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

[Tom Vest]

On Aug 27, 2008, at 2:46 PM, Milton L Mueller wrote:

> 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.

Hi Milton,

Sorry if that excerpt taxed your attention span.

Seriously though, you might want to try reading a little more  
carefully before responding.
Nobody said that anybody was out to intentionally "game" the migration  
process.
Remember, this is a forum composed almost exclusively of presumptive  
"gamers", as you might call them.
Accusing your audience of willful malfeasance wouldn't exactly be the  
smartest way to make your case.
But I encourage you to give it a try.*

You might also try to learn a little more about the incentive  
structure in this industry before making such broad and absolute  
pronouncements.

>> 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.

Apparently, some operators don't think so, right now.
But you do know better, don't you?

Here's a hint:
http://en.wikipedia.org/wiki/Unintended_consequence

> Note that the concentration of ipv4 resources he fears could be  
> achieved
> via acquistions under the current regime.

Really? I suppose those thousands of M&A transactions wouldn't raise  
an eyebrow.

In fact, your refutation makes me wonder why there are any economic  
regulations at all in any sector -- you can outlaw something or you  
can incentivize it, the results will be the same. Somebody call  
Washington!

> Note also that the analysis _assumes_ that the price of IPv4 addresses
> "increases in perpetuity." A strong, what we call "heroic" assumption.

I guess you're hoping here that others are as "casual" in their  
reading and interpretation as you apparently are.
I'm happy to let those who actually read to decide for themselves.

> "Heroic" being a polite word for pulled out of one's a** and patently
> unrealistic.

Now that's an interesting accusation coming from you. I pull things  
like this out of memory, and basic common sense, tempered by actual  
industry experience doing strategic things, in this very industry, and  
working with/observing others doing the same kind of job(s) for peer  
institutions.

Remind me again, what's your basis for judging what's realistic and  
unrealistic in this specific context?

> 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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* "RB Benediction," (TM) Randy Bush