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

David Farmer farmer at umn.edu
Thu Sep 23 23:35:13 EDT 2021

On Thu, Sep 23, 2021 at 17:53 William Herrin <bill at herrin.us> wrote:

> On Thu, Sep 23, 2021 at 2:41 PM David Farmer via ARIN-PPML
> <arin-ppml at arin.net> wrote:
> > I have a question for those that oppose the leasing or loaning of IPv4
> addresses to other entities absent connectivity; Is it the rent-paying or
> that lack of connectivity provided with the addresses that offend you? Or,
> both?
> Hi David,
> The defined Economics term is "rent seeking." Just renting something
> to someone is not "rent seeking." The term has a specific meaning.
> Briefly, it means exploiting a rule-making process (such as law,
> regulation or other public policy) often by changing it to let you
> make money without adding value.

So, I intentionally didn’t, use that term, but I figured someone would. I
didn’t want to limit my question to that precise meaning, but I didn’t want
to exclude it either.

I have heard it said by some that charging for addresses is wrong, they
should be included with the connectivity for no additional charge. Along
time ago, I felt much the same, but things have changed and that is no
longer realistic. Things have evolved, maybe not for the better, but
nevertheless they have evolved.

Address transfers are at least notionally not rent seeking - the
> recipient isn't paying for the addresses, he's paying the former
> registrant's one-time cost to reconfigure to stop using them while the
> addresses themselves convey to the new registrant for exactly the same
> cost as the original registrant. Yes I know that's ridiculous. Call it
> a "legal fiction."
> Address leasing, on the other hand, is unapologetically rent seeking.
> I have them only because the regulatory agency allowed it. I add no
> value by letting you pay me to use them but you have no choice because
> the regulatory agency has no more to offer. I and my contemporaries
> took them all.

Requiring Technical Need doesn’t automatically prevent Rent Seeking, since
most LIRs got most of there addresses from the free pool for minimal cost,
at least no where near the current transfer market cost. It seems to me
that LIRs that are withdrawing there assignments to customers in order to
lease them to other customers are also “unapologetically rent seeking” as
well, and possibly even more so. So, Technical Need is no protection from
Rent Seeking.

What's wrong with a little rent seeking? Rent seeking is
> anticompetitive behavior. Quoting from
> https://www.investopedia.com/terms/r/rentseeking.asp :
> "Rent seeking can disrupt market efficiencies and create pricing
> disadvantages for market participants. It has been known to cause
> limited competition and high barriers to entry.
> Those that benefit from successful rent seeking obtain added economic
> rents without any added obligations. This can potentially create
> unfair advantages, specifically providing wealth to certain businesses
> that leads to greater market share at the detriment of competitors."

Yes, I agree, but protecting lessors that already have addresses to from
potential competitive lessors, by requiring Technical Need will not prevent
Rent Seeking, and could actually reinforce Rent Seeking by those that have
addresses rather than discouraging such Rent Seeking.

I have no problem with a healthy skepticism of address brokers, they are
out to make money, but there is nothing wrong with that. Furthermore, it’s
not like the MegaCarrier and MegaCable companies are not equally out to
make even more money and some of them are duopolies or even monopolies in
there service territories, talk about Rent Seeking behavior.

So, maybe you could go back to my original question and comment on the
examples I provided.


David Farmer               Email:farmer at umn.edu
Networking & Telecommunication Services
Office of Information Technology
University of Minnesota
2218 University Ave SE        Phone: 612-626-0815
Minneapolis, MN 55414-3029   Cell: 612-812-9952
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