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

I didn't have any popcorn but a few nachos were helpful to read the full
e-mail.

Very good and detailed explanations. +100 from me to Elvis which can also
be read as -100 for the policy.

For those of you who pretend working, it's friday so you can't trick anyone
;). You'd better read Elvis's mail entirely.

Have a nice weekend,
Ciprian

On Fri, Oct 21, 2016 at 4:36 PM, Elvis Daniel Velea <elvis at velea.eu> wrote:

> 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
>
>
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