[arin-ppml] Stepping forward, opening my mouth and removing all doubt about

[Milton L Mueller]

It's great when Tom forwards these lengthy (sorta)economic analyses and
one can refute them in one sentence. 

And here it is: 
if ISPs can game the migration process in the way he predicts, then they
don't need transfer markets to do it. 

> The key ingredient in this perverse mix is not the scarcity of IPv4  
> itself, but rather the continued scarcity of substitutable Internet  
> content and services that require no IPv4 at all - i.e., that are  
> transparently accessible by IPv6-only networks. Knowing this, every  
> prospective IPv4 seller-cum-service provider could face strong  
> individual disincentives to migrate their own online content and  
> services to IPv6, or otherwise make such resources transparently  
> accessible to pure IPv6-based operators. 

Note that this supposed "disincentive" exists whether or not there are
ipv4 transfer markets.
Note that the concentration of ipv4 resources he fears could be achieved
via acquistions under the current regime. 
Note also that the analysis _assumes_ that the price of IPv4 addresses
"increases in perpetuity." A strong, what we call "heroic" assumption.
"Heroic" being a polite word for pulled out of one's a** and patently
unrealistic.

Milton Mueller
Professor, Syracuse University School of Information Studies
XS4All Professor, Delft University of Technology
------------------------------
Internet Governance Project:
http://internetgovernance.org
 

> -----Original Message-----
> From: Tom Vest [mailto:tvest at pch.net] 
> Sent: Wednesday, August 27, 2008 1:24 PM
> To: Milton L Mueller
> Cc: Alain Durand; arin-ppml at arin.net
> Subject: Re: [arin-ppml] Stepping forward, opening my mouth 
> and removing all doubt about
> 
>  From a forthcoming paper:
> 
> "One author <formerly with a Tier 1 ISP> believes that there is a  
> significant risk that introduction of a transfer market may  
> substantially increase incentives to delay conversion to IPv6, and  
> quite possibly derail it altogether. This prediction is based on the  
> hypothesis that the establishment of a market for IPv4 
> transfers will  
> present every individual IPv4-based network operator capable of  
> providing Internet services with a mix of incentives that is broadly  
> weighted toward, and cumulatively strengthened over time, by the  
> perpetuation of IPv4's status as critical, non-substitutable (i.e.,  
> "bottleneck") input for Internet service delivery.
> 
> On this argument, individual IPv4-based incumbents facing the  
> certainty of one-time returns resulting from an immediate 
> simple sale  
> and transfer of surplus IPv4, might opt instead to postpone any sale  
> as long as transfer prices appear to be stable or appreciating, with  
> any resulting opportunity costs being offset by the steady stream of  
> recurring revenues that could be realized by making the surplus IPv4  
> addresses accessible only as an indivisible part of a "bundled"  
> Internet service (e.g., IPv6-IPv4 translation or IPv4 transit). As  
> long as the market for simple transfers and critical IPv4-related  
> services continues to appreciate - or at minimum, simple transfer  
> prices do not clearly depreciate below the medium-term gains  
> achievable in the bundled IPv4 services market - simple sale 
> would be  
> irrational. As long as simple IPv4 transfers remain a sub-optimal  
> strategy for potential sellers, and IPv4 continues to be 
> sought by at  
> least some growing ISPs -- and remains an absolutely 
> non-substitutable  
> requirement for aspiring new Internet service providers -- 
> prices are  
> likely to continue appreciating, in perpetuity.
> 
> In turn, this appreciation would encourage surplus IPv4 to become  
> increasingly concentrated amongst providers of bundled IPv4 
> services,  
> both through successful bargaining and competition for the remaining  
> liquid IPv4 addresses, and by the gradual adoption of increasingly  
> attractive IPv4 service-centered business models by large, 
> independent  
> IPv4 reserve holders that previously provided networking 
> services only  
> to themselves.
> 
The cumulative 
> result of such  
> individual-level dynamics would be an indefinite postponement 
> of, and  
> active resistance to any IPv6 transition by the same institutions  
> whose strategies, decisions, and investments will ultimately 
> determine  
> when, how, or whether such a transition will actually happen."
> 
> TV
> 
> On Aug 27, 2008, at 1:01 PM, Milton L Mueller wrote:
> 
> >
> > Alain, as a person from an ISP wouldn't the ability to sell IPv4
> > resources freed up by a conversion to IPv6 add anything to the
> > incentives of ISPs to make the migration? Of course that is more a
> > matter for your business officers but I suspect that it could make a
> > difference.
> >
> >> -----Original Message-----
> >> From: arin-ppml-bounces at arin.net
> >> Recent ARIN stats showed that most addresses have been
> >> allocated in large or very large blocks. This is a
> >> direct consequence of the market concentration. Other recent
> >> data showed that what would be potentially available via a  
> >> liberalized
> >
> >> transfer policy would mostly be legacy Bs & Cs.
> >> Those blocks are simply too small to meet
> >> the global demand.
> >>
> >>  - Alain.
> >>
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