[address-policy-wg] 2013-03 New Draft Document and Impact Analysis Published (No Need - Post-Depletion Reality Adjustment and Cleanup)

Hi Sylvain,

> On 20/09/2013 14:27, Tore Anderson wrote:
>> Conservation is the natural behaviour in an environment of scarcity.
> 
> In such an environment the natural behaviour could also be that companies
> willing to protect their interest are ready to put money on the table to
> get as much ressource as they can afford.

I agree - when, and only when, the companies actually *need* the
resource in the first place - precisely "to protect their interest". In
this case, 2013-03 brings no change from today - such companies are
eligible for the being a transfer recipient already.

So the ones 2013-03 actually makes a difference for, are companies that
have no need and no interest in the resource. What I do not understand,
is why anyone would expect that a company that has no need and no
interest in IPv4 address space would go out and buy some. Especially,
considering that the market demand *dwarfs* the supply, these companies
could not pick it them up "a dime a dozen", they would have actually
outbid all of those companies that do *need* it - desperately.

To me this behaviour seems completely irrational and thus completely
unlikely to occur. It's kind of like buying milk if you're lactose
intolerant or petrol if you don't have a car.

> And LIRs could be tempted by selling these ressources without a need being properly justifying it.

(I am assuming we are talking about an LIR's assignment to its End
User's here?)

As above, why would you expect an End User to buy an assignment (in
itself, this is completely OK by today's policy BTW) if he has no need
for it?

> 2013-03 allows this. Yes it could look stupid if the game was over once
> the next /22 is filled. But...
> 
> The transfer market allowing LIRs to transfer allocations, LIRs having
> such lucrative approach of ressource distribution could also expect to
> buy more ressources for clients having enough money.
> 
> It looks quite obvious to me that in such conditions, small companies
> or non for profit organisations would have severe disadvantages, since
> the available stock would quite quickly disappear.

Yes, this is the natural outcome of a market. However, it is a natural
outcome of *today's* market, it is not something brought on by 2013-03.

It is already the case *today* that big and wealthy ISPs or corporations
with lots of money to spend has a huge advantage over small and
non-profit organisations.

Today, the RIPE NCC does not make a "priority" list over organisations
that are eligible for transfers. In other words, the RIPE NCC will do
*nothing* to help the small/non-profit organisations to get what they
need from the available market offerings before the big and wealthy ones
gets to scoop up the rest. The small and non-profit organisations are on
their own, and they are already today in a pretty hopeless situation.

> We do not oppose to the principle of allocation transfers despite we
> might not be in full accordance with its current terms. But we are not
> welcoming deregulation.
> 
> The hurt being to be expected from the conjonction of the two. Here the
> discussion is about 2013-03, however we consider it in the global
> environment and allocation transfers is part of it.
> 
> We believe that in this environment, 2013-03 is nocive.

The only way I can see that 2013-03 would worsen the environment we
already have, is if those that have no need for IPv4 address space
suddenly starts wanting it and trying to buy it. I just do not see why
that would happen.


But - for the sake of the argument, let's say that it would happen. That
there actually are LIRs, or organisations willing to be come LIRs, that
1) have no need for IPv4 addresses, yet 2) are willing to spend a lot of
money on IPv4 addresses.

These organisations would need to be *very* resourceful and motivated -
keep in mind that they would not have to outbid only small and
non-profit organisations, they would also need to outbid the state
telcos and big ISPs etc. that do have both "need" *and* lots of money to
spend.

If these highly motivated and resourceful organisations really do exist,
I do not see that they would be significantly hindered by today's "need"
requirement in getting what they want. Creating need is easy. The only
thing they would need to do is to find one or more organisations that
*do* need address space, and make a deal to loan/lease (by assigning)
the address space they do manage to buy on the market back to them -
because once an LIR has deals and documentation in place to make
assignments totalling N addresses, it has also "justified need" for
receiving allocations totalling N addresses.

Today, more than one year after the NCC ran out, it ought not to be
difficult to find End Users willing to receive assignments. 97% of the
demand isn't being met by the market. I'm convinced those that do need,
but currently aren't getting any, would leap at the opportunity.

So in summary I don't really see that our current policy can do much to
stop such "non-needy" rich organisations from entering the market in the
first place, and therefore I do not really see that 2013-03 would
contribute much to opening the door for them significantly more than it
already is. While it is true that under 2013-03 they wouldn't have to
assign away the address space to End Users, if their motivation for
entering the market is to make a profit, I would expect them to be
planning to lease out anything they manage to get in anyway - which, as
described above, is allowed today.

> We do not want public IP ressources to become deluxe products.

I sympathise, but I am afraid that train left the platform as of 2007-08
and got up to cruising speed on 2012-09-14. The folks with the deepest
pockets gets to fight over the resources, and the small and poor are
Shit Outta Luck. That's the world we live in *today*, and I don't see
how 2013-03 could reasonably be expected to worsen this situation.

> There we probably have a big point of divergence. But maybe I'm wrong.
> However I am quite conviced that I read somewhere that IP ressources
> did not belong to anybody, and one was not entitled to prevail of any
> possession rights over it. Wich means they cannot be sold, of course.
> 
> So this always made me think that the idea of an IPv4 market in itself
> was in violation with Ripe's rules and policies.
> 
> If I am wrong and this is not the case, I will deeply reconsider the
> legitimacy of a private structure, in which participate only private
> structures, to deal with public vital ressources.

No, you are quite right. IPv4 addresses are not property in a legal
sense. See Article 10.2 the RIPE NCC Standard Service Agreement (ripe-533).

So in the case of an allocation transfer, what is being sold is not the
addresses themselves, but the right to maintain the allocation -
pursuant to the SSA and the RIPE Community's policies.

I think of it in the same way that sometimes when a tenant that wants to
move is permitted to transfer his tenancy contract to a new tenant; they
don't transfer ownership of house/apartment itself, only the right to
live there.

> I believe free pricing of transfers is a shame, and I believe that 2013-03
> drops control of allocation usage worsens its considerably.
> 
> This is why I still oppose this resolution.

I can empathise with you not wanting a situation where money and hard
capitalism rules and the small players gets squished out. But that's
what we have today, and I do not agree that 2013-03 will significantly
change this for the worse (or better ).

If you truly want to improve this situation, the only way to go about it
that I can see is to submit a policy proposal that simply deletes the
section titled "Transfers of Allocations". Such a proposal would not in
conflict with 2013-03; "deregulating the market" is not one of its
goals. FWIW, the only reason why "need" is being removed for transfers,
is that when you remove "need" for assignments (which *is* the goal),
"need" at the allocation level becomes a meaningless concept, because
the latter builds on the former.

Best regards,
Tore Anderson