Hi,Thank you for forwarding these comments and observations from the JPNIC community.
Hi all, A few last minutes comment before the meeting... ### WARNING: it's long ###
WARNING : its even longer now! :-)
We undertand this proposal restricts APNIC's role to updating DB registrations. However, we believe implications and issues outside DB update must be also considered before implementing this policy.
There is a view these days that where we are heading with IPv4 is not a pretty place for many reasons, and thats a view that I personally share. But to avoid that situation where the network's continued expansion is dominated by considerations related to unallocated address pool exhaustion, perhaps this industry should've made its moves to adopt Ipv6 quite some years ago, rather than leaving things to well after the last second to figure out how to avoid some of these issues. But thats now a lost opportunity and we are facing some pretty tough issues as an industry.
And central to those issues are the management of addresses and, given that the allocation function is coming to an end, the ongoing management of the registry function. For me the most relevant aspect of IPv4 policies these days is all about what actions are appropriate to preserve the integrity, accuracy and common utility of the address registry for the Internet as a whole. Without such an authoritative registry which is _accurate_ and _complete_ then you might as well give up and return to using smoke signals, because its possible that the Internet won't be useful any more! :-) If IP addresses are no longer assuredly unique and the association of an IP address with a certain end point is no longer universally acknowledged as a unique association then the network heads in a direction that leads to a collapse into address chaos.
So how do you preserve the integrity and accuracy of the IPv4 registry when the current mechanisms for address supply vaporizes and yet demand for additional IPv4 addresses is still strong? That's the primary motivation for me behind proposing the address transfer policy.
Our understanding of this proposal is that it implies to allow tradingof IP address between LIRs which is likely to involve monetary exchange.
The policy explicitly does not cast APNIC into any role regarding the operation of monetary exchange, nor any role regarding the pricing addresses, nor the mechanisms relating to the way in which the exchange may have been arranged. Some would argue that a registry, or title office, has no role in facilitating a marketplace, and should remain strictly neutral. The transfer policy advocates placing APNIC in such a "title office" role in so far as the proposal does not place APNIC as a facilitator nor even an advocate of markets, nor does it place APNIC in a position of having to deny the existence of markets for addresses, if or when they emerge. The policy simply proposes to allow APNIC to recognise and register a transfer of addresses if the parties involved meet a number of nominated criteria. How the parties arrived at the position of requesting a transfer is explicitly not cast as being APNIC's business in the scope of this policy proposal.
We've listed possible issues below: 1. Change in the nature of IP address/IP address distribution - IP adress may be considered an "asset" or "property" rather than a resource
I'll respond to this comment here, but with the caveat that this response is not really relevant to the policy proposal per se, and the comments are, as per the disclaimer below, strictly comments that are my opinions, and not necessarily positions that relate to any other party or any organization, including my employer.
If you strip off all the layers and look at this in economic terms, what allowed addresses to be considered as valueless commodities was their abundance. If you had a need, the need was met from the allocation pools at effectively nominal cost. If you did not have a need then your valuation of the price of addresses was effectively zero, and if you did have a need then the allocation registries could meet that need at a minimal transaction cost. So the formation of any market in addresses was stymied simply because there were no buyers willing to pay because all such needs could be met from the existing distribution system. This lead to an observation that *within the context of that particular distribution framework* addresses had no intrinsic value and consequently could be considered as something other than an "asset" or "property" simply because they had no explicit monetary value within this form of distribution system.
But such an observation says nothing about the intrinsic nature of addresses and says more about the properties of a distribution system that exploited abundance to suppress any organized formation of secondary markets.
So when that distribution framework grinds to a halt due to supply exhaustion do the properties of a lack of a monetary value for an address still hold? In a conventional view of trade, economics and markets this would not be the case. Where a good is in demand and the demand exceeds supply then the relative scarcity is expressed as a pricing function. Now one view would be that this pricing function generates a consequent interpretation of the good as an asset simply because there is this value that is placed on the good because of the shift in the demand and supply situation. In other words the nature of a good, including addresses, is dependent on the context and the demand / supply position, the distribution framework and the utility value and the content of the utility function.
Which is a long way of saying that what will change the nature of IPv4 addresses in terms of their view as an asset or property is the situation of premature exhaustion where demand will outlive supply, and this is not intrinsically an outcome of this transfer policy per se. i.e. this shift in the generally viewed nature of an IPv4 address will shift irrespective of this policy proposal.
And if this shift in the value of IPv4 addresses presents an intractible problem, then perhaps the time when this situation could've been avoided has already come and gone and what we are left with is to accommodate what needs to be done as effectively as we can.
- This proposal implies that there are no longer needs to demonstrate the needs in receiving address space. Thisleads to inconsistency that those who receive the space via APNICmust demonstrate the needs and those who receive it via transfer don't need to do so. It may result in those who do not necessarily need address space are eligible to receive it for financial reasons (We understand too strict a criteria would lead to black market, but perhaps there should be checks in some form to prevent hoarding)
Most of this proposal is aimed at the post 2010 situation when the current distribution framework for Ipv4 addresses is no longer viable because the existing framework would've come to a halt. This comment therefore refers to the period between when this policy is implemented and the point when the address pool is exhausted for APNIC.
Now its my personal guess that this period will be short. Maybe I'm taking a pessimistic view of the speed of the policy development process these days, but proposals such as this one do take time, and it may well be that the above situation will not eventuate simply because exhaustion would've occurred
prior to this policy being adopted.
2. Social implications as a result of allowing transfer- IP address holdings may be subject to taxation for LIRs as wellas APNIC. Impact of such change is not properly analyzed
See the above comments - once addresses are scarce and when demand outstrips supply then a pricing function will emerge. Whether this emerges in the context of the RIRs or in the context of alternative registry systems is yet to be seen, but the basic dynamics of the situation is unaltered. Irrespective of the RIRs' position this pricing function will have implications for address holders,
In other words this comment appears to have traction *irrespective of the fate of this transfer policy* It is a matter of some concern given the potential range of price outcomes, but for any enterprise to suddenly have an incredibly valuable asset appear on their financial books is a source of some concern for a number of reasons, including, but not limited to taxation.
So I would argue that address pools will have a significant asset value post IPv4 address exhaustion and irrespective of whether such addresses move between parties or not in the context of markets may attract taxes and changes, depending on the local rules and regulations concerning the holding of assets.
- APNIC may get caught in legal disputes over adress holdings andtransfers and restricting APNIC's role to DB update in the policymay not be effective enough as a protection
Again, once the current IPv4 distribution framework grinds to a halt in the coming months, folk will search around for "unused" space and attempt to use it, and disputes will increase and recourse to legal remedy will always be available. Again, this policy is entirely neutral about this - the likliehood of escalation in the number of such disputes is independent of the adoption or otherwise of this transfer policy, in my view.
We also had some discusssion in JP-OPM and major comments received wereas follows: - Those who trade in black markets always chose the easiest way -therefore, even if this policy is implemented, they will likely tomove address space between themselves without going through the official procedure
I am not so pessimistic as this, and note that this (the formation of black markets) would be a terrible outcome for the Internet. The association of a holder with an address is not useful if it is kept as a private secret - for the network to work in any meaningful and useful way this association MUST be public and MUST be universally acknowledged. Black markets, if one defines such markets as occluded or hidden transactions where the parties and the outcomes are not visible to all others are useless - useless to the participants and useless to the Internet!
The more likely scenario is that needs will be expressed in other ways. If parties wish to effect movement of addresses in order to meet continuing demands for addresses then if the RIRs are not able to record the outcome of such transactions then its more likely that other public registries will appear. Given that such registries would be holding current rather than historical information about the disposition of addresses one possible (probable) scenario is that everyone else would use those sources of information as the authoritative source of information about addresses. At that point the RIRs would revert to the status of an historical institution with no further relevance in the IPv4 world. In other words, denial of a shift in requirements for the registry function may well be a move which simply ensures that the registry function moves elsewhere where requirements are accommodated.
But such an orderly transition is unlikely in this situation. A more likely scenario is a number of such alternate registries appearing each with differing information and differing modes of operation - at this point the ability to determine that any address is unique and the identity of the current holder of the address vaporises and the Internet itself then suffers potentially irreparable damage. The remedies to such a scenario are typically political and typically work "consensus" in the direction of "equal distaste expressed by every party". Again its not a pleasant scenario when compared with what we've been able to achieve in terms of cost, efficiency and efficacy in the RIR system.
- Some form of demonstration of needs should be required to prevent address hoarding
Its not clear to me that a title office should also act as a market regulator. Its not clear to me that APNIC should undertake such a role. That's not toi say that there should or should not be some form of restraint on the actions of individual actors that provides appropirate disincentive for hoarding, but it is saying that its probably asking a bit much for a title office to also undertake the role of a market regulator. To the extent that hoarding is a natural expression of the expectation of price escalation then surely the issue here is that at some point the alternative, that of more visible and rapid moves to quit IPv4 and use IPv6, becomes economically so much more attractive that the hoarder is left with a valueless pile of integers. So its unclear to me that address hoarding would be an attractive proposition financially given that there is substitutability, and this substitutability becomes more attractive the higher the price moves in IPv4.
- simply register them as assignments rather than treat it as transfer of allocations. this will allow to achieve the goal without fundamental changes in the policy (issues on this methods were also discussed)
This appears to be a continuation of the previous comment, that APNIC should act as a market regulator and constrain who can be a market actor and the nature of each and every transaction. Its an interesting proposition, but it certainty has some substantive issues, including issues of authority, credibility, competence, effectiveness, acceptability, and substitutability to name a few.
regards, Geoff Disclaimer:Most of you have figured it out by now, but for those who haven't the above is entirely a product of my own delusions and definitely noone else's.