[arin-ppml] Creating a market for IPv4 address space in absence of routing table entry market

[Jason Schiller]

On Sun, 15 Jun 2008, Milton L Mueller wrote:

> I see no reason why the transacting parties would not be able to
> internalize the routing externality. Who is going to put down good money
> for addresses that can't be routed, or that even have a substantial risk
> of non-routability? 

Milton,

I think it is rather difficult to internalize the routing externality.  As
Geoff Huston says there is no routing economy.  The problem is that there
is a real cost of consuming a routing table slot (RIB), a forwarding table
slot (FIB), and CPU to deal with routing instability with a reasonable
amount of convergence time.

Scaling the RIB memory, the FIB memory, and the routing processor CPU have
costs, not just in dollars, but also in size, weight, power, cooling
requirements, etc.  Assuming we can reasonably predict the growth of the
routing table, assuming the growth rate doesn't change too suddenly, and
assuming we can reasonably estimate the costs of scaling a router, we will
still have a problem of distributing the cost.

The distribution problem is as follows:

1. Identify all of the ASes that receive full routes
   1A. Alternatively, identify all of the ASes that cannot function
       without receiving full routes

2. Identify the number of routers in each of these networks that receive
   full routes

3. Identify the life span of these routers as a function of the number of
   Internet routes, the number of internal routes, the number of places
   these routes are learned, the BGP architecture (flat iBGP vs hierarchy
   with some number us clusters / sub-ASes being aggregated at a given
   level of the hierarchy), and the amount of routing churn

4. Recover enough cost by charging per prefix in the projected life span
   for all networks that carry full routes to upgrade all of their routers
   that carry full routes

5. Distribute this money equitably to all the networks that carry full
   routes

To say it another way, should an ISP charge an end user to place a route
in the routing table, and then share a portion of those proceeds to every
other network that carries that route?  Should that portion be determined
by the cost of what upgrades cost?  Should ISPs with more routers (and
thus a higher upgrade cost) receive a greater share of the proceeds?

Also it seems there is not a strong correlation between routing churn and
Internet table size, but rather only a few networks are responsible for a
majority of the churn, so this seems less predictable.  Should ISPs also
charge for routing churn and share a portion of those proceeds to every
other network that see the churn? 

What about multi-homed end-sites that receive a full routing table?  Is
this only a benefit to them to use shorter paths, and therefore they
should carry the burden, or should they receive a share of the portion of
the proceeds from charging for routing slots?

__Jason

> 
> > -----Original Message-----
> > 
> > The arrangement of the address space (in terms of numbers of
> > blocks, shape of said blocks, and fit to existing holders blocks) are
> > all factors which affect the value of some space to a given holder.
> > i.e. 16 random /28's may not have the same usefulness as a /24)
> > Most of this consequential to the externality of having to route
> > the address space before being able to use it for most applications.
> > As there is no market for global table routing slots, and yet a very
> > real limit on their availability, this externality is extremely
> difficulty
> > to assess and creates a continuously iterated prisoner's dilemma
> > situation with unknown equilibrium points.   Market failure in
> > this case can result in a truly dysfunctional Internet.