[ppml] Combining Forecasts

Wed Aug 29 07:38:44 EDT 2007

Hello;

On Aug 29, 2007, at 6:21 AM, Iljitsch van Beijnum wrote:

> On 29-aug-2007, at 11:10, <michael.dillon at bt.com>
> <michael.dillon at bt.com> wrote:
>
>> Combining forecasts by averaging them has been shown to improve the
>> accuracy of forecasting. Perhaps it is time to dig some of the other
>> forecasts out of the woodwork so that we have more than just Tony's
>> and
>> Geoff's work.
>

I think that the trouble with the forecasts is not the numbers, nor  
the math, nor even the approaches, but the assumptions. None of the  
forecasts that I am aware of have any price elasticity in them, and  
this will become critical as exhaustion nears. Let me explain this a  
little.

Of course an address market is developing and will develop, and that  
will either

- cause a land rush (which I see signs of developing now) and / or
- supplant the existing mechanisms.

Such developments are by their nature very hard to predict. However,  
I can make some meta-predictions

- If nothing is done, there will be a land rush soon and once it  
starts the remaining addresses will disappear very suddenly, probably  
within a few months, starting at some time that is very hard if not  
impossible to predict in advance, because this is a psychological  
effect, much like stock market bubbles or crashes.

- If requirements are increasingly tightened, or artificial  
restrictions are imposed like the exponential slowdown
of assignments proposed earlier, or the assignments are stopped for  
"cooling off" once the land rush is underway, the market will  
gradually (or rapidly) supplant the assignment mechanisms, and it is  
conceivable that total exhaustion will not occur for some time. (At  
some point, it would be easier to buy / lease / rent addresses than  
to go to a RIR and obtain them through assignment, and so the  
pressure on assignments would relax, and you would expect that  
exhaustion would be approached asymptotically.)

- it is entirely possible that a land rush will cause a spurt of  
market development and, as addresses start to become valuable, a lot  
will "come out of the woodwork" as people start to realize that they  
have some they can give up for cash, and then the system will convert  
to an asymptotic approach to exhaustion.

Please note that I am not proposing a market here, I am just stating  
that I see it as inevitable given current trends. Note that once it  
forms (whether openly, or underground, or through some shadow play  
like the long term lease of PA space from a consolidator) there will  
be market forces opposing the adoption of IPv6 (as it will reduce the  
market value of their assets). My personal opinion is that it would  
be better to capture that market and de-nature it (say, by requiring  
IPv6 support to trade PI space).

Is it useless to predict, then ? No, of course not. In fact, I think  
that predictions should be used to help evaluate policy proposals in  
this area (i.e., policy proposals should be included in predictions  
to see if they actually have the desired effects). This, frankly,  
sounds like a full time job for a professional statistician.

I would be glad to discuss thus further off list and kibitz about  
ways to incorporate these ideas in forecasts.

Regards
Marshall

> Here's mine. Please note that the numbers I'm about to mention are
> based on the dayly RIR allocation reports that I download from their
> FTP servers a few times a week. You can peruse this information
> yourself at http://www.bgpexpert.com/addrspace.php but caveats apply;
> also see http://www.bgpexpert.com/addrspace2005.php and http://
> www.bgpexpert.com/addrspace2006.php .
>
> On january first, 2005, the total free address space (= free in the
> global IANA pool and the space delegated to RIRs by IANA, but not to
> LIRs/ISPs/end-users by RIRs) was 97.4 /8s. A year later it was 87.5
> and on january first, 2007, it was 77.5. So we've been using up
> pretty much exactly 10 /8s a year in 2005 and 2006.
>
> Today the free space is 69.8 /8s. And interestingly, earlier this
> year a legacy /8 was returned to the IANA pool, something that hasn't
> happened for many years. So in 8 months (2/3s of a year) we've been
> using up either 7.7 or 8.7 /8s, depending on how you count that
> reclaimed block while 6.7 would have been expected during such a
> period based on the last two years. So that's a 15 to 30 % increase
> in yearly address use. Let's project this into the future, and
> include a stable 11 /8s a year option just for kicks:
>
>                  0%            15%           30%
>             used   free   used   free   used   free
> 2008-1-1:  11.0   67.5   11.5   66.0   13.0   64.5
> 2009-1-1:  11.0   56.5   13.2   52.8   16.9   47.6
> 2010-1-1:  11.0   45.5   15.2   37.6   21.9   25.7
> 2011-1-1:  11.0   34.5   17.5   20.1   28.4   -2.7
> 2012-1-1:  11.0   23.5   20.1    0.0
> 2013-1-1:  11.0   12.5
> 2014-1-1:  11.0    1.5
>
> So if nothing happens, we have until about valentine's day 2014, but
> if we have a new trend on our hands it's either new year 2012 or late
> 2010. However, the yearly address consumption has never shown clear
> trends that keep going for more than a few years. What often happens
> is that there is a sudden increase from one year to the next, and
> then a decrease or stagnation in the year after. So I don't think
> we'll see a consistent 30% trend, or even a 15% one. I'd say there's
> a 25% chance we'll run out in 2011, a 40% chance that it's 2012 and a
> 25% chance it's 2013.
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