Let us all bend over, apply the Vaseline...

[Bob Atkins]

On Wed, 30 Apr 1997, Michael Dillon wrote:

> On Wed, 30 Apr 1997, Bob Atkins wrote:
> 
> > A monopoly,
> > whether non-profit or for-profit has *absolutely* no incentive to lower
> > prices *or* reduce their backend costs. 
> 
> I quite agree with this statement.
> 
> > They have a captive market and no other authority to hold them
> > accountable. 
> 
> Fortunately ARIN is not a monopoly and will have several authorities to
> hold them accountable. Since ARIN is a 501(c)6 organization, the law holds
> them accountable to the members and to the IRS regulations for
> non-profits. The members will hold ARIN accountable. Since ARIN receives
> its address blocks from IANA for allocation to North American users, IANA
> will hold ARIN accountable. Since ARIN is applying the policies of RFC2050
> set forth by the Internet community and the IETF, both of these groups
> will hold them accountable. And, in fact, since ARIN is directed by a
> board of *TRUSTEES*, they too will hold the organization accountable.
> Not to mention the press and assorted onlookers.
> 
> I'm glad you brought up this point because until you forced me to think it
> through I hadn't realized that there were so many layers of accountability
> that ARIN's activities would be subject to.
> 

Granted you have identified a certain level of accountability, however
the level you are indicating is not going to be able to mitigate
individual issues or even offer some form of mediation when necessary.
Most of these bodies will only be in a position to facilitate policies.
The board of trustees would likely have a financial interest since it is
likely that their salaries would be derived from the collected fees.
Neither the IETF nor the Internet community at large have any power of
enforcement so their impact is nil or at least not significant - again
in the role of mediator. The IRS has no direct role either except in
the overall tax status of the organization.

> > > > The idea of paying such a high recurring cost for IP space is absurd
> > > > and only goes to justify a bloated $3M annual budget.
> > > 
> > > The companies who will be paying these fees will have annual budgets that
> > > are larger than ARIN's. They can afford it.
> > 
> > You just made the point that I am trying to make. ARIN will serve to
> > squash smaller ISPs.
> 
> I'm afraid you have misunderstood my statements above. I am trying to
> point out that ARIN will have *NO* effect, positive or negative, on
> smaller ISPs. The smaller ISPs will continue to get their address
> allocations from their upstream providers just as they have done for the
> past couple of years. It is only the larger ISPs that will have any need
> to ask ARIN directly for an address allocation and those ISPs are clearly
> able to pay the small fees with no hardship at all.
> 

I need to clarify something. What *is* a smaller ISP?  A mom and pop
operation with a few dialup lines? A regional ISP with a healthly
combination of dialup and leased services?

As a regional ISP I cannot take address space from any upstream. I need
to be able to establish multi-homed Internet connectivity, peering at
one or more NAPs. Due to portability issues an upstream ISP can't be
the source of my IP address space.

Besides everyone is conveniently sidestepping the issue of cost. Do you
think for even a moment in this highly competitive arena that an
upstream ISP isn't going to charge for the address space they assign to
another ISP? Come on! Of course they will and you can be sure at a
premium too.  Hey there would be no recourse, the smaller ISP would be
stuck with it because they might be too small to apply directly to ARIN
for space.

Do you think that I, as a regional ISP won't pass along the cost
for address space to my customers, maybe, but I might not be able to
because the larger ISPs will probably absorb the address space costs
and I won't be able to cost recover directly from a customer. So who
do you think will get caught in the squeeze. Yep, you got it, the small
to medium ISP.

> If I thought that ARIN would have any negative impact on small ISPs I can
> assure you that I would be utterly opposed to their actions because in the
> next couple of weeks I expect to begin working for a company that will
> be selling services to small ISPs and that will be doing everything
> possible to support and assist those small ISPs to be successful and
> profitable.
> 

Upstream, larger ISPs are looking to dominate the marketplace. To think
that they will settle for anything less is a dream. You can be sure that
ARIN will simply provide one more way in which small/medium ISPs will
be squeezed into lower margins by having to absorb one more cost that
they won't be able to pass on. $2500/year may not seem like much but
it does add up. It is real money and it has to come from somewhere.

In a perfect world all ISPs should be able to obtain their address space
from a common source. Not a central source, but a common one. A source
that has no competitive interests in the ISP market. Relying on upstream
ISPs to provide address space for all but the smallest ISPs is not a
viable solution in my book. I'm competing against that upstream ISP
and you can be sure that *they* will not make it easy for me if they
can help it.

Besides I need to impress upon you that it is next to impossible for
a small ISP to change their upstream ISP if the address space that
they get from the upstream is not portable. They become locked in
to the upstream provider with no reasonable hope of change. Yet another
way in which this type of scheme will further benefit the large players
at the expense of the smaller ones.

> > > So why don't you put in a bid for it then. Please submit full details of
> > > capital and other expenses for the first year of operation in a form
> > > that can be verified by the members of this list. 
> > 
> > I may very well do this however, since it isn't likely receive any serious
> > consideration I can't say it will be on the top of my priority list.
> 
> I can assure you that if you do post a detailled budget to this list, it
> will receive some serious attention from me and I will urge others to gove
> it serious attention as well. This doesn't mean I will be praising you
> from the rooftops, but it does mean that I will be asking some hard
> questions about your numbers to ensure that they really are solid. I think
> it is very important that the ARIN budget be a solid one and that all
> items on the budget be fully justified. Of course, it's pretty hard to do
> this without some input from other people and that's why I suggest you
> work up a reasonable first draft and then we can all work together on the
> list to improve it.
> 

I may very well consider doing this just to see if it leads somewhere.

---
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