[arin-ppml] FW: Revised and Retitled - Draft Policy ARIN-2021-6: Permit IPv4 Leased Addresses for Purposes of Determining Utilization for Future Allocations

scott at solarnetone.org scott at solarnetone.org
Fri Mar 18 11:22:58 EDT 2022


Mike,

> 
> The primary value of the leasing company is that they are allowing the
> effective financing of Ipv4 address space through the taking-on of risk in
> the initial investment.  Currently there is no vehicle for this, and the
> result is that smaller, newer, less-capitalized companies are required to
> pay in full, up-front, for address blocks.
>

Seems as though the little guy can meet these needs with 4.10, for only 
the cost of annual membership.  I certainly was able to, realizing a cost 
savings over upstream LIR provided addresses.


Scott

> Regards,
> 
> Mike
> 
>  
> 
> From: ARIN-PPML <arin-ppml-bounces at arin.net> On Behalf Of Holden Karau
> Sent: Thursday, March 17, 2022 7:29 PM
> To: andrew.dul at quark.net
> Cc: arin-ppml <arin-ppml at arin.net>
> Subject: Re: [arin-ppml] Revised and Retitled - Draft Policy ARIN-2021-6:
> Permit IPv4 Leased Addresses for Purposes of Determining Utilization for
> Future Allocations
> 
>  
> 
> Wait so some company could come to ARIN and ask for a block of IP addresses
> using leasing as the justification and then turn around and lease them.
> 
>  
> 
> What value is the leasing company providing? It seems like a solid way to
> get a bunch of LLCs formed to acquire IP addresses from the waiting list and
> then make money for doing ~nothing.
> 
>  
> 
> On Thu, Mar 17, 2022 at 4:18 PM Andrew Dul <andrew.dul at quark.net> wrote:
>
>       The draft policy as currently written does not provide any
>       additional limits against speculation.  As drafted, it allows
>       any organization (including those who do not operate networks)
>       to obtain IPv4 addresses for the purpose of leasing.  
> 
>  
> 
> With that policy change what types of limits does the community think
> would be needed?
> 
>  
> 
> Thanks,
> 
> Andrew
> 
>  
> 
> On 3/17/2022 3:00 PM, Scott Leibrand wrote:
>
>       +1 to both Owen and David Farmer's comments. Leasing IPv4
>       space is likely the best solution for some networks that
>       need those addresses to operate their network. If an
>       organization wants to acquire and lease out IPv4 space
>       without providing bundled IPv4 transit, that should be
>       allowed by policy. It might be useful for ARIN policy to
>       try to slightly dampen speculation by requiring that
>       organizations seeking to acquire large blocks of IPv4
>       space demonstrate that their current holdings are being
>       efficiently used by the organization they're registered to
>       in whois. I am not sure if this policy proposal does that
>       to my satisfaction, but once we ensure it does so, I would
>       likely support it.
>
>        
> 
> -Scott
> 
>  
> 
> On Thu, Mar 17, 2022 at 1:33 PM Owen DeLong via ARIN-PPML
> <arin-ppml at arin.net> wrote:
>
>        
>
>        
>
>             On Mar 16, 2022, at 15:22 , Fernando
>             Frediani <fhfrediani at gmail.com> wrote:
> 
>  
> 
> Hi David
> 
> If I understand correctly you seem to have a view
> that there should be a ARIN policy to permit IPv4
> leasing just because it is a reality and we kind of
> have to accept it in our days. No we don't, and
> that's for many different reasons.
> 
> Well, of course, you are free to deny reality as much as
> you want. Many people do. It’s not particularly helpful in
> the discussion, however.
> 
>  
>
>       I am used to see people saying the brokers are
>       doing a good thing for the community by
>       facilitating the things which in reality is
>       the opposite. It may look like a good things,
>       but the real beneficiaries are only them who
>       profit from it without much concern of what is
>       fair or not to most organizations involved.
> 
>  
> 
> You are actually mistaken here. I used to think as you do,
> actually. I was very resistant to the first “specified
> transfer” policies because of some of the reasons you
> describe. However, what you are failing to recognize is
> that:
> 
> + Brokers and specified transfers were going to happen
> with or without the RIRs. If they happened without the
> RIRs,
> 
> there’d be no accurate record of who was using which
> address space and the provenance of addresses would be
> 
> very difficult to support or defend.
> 
>  
> 
> * Benefit to the community from brokers: (ethical) brokers
> are familiar with the rules in the RIRs in which
> 
> they operate and can assist their customers in accurate
> and compliant registration updates and
> 
> aid in keeping the allocation database(s) accurate.
> 
>  
> 
> + With the economic realities of IPv4 addresses becoming
> progressively more and more expensive and the advent
> 
> of ISPs with limited IPv4 resources available, it is
> inevitable that more and more IP service providers will be
> 
> doing one or more of the following:
> 
>  
> 
> + Separate surcharges for IPv4 addresses
> 
> + Expecting customers to supply their own IPv4 addresses
> 
> + Surcharges for IPv4 services
> 
> + IPv4 “installation charges” large enough to cover the
> procurement of addresses
> 
>  
> 
> * Brokers assist ISPs and customers in many of the above
> circumstances.
> 
>  
> 
> + With a variety of organizations holding IPv4 addresses
> that may or may not even known they have them and whose
> 
> IPv4 resources may vastly exceed their needs, it is
> (arguably) desirable to have those addresses be
> transferred to parties
> 
> that have current need for IPv4 addresses.
> 
>  
> 
> * Brokers provide a valuable service to the community
> identifying and marketing these resources
> 
> * Paid transfers provide an incentive for entities to make
> more efficient use of the resources they have in order
> 
> to monetize the resources they no longer need. Brokers are
> frequently able to assist in this process.
> 
>  
> 
> + With the high cost of acquisition, IPv4 addresses have
> become a capital intensive part of any network-dependent
> 
> business model that must support IPv4. Further, there is
> some risk that this capital outlay may be fore a resource
> 
> which will abruptly and quickly lose its value and no
> longer be needed well before it can be amortized as a
> capital
> 
> expenditure. As such, it may make sense for some entities
> to transfer that risk to another organization by using
> 
> a lease structure instead of purchasing the addresses
> outright.
> 
>  
> 
> * Brokers that provide IPv4 leasing in an ethical and
> policy compliant way provide a valuable service
> 
> to these businesses. Yes, their price per address may
> eventually be more than it would have cost
> 
> them to purchase the addresses, but the same is true of
> virtually any rental situation.  On the other hand,
> 
> that excess helps offset the risk that the lessor is
> taking by owning a resource that may or may not remain
> 
> valuable and may or may not continue to produce revenue.
>
>       IP Leasing is very different from IP Transfer
>       which I see not problem they continue doing
>       it. IP Transfer at least we have some
>       guarantees that the directly receiving
>       organization really justify for them and that
>       is a quiet important (I would say fundamental)
>       point to look at, because that is fairer to
>       everyone involved. What guarantees we have
>       when a IP Leasing is done in that sense, that
>       fairness start to lack here.
> 
> If we set the policies up correctly, we should have the
> same exact guarantees on a lease.
> 
>  
> 
> If $ISP acquires a /10 through transfer and then issues
> various subordinate prefixes to their customer, the only
> guarantee
> 
> you have that $ISP’s customers who receive the addresses
> really justify them is that $ISP says so. We generally
> trust $ISP
> 
> to act in good faith.
> 
>  
> 
> If $LESSOR acquires a /10 through transfer and then leases
> various subordinate prefixes to their customers, we have
> pretty
> 
> much the same guarantee with the additional bit that
> $CUSTOMER is at least willing to pay enough for the
> addresses to $LESSOR
> 
> to make the lease make sense. In general, I think it is
> somewhat safe to assume that $CUSTOMER is not going to
> make a
> 
> monthly recurring payment to $LESSOR for something they
> don’t intend to use. If one’s intent is to deprive the
> market and
> 
> inflate the price, then the risk profile for such a
> transaction is vastly more favorable if you purchase
> rather than lease.
> 
>  
> 
> Sure, there could be lessors that don’t get reasonable
> justification for allocations from their customers, but
> there are most
> 
> certainly ISPs in that category as well. Either way,
> you’ve got very little assurance. A lessor can provide
> just as much
> 
> justification to an RIR for the addresses they will
> allocate to leases as an ISP can for addresses they will
> lease to their
> 
> customers. The only difference is a lease with
> connectivity from the same company or a lease from a
> company other than
> 
> the one(s) providing connectivity.
>
>       People see the brokers are doing a favor to
>       organizations in general by facilitating they
>       get some chunks of IPv4, but that in reality
>       makes the cost of IPv4 for both leasing and
>       transfer more and more expensive as it makes
>       organization even more dependent from
>       these those crumbs that seem to be offered
>       with good intention but in reality it is
>       feeding a system that is contrary the
>       interests to most organizations involved.
> 
> Just as you are free to mount, balance, and rotate your
> own tires, or, you can go to a tire store and have them
> perform that service for a fee, brokers provide a service
> for a fee. If you want to obtain addresses in the transfer
> market without a broker, you’re still free to do that.
> Brokers are not driving the cost of IPv4… The scarcity and
> difficulty of operating with IPv4 is driving the cost of
> IPv4. Brokers are along for the ride providing a service
> and collecting a fee for that service. Whether that fee is
> reasonable or not is (and should be) entirely in the eye
> of the customer. Customers are always free to walk away
> and find a different supplier or look for their addresses
> independently.
>
>       It may sound a cliche but IPv4 is over and
>       organizations must learn how to survive with
>       what they have, reinvent themselves and make
>       better used of their IPv4 resources, deploy a
>       proper CGNAT, deploy IPv6 either they like it
>       or not, etc. If an organization have so little
>       or none and need some minimal amount is fine
>       they seek for a Transfer of a minimal amount
>       with the help of brokers. 
> 
> I agree. However, the increasing cost of IPv4 is a natural
> and organic part of that process and sticking our heads in
> the sand and pretending that it is not the economic
> reality of how the current world works will not help
> anyone. Not the community, not organizations that are
> short on IPv4 resources, and not the RIRs who are only
> useful so long as their databases provide a reasonably
> accurate reflection of the actual utilization of the
> address space and who controls it.
> 
>  
> 
> A broker is an LIR just like an ISP. Since ISPs are now
> charging for addresses independent of connectivity and
> bandwidth, it only makes sense that customers can shop for
> them separately from different suppliers. Just like you
> can buy tires for your car from the dealership or from
> some other store that sells and supports tires, IPv4
> addresses are moving that way as well. The RIRs can either
> recognize this and adapt to it with policies that make
> sense and preserve some of the things you’ve outlined as
> concerns above, or, they can simply deny the reality of
> IPv4 leasing and lose track of how addresses are actually
> managed for some significant chunks of the internet.
>
>       Encouraging IP Leasing as if it were something
>       normal just "because it exists today" is a
>       shot in the foot that in the long term only
>       worsens the existing scenario, it feeds a
>       market without much discretion increasing
>       final prices for everyone and what is the
>       worst of all, creates even more unfairness for
>       everyone who has always submitted to the rules
>       we have until today for distributing addresses
>       to those who really have a real justification
>       to keep control of that resource that does not
>       belong to them.
> 
> I don’t believe that a policy that merely allows IPv4
> leasing can be said to encourage it. Rather, it permits
> it, recognizes that it exists and is not going to stop
> existing just because policy pretends it can’t exist.
> 
>  
> 
> The market is not likely to be significantly swayed by
> policy in terms of pricing, with the exception that
> AFRINIC has been able to preserve a devalued price on
> addresses within their region due to their restrictive
> lack of a transfer policy for moving addresses to/from
> AFRINIC. However, while this has the effect of keeping
> AFRINIC IPv4 addresses less expensive on the open market,
> it also leads to a significant amount of utilization of
> those addresses outside of policy and quite a bit of
> hoarding of addresses by some of AFRINIC’s largest
> members. ARIN’s counsel has advised against naming names
> here, so I won’t, but if you want names, contact me off
> list.
> 
>  
> 
> Owen
> 
>  
>
>       Regards
>       Fernando
>
>       On 16/03/2022 13:09, David Farmer via
>       ARIN-PPML wrote:
>
>       Yes, bundling IPv4 addresses with
>       bandwidth is permitted, and in the past
>       was common practice, heck even the
>       expected practice. However, the fact
>       that IPv4 address demand isn't
>       decreasing significantly, the costs to
>       acquire new IPv4 addresses are
>       increasing significantly, and with the
>       increasing commoditization of bandwidth,
>       it is no longer economically viable to
>       bundle bandwidth, and its associated
>       connectivity, with IPv4 addressing. This
>       is driving a structural separation of
>       bandwidth, connectivity, and IPv4
>       addressing, from each other, instead of
>       bundling them together as in the past.
> 
>  
> 
> Let me state that differently; ISPs are being
> driven, buy cost conscience consumers, to
> separate the costs of bandwidth and the costs
> of the IPv4 addresses needed to utilize the
> bandwidth from each other.  Minimally this
> separation is achieved by accounting for the
> costs on separate line items of a common bill
> from a single provider. However, price
> competition for bandwidth and IPv4 addresses
> separately will inevitably drive a structural
> separation between the two. Consumers will
> want the best price they can get for bandwidth
> and the best price they can get for IPv4
> addresses, regardless of whether they come
> from a single provider or not.
> 
>  
> 
> Some may argue this is being driven by the
> existence of address brokers, and their desire
> to make money, I disagree. While address
> brokers making money is the grease that keeps
> this machine working, the need for the machine
> is driven by; IPv4 free pool exhaustion, the
> increasing cost of IPv4 addresses, and the
> lack of adoption of IPv6.
> 
> In other words, address brokers wouldn't exist
> if there wasn't a demand for their services.
> 
>  
> 
> In short, the economic conditions that allowed
> for and even encouraged the bundling of IPv4
> addresses with bandwidth and connectivity no
> longer exist, that world is gone. While I have
> not personally yet determined if I support
> this particular policy text, nevertheless, the
> time has come to recognize the next step in
> this inextricable evolution of IPv4 address
> policy by the ARIN policy community and permit
> IPv4 leasing.
> 
>  
> 
> Thanks.
> 
>  
> 
> On Fri, Mar 11, 2022 at 5:05 PM John Santos
> <john at egh.com> wrote:
>
>       I disagree.  The addresses are
>       useless unless they ALSO purchase
>       access and 
>       routing from another network
>       operator.  How is this cheaper?
>
>       It is and always has been allowed
>       to lease bundled access of
>       addresses and 
>       connectivity from a LIR, without
>       any expense for purchasing those
>       addresses.
> 
>
>       On 3/11/2022 12:13 PM, Tom
>       Fantacone wrote:
>       > I support the proposal as
>       written.
>>       > It facilitates the provision of
>       a valuable service to a large
>       swath of the ARIN 
>       > community, namely the ability of
>       network operators with an
>       operational need to 
>       > lease IPv4 addresses from 3rd
>       party lessors at a fraction of the
>       cost of 
>       > purchasing those addresses.  Too
>       often we have seen network
>       operators justify 
>       > their need for IPv4 space only
>       to find that they can't afford to
>       make the 
>       > purchase.  They end up using
>       CGNAT or some other sub-optimal
>       solution.
>>       > Bill, regarding your point "B",
>       by providing IPv4 leasing, these
>       3rd parties are 
>       > certainly performing a function
>       that ARIN does not.
>>>>       > ---- On Thu, 10 Mar 2022
>       17:46:36 -0500 *William Herrin
>       <bill at herrin.us>* wrote ----
>>       >     On Wed, Mar 9, 2022 at 8:24
>       PM ARIN
>       <info at arin.net <mailto:info at arin.net>>
>       >     wrote:
>       >      > * ARIN-2021-6: Permit
>       IPv4 Leased Addresses for Purposes
>       of Determining
>       >     Utilization for Future
>       Allocations
>>       >     I continue to OPPOSE this
>       proposal because:
>>       >     A) It asks ARIN to
>       facilitate blatant and
>       unapologetic rent-seeking
>       >     behavior with changes to
>       public policy.
>>       >     B) It proposes that third
>       parties perform precisely and only
>       the
>       >     functions that ARIN itself
>       performs without any credible
>       compliance
>       >     mechanism to assure the
>       third party performs to ARIN's
>       standards or in
>       >     accordance with the
>       community's established number
>       policy.
>>       >     Regards,
>       >     Bill Herrin
>>>       >     -- 
>       >     William Herrin
>       >   
>        bill at herrin.us <mailto:bill at herrin.us>
>       >   
>        https://bill.herrin.us/ <https://bill.herrin.us/>
>       >   
>        _______________________________________________
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>>>>>       >
>       _______________________________________________
>       > ARIN-PPML
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>       -- 
>       John Santos
>       Evans Griffiths & Hart, Inc.
>       781-861-0670 ext 539
>       _______________________________________________
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> 
>  
> 
> -- 
> 
> ===============================================
> David Farmer           
>    Email:farmer at umn.edu
> Networking & Telecommunication Services
> Office of Information Technology
> University of Minnesota   
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