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<p class="MsoNormal"><span style="font-size:11.0pt;font-family:"Calibri",sans-serif;color:#1F497D">I would add to Mike’s and your comments that needs based policies are probably having a different effect now that runout is here than they did before runout.
That is why some of these policies need to be changed towards less needs based testing.
<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:11.0pt;font-family:"Calibri",sans-serif;color:#1F497D"><o:p> </o:p></span></p>
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<p class="MsoNormal"><i><span style="font-size:11.0pt;font-family:"Trebuchet MS",sans-serif;color:#1F497D">Steven Ryerse<o:p></o:p></span></i></p>
<p class="MsoNormal"><i><span style="font-size:11.0pt;font-family:"Trebuchet MS",sans-serif;color:#1F497D">President<o:p></o:p></span></i></p>
<p class="MsoNormal"><i><span style="font-size:11.0pt;font-family:"Trebuchet MS",sans-serif;color:#1F497D">100 Ashford Center North, Suite 110, Atlanta, GA 30338<o:p></o:p></span></i></p>
<p class="MsoNormal"><i><span style="font-size:11.0pt;font-family:"Trebuchet MS",sans-serif;color:#1F497D">770.656.1460 - Cell<o:p></o:p></span></i></p>
<p class="MsoNormal"><i><span style="font-size:11.0pt;font-family:"Trebuchet MS",sans-serif;color:#1F497D">770.399.9099- Office<o:p></o:p></span></i></p>
<p class="MsoNormal"><span style="font-size:10.0pt;font-family:"MS Mincho",serif;color:#1F497D"><o:p> </o:p></span></p>
<p class="MsoNormal"><span style="font-size:11.0pt;font-family:"Calibri",sans-serif;color:#1F497D"><img width="56" height="37" id="Picture_x0020_1" src="cid:image001.jpg@01D1B1EA.80C6C970" alt="Description: Description: Eclipse Networks Logo_small.png"></span><span style="font-size:10.0pt;font-family:"MS Mincho",serif;color:#1F497D">℠</span><span style="font-size:14.0pt;font-family:"Trebuchet MS",sans-serif;color:#1F497D">
</span><span style="font-size:11.0pt;font-family:"Trebuchet MS",sans-serif;color:#1F497D">Eclipse Networks, Inc.</span><span style="font-size:14.0pt;font-family:"Trebuchet MS",sans-serif;color:#1F497D"><o:p></o:p></span></p>
<p class="MsoNormal" style="text-indent:.5in"><sup><span style="font-size:9.0pt;font-family:"Trebuchet MS",sans-serif;color:#1F497D"> Conquering Complex Networks</span></sup><sup><span style="font-size:9.0pt;font-family:"Calibri",sans-serif;color:#1F497D">℠</span></sup><sup><span style="font-size:9.0pt;font-family:"Trebuchet MS",sans-serif;color:#1F497D"><o:p></o:p></span></sup></p>
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<p class="MsoNormal"><span style="font-size:11.0pt;font-family:"Calibri",sans-serif;color:#1F497D"><o:p> </o:p></span></p>
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<p class="MsoNormal"><b><span style="font-size:11.0pt;font-family:"Calibri",sans-serif">From:</span></b><span style="font-size:11.0pt;font-family:"Calibri",sans-serif"> arin-ppml-bounces@arin.net [mailto:arin-ppml-bounces@arin.net]
<b>On Behalf Of </b>John Curran<br>
<b>Sent:</b> Thursday, May 19, 2016 3:28 PM<br>
<b>To:</b> Mike Burns <mike@iptrading.com><br>
<b>Cc:</b> ARIN PPML <ppml@arin.net><br>
<b>Subject:</b> [arin-ppml] Dynamics of a transfer environment without operational need assessment<o:p></o:p></span></p>
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<p class="MsoNormal"><o:p> </o:p></p>
<p class="MsoNormal">On May 19, 2016, at 8:52 PM, Mike Burns <<a href="mailto:mike@iptrading.com">mike@iptrading.com</a>> wrote:<o:p></o:p></p>
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<p class="MsoNormal">...<o:p></o:p></p>
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<p class="MsoNormal"><span style="font-size:11.0pt;font-family:"Calibri",sans-serif;color:#1F497D">I want community members to understand that this is evidence that the market is a natural conserver of valuable resources, and naturally elevates them to a higher
and better use.</span><o:p></o:p></p>
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<p class="MsoNormal"><o:p> </o:p></p>
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<p class="MsoNormal">Mike - <o:p></o:p></p>
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<p class="MsoNormal"><o:p> </o:p></p>
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<p class="MsoNormal">There is little doubt that having an IP address transfer market has enabled unused or<o:p></o:p></p>
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<p class="MsoNormal">otherwise “fallow” IP address blocks to come back to productive use.<o:p></o:p></p>
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<p class="MsoNormal"><span style="font-size:11.0pt;font-family:"Calibri",sans-serif;color:#1F497D">Thus reducing the actual importance of these “angels-on-the-heads-of-pins” discussions about utilization periods or parsing the application of free pool allocation
language in its application to transfers.</span><o:p></o:p></p>
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<p class="MsoNormal"><o:p> </o:p></p>
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<p class="MsoNormal">Given that all of our experience has been with needs-based transfer policies (which <o:p></o:p></p>
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<p class="MsoNormal">provide some back pressure to speculation, whether via the direct prohibition that is<o:p></o:p></p>
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<p class="MsoNormal">implied or the convolutions that is necessary to work around same), it is rather unclear <o:p></o:p></p>
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<p class="MsoNormal">if financial speculation would have occurred over the past five years in absence of the<o:p></o:p></p>
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<p class="MsoNormal">needs-based assessment model. In an early message, you characterize it as such - <o:p></o:p></p>
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<p class="MsoNormal"><o:p> </o:p></p>
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<p class="MsoNormal"><span style="font-size:11.0pt;font-family:"Calibri",sans-serif;color:#1F497D">Policy in ARIN has been held hostage for years to the boogeyman of speculators capable of harmfully manipulating the market. Never has evidence supporting the
existence of these people been offered. And certain unavoidable facts are avoided:</span><o:p></o:p></p>
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<p class="MsoNormal" style="text-indent:-.25in"><span style="font-size:11.0pt;font-family:"Calibri",sans-serif;color:#1F497D">1.</span><span style="font-size:7.0pt;color:#1F497D"> </span><span style="font-size:11.0pt;font-family:"Calibri",sans-serif;color:#1F497D">Any
such speculation will drive IPv6 and could render IPv4 worthless</span><o:p></o:p></p>
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<p class="MsoNormal" style="text-indent:-.25in"><span style="font-size:11.0pt;font-family:"Calibri",sans-serif;color:#1F497D">2.</span><span style="font-size:7.0pt;color:#1F497D"> </span><span style="font-size:11.0pt;font-family:"Calibri",sans-serif;color:#1F497D">Supply
has been fragmented through a quarter century of worldwide RIR allocations</span><o:p></o:p></p>
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<p class="MsoNormal" style="text-indent:-.25in"><span style="font-size:11.0pt;font-family:"Calibri",sans-serif;color:#1F497D">3.</span><span style="font-size:7.0pt;color:#1F497D"> </span><span style="font-size:11.0pt;font-family:"Calibri",sans-serif;color:#1F497D">Every
policy-compliant transfer is publicly recorded</span><o:p></o:p></p>
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<p class="MsoNormal" style="text-indent:-.25in"><span style="font-size:11.0pt;font-family:"Calibri",sans-serif;color:#1F497D">4.</span><span style="font-size:7.0pt;color:#1F497D"> </span><span style="font-size:11.0pt;font-family:"Calibri",sans-serif;color:#1F497D">Prices
have not changed dramatically in five years of trading</span><o:p></o:p></p>
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<p class="MsoNormal"><span style="font-size:11.0pt;font-family:"Calibri",sans-serif;color:#1F497D"> </span><o:p></o:p></p>
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<p class="MsoNormal"><span style="font-size:11.0pt;font-family:"Calibri",sans-serif;color:#1F497D">These conditions make it all but impossible for any market manipulation to occur, because due to fragmentation, the acquisition of enough blocks to manipulate
the market would take years, in my educated opinion, and would have to involve a very rich speculator who was willing to engage in a series of transfers under assumed names, with the speculated asset marching towards a zero value. It’s ludicrous to believe
that any such speculator exists, willing to risk not only the loss of his investments, but worldwide opprobrium.</span><o:p></o:p></p>
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<p class="MsoNormal"><o:p> </o:p></p>
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<p class="MsoNormal">While the circumstances you describe does inhibit speculation, it is unclear if it they<o:p></o:p></p>
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<p class="MsoNormal">would still be latent in a transfer market environment which allowed and effectively <o:p></o:p></p>
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<p class="MsoNormal">endorsed speculation. For example, it is unclear if a short-term market squeeze in<o:p></o:p></p>
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<p class="MsoNormal">IPv4 (e.g. 3 months) would materially impact deployment of IPv6 (which has many<o:p></o:p></p>
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<p class="MsoNormal">other factors that businesses face in making such decisions.) Similarly, we’ve seen<o:p></o:p></p>
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<p class="MsoNormal">greatly accelerated recovery of unused IPv4 blocks since the IPv4 free pool runout<o:p></o:p></p>
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<p class="MsoNormal">in the ARIN region in September 2015 (effectively describing fragmentation of the<o:p></o:p></p>
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<p class="MsoNormal">marketplace over time) and absence of operational need could bring many more <o:p></o:p></p>
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<p class="MsoNormal">actors into seeking underutilized IPv4 number resources blocks. If the community<o:p></o:p></p>
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<p class="MsoNormal">decides to make IPv4 address block rights transferable to any party, regardless of<o:p></o:p></p>
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<p class="MsoNormal">operational need, then they are likely to be considered an investable asset class<o:p></o:p></p>
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<p class="MsoNormal">and analyzed very differently by financial firms going forward. Whether that would <o:p></o:p></p>
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<p class="MsoNormal">be a good outcome (or not( is a matter of judgement regarding the functioning of <o:p></o:p></p>
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<p class="MsoNormal">markets and resulting impact/benefit to this community.<o:p></o:p></p>
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<p class="MsoNormal"><o:p> </o:p></p>
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<p class="MsoNormal">In any case, the proposed policy 2015-3 does not directly touch on these merits <o:p></o:p></p>
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<p class="MsoNormal">of needs-based transfers or otherwise, as it describes removal of a criteria whose <o:p></o:p></p>
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<p class="MsoNormal">definition is unclear to operational need assessment for transfers (and thus not <o:p></o:p></p>
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<p class="MsoNormal">operational today), and thus my reason for moving this more general discussion <o:p></o:p></p>
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<p class="MsoNormal">of a transfer market without operational need-assessment to a separate thread <o:p></o:p></p>
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<p class="MsoNormal">and subject.<o:p></o:p></p>
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<p class="MsoNormal"><o:p> </o:p></p>
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<p class="MsoNormal">Thanks!<o:p></o:p></p>
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<p class="MsoNormal">/John<o:p></o:p></p>
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<p class="MsoNormal"><o:p> </o:p></p>
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<p class="MsoNormal">John Curran<o:p></o:p></p>
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<p class="MsoNormal">President and CEO<o:p></o:p></p>
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<p class="MsoNormal">ARIN<o:p></o:p></p>
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