[ppml] Markets, pricing, transparency, 2008-2 / 8.3.9

Cliff Bedore cliffb at cjbsys.bdb.com
Tue Mar 18 11:11:47 EDT 2008

Tom Vest wrote:
> On Mar 17, 2008, at 10:20 PM, Cliff Bedore wrote:
>> Regarding a "market" for IPv4 addresses, I still have not heard any
>> disadvantage to ARIN staying completely out of the market part and 
>> just have a
>> policy that allows one more method of acquiring addresses.
>> As I understand current policy, there are basically two ways to get 
>> addresses
>> 1)  Ask ARIN with appropriate justification
>> 2)  Buy/merge with a company and get the addresses as a part of that
>> transaction (again with some justification to ARIN
>> It seems to me that all that 2008-2 needs to do is add a third method 
>> once the
>> IANA free pool is gone.
>> 3) Party 1 offers to transfer to Party 2 some block of addresses.  
>> Party 1
>> has the right to offer and Party 2 justifies the right to receive the
>> addresses.  No market, no ARIN involvement with SEC, just ARIN 
>> approving use
>> of a block of addresses.
>> Why is this not a simple way to handle the end of life address 
>> management of
>> v4 addresses?  ARIN gets their fees just like now so they remain 
>> viable but
>> have no interaction with the "market" and its associated problems.
>> Cliff
> Basically this is the simple way, but it will not work -- technically 
> it cannot work. This is because the arrangement you describe requires 
> the same incentives to operate in multiple, simultaneous, but mutually 
> contradictory ways -- more or less like this:
> 1. First, eliminate the single source mechanism for address 
> delegation. Henceforth anyone may potentially be a buyer or seller of 
> address resources, as they see fit.

We're not eliminating the single source.  Like the title for your car 
from the DMV, it goes through one and only one place.
> 2. Next, allow market forces to govern the address delegation function 
> -- i.e., engage everyone's well-honed instincts to spend less and 
> profit more, and allow the overall distribution of address resource be 
> determined and legitimated by that market process.

> 3. Having empowered everyone this way, and fired up those competitive 
> juices, also make sure that under certain defined circumstances, 
> everyone always ignores both their new sovereign prerogatives and 
> their newly engaged, otherwise-unrestricted market instincts, and 
> voluntarily accept extra costs, restrictions on when and under what 
> circumstances they may act, etc.

Doesn't happen in what I describe.
> 4. Make sure that they follow these rules and pay these extra costs in 
> 100% of the required circumstances.  Also assure that everyone takes 
> the extra effort to inform some now distant, formerly critical 
> institution of the results of their actions -- for whatever reason.

Doesn't happen in what I describe
> 5. This is a decentralized, market-driven system, but unlike every 
> other market in human history all rules are purely voluntary, and no 
> other enforcement mechanisms will ever exist. Make it work anyway.

Not decentralized.  Not a market.  Simply one more way in which 
addresses may be obtained from/through ARIN
> If that illustration doesn't work, maybe this one will:
> Basically the arrangement you describe would be like vehicle insurance 
> in the US. We all know that, if we can afford it, auto insurance tends 
> to protect us from somewhat from extreme risks. We also probably have 
> a vague sense that the insurance we pay for also helps to protect 
> other drivers too -- although that's hardly a motivating factor for us 
> to buy in.  But some people simply can't afford it, and some are 
> forgetful and let their coverage lapse, and some people just like to 
> live dangerously, damn the consequences for themselves and everyone else.

Not like insurance.  Much more like the DMV.
> The Insurance Research Council estimates that 15-16% of all vehicles 
> on US roads at any given time (c. 2007) were uninsured. Lucky for US 
> drivers, there is no Department of Homeland Insurance that might be 
> called in to rectify the situation in case uninsured, anonymous 
> motorists start crashing into important things, or if that compliance 
> rate drops too low. We do not enjoy the same luxury.

People hijack addresses now for various reasons.  I even had one of mine 
hijacked years ago.  But it got fixed within the existing system.
> I can't make the case any more clearly. I would also like the simple 
> way to work, but wishing it will not make it so.

Then I guess I give up because I still don't understand your examples or 
why what I put forth won't work.
> TV


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