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Re: [Fwd: Kremen VS Arin Antitrust Lawsuit - Anyone have feedback?]

  • From: Owen DeLong
  • Date: Fri Sep 08 14:40:20 2006

On Sep 8, 2006, at 10:33 AM, Stephen Sprunk wrote:

Thus spake <Michael.Dillon@btradianz.com>
[ I said ]
The debate there will be around the preferential treatment that larger
ARIN members get (in terms of larger allocations, lower per address
fees, etc), which Kremen construes as being anticompetitive via
creating artificial barriers to entry. That may end up being changed.
Your statement about preferential treatment is factually
incorrect. Larger ARIN members do not get larger allocations.
It is the larger network infrastructures that get the larger
allocations which is not directly tied to the size of the
company. Yes, larger companies often have larger infrastructures.
And that's the point: A company that is established gets preferential treatment over one that is not; that is called a barrier to entry by the anti-trust crowd. You may feel that such a barrier is justified and fair, but those on the other side of it (or more importantly, their lawyers) are likely to disagree.

As for fees, there are no per-address fees and there
never have been. When we created ARIN, we paid special
attention to this point because we did not want to create
the erroneous impression that people were "buying" IP
addresses. The fees are related to the amount of effort
required to service an organization and that is not
directly connected to the number of addresses.
Of course it's directly connected; all you have to do is look at the current fee schedule and you'll see:

/24 = $4.88/IP
/23 = $2.44/IP
/22 = $1.22/IP
/21 = $0.61/IP
/20 = $0.55/IP
/19 = $0.27/IP
/18 = $0.27/IP
/17 = $0.137/IP
/16 = $0.069/IP
/15 = $0.069/IP
/14 = $0.034/IP

While the price points quoted may be accurate, they don't really reflect the pricing
tiers in use at ARIN and I notice you completely ignore the fact that no matter how
much more than a /14 you have, you pay $18,000 and additional allocations don't
really cost anything.

Further, the prices you suggest refer to registration fees for ISPs, but, the current
fee schedule if you are NOT an ISP is a bit different (end user subscriber):

/24 = $100/year
/23 = $100/year
/22 = $100/year
/21 = $100/year
...
/8 = $100/year
etc.


So, just between the two ends of the fee schedule, we have a difference of _two orders of magnitude_ in how much an registrant pays divided by how much address space they get. Smaller folks may use this to say that larger ISPs, some of whose employees sit on the ARIN BOT/AC, are using ARIN to make it difficult for competitors to enter the market.

Since you are paying for registration services and not for the IPs themselves, that is perfectly reasonable.
End users registration needs are simple, thus, the $100/year flat fee. ISPs do some volume of
sub-assignment registration and as a result, the larger the network, the more registration effort
involved. However, the effort does not scale linearly with the address space and the fee
structure reflects this.
Since that argument appears to be true _on the surface_, ARIN will need to show how servicing smaller ISPs incurs higher costs per address and thus the lower fees for "large" allocations are simply passing along the savings from economy of scale. Doable, but I wouldn't want to be responsible for coming up with that proof.

I don't even think it is all that difficult. Especially given the end-user fees.

Besides the above, Kremen also points out that larger prefixes are more likely to be routed, therefore refusing to grant larger prefixes (which aren't justified, in ARIN's view) is another barrier to entry. Again, since the folks deciding these policies are, by and large, folks who are already major players in the market, it's easy to put an anticometitive slant on that.

It is my experience that any prefix within ARIN policy is generally equally routable. I would say that
in my experience, Kremen's assertion in this area is false. Additionally, the characterization of
the ARIN policy process is largely detached from reality. While the BoT technically has final
and complete authority, I cannot recall a situation in which a policy with consensus was not
accepted by the board, nor can I recall a situation where the board adopted a policy without
consensus. Since the public policy meetings and mailing lists where consensus is judged
are open to any interested party, it is very hard to view this as an anti-competitive act in my
opinion.

Owen

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