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

Mike Burns mike at iptrading.com
Fri Mar 18 11:38:56 EDT 2022


Hi Scott, 

Sorry, I misinterpreted your statement and missed your point.
Which I guess was that the little guy should be concentrating on transitioning to IPv6 and can thus acquire "free" addresses from the 4.10 pool.

Fair enough.

Regards,
Mike


-----Original Message-----
From: scott at solarnetone.org <scott at solarnetone.org> 
Sent: Friday, March 18, 2022 11:23 AM
To: Mike Burns <mike at iptrading.com>
Cc: arin-ppml at arin.net
Subject: Re: [arin-ppml] FW: Revised and Retitled - Draft Policy ARIN-2021-6: Permit IPv4 Leased Addresses for Purposes of Determining Utilization for Future Allocations

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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>       >
>       _______________________________________________
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>       -- 
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>       Evans Griffiths & Hart, Inc.
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>       _______________________________________________
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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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