<html xmlns:v="urn:schemas-microsoft-com:vml" xmlns:o="urn:schemas-microsoft-com:office:office" xmlns:w="urn:schemas-microsoft-com:office:word" xmlns:m="http://schemas.microsoft.com/office/2004/12/omml" xmlns="http://www.w3.org/TR/REC-html40"><head><meta http-equiv=Content-Type content="text/html; charset=utf-8"><meta name=Generator content="Microsoft Word 15 (filtered medium)"><style><!--
/* Font Definitions */
@font-face
{font-family:"Cambria Math";
panose-1:2 4 5 3 5 4 6 3 2 4;}
@font-face
{font-family:Calibri;
panose-1:2 15 5 2 2 2 4 3 2 4;}
@font-face
{font-family:Verdana;
panose-1:2 11 6 4 3 5 4 4 2 4;}
@font-face
{font-family:Consolas;
panose-1:2 11 6 9 2 2 4 3 2 4;}
/* Style Definitions */
p.MsoNormal, li.MsoNormal, div.MsoNormal
{margin:0in;
font-size:11.0pt;
font-family:"Calibri",sans-serif;}
a:link, span.MsoHyperlink
{mso-style-priority:99;
color:blue;
text-decoration:underline;}
pre
{mso-style-priority:99;
mso-style-link:"HTML Preformatted Char";
margin:0in;
font-size:10.0pt;
font-family:"Courier New";}
span.HTMLPreformattedChar
{mso-style-name:"HTML Preformatted Char";
mso-style-priority:99;
mso-style-link:"HTML Preformatted";
font-family:Consolas;}
span.EmailStyle21
{mso-style-type:personal-reply;
font-family:"Calibri",sans-serif;
color:windowtext;
font-weight:normal;
font-style:normal;}
.MsoChpDefault
{mso-style-type:export-only;
font-family:"Calibri",sans-serif;}
@page WordSection1
{size:8.5in 11.0in;
margin:1.0in 1.0in 1.0in 1.0in;}
div.WordSection1
{page:WordSection1;}
--></style><!--[if gte mso 9]><xml>
<o:shapedefaults v:ext="edit" spidmax="1026" />
</xml><![endif]--><!--[if gte mso 9]><xml>
<o:shapelayout v:ext="edit">
<o:idmap v:ext="edit" data="1" />
</o:shapelayout></xml><![endif]--></head><body lang=EN-US link=blue vlink=purple style='word-wrap:break-word'><div class=WordSection1><p class=MsoNormal>Hi Scott,<o:p></o:p></p><p class=MsoNormal><o:p> </o:p></p><p class=MsoNormal>Thank you, I wrote a response to your initial post that centered on the market and the current leasing returns, which I would put at roughly a 12% rental return on investment, or 100 months of payments equals one address purchase.<o:p></o:p></p><p class=MsoNormal><o:p> </o:p></p><p class=MsoNormal>I would like to point out that prices in the transfer market plateaued last November and have traded in increasingly narrow ranges subsequent to that. This is the longest duration price plateau that I can remember.<o:p></o:p></p><p class=MsoNormal><o:p> </o:p></p><p class=MsoNormal>Stable prices and 12% returns on investments that don’t wear out, have no moving parts, and which generally appreciate in value. Not tremendous, not bad. A good place to inaugurate an ARIN-based leasing business, in my opinion.<o:p></o:p></p><p class=MsoNormal><o:p> </o:p></p><p class=MsoNormal>And frankly one of the reasons leasing is attractive is because there is no other financing vehicle for IPv4 purchases, and that is an indictment of stodgy bankers. Still you can’t blame them, as they have absolutely no knowledge of this market, even though it’s really a $200 billion commodity market. Once they hear that the IPv6 transition is both inevitable and will result in a zero value at some unpredictable future time, they’re out.<o:p></o:p></p><p class=MsoNormal><o:p> </o:p></p><p class=MsoNormal>That leaves sophisticated and risk-tolerant investors, and for them 12% is a hard sell. Nonetheless some of these have begun sniffing around the market and some are actively buying, but only in RIPE.<o:p></o:p></p><p class=MsoNormal><o:p> </o:p></p><p class=MsoNormal>This policy seeks to recognize that a need for leasing exists, and seeks to remove the restriction that participants must already be incumbent owners, while retaining the essential element of needs testing which is deployment on an operating network.<o:p></o:p></p><p class=MsoNormal><o:p> </o:p></p><p class=MsoNormal>Regards,<br>Mike<o:p></o:p></p><p class=MsoNormal><o:p> </o:p></p><p class=MsoNormal><o:p> </o:p></p><div style='border:none;border-top:solid #E1E1E1 1.0pt;padding:3.0pt 0in 0in 0in'><p class=MsoNormal><b>From:</b> ARIN-PPML <arin-ppml-bounces@arin.net> <b>On Behalf Of </b>Scott Leibrand<br><b>Sent:</b> Friday, March 11, 2022 1:43 PM<br><b>To:</b> ARIN-PPML List <arin-ppml@arin.net><br><b>Subject:</b> Re: [arin-ppml] Revised and Retitled - Draft Policy ARIN-2021-6: Permit IPv4 Leased Addresses for Purposes of Determining Utilization for Future Allocations<o:p></o:p></p></div><p class=MsoNormal><o:p> </o:p></p><div><p class=MsoNormal>It seems that lots of people oppose this policy based on their assumptions about what it will do to the economics of the IP address transfer market, but no one is making those assumptions explicit or describing what exactly they think would happen if it were passed.<o:p></o:p></p><div><p class=MsoNormal><o:p> </o:p></p></div><div><p class=MsoNormal>Right now <a href="https://auctions.ipv4.global/prior-sales" target="_blank">https://auctions.ipv4.global/prior-sales</a> is showing recent prices of about $55 per IP (to buy them on the transfer market), up from about $30/IP a year ago.<o:p></o:p></p></div><div><p class=MsoNormal><o:p> </o:p></p></div><div><p class=MsoNormal>Right now <a href="https://www.heficed.com/lease-ipv4/" target="_blank">https://www.heficed.com/lease-ipv4/</a> is quoting $0.50/mo per IP ($546 for 1024 addresses). The data at <a href="https://www.ipxo.com/blog/leasing-vs-buying-ip-addresses/" target="_blank">https://www.ipxo.com/blog/leasing-vs-buying-ip-addresses/</a> is a bit older, but indicates that in late 2020, prices were in a similar range of $0.34 - $0.67 per IP.<o:p></o:p></p></div><div><p class=MsoNormal><o:p> </o:p></p></div><div><p class=MsoNormal>If someone buys addresses at $55 each and leases them out at $0.50/mo, it would take 110 months (9 years) to cover the cost. That would be a lousy business, so clearly, entities leasing space are expecting IPv4 purchase prices to continue rising more quickly than their cost of financing, and expect to be able to sell any addresses they buy at a profit.<o:p></o:p></p></div><div><p class=MsoNormal><o:p> </o:p></p></div><div><p class=MsoNormal>Leasing is clearly already happening. Right now it has to be done using RIPE space or by an entity that has (at least nominal) network connectivity.<o:p></o:p></p></div><div><p class=MsoNormal><o:p> </o:p></p></div><div><p class=MsoNormal>If you oppose or support this policy on grounds that it will affect the supply and demand of addresses, can you be more specific as to what effects you expect relaxing the justification requirements for those offering IP leasing who want to buy more space to lease out would have? How would this policy affect the demand and price of IPv4 addresses bought and sold on the transfer market? How would that affect the supply, demand, and price of IPv4 addresses available for lease? How would that affect network operators? Would more of them switch from purchasing addresses to leasing them? With leasing (currently) being cheaper than purchasing (because a purchase is also an investment in a currently-appreciating asset), would it help or hurt network operators for leasing to be considered a more legitimate option?<o:p></o:p></p></div><div><p class=MsoNormal><o:p> </o:p></p></div><div><p class=MsoNormal>-Scott<o:p></o:p></p></div></div><p class=MsoNormal><o:p> </o:p></p><div><div><p class=MsoNormal>On Fri, Mar 11, 2022 at 10:02 AM Fernando Frediani <<a href="mailto:fhfrediani@gmail.com" target="_blank">fhfrediani@gmail.com</a>> wrote:<o:p></o:p></p></div><blockquote style='border:none;border-left:solid #CCCCCC 1.0pt;padding:0in 0in 0in 6.0pt;margin-left:4.8pt;margin-right:0in'><div><div><p class=MsoNormal>On 11/03/2022 14:56, Tom Fantacone wrote:<o:p></o:p></p></div><blockquote style='margin-top:5.0pt;margin-bottom:5.0pt'><div><div><p class=MsoNormal><span style='font-size:10.0pt;font-family:"Verdana",sans-serif'>Bill,<o:p></o:p></span></p></div><div><p class=MsoNormal><span style='font-size:10.0pt;font-family:"Verdana",sans-serif'><o:p> </o:p></span></p></div><div><p class=MsoNormal><span style='font-size:10.0pt;font-family:"Verdana",sans-serif'>We can quibble about semantics, but let's go with your verbiage:<o:p></o:p></span></p></div><div><p class=MsoNormal><span style='font-size:10.0pt;font-family:"Verdana",sans-serif'><o:p> </o:p></span></p></div><p class=MsoNormal><span style='font-size:10.0pt;font-family:"Verdana",sans-serif'>If I run a network and qualify for an /18 right now, can I go to ARIN and lease one? I must either <i>pay someone to release their addresses to ARIN to lease to me</i> or lease one from a (non-ARIN) 3rd party.<o:p></o:p></span></p></div></blockquote><p class=MsoNormal>And that should always be the expected, release them to ARIN which should be the only actor taking care of it.<br>I really fail to understand how can one consider legit that a 3rd party could be doing this job otherwise.<o:p></o:p></p><p>If everybody sticks that what is expected, things work better, is much better to trust ARIN to do this plus in the end doing in such way doesn't least space for speculation, price rises and community have the assurance that the one who is intermediating it is someone really neutral and with no other interests to the business other than make sure the policies are being followed.<o:p></o:p></p><p>Fernando<o:p></o:p></p><blockquote style='margin-top:5.0pt;margin-bottom:5.0pt'><div><p class=MsoNormal><span style='font-size:10.0pt;font-family:"Verdana",sans-serif'><o:p> </o:p></span></p><p class=MsoNormal><span style='font-size:10.0pt;font-family:"Verdana",sans-serif'>And the amount I must pay (commonly referred to as the Purchase Price in most IPv4 transfer contracts, whether I'm technically "buying" it or not), is significantly more than either typical lease rates or ARIN's annual fees. My point is that 3rd party lessors do provide a service that ARIN does not.<o:p></o:p></span></p><p class=MsoNormal><span style='font-size:10.0pt;font-family:"Verdana",sans-serif'><o:p> </o:p></span></p><p class=MsoNormal><span style='font-size:10.0pt;font-family:"Verdana",sans-serif'>Regards,<o:p></o:p></span></p><p class=MsoNormal><span style='font-size:10.0pt;font-family:"Verdana",sans-serif'><o:p> </o:p></span></p><p class=MsoNormal><span style='font-size:10.0pt;font-family:"Verdana",sans-serif'>Tom Fantacone<o:p></o:p></span></p><div><p class=MsoNormal><span style='font-size:10.0pt;font-family:"Verdana",sans-serif'><o:p> </o:p></span></p></div><div style='border:none;border-top:solid #CCCCCC 1.0pt;padding:0in 0in 0in 0in;margin-top:7.5pt;margin-bottom:7.5pt'><p class=MsoNormal style='mso-line-height-alt:0pt'><span style='font-size:10.0pt;font-family:"Verdana",sans-serif'><o:p> </o:p></span></p></div><div><div><p class=MsoNormal><span style='font-size:10.0pt;font-family:"Verdana",sans-serif'><o:p> </o:p></span></p></div><div id="gmail-m_7976876151835855449gmail-m_-4808509796066532705gmail-m_-8107556546104187107gmail-m_-968748883022522820gmail-m_-488674295728572883Zm-_Id_-Sgn1"><p class=MsoNormal><span style='font-size:10.0pt;font-family:"Verdana",sans-serif'>---- On Fri, 11 Mar 2022 12:42:52 -0500 <b>William Herrin <a href="mailto:bill@herrin.us" target="_blank"><bill@herrin.us></a></b> wrote ----<o:p></o:p></span></p></div><div><p class=MsoNormal><span style='font-size:10.0pt;font-family:"Verdana",sans-serif'><o:p> </o:p></span></p></div><blockquote><div><p class=MsoNormal><span style='font-size:10.0pt;font-family:"Verdana",sans-serif'>On Fri, Mar 11, 2022 at 9:40 AM Tom Fantacone <<a href="mailto:tom@iptrading.com" target="_blank"><span style='color:#0000EE'>tom@iptrading.com</span></a>> wrote: <br>> If I run a network and qualify for an /18 right now, can I got to ARIN and lease one? I must either buy one on the transfer market <br><br>Tom, <br><br>I think you misunderstand the transfer market. You don't buy addresses <br>on the transfer market. You lease addresses from ARIN and then pay <br>someone on the transfer market to release their addresses to ARIN for <br>lease to you. <br><br>Regards, <br>Bill Herrin <br><br><br>-- <br>William Herrin <br><a href="mailto:bill@herrin.us" target="_blank"><span style='color:#0000EE'>bill@herrin.us</span></a> <br><a href="https://bill.herrin.us/" target="_blank"><span style='color:#0000EE'>https://bill.herrin.us/</span></a> <o:p></o:p></span></p></div></blockquote></div><div><p class=MsoNormal><span style='font-size:10.0pt;font-family:"Verdana",sans-serif'><o:p> </o:p></span></p></div></div><p class=MsoNormal style='margin-bottom:12.0pt'><o:p> </o:p></p><pre>_______________________________________________<o:p></o:p></pre><pre>ARIN-PPML<o:p></o:p></pre><pre>You are receiving this message because you are subscribed to<o:p></o:p></pre><pre>the ARIN Public Policy Mailing List (<a href="mailto:ARIN-PPML@arin.net" target="_blank">ARIN-PPML@arin.net</a>).<o:p></o:p></pre><pre>Unsubscribe or manage your mailing list subscription at:<o:p></o:p></pre><pre><a href="https://lists.arin.net/mailman/listinfo/arin-ppml" target="_blank">https://lists.arin.net/mailman/listinfo/arin-ppml</a><o:p></o:p></pre><pre>Please contact <a href="mailto:info@arin.net" target="_blank">info@arin.net</a> if you experience any issues.<o:p></o:p></pre></blockquote></div><p class=MsoNormal>_______________________________________________<br>ARIN-PPML<br>You are receiving this message because you are subscribed to<br>the ARIN Public Policy Mailing List (<a href="mailto:ARIN-PPML@arin.net" target="_blank">ARIN-PPML@arin.net</a>).<br>Unsubscribe or manage your mailing list subscription at:<br><a href="https://lists.arin.net/mailman/listinfo/arin-ppml" target="_blank">https://lists.arin.net/mailman/listinfo/arin-ppml</a><br>Please contact <a href="mailto:info@arin.net" target="_blank">info@arin.net</a> if you experience any issues.<o:p></o:p></p></blockquote></div></div></body></html>