[arin-ppml] LAST CALL for Recommended Draft Policy ARIN-2015-3: Remove 30 day utilization requirement in end-user IPv4 policy

[Chris Woodfield]

Reading this thread, as interesting as it has been over the past couple of weeks, makes a few things obvious. I make these assertions primarily to allow others to point out any glaring misreadings I may be making here.

1. We currently don’t have much info regarding the potential for IPv4 addresses to become a speculative commodity. The best we can go by is the experience that unregulated markets have the annoying habit of turning just about any type of asset into a speculative commodity, whether it be real estate, oil, pork bellies, orange juice, or out-of-print Magic: The Gathering cards. Therefore, there is a not-unfounded fear among some that should tight needs-based controls on IPv4 allocations be lifted, IPv4 space will be speculatively commoditized like any other tradable asset.

2. There are community members that don’t think that the above is necessarily a bad thing, and others who believe that at least that the nature of IP allocations (not being hard assets, like many of the other examples I listed above) will curb undesirable speculative activity. 

3. The immediate utilization rule is onerous for many operators and should be updated to reflect current practices.

As such, here’s my thoughts on this:

1. There seems to be a wide gulf between those advocating keeping the 30-day rule and those advocating removing it entirely, which does remove what I do feel to be an effective enforcement policy (when followed up on, of course) against allocating space that does not get used. That said, I haven’t seen any conversations around relaxing the rule to make it less onerous, which could be a viable middle ground here. For example, we could change “immediate” to “within 60 (or 90) days"; or we could allow the definition of “immediate usage” to incorporate something like “must be announcing the prefix to a peer”. (if there was such a discussion, I’m not finding it in the PPML archives, so please help me find one if it exists).

2. Remember that ARIN has regular meetings, and a policy development process for a reason: So that operational issues with existing policy can be modified as needed to suit the needs of the community and to better execute on RIR principles and goals. If this, or any proposal, is adopted and we do see the negative effects that some are warning against…we have the power to roll it back! And I’d expect that if we were to see rampant speculation/monetization of IPv4 space as a result of this change, ARIN should do exactly that.

As such, I’ll state my position on the policy as currently undecided. I’d be in strong support of a policy that incorporates items #1 and with the community’s commitment to #2.

Thanks,

-Chris

> On May 19, 2016, at 8:48 PM, Owen DeLong <owen at delong.com> wrote:
> 
> 
>> On May 19, 2016, at 07:41 , Mueller, Milton L <milton at gatech.edu <mailto:milton at gatech.edu>> wrote:
>> 
>>  
>>   <>
>> From: Owen DeLong [mailto:owen at delong.com <mailto:owen at delong.com>] 
>> 
>>  
>> Transfers are not rationed by price…
>>  
>> MM: False. This is like saying white is black. Transfers involve a payment by the receiving party. They are, therefore, rationed by price. Not much room for debate here. You’re just wrong. 
> 
> Rationed: a fixed allowance of provisions or food, especially for soldiers or sailors or for civilians during a shortage: a daily ration of meat and bread. 2. an allotted amount: They finally saved up enough gas rations for the trip.
> 
> I simply do not agree with you that price constitutes any sort of limitation on the amount of resources that can be acquired by an organization with sufficiently deep pockets.
> 
> Therefore, you are simply wrong.
> 
>> Price does not ensure that the purchaser has actual need for the resources, it merely insures that they have monetary resources that they are willing to trade for number resources.
>>  
>> MM: It means that they value the resources and thus have some kind of need for them. There are 1,000 other things they could spend that money on but the buyer has determined that the value they will get out of the numbers is at least equal to the value of the money they spend.
> 
> It means that they believe the resources have value. That is different from having need for them or from valuing them. This is the sophistry in which you consistently engage hoping nobody will notice the inaccuracy in your statement.
> 
> For example, I may perceive that a stock has value or will have a greater value in the future. I may purchase the stock on that basis. It does not mean that I value the particular stock or the company it represents. It further does not mean that I have any need whatsoever for the stock other than my hope that its value will increase and that I can sell it at a gain.
> 
>> You’ve presented no evidence whatsoever to support your conclusion that stringent needs assessment raises the price
>>  
>> In fact, in the RIPE region where there are virtually no needs-based controls, according to the brokers I have discussed things with, prices are rising more rapidly than in the ARIN region, which would in fact appear to suggest that our needs-assessment regime is, in fact, holding prices down.
>>  
>> MM: Facts? Citations to specific transactions? I am always open to evidence.
> 
> These are facts. Feel free to discuss the pricing trends in RIPE vs. ARIN regions with any of the brokers. I cannot cite specific transactions because I am not directly familiar with the details of most of them and I am under NDA for the ones that I do know about. However, that does not discredit my general claim that both the transactions of which I am aware of the specifics, and the discussions I have had with several brokers have indicated that prices are generally higher in the RIPE region than in the ARIN region.
> 
>> If we eliminate needs assessment, what mechanism assures that the transferee is actually a network operator? Further, how does it in any way assure that the transfer is from a place of less need to a place of greater need rather than a place of limited need to a place of greater monetary resources?
>>  
>> MM: This is not the place to rectify your general lack of familiarity with economics. But you seem to think that people with “greater monetary resources” simply throw them at anything that moves. In fact, in the real world, everyone tries to maximize the value they get from whatever resources they have. So if someone pays for addresses, it is a very reliable indicator that they need them for something. Most if not all of the organizations that can derive value from numbers are network operators.  The threat of massive speculation is a bogeyman you have invented – there is no evidence that it exists. The only “speculation and hoarding” that currently exists is the holding of number resources by current assignees who don’t need them. And stringent needs assessment freezes that problem into place. Sorry to say it, but you, Owen, are one of the greatest defenders of hoarding.  
> 
> I am not alone in thinking that this is often true. As cases in point, I give you the Pet Rock, several of P.T. Barnum’s exploits, John Travolta’s personal 727, the Fry Brothers (of Fry’s Electronics fame) personal 747.
> 
> If someone pays for addresses, it is an indicator that one of two things is true… 1. They have a use for the addresses that they believe is at least as valuable as the price paid, or, 2. They have a belief that the market value of the addresses in the future will exceed the cost of obtaining and holding them until that time.
> 
> Your continuing to insist that the second of these two possibilities does not exist is absurd. If it were not true, we would not have stock markets, day traders, mutual funds, or most of the other things regulated by the securities and exchange commission.
> 
> This is not my general lack of familiarity with economics and your continued ad hominem attacks do nothing to change the falsity of your argument.
> 
>> You start with an assumption that you are correct in your conjecture and then act as if it is everyone else’s duty to provide evidence that your speculation is not correct. The reality is that these are judgment calls based on limited experience and while we do know that needs assessment does, in fact, work to some extent, there is very limited experience without it. Unfortunately, once it is eliminated, it will be virtually impossible to put the genie back in the bottle, so people are understandably cautious about opening the bottle all at once.
> 
> Where, exactly, do you see conjecture? It is a fact that if we commoditize IPv4 addresses, we will enable them to be treated as an investment vehicle, just like many other forms of property both real and personal. You’ve provided no reasoning whatsoever that distinguishes IPv4 address registrations from real estate, collectibles, or any of a host of other forms of property in this regard.
> 
> It is not conjecture when I say that there are people who invest in these other things in a variety of ways, some of which are speculative. I have no reason whatsoever to believe that commoditizing IPv4 addresses would not enable similar forms of speculation in addresses.
> 
> Your continued claims to the contrary appear to ignore the realities of other unregulated commodities.
> 
> If you need further examples, I point you to the Chicago Merchantile Exchange.
> 
> Owen
> 
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