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I recently attended RIPE 66 where Tore Anderson presented his suggested policy change 2013-03, “No Need – Post-Depletion Reality Adjustment and Cleanup.” In his presentation, Tore suggested that this policy proposal was primarily aimed at removing the requirement to complete the form(s) used to document need. There was a significant amount of discussion around bureaucracy, convenience, and “liking” (or not) the process of demonstrating need. Laziness has never been a compelling argument for me and this is no exception. The fact is that any responsible network manager must keep track of IP address utilization in order to design and operate their network, regardless of RIR policy. Filling this existing information into a form really does not constitute a major hurdle to network or business operations. So setting aside the laziness decree, let’s move on to the rationale presented.
IPv4 is Dead?
Tore pointed to section 3.0.3 of RIPE-582, the “IPv4 Address Allocation and Assignment Policies for the RIPE NCC Service Region:”
Conservation: Public IPv4 address space must be fairly distributed to the End Users operating networks. To maximise the lifetime of the public IPv4 address space, addresses must be distributed according to need, and stockpiling must be prevented.
According to Mr. Anderson, this is “something that has served us well for quite a long time” but now that IANA and RIPE have essentially exhausted their supply of free/unallocated IPv4 addresses, is obsolete. From the summary of the proposal:
Following the depletion of the IANA free pool on the 3rd of February 2011, and the subsequent depletion of the RIPE NCC free pool on the 14th of September 2012, the “lifetime of the public IPv4 address space” in the RIPE NCC region has reached zero, making the stated goal unattainable and therefore obsolete.
This argument appears to be the result of what I would consider a very narrow and unjustified interpretation of the goal of conservation. Tore seems to interpret “maximise the lifetime of the public IPv4 address space” to mean “maximise the duration that public IPv4 space remains available at the RIPE NCC.” Under this translation, it is possible to believe that a paradigm shift has occurred which calls for a drastic reassessment of the goal of conservation. If, however, we take the goal as written in RIPE NCC policy as a carefully crafted statement meant to convey it’s meaning directly and without interpretation or translation; a different conclusion seems obvious. While Tore is correct in his observation that IANA and RIPE NCC (and APNIC and soon ARIN) have all but depleted their reserves of “free” IPv4 addresses, that does not mean that the lifetime of the public IPv4 address space has come to an end. While I would love for everyone to enable IPv6 and turn off IPv4 tomorrow (or better yet, today), that is simply not going to happen all at once. The migration to IPv6 is underway and gaining momentum but there are many legacy devices and legacy networks which will require the use of IPv4 to continue for years to come. Understanding that the useful life of IPv4 is far from over (raise your hand if you have used IPv4 for a critical communication in the past 24 hours) makes it quite easy to see that we still have a need to “maximise the lifetime of the public IPv4 address space.”
In fact, the IANA and RIR free pools have essentially been a buffer protecting us from those who would seek to abuse the public IPv4 address space. As long as there was a reserve of IPv4 addresses, perturbations caused by bad actors could be absorbed to a large extent by doling out “new” addresses into the system under the care of more responsible folks. Now that almost all of the public IPv4 address space has moved from RIR pools into the “wild,” there is arguably a much greater need to practice conservation. The loss of the RIR free pool buffer does not mark the end of “the lifetime of the public IPv4 address space” as Tore suggests but rather marks our entry into a new phase of that lifetime where stockpiling and hoarding have become even more dangerous.
A Paradox
Tore made two other arguments in his presentation, and I have trouble rectifying the paradox created by believing both of them at once. The two arguments are not new, I have heard them both many times before in similar debates, and they invariably go something like this:
I want to look at these arguments first individually, and then examine the paradox they create when combined.
Early in his presentation, Tore said something to the effect of because the LIR can not return to RIPE NCC for more addresses, they would never give a customer more addresses than they need and that the folks involved will find ways of assessing this need independently. OK, if this is true then why not make it easy for everyone involved by standardizing the information and process required to demonstrate need? Oh, right, we already have that. Removing this standardization opens the door for abuse, large and small. The most obvious example is a wealthy spammer paying an ISP for more addresses then they can technically justify, in order to carry out their illegal bulk mail operation. The reverse is true as well, with no standard for efficient utilization to point to, it is more possible for an ISP to withhold addresses from a down stream customer (perhaps a competitor in some service) who actually does have justifiable technical need for them.
The second argument is more ridiculous. I truly don’t understand how anyone can be convinced by the “people are breaking the rules so removing the rules solves the problem” argument. While I am in favor of removing many of the rules, laws, and regulations that I am currently aware of; I favor removing them not because people break them but because they are unjust rules which provide the wrong incentives to society. If you have a legitimate problem with people stealing bread, for example, then making the theft of bread legal does not in any way solve your problem. While it is possible that bread thieves may be less likely to lie about stealing the bread (since they no longer fear legal repercussions) and it is certainly true that they would no longer be breaking the law, law-breaking and lying are not the problem. The theft of bread is the problem. Legalizing bread theft has only one possible outcome: Encouraging more people to steal bread. So the fact that bad actors currently have an incentive to lie and cheat to get more addresses in no way convinces me that making their bad behavior “legal” would solve the problem. If anything it is likely to exacerbate the issue by essentially condoning the bad behavior, causing others to obtain more addresses then they can technically justify.
Of course it get’s even worse when you try to hold up both of these arguments as true at once. If people can be counted on to take only what they need, why are they lying and cheating to get more? If people are willing to lie and cheat to get around the needs based rules, why would they abide by needs when the rules are removed? I just can’t make these two statements add up in a way that makes any sense.
Conclusions
Since we still need IPv4 to continue working for some time, maximizing the lifetime of the public IPv4 address space through conservation is still a noble and necessary goal of the RIRs, perhaps more important than ever. Filling out some paperwork (with information you already have at hand) is a very low burden for maintaining this goal. At this time, there is no convincing rationale for removing this core tenant of the Internet model which has served us so well.
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The RIRs’ function and interest is to make IP addresses available to those who need them. We have proven that for those who do need addresses, the demonstration of that need is not difficult, under a set of policies which are determined by the very communities which are subject to them. If this need-based distribution system had not been reasonable and workable, then a black market could have emerged in response, at any time over the past 20 years - yet it did not.
As IPv4 addresses are distributed more through transfers than through allocations, there seems to be no reason for continued needs-based transfer policies to suddenly drive requests into a black market. If addresses are available to be transferred, then the recipient who needs them can demonstrate that need under policies which are already well understood, and well proven. In the APNIC case at least, the required transfer approval can be obtained before addresses are found, which avoids uncertainty and delay in the transfer transaction.
We can debate the merits of different policy approaches - needs-based versus the alternatives - and we will probably do so for many years. However the real need for IPv4 addresses is here and now, and if we are to avoid a black market emerging in the short run, then the obvious action is to converge quickly on a consistent set of RIR transfer policies. The practical reality is that this can only occur (in the short run) if those policies continue to converge on consistent needs-based requirements.
So let’s get on with that, and we can take up our fiddles again when the fires are extinguished.
Paul Wilson
Director General
APNIC
I think what Mr. Anderson was saying on #1 above was that a market price would serve as an appropriate, natural arbiter in that enterprises wouldn’t buy a significant amount more than they needed. A few, where management is plugged into this issue, might buy an extra marginal amount of IPv4 as an “insurance policy” should v6 transition take longer than anticipated, but they are not in the business of speculating/investing- they are in the technology business.
One point that was made clear in Dublin is that 2012-03 is not a transfer proposal; rather, it was borne from a desire to make assignments more expedient and straightforward. The number of assignments dwarfs the number of transfers by an astounding ratio. While transfers will grow in relative importance as the means to allocate resources appropriately as the free pools in other regions reach depletion, it will not be a large or liquid enough of a market for a “bad actor” to be able to wreak a level of havoc commensurate with the amount of ink spilled/ energy spent trying to prevent his entry.
Paul, I agree entirely with your point on need for consistency on the big picture items.
Louis Sterchi
The Kalorama Group
Hi Louis, Let me start with your second point, that 2013-03 is not a transfer proposal. You are correct in that the author stated in his presentation that this policy proposal was not about transfers. However, part of my concern here is exactly that; this proposal would have significant impacts beyond the authors intentions. Second, based on the above point, that Mr. Anderson does not see this as a transfer policy, I do not believe he said anything about market pricing (since that would only be relevant to transfers). In either case, my view on that argument is the same. If people are only going to take what they need (regardless of motivation), then there is no harm in maintaining needs based requirements for address allocation, assignment, and transfer. Finally, your repeated claim that the work to protect this community resource is not commensurate with the risk is a fallacy because the protections are already in place. Doing nothing results in the goal of conservation being upheld. It is those who seek to strip away this form of stewardship who are spilling ink and spending energy. In that light, I do support the notion of moving on to more important work - which I believe was Mr. Wilson's point as well. Cheers, ~Chris
We see them in every other market. If the requirement to demonstrate need is removed, wouldn't we naturally see people enter the market who didn't need the addresses themselves but were merely speculating in the market: buying addresses now from companies who have them available, betting that in the future they can sell those addresses to companies who do need them at a higher price? The requirement to show need seems to be the major thing preventing that, and I would argue that, based on what we've seen in other markets, we very much want to discourage speculation in IPv4 addresses.
I enjoyed reading the thoughts on Tore’s 2013-03 policy proposal. It is a healthy debate.
We support the RIPE communities’ right to implement distinct policy that is suitable for its LIRs. At RIPE 66, it was refreshing to hear an RIR focus on the integrity of the registry as opposed to jurisdiction over number resources distributed prior to, or following the formation of the RIR itself. Though Policy Proposal 2013-03 is not a transfer proposal, we acknowledge implementation may unnecessarily complicate ARIN’s management of the largest global surplus of previously distributed resources, because the elimination of need by the RIPE NCC sets an interesting precedent; one that many may recall was undertaken by APNIC following run-out only to revert to needs-based justification on transfers when effectively forced to do so by ARIN’s demand for reciprocal needs-based policy for inter-RIR transfers. When ARIN is down to its final /8, then perhaps the ARIN community and the ARIN AC will begin to view the world as the RIPE and APNIC communities presently do…and until then, alignment of ARIN and RIPE transfer policy is going to be a challenge because the same issues are not being addressed.
Policy Proposal 2013-03 should give us all pause to revisit the appropriateness of managing IPv4 transfers by the exact same policy manuals and procedures as are applied to free allocations. IPv4 blocks have commercial value. Those already distributed by the RIRs will not be reclaimed for this very reason. ISPs or LIRs have need for IPv4 resources that can no longer be allocated by the RIPE NCC or APNIC. These businesses are prepared to spend hundreds of thousands to ensure business continuity. The business case is an internal one with executive and/or board approval. So is it sensible to “judge” an ISP or LIR’s requirements based on what they can and cannot justify per the antiquated policy manual designed to manage free allocations? Again, it will be most interesting to see how the ARIN community assesses the appropriateness of their application of the Number Resource Policy Manual (NRPM) on paid transfers once the free pool is depleted. Streamlining of administration and integrity of the registry should be the primary mandates for each region.
Elimination of need will promote speculation, stockpiling and hording? Sorry to be a little harsh, but this is such a tired, fear-mongering argument. It is impossible to intelligently speculate in a market with no price transparency. The only people that know with certainty the last price paid on a commercial transaction are the buyer, seller and broker. That is it. We are brokers that are fully informed where price is concerned…and I would not suggest anyone set up an elaborate ruse to procure IPv4 blocks for the sake of speculation or stockpiling because there are a dozen reasons why price will increase and a dozen reasons why price will decrease. In other words, in the absence of price transparency, speculation is a 100% gamble rather than an informed risk as is the case within other long since matured markets. Intelligent, well researched venture capitalists (or others) would never touch this market with those odds.
Jeff Mehlenbacher
Executive Vice President
IPv4 Market Group
Actually it’s not much of a surprise that the vast majority of folks I hear making loud arguments for the removal of needs based allocation/assignment/transfer of IP addresses are those who would most obviously profit from such a change directly, since they are all address brokers. Your comment is noted, along with its inherent bias.
Chris, As I argued on the PPML in support of removing the needs requirement for transfers, I quickly found that the loudest voices I heard opposing me belonged to self-professed IPv6 evangelists and IPv6 consultants. Also loud were the voices of policy wonks who had gained a leadership position at the RIR. IPv6 evangelists and consultants are obviously biased against IPv4 market mechanisms whose purpose is to extend the lifetime of IPv4. Policy wonks are biased against changes in policy which reduce the power of the RIR, and implicitly their own power. In a stakeholder-governed community, it is especially important that we avoid the ad hominem attacks against participants, and resist the urge to devolve a factual argument into finger-pointing about presumed motivations. Since you seem to think that the arguments of the brokers here are motivated by profits, while maintaining for your own "bias" the noble and lofty goals of growth and continuance of the Internet, I think it is fair to point out your own profit motive, which as of last year at least seemed to be related to the deployment of IPv6. TheIPv6Consultants Do we really need to go down this road, or can we agree to avoid the motivations of the participants as valid discussion points? Regards, Mike Burns IPTrading.com
Hi Mike, I'm glad that you have taken the time to reply here. Tell me, is it at all interesting to you that you are the third commenter with a negatively slanted argument and also the third address trader to comment? Others may find it so. I must however refute that pointing this fact out is in any way an attack on anyone. In contrast, your ad hominem attack on "policy wonks" is noted, along with the hypocrisy inherent in your comments. As for the link you have provided to a website that no longer exists, and your insinuation that I am motivated by profits... I must point you to the comment I made below:
The parenthetical inclusion was intentional. I fully admit that my "noble and lofty goals of growth and continuance of the Internet" also serve my career. In fact, I am quite proud of that fact. I have worked hard to align my passion with a profit stream. Today I do what I love, and I am paid well for it. I have the great privilege of doing what I believe in. The reason I evangelize the use of IPv6 is because it is the only tool we currently have available to us to "keep the Internet operating and growing in the free and open manner upon which so much of our world economy is dependent upon today." In other words, the exact same reason that I call for continued stewardship of the IPv4 resource. I plan to continue to make my living by doing good work which I believe in and I fully expect that to take me through several more protocol transitions over the next 20 or 30 years (although perhaps none as dramatic as this one). Cheers, ~Chris PS - There are no "IPv4 market mechanisms" which will "extend the lifetime of IPv4." IPv4 will be used until it is no longer needed. This is no reason to abdicate our role as stewards, nor is it a threat to my livelihood (although I do appreciate your concern).Chris, I’m a little disappointed that the first sign of a differing opinion should result in you throwing up your hands and claiming bias toward all those that might uphold the independence of policy development within various regions.
I have no hesitation in announcing that I am part of the IPv4 brokerage market because we provide a transparent, policy aligned, RIR endorsed facilitation service for organizations with excess capacity and those with justified need. Removal of need will not change our mission or methodology or profits. It’s about consensus within the community and the voice of paying members of the RIRs. As ARIN still has ample free allocations, you’ve yet to experience such pressures from your “business” community.
I would ask that you review RIPE NCC policy proposals and note that IPv4 Market Group proposed policy 2012-02 which would have aligned RIPE and ARIN regions with respect to inter-RIR transfers. Though it upends to a great extent our policy proposal, we do support 2013-03 because it is right for the RIPE region and we will work within that framework should it be passed.
Jeff Mehlenbacher
Executive Vice President
IPv4 Market Group
Jeff, I apologize if my terseness was taken as flippancy. So that you don't think I have "thrown up my hands" I will take the time today to address your comments more thoroughly. First, I stand by my claim of bias. Everyone has one, and most debates go a bit easier when everyone is aware of the key ones. My bias is to keep the Internet operating and growing in the free and open manner upon which so much of our world economy is dependent upon today (so that my career within the Internet ecosystem can continue to grow as well). Your bias as an address broker is to see as many deals brokered as possible, because your company gets a cut of each one executed through your company. There is nothing inherently evil in being an address broker and I mean no disrespect by labeling you and Louis as such. Address brokers are a (growing) part of the Internet ecosystem. Your role and your needs must be acknowledged. However, folks who actually operate networks must remain the core constituency of Internet number policy as it is those networks, fully and literally, which make up the Internet itself. Second, your primary point above seems to be the "RIPE communities' right to implement distinct policy." While I take no argument with the specific point, I fail to see how it is relevant to this discussion in any way whatsoever (which is in large part why I replied so tersely originally). When I speak about RIPE policy I am speaking as a member of the RIPE community (unless otherwise noted). There are five RIRs to better handle cultural, legal, and linguistic differences but none are exclusionary and many individuals and organizations participate in multiple RIRs policy development processes. This is a fact that you obviously recognize, being the representative of a Canadian firm which has recently introduced a policy proposal in RIPE. "The independence of policy development within various regions" is a valid but irrelevant truth in this case (unless you would condemn IPv4 Market Group for meddling in RIPE affairs). So, on to the next point I can draw out of your comments; that the "ARIN community and the ARIN AC" will 'see the light' when the ARIN free pool reaches its last /8. First of all, there is no specific significance to ARINs last /8. Unlike APNIC and RIPE, ARIN has no policy reserving or creating special treatment for their last /8 of 'free' IPv4. Secondly, I know many members of the ARIN community and perhaps unsurprisingly the ARIN AC as well. I can assure you that no one in either category is blind to the fact that RIR free pools of IPv4 are running out. In fact, if you care to review the PPML archives over the past several years, you will find much conversation dedicated to just that topic. A desire to maintain a minimum level of stewardship over the shared resources that the RIRs are tasked with overseeing is not simple ignorance, and calling it that simply serves to identify your own ignorances (of ARIN policy and of the ARIN community). The second paragraph in your original comment is a bit hard for me to parse (another reason for my terse original reply), but I believe the point introduced is that "2013-03 should give us all pause to revisit the appropriateness of managing IPv4 transfers..." This topic is one that the RIR communities have been discussing for several years now. This is not the first time that someone has suggested removing need, and likely not the last. This is no revolutionary policy proposal which is waking us from our slumber, in fact it is a policy proposal which is purportedly not even interested in transfers at all. I feel the need to point out that the reverse of your statement is perhaps even more true: As folks throw up policy proposals out of laziness, greed, and ignorance, we need to remain alert and not allow the familiar to replace the correct. Finally, you make the tired, unsupported claim that there is no possibility of market manipulation in IPv4 address transfers. And in all actuality, your mostly right, today, under the current protections and stewardship of the RIRs and their communities we have a working system mostly free from those fears. That is no guarantee that removing those protections and eliminating that stewardship will result in a positive change however and as far as I can see, the probability lies in the other direction. Perhaps I'll write another article soon, elaborating on the potential risks inherent in the potentially damaging changes you seem to support. Cheers, ~Chris PS - One nit that I feel needs to be pointed out; "it" is not about "the voice of paying members of the RIRs." The RIR communities are made up of far larger groups than their memberships. Paying members financially support the entire community by funding the services that the RIRs provide, but when it comes to matters of policy, they have no exclusive voice, nor even a louder voice, than any other member of the community.
Why would address brokers be so keen on removing a needs requirement in the RIPE region when it means they wouldn’t be able to broker transfers from other regions that maintain this requirement in their transfer policies? Isn’t their long term interests in maintaining a needs requirement? Perhaps they aren’t in it for the long term? I would appreciate hearing your perspective on this.
McTim - I tried to reply here a couple days ago and it apparently didn't get posted. Rather than trying to recreate what I wrote at that time, or going into significant details here as a comment, I'll instead say that there are several motivations (some competing) for all parties involved and that I plan to dig into those motivations, as well as the whole space of why removing needs could go wrong, in a future post - so stay tuned! ;-)
Hi McTim, You have asked an excellent question. Certainly it is one I have discussed with my colleagues in the brokerage business. I can report, for those who wish to "dig into those motivations" as some means of debating needs-testing, that brokers generally believe that maintaining a needs test makes the broker's role more necessary. Buyer and sellers feel they need a somebody to chaperon them through this process. The more bureaucratic and byzantine the process, the more the need for a broker. However, brokers also recognize that the Fear, Uncertainty, and Doubt associated with the needs test requirement has a squelching effect on the market, diminishing the number of trades overall. I think that in the balance, most are guided not by their personal profit motive, but by their belief that the needs-test is an unnecessary relic of the free pool era which is not required for transfers of priced commodities and whose retention for transfers goes against the principles of good stewardship. But you are correct in your implication that brokers should not be motivated to remove the needs test in RIPE, because that will limit RIPE members to buying and selling only among themselves. So I will leave you and Chris with two questions. Why do you think three brokers commented otherwise on this thread? And what does that tell you about the use of motivation in arguments about policy? I encourage Chris to continue to try to make the argument for retention of needs testing IPv4 transfers without reference to the motivations of the people making counter-arguments. Regards, Mike