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

Stephen Sprunk stephen at sprunk.org
Fri Sep 8 17:33:46 UTC 2006

Thus spake <Michael.Dillon at 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

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 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.

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.


Stephen Sprunk         "God does not play dice."  --Albert Einstein
CCIE #3723         "God is an inveterate gambler, and He throws the
K5SSS        dice at every possible opportunity." --Stephen Hawking 

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