I am answering Mr. Woodcock using the new subject line, I hope that is okay.
Hi Bill, > On May 19, 2016, at 11:52 AM, Mike Burns < <mailto:[email protected]> > [email protected]> wrote: > I want community members to understand that this is evidence that the market > is a natural conserver of valuable resources. Bill wrote: Help me understand what evidence you see that any market has ever conserved expensive FIB slots. > ...and naturally elevates them to a higher and better use. It seems to me that this is the same fallacy upon which inter-provider QoS ran aground. Just because something was valuable and expensive to Party A, and Party A exchanges traffic with Party B, there’s no reason why the same thing would be valued by Party B, who has their own concerns. Thus, the fact that Party A buys an address block for a lot of money may make routing that address block very important to Party A, but that’s independent of Party B’s interest in receiving that routing announcement or wasting a FIB slot on it. Thus, the money has been spent, but nothing has been elevated to a higher or better use; it may in fact not be usable at all, outside the context of needs-based allocation of FIB slots. I’m not sure I understand, can you tie this to an example where a valuable asset is traded, as in the transfer market? I am not trying to make a blanket statement that markets are perfect in every case, every where. I am saying that the natural tendency of a market is to elevate valuable assets to a higher and better use. It seems like in your example, there is an element of utility for both Party A and Party B in the use of FIB slots. > 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. I agree that there’s a lot of cruft that’s built up by people who weren’t intent upon using concise language in policy development, and who failed to remove or update language before slathering more over the top of it. However, that in no way invalidates the basic requirement for regulation to defend the commons (global routing table size) against the competing interests of individuals (more smaller prefixes routed). There is no regulation anywhere that mandates prefix size that I am aware of. I have seen /32s in the table. It’s not regulation but mutual shared interest in the utility of the table that drives things. Both are valuable. They’re naturally opposed interests. Any useful discussion of either one must be in terms of the trade-off against the other. You’re discussing only one of the two; only half of an inextricably linked conversation. -Bill I can see the commons argument applying to free pool addresses, but I don’t see it as applicable to priced resources, which FIB slots are not. Regards, Mike From: John Curran [mailto:[email protected]] Sent: Thursday, May 19, 2016 3:28 PM To: Mike Burns <[email protected]> Cc: ARIN PPML <[email protected]> Subject: Dynamics of a transfer environment without operational need assessment On May 19, 2016, at 8:52 PM, Mike Burns <[email protected] <mailto:[email protected]> > wrote: ... 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. Mike - There is little doubt that having an IP address transfer market has enabled unused or otherwise “fallow” IP address blocks to come back to productive use. 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. Given that all of our experience has been with needs-based transfer policies (which provide some back pressure to speculation, whether via the direct prohibition that is implied or the convolutions that is necessary to work around same), it is rather unclear if financial speculation would have occurred over the past five years in absence of the needs-based assessment model. In an early message, you characterize it as such - 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: 1. Any such speculation will drive IPv6 and could render IPv4 worthless 2. Supply has been fragmented through a quarter century of worldwide RIR allocations 3. Every policy-compliant transfer is publicly recorded 4. Prices have not changed dramatically in five years of trading 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. While the circumstances you describe does inhibit speculation, it is unclear if it they would still be latent in a transfer market environment which allowed and effectively endorsed speculation. For example, it is unclear if a short-term market squeeze in IPv4 (e.g. 3 months) would materially impact deployment of IPv6 (which has many other factors that businesses face in making such decisions.) Similarly, we’ve seen greatly accelerated recovery of unused IPv4 blocks since the IPv4 free pool runout in the ARIN region in September 2015 (effectively describing fragmentation of the marketplace over time) and absence of operational need could bring many more actors into seeking underutilized IPv4 number resources blocks. If the community decides to make IPv4 address block rights transferable to any party, regardless of operational need, then they are likely to be considered an investable asset class and analyzed very differently by financial firms going forward. Whether that would be a good outcome (or not( is a matter of judgement regarding the functioning of markets and resulting impact/benefit to this community. In any case, the proposed policy 2015-3 does not directly touch on these merits of needs-based transfers or otherwise, as it describes removal of a criteria whose definition is unclear to operational need assessment for transfers (and thus not operational today), and thus my reason for moving this more general discussion of a transfer market without operational need-assessment to a separate thread and subject. Thanks! /John John Curran President and CEO ARIN
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