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

Holden Karau holden at pigscanfly.ca
Thu Mar 17 19:28:41 EDT 2022


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/>
>>> >     _______________________________________________
>>> >     ARIN-PPML
>>> >     You are receiving this message because you are subscribed to
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>>> >
>>> >
>>> >
>>> >
>>> > _______________________________________________
>>> > ARIN-PPML
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>>>
>>> --
>>> John Santos
>>> Evans Griffiths & Hart, Inc.
>>> 781-861-0670 ext 539
>>> _______________________________________________
>>> ARIN-PPML
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>>>
>>
>>
>> --
>> ===============================================
>> 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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>
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