MR. DURANT: I am Durant, Comcast. I’m going to stay on the same topic, but moving the monetization aside and simply talking about property, has there been a case where a legacy order has “transferred” “property” of some address base to another company or another organization, and that new organization had come to ARIN to “register” that space within ARIN? And if it does not happen yet, if this was to happen tomorrow morning, what would be the reaction from ARIN?

MR. DURANT: I am Durant, Comcast. I’m going to stay on the same topic, but moving the monetization aside and simply talking about property, has there been a case where a legacy order has “transferred” “property” of some address base to another company or another organization, and that new organization had come to ARIN to “register” that space within ARIN?
And if it does not happen yet, if this was to happen tomorrow morning, what would be the reaction from ARIN to such a request?

MR. CURRAN: I know this one by heart, but actually, I see Leslie and Ray down that end. So Leslie or Ray, go ahead.

MS. NOBILE: I didn’t hear the last part of that.

MR. CURRAN: If a entity comes to ARIN and says, “I need to change the records for this property that I’ve bought, it’s currently pointing to the old organization, and it’s now my property, and it should point to me preferably.”

MS. NOBILE: Yeah, this does happen quite frequently, in fact, and they have to follow the transfer policy guidelines. That’s what we tell them. So of course if they can provide the documentation that the company A bought company B or whatever, they have a legal documentation and we can verify that, then we do the transfer. If they come to us and say, “I bought this property, I bought these addresses, here’s the agreement,” we say no, because the policy clearly says IP addresses are not property. That’s written right into the policy. And that’s what we tell them. We won’t do any kind of a transfer, because you don’t have the correct paperwork. So does that kind of answer your question?

MR. DURANT: So the loophole is actually to buy the company if you want to buy the other space. (Laughter)

MS. NOBILE: In fact — yes.

MR. CURRAN: It is — if you purchase a company, then you’ll be able to as effecting transfer — you’ll be able to as part of — as doing that, you’ll be able to effect the transfer. The only reason you’re getting to transfer the addresses is because you’ve got the reason why the addresses were signed when you purchased the company.

MR. DeLONG: John, if I may?

MR. CURRAN: Yeah.

MR. DeLONG: One thing to point out on that process, though, is that when they do that transfer, they’re required to sign a current RSA, and they move out of the legacy category if the addresses were previously in that category, and into the ARIN category. They are paying fees, and they are subject to all the requirements and changes to the RSA going forward at that point.

MS. NOBILE: Actually, they don’t necessarily pay yearly fees, they pay a $200 — is it $250 — maintenance fee? Is that what it is?

SPEAKER: $500.

MS. NOBILE: $500?

MR. CURRAN: Transfer fee.

MS. NOBILE: $250 for the transfer fee, and then they pay a yearly maintenance fee. They don’t necessarily pay ISP subscription member fees. If it’s legacy space, right — and it’s an old company they have legacy space, a new company has bought them, the new company is not affiliated, they’ve never been in with ARIN before that, they don’t have any space from ARIN. We move this space — and we don’t even actually ask what the new company is doing with it, we just want to make sure it’s utilized. We move the legacy space as is, and we still refer to it as legacy space. They do sign an RSA. They do pay a maintenance fee, but we do not charge fees on that space, we don’t charge subscriber fees, because it was — it’s kind of complicated.

MR. DeLONG: They get treated as end users but —

MS. NOBILE: They get treated as the end users, thank you. I didn’t bring that out —

MR. DeLONG: But they —

MR. PLZAK: One another comment. One of the reasons people want to do that and to keep those records current is that at some point in time, if somebody is interested in conducting a peering agreement with someone else, you’d want to say, “Who are you?” Remember one of the roles of the IR is to provide that registration which establishes the uniqueness of who the operator of the network space really is. So that becomes even more problematic going forward looking in terms of things like routing security.

MR. CURRAN: Right. Other panelists want to comment? No? Okay. Microphone, center back.

MR. BICKNELL: Leo Bicknell, Harrah’s Entertainment. Actually, I want to make a comment on Scott’s earlier comment, because I think he did an excellent job with the math but may have missed the business case. I believe 10 percent of the address space, just off the top of my head, is more than enough to run a enterprise the size of UU Net, Verizon business, or AT&T or Level3, or perhaps all three of them together. And I’ve a feeling if v6 is not viable in time, and the business community has an opportunity to run several billion dollars’ worth of enterprise or not, they will find that last 10 percent amazingly valuable.

MR. CURRAN: Scott, would you like to respond to your response to your comment?

MR. BRADNER: Scott Bradner trying to figure out what he just said. What you just said, not him. If a 10 percent were in one place — yeah, maybe — 10 percent isn’t in one place. It’s scattered all over the place, and the effort going back to all of those places and even just doing the bookkeeping to find all those places in figuring out how to get it back. And looking at some personal experience, so Harvard’s got 6Bs (?). When we got them, they all went to different parts of Harvard, legally separate parts of Harvard, but ARIN sees it as one. So we’re not using anywhere near all of that. But when we go back to ARIN and say hey, can we have some more address space? They go no, you got all this crap, and you’re not using it. We can’t — it’s not cost-effective in anybody’s mind to do the reclamation on that sort of thing. Even though a lot of that space is really wasted. And we’re not alone in that. It’s all over the place. Somebody mentioned earlier that people who have legacy address space — I think it was you — a lot of it is very inefficiently managed. And that’s where pulling those things out is just not cost-effective to do. We felt that it wasn’t going to be cost-effective, but mostly it wasn’t going to be psychologically effective, that we were going to be — if it’s got 10 percent, within 10 percent at the end, we’re in an end game where rationality is not part of the process. We’re in a scarce situation, and rationalization doesn’t work there.

MR. BICKNELL: Right. And I actually completely agree on that. People will not be rational. They’ll pay whatever it takes to get the address space. And so someone will knock on your door and say, we will pay for everyone to do all the auditing for you, and we’ll give you an extra $100 million and all we want is 10 addresses back. And you’ll go off and do it. And we the community have to keep track of it. So it’s still our problem to solve.

MR. CURRAN: Following your train of thought, and I’m not going into monetization, but I guess what you’re saying is that potentially, the problem of whether it’s worth reclamation will solve itself if monetization happens.

MR. BICKNELL: Right. To use a simple example, today we don’t extract oil from Texas, and we don’t extract it from shale because it’s not cost-effective. If we didn’t have any from the Middle East and gas were $9 a gallon, we’d extract it like crazy. And IP addresses are no different. Today, I can go get them from ARIN for extremely low cost per subscriber. If ARIN is out and I have to go buy them on eBay, and I have to go pay $5 million for a /24, I’m going to go see if anybody has one laying around. And they’re going to be greatly incentivized to go see if they have one laying around.

MR. CURRAN: Good point. I guess you also want to find out the routing table entry cost when you do that. Microphone on this end.

MR. RICH: I guess the argument only really works so if the underlying presumption is there isn’t an alternative. When you talk about hundreds of millions of dollars more — I know you were exaggerating. But there’s a viable alternative, and it’s not — the cost of transitioning is going to be far less than the cost of reclamation or obtaining IP before it is on the “black” market. So I don’t think it’s a realistic situation. I guess my comment, why do we do anything — why do we even need to — do we really need to worry about the legacy space?

MR. CURRAN: Because you’re saying we don’t necessarily — and your assertion is potentially — we don’t need to worry about it at all, because the effort involved may be more painful than what’s involved in transitioning.

MR. RICH: Absolutely.

MR. CURRAN: Comments from the panelists? Everyone on the panel thinks transition is effortless.

MR. DeLONG: I think the transition is not effortless, but I think that only time will tell which one is harder or easier or cost more or cost less, and I think that at some point economic equilibrium will occur. But anything further and we get into the monetization rattle.

MR. CURRAN: Uh-huh. All right.

MR. PLZAK: I’d like to remind the panel and everyone else that some of these issues are also going to occur again tomorrow afternoon in discussion on IPv4 Consumption.

Because that’s also a rich fertile area to discuss the transition to IPv6, and it’s also inherent to other discussions about why isn’t it happening as rapidly as some people think it should.

MR. CURRAN: Center back microphone.

MR. WOODCOCK: Bill Woodcock. Just an addition to something that Leslie said, because it’s important and it’s already come up two or three times in the conversation, which is that in the two sort of reclamation amnesty policies, the final sentence of each of those policies is, if the address space that’s being handed in was legacy, the replacement space would be treated that way also. Right? So if you are a legacy holder and you want to give back some, or you want to give back some with some caveats or whatever — I mean, there is plenty of room for negotiation there, and it doesn’t mean that you’re automatically going to fall into a different category that you don’t want to be in. Right? You can be a legacy holder and give back pieces, right? Or be a legacy holder and do updates, or be a good legacy holder and give some back and get a different block or whatever. You just have to negotiate it with registry services, and they have the tools to work with you because of those policies.

MR. CURRAN: I believe that’s the policy with the — I guess the one underlying statement that says there are some aspects of being a legacy holder today like being hidden, anonymous and unknown that go away. So with respect to address size, I believe you’re correct. But you then do end up being a known entity to the ARIN organization. Anyone want to comment on that?

MR. ANTIA: The negotiation doesn’t work. About two years ago, I was with a new organization, we had some legacy address, we wanted to swap some stuff around, and we were not successful. ARIN did not — I do not remember the details of it. Marty, you may remember, but we were not successful in negotiations.

MR. RYAN: We’re ready to deal.

MR. CURRAN: Come on back. I see Jordi.

MR. PALET MARTINEZ: Jordi Palet.

MR. CURRAN: Go ahead.

MR. PALET MARTINEZ: I really think IPv6 is coming. Obviously. And I think it don’t really matter too much according to what has been said during the reclamation effort in terms of how much life IPv4 would provide. Maybe it’s more a question of what cost this — that legacy space. But maybe we can work out something, and probably could be a policy in order to somehow encourage people that has legacy space — and they know that sooner or later, they will meet IPv6 space. It could be something like if you don’t agree before — let’s say next two years to return the legacy space that you’re not using, or sign there, you will not be entitled to get an IPv6 allocation in the next 20 years. Or something like that. Maybe it’s a way to say, okay, this is what the community decides. You could agree or not, but maybe this could help; I don’t know. What do you think?

MR. CURRAN: Panelists wish to comment?

MR. ANTIA: I’m not sure that a large number of people would ever hear that message. I think it would fall on deaf ears, or — because they’re not listening to ARIN right now. Why would they hear that message?

MR. CURRAN: This be a message maybe that when —
SPEAKER: (Off mic).

MR. CURRAN: Tell them in person.

MR. DeLONG: Yes, all these people. At least the bigger ones —

SPEAKER: A door-to-door campaign.

SPEAKER: Outreach. (Laughter)

MR. CURRAN: Okay. Got it. Other comments from the panelists? We got about 20 more minutes. We got plenty of time here. (Laughter)

MR. DeLONG: I think that’s a stick, and I think that we’ll have more success with carrots.

MR. CURRAN: The threat of a stick. Okay. Yes. Center back.

MR. CONRAD: David Conrad, wearing — I have two comments, so I’ll wear two hats. The first comment is with my IANA/ICANN hat on, and that is that we’re actually discussing with the RIRs right now ways of trying to figure out what to do with — at least the registration information of some of the legacy address space, and how to partition it out in a way that makes sense without offending three-quarters of the human population. It’s often a challenge anytime you do anything with ICANN, you typically offend three-quarters of the human population, as far as I can tell. But we’re working on that bit.

SPEAKER: Make it work.

MR. CONRAD: I’m sorry? (Laughter)

MR. CONRAD: We’re working really hard to get the 100 percent mark. The other comment I have to make is without any hats on, especially not an ICANN hat, and that is to actually take issue a bit with what John had said with regards to not wanting to address monetization. This whole topic is about the monetization of address space. Right now, people pay. You pay through dealing with bureaucratic processes that are created by the registries. You pay by creating companies to hold the address space, then to transfer that address space to a new company. What we’re looking at in the future is, as v4 space becomes more scarce, that monetization is going to become much more public. There is also a monetization associated with transition. Right now, the primary reason as far as I can tell why people haven’t transitioned IPv6 is because they actually want to connect to the Internet, and the Internet is not IPv6. You won’t actually get anywhere until a significant portion of the Internet actually is IPv6 addressable, so you have a bit of a chicken and egg problem. So what eventually you’ll run into is the cost for obtaining IPv4 space will either reach a point where it overwhelms the cost of transitioning to IPv6, or you’re going to end up with IPv4 forever. So at some point you’re going to have to deal with actually looking at the monetization of the IPv4 address space within the registry, the RIR framework, and it’d probably be good to do that sooner rather than later.

MR. CURRAN: So just to respond, all the panelists believe it’s a very important topic. We just wanted to get the non-monetization discussion of this going, because we felt that alone could easily occupy an hour-and-a-half. To respond to the second half, David, which I’ll do personally; I have an RFC that’s 11 years old now, yeah, coming up on 11 years old, which ends with a sentence “IPv4 and that.” (?) So I understand exactly. It is going to be — we may not have many carrots in the IPv6 transition game right now. Any panelists wish to comment on David’s — no? Okay. Center back. Yes.

MR. HANNIGAN: Martin Hannigan again. So I guess I agree with David’s comments, and I’ll move on from there, and also — I mean, it seems clear, but it hasn’t been said that there can be more than one carrot, obviously. And there can be things that we do now, and things that we continue to work on that are tougher solutions, like the monetization issue. So for example, Bob raised a point about the amnesty policy, an unsuccessful attempt to negotiate the return of some resources. We could now make changes to the amnesty policy to make it more friendly in terms of a goal of some reclamation. And I would support some activity in policy around that now. And I’d like to continue to hear about the monetization issue in the proper forum. Thank you.

MR. CURRAN: We’re still 15 minutes from break. Microphones remain open. Yes, Mr. Vixie.

MR. VIXIE: I’m Paul Vixie. I’m a member of the Board of Trustees but I’m speaking here as member of the Internet community. I’m sorry, but I have several comments. First, to the suggestion that the end game is not worth playing because it would be a non-rational situation. I believe that was Scott’s analysis. It will be a non-rational situation. That’s true. That doesn’t mean we don’t play, that means we play now when it is still somewhat rational, and when we can get those addresses back into the pool, where they will be allocated by sensible community-based means instead of an open market sort of means like when you buy DVDs on the streets of Mexico City. So contrary to what Scott said, I think that the non-rational end game means that we have to hurry rather than that we should avoid it. In response to — I think Jordi’s suggestion that we penalize someone who does not convert, I actually have two comments. The first is if we thought people would convert to avoid this end game, then we would really not worry about it, we’d give all the address space out just as quick as we could under the policies that we had. And then we would just say, well, that’s the way to get to v6 faster. Nobody in this room believes that that’s going to happen. We all believe that it’s going to be a very tight end game. And I want to point out finally to the idea that we would penalize someone by saying that if you don’t do a certain thing by a certain time, then you can’t ever do it, or you can’t do it for 20 years. What spammers do is if you say that they have to honor opt-out requests, what they do is they form a subsidiary every week. And each new subsidiary gets to spam you until you tell that subsidiary to stop. And so you have this endless chain of subsidiaries who own each other. And I don’t believe that there’s any power in the universe — at least the FTC has not found it — that makes it actually possible to audit the ownership of each of those subsidiaries to make sure that they’re not 51 percent controlled by somebody who you have told not to spam you. So let me just say that that has not proven practical.

MR. CURRAN: Good input. Anyone like to comment? Okay. Welcome back, David.

MR. CONRAD: It’s good to be back. On the question of irrationality, something I think I can claim some authority on. If not intense familiarity —

MR. CURRAN: Indoctrination.

MR. CONRAD: And yeah, I was on ARIN’s Board of Trustees.

MR. RYAN: Kind of cold in here all of a sudden.

MR. CONRAD: So from my perspective, and I’m not an economist, and I’m not going to talk about monetization except I am — you can deal with scarcities in essentially two fundamental ways. You can deal with it via a command economy, which is the approach the RIRs have historically taken, or you can deal with it in a market economy. Historically, it appears that market economies tend to be more efficient in allocation in scarce environments as long as you have sufficient monetary resources to enable the acquisition of the resource. The challenge will be, as I personally believe; it’s extremely unlikely that we won’t have either a gray or even a white market in address space. The challenge will be in dealing with the routing system fragmentation that’s going to result from a flood of longer prefixes generated from the unused but allocated address space that currently exists within the legacy space, as well as the space that has been allocated by the RIRs. This is a topic that is relevant to what Marla was presenting on earlier, the RAWS (?) workshop that was held in Amsterdam and the RAM mailing list, and potentially a working group that may spawn out eventually of the interminable IETF processes. It looked like you were going to comment.

MR. CURRAN: Go finish.

MR. CONRAD: Okay. The key consideration is, as was discovered back in 1996 when there was a really bad set of ideas being floated about a working group that went by the name of PIARA, (?) that routing announcements and addressing have ties together when you’re actually dealing with monetization, with dealing with scarcity and the more efficient use of address space in particular. So it’s just something else that the folks here, particularly the ISPs, will need to consider as they look forward to dealing with the multiple megawatts and millions of pounds of tons of cooling that they’re going to need to actually deal with their new spiffy routers from their favorite vendors.

MR. CURRAN: So I’m going to ask, I guess — I’ll paraphrase a question that was implied by your statements. It is true that presently, allocations from the registries generally are following some form of pattern. They aggregate well, they’re assigned either in well-known blocks or they’re assigned through ISPs who maintain some aggregation. And this means that the impacts of the routing table is something that is if not predictable, at least tolerable. And that one of the questions that comes up as we get to IPv4 exhaustion is, what happens to the routing table when all of those little IPv4 address nuggets lying around in the world — both legacy and non-legacy — get routed. And you said Marla’s presentation is working on technologies that will enable all that. What I’m wondering is, do you believe that worrying about the legacy space and reclaiming it is going to help the problem of those routing tables or hurt the problem of those routing tables?

MR. CONRAD: It’s going to make it infinitely worse. Specifically as the address space becomes more scarce, I believe — I might be wrong, but I believe that the unused but allocated space will begin to populate the routing tables, typically the longer prefixes. In addition, ISPs are going to need to obtain address space in order to bring in more customers unless they want to stop bringing in more customers. And they’ll obtain address space however they can, which will almost certainly mean obtaining non-aggregatable provider-independent long prefixes, which they will then need to figure out how to do traffic engineering on. So within the context of the internal tables within the ISPs, the problems that they’re experiencing even today with regards to having very large tables and a lot of thrash and very slow convergence is only going to get worse.

MR. CURRAN: And that won’t be more painful than moving to v6?

MR. CONRAD: That’s where the monetization comes in; right?

MR. CURRAN: Okay.

MR. CONRAD: At some point, it will become more painful, more expensive, to deal with IPv4 than it will be to deal with something else.

MR. CURRAN: Okay.

MR. CONRAD: Whether or not that something else is IPv6 is yet to be seen.

MR. CURRAN: Panelist comments?

MR. RYAN: I thought, David, for the first time in my life, I’ve ever disagreed with you, it was your comment that we are part of a command economy. I totally reject that notion that the RIRs are a command economy, because frankly, if we were a command economy, we would treat these resources as if we wanted to make a profit like MITRE Corporation, and we’d monetize them so that our non-profit would be highly profitable. And that would be part of a command economy, so I was a little surprised by that part of your remark. And I think what I do see here, the routing table problem is the unique problem that people who don’t belong in this room don’t get. In other words, they don’t understand the impact on the routing table of various policy proposals. Similarly, I think there is a need to hire economists to address this. I think we literally need a different group of people to resolve this problem than we’ve used to resolve other problems. I would hire an economist here for this purpose. I might hire other trades as well, and throw them into the same room to try and come up with an appropriate policy. Only kidding, David.

MR. CURRAN: Okay.

MR. CONRAD: Just to clarify, the fact that the RIRs are at least one form of a command economy does not imply that the RIRs would be interested in deriving a profit. They’re meeting other goals of the community to which they serve, just like other command economies have done historically in the past.

MR. RYAN: I actually — I —

MR. CONRAD: We can take that off.

MR. RYAN: I’ve a Bachelor of Science in Economics, so the word “command economy” I don’t think belongs here. Maybe it does, and you’re correct, we can take it offline.

MR. CONRAD: Would you prefer socialism?

MR. RYAN: Okay.

MR. PLZAK: I should warn people I’m closing the microphones in about a minute. If you have comments — questions for the panel, or comments, please find a microphone. Microphones will be closing very shortly. Front center sent mic.

MS. AZINGER: Marla Azinger, Frontier Communications. This is a request, because David keeps hitting on things that are more for the v4s since that panel that we’re going to do.

SPEAKER: Uh-huh.

MS. AZINGER: And it’s really hard to keep my butt in that chair and not at the mic to go off on that stuff, because it’s stuff that he keeps saying. So I just was hoping that people could keep it to what this panel really is, and you can save that other stuff for later — because I don’t want to go off track either.

MR. CURRAN: Luckily we’re winding down. So it shouldn’t be hard.

MR. ORTIZ: Hi. My name is Humberto Ortiz; I’m from the University of Puerto Rico. And we actually have two direct assignments, they’re /16s. So what would it take for us to become members of ARIN, and how can we contribute?

MR. CURRAN: There are multiple members of ARIN member services here who will find that man. We got it. Okay, on that point, I’d like to thank all of our panelists. (Applause)

MR. CURRAN: I will now turn this back over to Ray, and we can talk about the next item on the agenda, which at least on my agenda is a break.

MR. PLZAK: Thank you, John. Couple of things. Guys, would you please remain seated? Thank you, Leslie. We’re not done quite yet. First of all, there’s a lot of work to be done here, and I would like to thank everyone that came to the microphone. It really is helpful. And I can definitely see some policy proposals coming out of this. A reminder that the Cyber Café is open, and that Richard, nee Vanna, will be there spinning the wheel. And we got some more prizes that will be going on there. And that’s some of the other things that are still there, you can get. And please be back here at 3:50 for the next part of the agenda. Thank you.

(Recess)

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