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

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1

I am looking for anyone who has input on possibly the largest case
regarding internet numbering ever. This lawsuit may change the way
IP's are governed and adminstered. Comments on or off list please.
Anyone have experiences like are said in the lawsuit? I would love
to know if this is true or not. Anyone with negative ARIN experiences
that relate to the lawsuit, please let me know, thanks!

For thos interested, you may read this lawsuit here:
http://72.14.209.104/search?q=cache:44uxmnEmJVkJ:www.internetgovernance.org/pdf/kremen.pdf+Kremen+Vs+ARIN&hl=en&gl=us&ct=clnk&cd=1

Or google for Kremen VS Arin

Chris Jester
Suavemente, INC.
SplitInfinity Networks
619-227-8845

AIM: NJesterIII
ICQ: 64791506

Chris Jester
Suavemente, INC.
SplitInfinity Networks
619-227-8845

AIM: NJesterIII
ICQ: 64791506

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2

Two questions regarding thisfor the list (slightly OT):

  1. Has any sort of IP address ownership precedence been set in a US court?
  2. Isn’t ARIN considered a non-profit resource management/allocation organization? To my knowledge, there is no “marketplace” for IPs.

Thanks!
-brandon

3

Chris Jester wrote:

I am looking for anyone who has input on possibly the largest case
regarding internet numbering ever. This lawsuit may change the way
IP's are governed and adminstered. Comments on or off list please.
Anyone have experiences like are said in the lawsuit? I would love
to know if this is true or not. Anyone with negative ARIN experiences
that relate to the lawsuit, please let me know, thanks!

For thos interested, you may read this lawsuit here:
http://72.14.209.104/search?q=cache:44uxmnEmJVkJ:www.internetgovernance.org/pdf/kremen.pdf+Kremen+Vs+ARIN&hl=en&gl=us&ct=clnk&cd=1

Or google for Kremen VS Arin

Chris Jester
Suavemente, INC.
SplitInfinity Networks
619-227-8845

AIM: NJesterIII
ICQ: 64791506

Chris Jester
Suavemente, INC.
SplitInfinity Networks
619-227-8845

AIM: NJesterIII
ICQ: 64791506

NOTICE - This e-mail and any files transmitted with it are confidential and
are only for the use of the person to whom they are addressed. If you are
not the intended recipient you have received this e-mail in error. Any use,
dissemination, forwarding, printing, copying or dealing in any way
whatsoever with this e-mail is strictly prohibited. If you have received
this e-mail in error, please reply immediately by way of advice to us. It is
the addressee/recipient duty to virus scan and otherwise test the
information provided before loading onto any computer system. Suavemente,
INC.
does not warrant that the information is free of a virus or any other defect
or error. Any views expressed in this message are those of the
individual sender, except where the sender specifically states them to be
the views of Suavemente, INC.
  

This could be fairly interesting. One bit that did stick out is II. A. 25 (I don't know what the proper notation for this should be), "Recently a new form of Internet addressing has emerged, called Classless Inter-Domain Routing (CIDR). In this new addressing protocol, a CIDR network address could look like this: 190.30.250.00/21. The prefix is the address of the network, or
gateway, and the number after the slash indicates the size of the network. The higher the number, the more host space that is in the network."

Well, last I checked, 1993 wasn't recent, and those last two sentences were quite a mistake.

Cheers,
jonathan

4

Interesting read.
http://www.internetgovernance.org/pdf/kremen.pdf#search=%22kremen%20vs%20arin%22

I found this little gem in the “The Internet, IP addresses and Domain Names” section:

5

I am looking for anyone who has input on possibly the largest case
regarding internet numbering ever. This lawsuit may change the way
IP's are governed and adminstered. Comments on or off list please.

My personal opinion is that this is yet another
example of ignorance leading to anger leading to
a stupid waste of court time. The case is filled with
incorrect statements of fact which ARIN can easily
demolish. But at the bottom line, these people are
complaining because ARIN didn't let them use some
IP addresses that were assigned to a different company.

Since IP addresses are basically available free from
any ISP who sells Internet access services, this seems
like a severe error in judgement on the part of the
plaintiff. A smart businessperson would have used the
free IP addresses to keep their business online even if
they did decide to dispute ARIN's decision.

But in the end, IP addresses are not property, therefore
they cannot be assets and cannot be transferred. They can
only be kept if they are in use on network assets which are
transferred and which continue to be operational. And even
then, most people have no choice as to which specific
address block they use. They simply take what the ISP gives
them.

I personally suspect that ARIN will have this thrown out
of court in fairly short order. Even if it did go much
further, the parallels with NANPA would see it fade away
quite quickly.

This discussion really belongs on http://www.groklaw.net/
where I note it has not yet appeared. Perhaps another
indication that this is a tempest in a teapot.

--Michael Dillon

6

In small quantities, and which tie you to particular providers. Shells of companies have been bought (or just claimed) for their large, especially pre-ARIN, PI-IP assignments. To a young ISP, a /16 for example may seem like a lifetime supply of IP space, and save the company many thousands of dollars (ARIN registration fees) and paperwork hassles.

News of this case has been sent here before (by william@elan.net back in July). Is anything really happening with the case?

7

This is Gary Kremen owner of SEX dot com.

cohen stole sex.com from kremen and kremen sued and got it back - it looks like he is trying to force arin to give him cohen’s IP assignments sounds like a grudge match - but it is a shame that he might do arin collateral damage

8

Jon Lewis wrote:

In small quantities, and which tie you to particular providers. Shells of companies have been bought (or just claimed) for their large, especially pre-ARIN, PI-IP assignments. To a young ISP, a /16 for example may seem like a lifetime supply of IP space, and save the company many thousands of dollars (ARIN registration fees) and paperwork hassles.

Actually, their issue is that ARIN would only transfer the netblock to them under the condition of them signing the contract (which effectively states that ARIN controls the netblocks). They would also be liable for the annual fees. They are trying to treat IP address space as property which they own, and refuse to agree to ARIN registration/fees to obtain what they feel is their property. Unfortunately, while ARIN is a steward and technically does not *own* the IP address space, neither does the ISP that uses the space. The defendant apparently misses the fact that IP space is a community asset and is thus handled by the community.

IANAL, but I doubt they can prove Antitrust in this case. If only we could handle other limited resources in the world as effectively; including BGP routing table bloat.

-Jack

9

Thus spake Brandon Galbraith

Two questions regarding thisfor the list (slightly OT):

1) Has any sort of IP address ownership precedence been set in a US
court?

Not that I'm aware of, but I've never looked. I'm sure ARIN's lawyers have.

2) Isn't ARIN considered a non-profit resource management/allocation
organization? To my knowledge, there is no "marketplace" for IPs.

The entire suit is predicated on the concept that IP addresses can be owned and traded like other property. The rest is a house of cards that will fall if ARIN can prove that to be incorrect -- and will probably stand if they can't.

Also, any technical expert can rip about half of the house down without breaking a sweat because it's so flawed to the point of being entertaining. It'd be fun to read the transcripts if this ever goes to trial, but my money says it'll be decided one way or the other before it actually makes it into a courtroom.

The wording of Kremen's argument made me understand why ARIN is so resistant to using the term "rent" for their activities, because that implies that there is property exchanging hands. Courts have jurisdiction over property, though it's a minefield to try to dictate who someone must rent to. Keeping the words in registry-speak allows them to differentiate the situation and insist that addresses are not property at all.

The anti-trust angle is interesting, but even if ARIN were found to be one, it's hard to convince people that a _non-profit_ monopoly acting in the public interest is a bad thing. 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.

S

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

10

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.
However, ARIN gives the addresses based primarily on the
number of hosts attached to the network infrastructure.
It has been argued in the past that ARIN's policies are
prejudiced AGAINST larger organizations because the rules
do not properly allow for the scaling overhead necessary
due to the complexity of larger networks.

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.

--Michael Dillon
(no longer in any official ARIN capacity. Just another member)

11

One could probably debate that statement for a long time. Saying they are "free" to me is technically inaccurate. If you are getting PI space, you have to pay registration fees, which incurs cost on behalf of the party. A growing number of ISPs are now charging "leasing" fees or similar fees for the usage of PA addresses.

As IP address scarcity goes up, I wouldn't be surprised if leasing fees become higher and/or if ARIN fees become more steep as an attempt to weed out people who are trying to horde address space.

While IP addresses certainly are not a tangible asset, and a defined intrinsic value can not be determined, there does seem to be a value to them, if only speculative at best.

Best Regards,
-Michael

12

Yes, at the least, wasting huge piles of ARIN's money on legal fees; which is likely Kremen's entire intent, to "teach them a lesson" for not handing over what he wanted.

People who use the courts as a way to bleed their targets like this are vermin. Not surprising at all that this is all about some domain-squatting nonsense.

I do hope that ARIN can convince the judge to issue a summary judgement to throw this entire case out.

matto

--matt@snark.net------------------------------------------<darwin><
   Moral indignation is a technique to endow the idiot with dignity.
                                                 - Marshall McLuhan

13

Hopefully ARIN can recover their legal fees, so cash from members can be spent on IP space management.

-brandon

14

Matt Ghali wrote:

Yes, at the least, wasting huge piles of ARIN's money on legal fees; which is likely Kremen's entire intent, to "teach them a lesson" for not handing over what he wanted.

Correction. Wasting huge piles of our money. I was hoping the money would go towards a new template, too!

-Jack

15

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

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.

S

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

16

I read the complaint. I don’t like the fact that a lot of my friends are named in the suit, but I think there are some
points worth discussing within the community:

  1. IP address blocks are not ‘property’

“Domains are not property. The assignee of a domain has no ownership interest”

Network Solutions made this same argument years ago. That was their shield against lawsuits when negligence
(or worse) on NetSols part would cause a domain to be erroneously transferred. When mistakes were made,
Network Solutions was notoriously unwilling to reverse the transaction to correct the error.

Then they got sued for refusing to reverse a fradulent domain transfer, and they lost. The case had the side effect of setting
the precedent that domains are in fact tangible property. Now when a registrar or registry makes a mistake, they can be
legally held responsible. (What case was that? Kremen v. Network Solutions)

I would say that’s an improvement.

  1. Why does ARIN believe that it can ignore a court order?

  2. What’s wrong with treating assignments like property and setting up a market to buy and sell them? There’s plenty of precedent for this:
    Mineral rights, mining claims, Oil and gas leases, radio spectrum.

If a given commodity is truly scarce, nothing works as good as the free market in encouraging consumers to conserve and make the best
use of it.

Joe McGuckin
ViaNet Communications

joe@via.net
650-207-0372 cell
650-213-1302 office
650-969-2124 fax

17
  1. What’s wrong with treating assignments like property and setting up a market to buy and sell them? There’s plenty of precedent for this:

Mineral rights, mining claims, Oil and gas leases, radio spectrum.

If a given commodity is truly scarce, nothing works as good as the free market in encouraging consumers to conserve and make the best use of it.

I think you’re dead-on there, but you forget who you’re really trying to convince. It’ll happen eventually but in the meantime the greybeards who were largely responsible for the Internet as we know it (and who by and large still wield significant influence if not still stewardship) will be dragged there kicking and screaming from their academic/pseudo-Marxist ideals, some of whom seem to still resent the commercialization of the Internet. It’s also hard to see the faults in the system when you are insulated by your position as member of the politburo.

The flip side of the coin of course is that if you let the free market reign on IP’s, you may price developing countries right off the Internet which I don’t think anyone sees as a desirable outcome. There’s sure to be a happy middle ground that people smarter than I will figure out, and maybe it takes a silly lawsuit such as this to kick things off.

Andrew Cruse

18
  1. What’s wrong with treating assignments like property and setting up a market to buy and sell them? There’s plenty of precedent for this:

Mineral rights, mining claims, Oil and gas leases, radio spectrum.

If a given commodity is truly scarce, nothing works as good as the free market in encouraging consumers to conserve and make the best use of it.

I think you’re dead-on there, but you forget who you’re really trying to convince. It’ll happen eventually but in the meantime the greybeards who were largely responsible for the Internet as we know it (and who by and large still wield significant influence if not still stewardship) will be dragged there kicking and screaming from their academic/pseudo-Marxist ideals, some of whom seem to still resent the commercialization of the Internet. It’s also hard to see the faults in the system when you are insulated by your position as member of the politburo.

The flip side of the coin of course is that if you let the free market reign on IP’s, you may price developing countries right off the Internet which I don’t think anyone sees as a desirable outcome. There’s sure to be a happy middle ground that people smarter than I will figure out, and maybe it takes a silly lawsuit such as this to kick things off.

Andrew Cruse

Another somewhat important point is that we also need to conserve routing entries. If you make a market for addresses without regard to routability, you risk creating a situation where you flood the world with /32’s. No thanks.

Tony

19
  1. What’s wrong with treating assignments like property and setting up a market to buy and sell them? There’s plenty of precedent for this:
    Mineral rights, mining claims, Oil and gas leases, radio spectrum.
    If a given commodity is truly scarce, nothing works as good as the free market in encouraging consumers to conserve and make the best use of it.

I think you’re dead-on there, but you forget who you’re really trying to convince. It’ll happen eventually but in the meantime the greybeards who were
largely responsible for the Internet as we know it (and who by and large still wield significant influence if not still stewardship) will be dragged there kicking
and screaming from their academic/pseudo-Marxist ideals, some of whom seem to still resent the commercialization of the Internet. It’s also hard to see
the faults in the system when you are insulated by your position as member of the politburo.

The flip side of the coin of course is that if you let the free market reign on IP’s, you may price developing countries right off the Internet which I don’t think
anyone sees as a desirable outcome. There’s sure to be a happy middle ground that people smarter than I will figure out, and maybe it takes a silly lawsuit
such as this to kick things off.

Andrew Cruse

Another somewhat important point is that we also need to conserve routing entries. If you make a market for addresses without regard to routability, you risk
creating a situation where you flood the world with /32’s. No thanks.

Tony

I would think that would tend to police itself. Even now with things as they are you’re going to have serious reachability problems if you try to announce anything smaller than a /24. And if routing tables suddenly explode, I’d expect that threshold to quickly move in reaction.

Andrew Cruse

20

The real fundamental flaw with this free-market approach to handling IP assignments is the fact that it will further create an environment where smaller (start-ups, small businesses) entities trying to acquire PI space will face insurmountable challenges (eg, financial).

While I think the majority of people these days would agree that the free-market approach to economics is definitely the best, certain resources are not very applicable to be traded in a free-market environment. I myself do not like over-bureaucratic processes, and while all of us at one time or another have complained about ARIN's procedures, policies, and practices, the purpose they serve is a needed one.

Best Regards,
-Michael