose transfers with no need.
> >
> > If there are "networks in need of additional IPv4 addresses", surely
> they should
> > be able to show this, in accord with long standing practice.
> >
> > I'd rather us not move to a situation which enables/encourages
> speculation and
> > profit taking (or rent-seeking if you will) in re: IP resource
> distribution.
> >
> > I'd also rather not encourage one competitor in a business segment to be
> able to
> > better stockpile addresses and for that to become a competitive advantage
> > against other providers in the space. Additionally if this is done in a
> wide
> > enough scale it can sufficiently lengthen wide spread IPv6 adoption.
> >
> > This policy would also allow for companies with the deepest pockets and
> the most
> > profitable services to concentrate IPv4 space. I'm not sure that is more
> "fair"
> > than the pre-existing framework for "fair".
> >
> > __Jason
> >
> >
> >
> > On Thu, Feb 18, 2016 at 2:32 PM, Vaughn Thurman - Swift Systems <
> > vaughn at swiftsystems.com > wrote:
> >
> >
> >
> > +1
> >
> > Sent from my mobile device, please forgive brevity and typos.
> >
> > On Feb 18, 2016, at 2:16 PM, Owen DeLong < owen at delong.com > wrote:
> >
> >
> >
> >
> > +1 — McTim said it very well.
> >
> > Owen
> >
> >
> >
> >
> > On Feb 18, 2016, at 10:34 , McTim < dogwallah at gmail.com > wrote:
> >
> > I am opposed.
> >
> > If there are " networks in need of additional IPv4 addresses", surely
> they
> > should be able to show this, in accord with long standing practice.
> >
> > I'd rather us not move to a situation which enables/encourages
> speculation and
> > profit taking (or rent-seeking if you will) in re: IP resource
> distribution.
> >
> > Regards,
> >
> > McTim
> >
> >
> > On Tue, Feb 16, 2016 at 7:12 PM, Leif Sawyer < lsawyer at gci.com > wrote:
> >
> >
> > Good afternoon -
> >
> > Based on feedback from Montreal as well as internal discussions, I've
> reworked
> > this policy.
> > AC members and ARIN staff are looking for additional feedback, as well
> as your
> > position in terms
> > of supporting or opposing this draft policy.
> >
> > We'll be discussing this policy, as well as any feedback provided on
> this week's
> > AC teleconference,
> > so I'm very appreciative of your input.
> >
> > Thanks,
> >
> > Leif Sawyer
> > Shepherd - ARIN-2015-9
> >
> > NRPM section 8: https://www.arin.net/policy/nrpm.html#eight
> >
> > Most current draft policy text follows:
> > --
> >
> > Draft Policy ARIN-2015-9
> > Eliminating needs-based evaluation for Section 8.2 and 8.3 transfers of
> IPv4
> > netblocks
> > Original Date: 23 September 2015
> > Updated: 16 February, 2016
> >
> > Problem statement:
> > The current needs-based evaluation language in NRPM sections 8.2 and 8.3,
> > regarding transfer of IPv4
> > netblocks from one organization to another, may cause a recipient
> organization
> > to bypass the ARIN
> > registry entirely in order to secure the needed IPv4 netblocks in a more
> timely
> > fashion directly from the
> > current holder. The result is that the data visible in ARIN registry may
> become
> > more inaccurate over
> > time.
> >
> > Policy statement:
> > This proposal eliminates all needs-based evaluation language for
> sections 8.2
> > and 8.3, allowing
> > transfers to be reflected in the database as they occur following an
> agreement
> > of transfer from the
> > resource provider to the recipient.
> >
> > Section 8.1 Principles:
> > - Strike the fragment from the 3rd paragraph which reads
> > ", based on justified need, "
> > so the resulting text reads
> > "Number resources are issued to organizations, not to individuals
> representing
> > those organizations."
> > Section 8.2 Mergers and Acquisitions:
> > - Change the 4th bullet from:
> > "The resources to be transferred will be subject to ARIN policies."
> > to:
> > "The resources to be transferred will be subject to ARIN policies,
> excluding any
> > policies related to needs-based justification."
> >
> > - Strike the final paragraph which begins "In the event that number
> resources of
> > the combined organizations are no longer justified under ARIN policy ..."
> >
> > Section 8.3 Transfers between Specified Recipients within the ARIN
> Region:
> > - Change the first bullet under "Conditions on recipient of the
> transfer" from:
> > "The recipient must demonstrate the need for up to a 24-month supply of
> IP
> > address resources under current ARIN policies and sign an RSA."
> > to:
> > "The recipient must sign an RSA."
> >
> > - Change the 2nd bullet under "Conditions on recipient of the transfer"
> from:
> > "The resources to be transferred will be subject to ARIN policies."
> > to:
> > "The resources to be transferred will be subject to ARIN policies,
> excluding any
> > policies related to needs-based justification."
> >
> > Comments:
> > a. Timetable for implementation: Immediate
> > b. Anything else
> > As the "free pool" for 4 of the 5 world's RIR's (APNIC, RIPE, LACNIC,
> and ARIN)
> > have now been
> > exhausted, networks in need of additional IPv4 addresses have shifted
> away from
> > the practice of
> > receiving them from the RIR's resource pool. Instead, networks in need
> are
> > seeking out current holders
> > of IPv4 resources who are willing to transfer them in order to fulfill
> that
> > need. Accordingly, the RIR's
> > primary responsibility vis-à-vis IPv4 netblock governance has shifted
> from
> > "allocation" to ensuring an
> > accurate registry database.
> >
> > The RIPE registry can be used as a reference of one which has evolved
> over the
> > past couple years to
> > shift their focus away from conservation/allocation and towards database
> > accuracy. IPv4 netblock
> > transfers within that RIR consist merely of validating authenticity of
> the
> > parties requesting a transfer.
> > Provided the organizations meet the basic requirement of RIR membership,
> and
> > that the transferring
> > organization has the valid authority to request the transfer, the
> transaction
> > completes without any
> > "needs-based" review.
> >
> > _______________________________________________
> > PPML
> > You are receiving this message because you are subscribed to
> > the ARIN Public Policy Mailing List ( ARIN-PPML at arin.net ).
> > Unsubscribe or manage your mailing list subscription at:
> > http://lists.arin.net/mailman/listinfo/arin-ppml
> > Please contact info at arin.net if you experience any issues.
> >
> >
> >
> > --
> > Cheers,
> >
> > McTim
> > "A name indicates what we seek. An address indicates where it is. A route
> > indicates how we get there." Jon Postel
> > _______________________________________________
> > PPML
> > You are receiving this message because you are subscribed to
> > the ARIN Public Policy Mailing List ( ARIN-PPML at arin.net ).
> > Unsubscribe or manage your mailing list subscription at:
> > http://lists.arin.net/mailman/listinfo/arin-ppml
> > Please contact info at arin.net if you experience any issues.
> >
> >
> >
> >
> > _______________________________________________
> > PPML
> > You are receiving this message because you are subscribed to
> > the ARIN Public Policy Mailing List ( ARIN-PPML at arin.net ).
> > Unsubscribe or manage your mailing list subscription at:
> > http://lists.arin.net/mailman/listinfo/arin-ppml
> > Please contact info at arin.net if you experience any issues.
> >
> > _______________________________________________
> > PPML
> > You are receiving this message because you are subscribed to
> > the ARIN Public Policy Mailing List ( ARIN-PPML at arin.net ).
> > Unsubscribe or manage your mailing list subscription at:
> > http://lists.arin.net/mailman/listinfo/arin-ppml
> > Please contact info at arin.net if you experience any issues.
> >
> >
> >
> > --
> > _______________________________________________________
> > Jason Schiller|NetOps| jschiller at google.com |571-266-0006
> >
> >
> > _______________________________________________
> > PPML
> > You are receiving this message because you are subscribed to
> > the ARIN Public Policy Mailing List (ARIN-PPML at arin.net).
> > Unsubscribe or manage your mailing list subscription at:
> > http://lists.arin.net/mailman/listinfo/arin-ppml
> > Please contact info at arin.net if you experience any issues.
> _______________________________________________
> PPML
> You are receiving this message because you are subscribed to
> the ARIN Public Policy Mailing List (ARIN-PPML at arin.net).
> Unsubscribe or manage your mailing list subscription at:
> http://lists.arin.net/mailman/listinfo/arin-ppml
> Please contact info at arin.net if you experience any issues.
>



-- 
_______________________________________________________
Jason Schiller|NetOps|jschiller at google.com|571-266-0006
-------------- next part --------------
An HTML attachment was scrubbed...
URL: <https://lists.arin.net/pipermail/arin-ppml/attachments/20160219/baf1ccb6/attachment.htm>