[arin-ppml] Draft Policy ARIN-2021-6: Remove Circuit Requirement

Wed Sep 22 14:22:21 EDT 2021

Hi Chris,

Thank you for the clarity!

I am of the impression that your thinking as expressed below is representative of many others’.

“I believe that IP resources are a public good, and as such, must be managed in a way that is equitable as practically possible. 

For 30+ years, before the existence of ARIN - a cornerstone of equitable management of this particular public good has been that IP blocks should be registered by operators, and that organizations that hold allocations should be holding them because they have an operational need for them to run their and/or their connectivity customer’s networks.”

Mike- Addresses were allocated to those with operational need because that most optimally fulfilled the dual purposes of ARIN-registration and conservation. It made eminent sense because it provided for explosive growth while preventing plundering of the too-small address pool.  The free pool no longer exists, and conservation is better provided by the market than the old regime anyway. We need to forget about conservation and concentrate on registration, our primary purpose. This proposal provides an absent financial incentive for registration.

“With this proposal in the NRPM, an entirely new type of LIR will be allowed to exist, one that does not operate a network and does not use the address space for its own needs, instead utilizing the allocated space purely as a source of lease income. Even more so, that type of organization has multiple business benefits: it can officially hold address allocations whose transfer value is virtually guaranteed to go up over time, while at the same time earning income via leases. Sounds like a great business opportunity, to be honest.”

Mike- YES! You are not alone in recognizing the business opportunity, but without this proposal you are limiting access to this opportunity to the big guys. The lucky incumbents, the large networks who can always justify purchases. 

YES! A new type of LIR will come to exist, whose purpose is to address the needs of lease customers while protecting the reputation of its addresses.

“However, I fear that such organizations will create severe distortions in the transfer market, as these organizations will be able to acquire resources with virtually no limit to their holdings, and will be able to acquire new space as quickly as they’re able to lease it out. Thus, those who wish to obtain their own addresses will find doing so increasingly difficult and expensive, and will find themselves with little choice but to... lease addresses from this type of organization. Thus furthering the extent of the market distortion.”

Mike - The current policy favors the big guys and lucky incumbents, I think that’s a larger market distortion and prevents professional lessors from finding their natural place. If buyers can acquire new space as quickly as they can lease it out, what’s wrong with that? It means there is a significant lease market whose needs are being addressed. 

Buyers are already competing in a global transfer market with the same large buyers you claim would be the beneficiaries of this proposal. Nothing changes in that regard, I don’t see the distortion beyond status quo.

“In many other business, we refer to this as “rent seeking”, and is not looked upon favorably.”

Yes, this is rent seeking. Without it, you don’t get to lease a car-only buy it outright. Without it, you can’t rent an apartment, you have to buy it outright. 

The smallest ISPs are the ones getting hurt. Let’s remember things have changed and addresses are much more expensive then they’ve been.  Let’s say an ISP wants to build out new infrastructure. Yeah! We like that. But they have expenses. Routers, circuits, colo space, IPv4 addresses. They can pay monthly for the first three items, but they must make an outright buy of the last. Why? 

There are marginal situations where this situation could actually prevent build-outs.  And as prices increase, the number of these situations will likewise increase.  Prices are increasing, sellers want to hold and monetize. Prices are increasing, buyers need to lease. This business opportunity will be hard to stop, why not harness it and at least get an incentive for registration?  And for professional lessors who can balance the reputational quality of their addresses with rent.  Eventually there will be a tighter relationship between address prices and lease rates, and this will be an overall plus for the health of the market because the opportunity you recognized as being so great will become just another investment option.

Hopefully, this sufficiently explains why I “don’t like leasing”. 

Thanks,

-Chris

Yes, thanks again for the clarity of your expression.

Regards,

Mike

On Sep 22, 2021, at 8:50 AM, Mike Burns <mike at iptrading.com <mailto:mike at iptrading.com> > wrote:

Hi Chris,

I am still unclear. So the “risk” you refer to is the inability to purchase new blocks using leases as justification?

I’m not entirely sure how that constitutes a risk, unless you mean they will run out of addresses they need for themselves. Is that their risk?

It seems like you are objecting to a proposal to allow using leased addresses as justification by simply stating that you don’t like leasing.

Why can’t you stand behind this distribution method, can you be clear on your objection to leasing?

Because certainly this proposal facilitates leasing.

I guess we are coming to the crux of things now, I’ve asked a few people who have opposed this policy why, and for some it comes down to disapproving of leasing. Now I’ve asked why.

A good reason, to me, is that leasing often serves the needs of miscreants. But leasing is allowed, so miscreants are currently being served. My experience tells me that miscreants have the advantage over most incumbent lessors, who are generally not in the business of leasing addresses. 

ARIN policy prevents newcomers into the leasing business, and I think professional lessors will provide some balance against miscreants if they were allowed to enter that market. 

Regards,

Mike

From: Chris Woodfield <chris at semihuman.com <mailto:chris at semihuman.com> > 
Sent: Wednesday, September 22, 2021 11:33 AM
To: PPML <arin-ppml at arin.net <mailto:arin-ppml at arin.net> >
Cc: Owen DeLong <owen at delong.com <mailto:owen at delong.com> >; Mike Burns <mike at iptrading.com <mailto:mike at iptrading.com> >
Subject: Re: [arin-ppml] Draft Policy ARIN-2021-6: Remove Circuit Requirement

I’m speaking to the risk that an organization that engages in leasing address blocks without providing related connectivity services. Given that these blocks cannot currently be used as justification for additional space, an organization that does so would not qualify for additional space should they require it, unless they are falsifying the nature of the allocations in their justification documentation (which, of course, is a policy violation that could lead to that organizations’s allocations being reclaimed if discovered).

This policy proposal, per the problem statement, is explicitly aimed at removing that risk, and as such, putting ARIN’s stamp of approval on this type of lease practice, and in fact, allows organizations to require additional space which it could then lease out, without the need to provide the network services associated with the blocks being leased. Which is a type of IP block monetization that I simply cannot stand behind.

As such, I remain opposed to this proposal.

-C

On Sep 22, 2021, at 7:00 AM, Mike Burns <mike at iptrading.com <mailto:mike at iptrading.com> > wrote:

Hi Chris,

Can you be more specific on which inherent risk this policy would remove?

Somebody +1’d this, but I don’t understand what you mean.

I don’t even know which party’s risk is being commented on.

Regards,
Mike

From: ARIN-PPML <arin-ppml-bounces at arin.net <mailto:arin-ppml-bounces at arin.net> > On Behalf Of Chris Woodfield
Sent: Tuesday, September 21, 2021 9:21 PM
To: Owen DeLong <owen at delong.com <mailto:owen at delong.com> >
Cc: PPML <arin-ppml at arin.net <mailto:arin-ppml at arin.net> >
Subject: Re: [arin-ppml] Draft Policy ARIN-2021-6: Remove Circuit Requirement

On Sep 21, 2021, at 10:22 AM, Owen DeLong <owen at delong.com <mailto:owen at delong.com> > wrote:

This policy doesn’t affect that… Leasing of address space you already have is permitted under current policy and cannot be grounds for revocation of address space.

The change in this policy proposal is not to permit or deny leasing, but to permit leased addresses to be considered utilized for purposes of determining eligibility for additional address acquisition.

You are correct that the proposal may not permit or prohibit leasing, but it does (intentionally, per the problem statement) remove one of the inherent risks of the practice, and as such, in my view, is effectively an endorsement. 

As such, my opposition stands.

-C

Owen

On Sep 21, 2021, at 08:22 , Chris Woodfield <chris at semihuman.com <mailto:chris at semihuman.com> > wrote:

Writing in opposition. I do not support the practice of leasing IP address resources. Organizations who have received larger amounts of IP address space than what they are efficiently utilizing are free to relieve themselves of their excess space via the transfer market.

Thanks,

-Chris

On Sep 21, 2021, at 8:06 AM, ARIN <info at arin.net <mailto:info at arin.net> > wrote:

On 16 September 2021, the ARIN Advisory Council (AC) accepted "ARIN-prop-302: Remove Circuit Requirement " as a Draft Policy.

Draft Policy ARIN-2021-6 is below and can be found at:

https://www.arin.net/participate/policy/drafts/2021_6/

You are encouraged to discuss all Draft Policies on PPML. The AC will evaluate the discussion in order to assess the conformance of this draft policy with ARIN's Principles of Internet number resource policy as stated in the Policy Development Process (PDP). Specifically, these principles are:

* Enabling Fair and Impartial Number Resource Administration

* Technically Sound

* Supported by the Community

The PDP can be found at:

https://www.arin.net/participate/policy/pdp/

Draft Policies and Proposals under discussion can be found at:

https://www.arin.net/participate/policy/drafts/

Regards,

Sean Hopkins

Senior Policy Analyst

American Registry for Internet Numbers (ARIN)

Draft Policy ARIN-2021-6: Remove Circuit Requirement 

Problem Statement:

Current ARIN policy prevents the use of leased-out addresses as evidence of utilization.

Policy statement:

Replace

“2.4. Local Internet Registry (LIR) A Local Internet Registry (LIR) is an IR that primarily assigns address space to the users of the network services that it provides. LIRs are generally Internet Service Providers (ISPs), whose customers are primarily end users and possibly other ISPs.”

with

“2.4. Local Internet Registry (LIR) A Local Internet Registry (LIR) is an IR that primarily assigns address space to users of the network. LIRs are generally Internet Service Providers (ISPs), whose customers are primarily end users and possibly other ISPs.”

Timetable for implementation: Immediate

_______________________________________________
ARIN-PPML
You are receiving this message because you are subscribed to
the ARIN Public Policy Mailing List ( <mailto:ARIN-PPML at arin.net> ARIN-PPML at arin.net).
Unsubscribe or manage your mailing list subscription at:
 <https://lists.arin.net/mailman/listinfo/arin-ppml> https://lists.arin.net/mailman/listinfo/arin-ppml
Please contact  <mailto:info at arin.net> info at arin.net if you experience any issues.

_______________________________________________
ARIN-PPML
You are receiving this message because you are subscribed to
the ARIN Public Policy Mailing List (ARIN-PPML at arin.net <mailto:ARIN-PPML at arin.net> ).
Unsubscribe or manage your mailing list subscription at:
https://lists.arin.net/mailman/listinfo/arin-ppml
Please contact info at arin.net <mailto:info at arin.net>  if you experience any issues.

-------------- next part --------------
An HTML attachment was scrubbed...
URL: <https://lists.arin.net/pipermail/arin-ppml/attachments/20210922/29034081/attachment.htm>