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

Tom Vest tvest at pch.net
Wed Aug 27 13:24:03 EDT 2008

 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 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. 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."


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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