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

Scott Leibrand scottleibrand at gmail.com
Fri Mar 18 17:46:41 EDT 2022


On Fri, Mar 18, 2022 at 12:39 PM Mike Burns <mike at iptrading.com> wrote:

> Hi Scott,
>
>
>
> I am sorry, I actually penned a long reply to  your initial post but never
> sent it.
>
> The limit on initial block size is the same as if you came to ARIN seeking
> a block not for lease, but for your circuit-connected customers. To wit,
> ARIN will require more than just your statement.
>
> What’s to stop a company from claiming they will be delivering service to
> connected clients over the next two years, so they should get a
> pre-approval?
>

They have to buy equipment and sign contracts for transit to deliver such
service. That equipment is worth far less if re-sold, and those contracts
cost money to terminate.

If literally the only thing I have to purchase to start an IP leasing
company is the addresses themselves, and I expect the addresses to continue
appreciating in value, then I am incentivized to buy the largest block I
can and provide ARIN with extremely optimistic (but not fraudulent) sales
projections showing how I plan to lease it all out. If I fail to lease the
space out as fast as my optimistic plans, I still make a healthy profit on
any price appreciation.

One way to address this might be to require that the documentation to be
provided to ARIN which details the use of at least 50% of the requested
IPv4 block be in the form of binding contracts if the IPv4 space is
intended for reassignment to customers. That way, a speculative lessor can
only start with a /24 or 2x as much IP space as they've already signed up
customers for, and then can come back to ARIN to transfer more as soon as
their customers have efficiently utilized at least 50% of their cumulative
IPv4 space.

If that's the approach we want to take, I think we'd need to modify the
policy to stipulate that.


>
> The initial size for a section 8 transfer per 8.5.5 is a /24. To get a
> larger initial block, evidence is required that should be equivalent in
> scope and detail regardless of whether the anticipated clients are
> connected with a circuit or not. Are we seeing such fraud by ISPs to
> increase their purchase size?
>
>
>
> Finally, if you attest to fraudulent information, you are taking liability
> risks that also dampen speculation.
>
>
>
> Regards,
>
> Mike
>
> PS You ignored my request for evidence of speculation at RIPE where
> absolutely no needs demonstration has been required for many years. 😉
>

It won't discuss in public whether I have observed speculation first-hand,
but I will say that all transactions I'm aware of were above-board and
policy-compliant. I do agree, though, that pure financial speculation is
not driving the overall market price for addresses beyond the difference
between prices for RIPE vs. ARIN space (which is minimal). If the choice
were between RIPE's (lack of) policy and ARIN's current no-leasing-allowed
policy, I'd likely choose RIPE's. But I think a leasing-allowed policy that
limits initial block size and then allows additional transfers based on 50%
utilization would be better than both of those.

-Scott


>
>
>
>
>
>
>
>
>
>
> *From:* Scott Leibrand <scottleibrand at gmail.com>
> *Sent:* Friday, March 18, 2022 3:25 PM
> *To:* Mike Burns <mike at iptrading.com>
> *Cc:* Owen DeLong <owen at delong.com>; Andrew Dul <andrew.dul at quark.net>;
> 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
>
>
>
>
>
> On Mar 18, 2022, at 7:37 AM, Mike Burns <mike at iptrading.com> wrote:
>
> 
>
> Hi Owen, Andrew, and Scott,
>
>
>
> Transfer approval of a larger-than-minimum block size requires detailed
> documentation of the use of at least 50% of the block in 24 months, and
> that detailed documentation must be officer-attested.  I’m sure we all
> agree that nobody can approach ARIN for a large initial block without
> providing believable documentation to ARIN, and the attestation provides
> actionability against fraud.
>
>
>
> I don’t doubt that believable documentation is required. But my concern,
> as I stated in the very first reply to this thread that everyone ignored,
> is:
>
>
>
> If you’re going to remove that, what is to stop me from opening a new LIR
> and stating that I want pre-qualification for a transfer of a /8 to lease
> out, because I have sales projections that I can lease out a /9 within 24
> months, a /10 within 12 months, and a /11 within 6 months? And if I fail to
> meet my sales projections, I can sell some or all of the /8 after 12 months
> (presumably at a profit, as prices just keep going up).
>
>
>
> It seems that there should be some limit on initial block size if we’re
> going to rely exclusively on recipients’ leasing projections instead of
> requiring use on an operational network.
>
>
>
> I take your point about a /8 being infeasible to acquire on the market,
> but the same point applies at whatever the maximum available size currently
> is.
>
>
>
> -Scott
>
>
>
> Further transfers require proof of utilization of the original transfers.
>
>
>
> This persistent fear of “speculation”, whatever that word means in this
> context, is belied by the RIPE experience. Will somebody please answer the
> RIPE experience before bringing up the “speculation” argument?
>
> It’s over 10 years now. The experiment has been performed. We have the
> data. It’s time to point to evidence instead of holding policy in thrall to
> assertions of the dangers of speculation.
>
>
>
> Remember the biggest damper on speculation is the reality of the market.
> You can’t just whip up a /8 to be transferred, and if you could, you are
> looking at spending almost a billion dollars! Do you really think a billion
> dollar investment in an asset that all the smart people say will be
> valueless at some point isn’t a damper on speculation? Do you think ARIN
> would approve an initial transfer of a /8 on the mere promise it will be
> leased out in two years?
>
>
>
> I trust the market and I trust ARIN staff enough to dampen “speculation”.
> As always, should something damaging appear, we retain the ability to
> change policy.
>
>
>
> Regards,
> Mike
>
>
>
>
>
> *From:* ARIN-PPML <arin-ppml-bounces at arin.net> *On Behalf Of *Owen DeLong
> via ARIN-PPML
> *Sent:* Thursday, March 17, 2022 8:20 PM
> *To:* Andrew Dul <andrew.dul at quark.net>
> *Cc:* 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
>
>
>
> I favor the kind of limitations Scott has expressed. I was commenting on
> the arguments made by Fernando and have not yet had the bandwidth to review
> the actual policy text in detail.
>
>
>
> Owen
>
>
>
>
>
> On Mar 17, 2022, at 16:17 , 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
>
>
>
>
>
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