[address-policy-wg] 2016-03 New Version and Impact Analysis Published (Locking Down the Final /8 Policy)

Hi,

On 10/19/16 11:05 AM, Marco Schmidt wrote:
> The goal of this proposal is to ban transfers of allocations made under the final /8 policy. Also the proposal specifies what resources must be added to the RIPE NCC IPv4 available pool.
I do not agree with this policy proposal and believe it will not fix 
anything, instead - it will harm the registry.
> Some of the differences from version 2.0 include:
>
> -    Clarification that changes to holdership of address space as a result of company mergers or acquisitions are not affected by proposed transfer restriction
this fixes only a tiny bit of the problem.
> -    Legacy space handed over to the RIPE NCC will be added to the IPv4 available pool
this has nothing to do with the policy proposal. I feel it's just some 
candy offered to sweeten the proposal itself.

This was the short version of my response. Those reading this e-mail 
during working hours, you can go back to work ;) those that still have 
some popcorn left, feel free to read further.

Below are the 6 most important reasons why I believe this policy 
proposal should not become policy:

1. This policy proposal will create two types of members.

a. the members that have received resources before 2012 + the members 
that can afford to 'buy' IP addresses allocated until recently (-2y from 
the date this policy proposal would be implemented)
b. the members that have only received resources after September 2012 
and can not afford to buy IP IP addresses at the market prices (but they 
can buy an unlimited number of these from the RIPE NCC at ~€4,5 
(€3,4/1st year + €1,4/2nd year - redistribution of profit)

The first type of member would be allowed to participate in an IP 
transfer market that was (until the implementation of this policy 
proposal, if ever) accessible to everyone and anyone with resources 
received from the RIPE NCC or an other member.
The second type of member will not be allowed to participate in this IP 
transfer market unless they buy first from an other member.

Some members have already been able to transfer their /22 received from 
the last /8. With the implementation of this policy proposal (if ever) I 
feel that we as a community will discriminate between those that have 
received their last /22 (and want/need, for various reasons to transfer 
it) 2 or more years before implementation and those that have received 
less than 2 years before the implementation (or any time after).

I know some of you do not like analogies. But I would compare this with 
2 people buying their cars. The first can buy the car and sell it 2 
years later, only because the purchase happened even just a few days 
before the car industry decides that cars can no longer be sold further. 
So, those that have bought their car and used it for 1.5 years will have 
to return it (for free) to the car manufacturer while others could have 
sold it because they were quick in the purchase process and bought it 
earlier.

So, I think that once this policy proposal would be implemented (if 
ever) it would discriminate the second type of member as they will not 
be allowed to participate in a well established IP transfer market with 
the IP addresses received from the RIPE NCC (and only with the IP 
addresses they need to buy from the market first).


2. This policy proposal will create yet an other color of IP addresses.

I believe and hope that in the near future we will start talking about 
the removal of colors and not about addition of more colors. Numbers are 
just numbers. There is no difference between a number received in 1990, 
one received after 1992 or one that has status PI or PA. Now, we want to 
add a color for numbers received after 2012...

My router does not know any difference between these numbers and nobody 
really cares. Do you think that PI holders care that they are not 
supposed to sub-assign that space to other customers ? Do you think the 
RIPE NCC has any say or can really verify who (and most importantly - 
how someone) is using any of these numbers?
The community decided to remove most of the barriers when 2013-03, 
2014-02, 2014-05 were approved and implemented. These policy proposals 
removed all the 'old' requirements and cleaned up the IPv4 policy so 
much that anyone can now do whatever they want with their IPv4 space 
(not that they could have not done it in the past, but they would have 
to lie to the RIPE NCC if they would have ever needed an additional 
allocation). This policy proposal tends to take us back to previous way 
of thinking, an old one - I think.

So, just adding more colors and barriers will only complicate things. 
And I've always liked policies and procedures that are clear and simple. 
As simple as possible.


3. This policy proposal will drive some IPv4 transfers underground.

We already know and have seen it in previous presentations that where 
the RIR system tries to impose some limitations, the real world invents 
something to circumvent those limitations. Currently, with very large 
allocations, the invention is called a 'futures contract'.

While the RIPE NCC policies will say that ALLOCATED FINAL can not be 
transferred between LIRs (if this policy proposal will ever make it into 
policy), most LIRs will find ways to circumvent the policy (as they have 
always done it). They will create contracts that will stay underground 
and will be covered by NDAs, they will use loopholes in the M&A process, 
they will do whatever they need to in order to (sell/buy) the resources 
they needed.

We've seen that some of the people that participated in the previous 
discussion of this policy proposal said they will never do such a thing, 
they will never buy a /22 that says ALLOCATED FINAL. Would you change 
your mind if your business depended on it? If there was no other way to 
receive an IP block that you desperately need ? If you have a very 
important customer that would leave if you can not assign a few more IP 
addresses?
I bet anyone that has a commercial business will think twice and examine 
again and again where is that border between profit and loss and whether 
respecting the RIPE Policies to the very last letter really matter that 
much that they would rather have a loss.


4. This policy proposal will drive the free IPv4 pool to run-out even 
faster.

What will the LIRs do if they won't be able to find affordable IPv4 in 
the market any longer? If these /22s that were allocated from the last 
/8 are no longer available in the transfer market? Well, they will 
either buy more expensive (pre-2012) IP addresses or go to the RIPE NCC 
and receive a /22 for less than €5/IP.
The board announced publicly that anyone can open multiple LIRs if they 
need more IPs.

Approving this policy proposal will only remove some 'assets' from the 
free market and the supply will shrink, therefore driving prices up for 
whatever is pre-2012 and pushing more members to get the IPs they need 
from the RIPE NCC by means of setting up multiple LIRs.


5. This policy proposal will affect the registry (in a bad way)

As said in #3, some transfers will be driven underground. We do not see 
many of those in the RIPE Region at this moment because there is no 
limitation on who can transfer and when (except for the two years 
anti-flip bit).
If this proposal ever becomes policy, the transfers of the /22s will 
still happen. If the two parties can not convince the RIPE NCC of their 
'M&A' and can not get the IPs changed in the RIPE Database from a name 
to an other, they will keep on using them with the wrong name.

This will affect the quality of the registry and we will have a registry 
with two colors. The bleached IPs will be the ones pre-2012 and the rest 
will have various colours of grey.

6. Artificial explosion of number members

The implementation of the members' vote (on the board decision of 
blocking the registration of multiple LIRs on the same company name) 
requires those that need a second /22 to keep it in a second LIR for at 
least 2 years before this second /22 can be transferred to their first 
LIR. The second LIR can then, after the transfer, be closed. So the 
price per IP, has been set to a minimum 2 years membership + sign-up fee 
- redistribution.

It may actually require the company opening multiple LIRs to keep all of 
these open if they want to hold on to their IP addresses. It is not very 
clear what will happen when these companies will want to consolidate all 
the LIRs they have into one. If they will be forced to return the /22 
they got on their second LIR, then they will be forced to keep this 
second LIR open.

If that's the case, the number of LIRs will explode and will not shrink 
every time a second LIR ages 2 years and can transfer the /22 to the 
first. I am unsure whether Remco, as a private citizen but more, as a 
Board member has given this enough thought. I believe that this policy 
proposal will make the RIPE NCC more and more unstable with difficulties 
in making financial plans on the long run.

I worry that these companies that will be forced to keep multiple LIRs 
open just to hold on to their /22s may take the Board or the NCC to 
court because they are not allowed (after 2 years) to consolidate their 
membership into one registry. I am unsure what a court would say when 
they are told that Remco has multiple hats and his proposal is not made 
with a Board hat. To most of the world (and I've talked to quite a few 
people about it), this policy proposal seems to come from the RIPE NCC 
Board.
To many people that I talk to, this policy proposal is seen as a double 
standard from the NCC Board. On one hand, the Board decided to advise 
the members to vote to allow companies to open multiple LIRs. On the 
other hand, one of the Board Members (even if as a private citizen) 
makes a policy proposal that forces those to pay a la longue for each 
/22 they received.


There may be other reasons why I do not like this proposal. The ones 
mentioned above are the most important ones.

Regards,
Elvis