[arin-ppml] Policy Proposal: IPv4 Recovery Fund

[Robert Bonomi]

> Date: Sun, 23 Nov 2008 11:59:48 -0500
> From: Leo Bicknell <bicknell at ufp.org>
>
> In a message written on Sun, Nov 23, 2008 at 11:11:14AM -0500, Milton L Mueller wrote:
> > Don't agree - you haven't reached a failure, you've reached a situation
> > that prevails for 90% of all material resources in society. Anyway, I
> > suspect we are near that situation now. (It's a guess, of course)
>
> I actually see three distinct phases that will occur, no matter
> what transfer policy is or is not passed.  What the different
> policies do is change the timing of the transitions between phases,
> primarily.
>
> Phase 1: The current state, there is a free pool.
>
> Phase 2: There is no more free pool, but enough people are willing to
>          give up space at a price someone else is willing to pay.
>          Demand continues to be met, probably with slowly increasing prices.

I'm not so sure about 'slowly'.  <wry grin>

> Phase 3: No one is willing to part for space without excessive sums of 
>          money and no buyer can afford those sums.  Demand is no longer
>          met.

Phase 3a: The cost of 'other alternatives' is less than the cost of "buying"
          into IPv4 space.  Demand withers.  No 'bids' are being made, 
	  because the 'offers' are _all_ "too high".

Phase 3b: A _few_ bids are made, by people still 'testing the waters' to see
          if they can get IPv4 space for less than their cost of conversion.
	  However, that cost of conversion is _declining_, so the value of the
	  bids is =also= declining.

 Phase 4: The hoarders who were waiting to cash in at the 'top' of the market
          come out of the woodwork. Supply exceeds demand, prices plummet
	  further.

 Phase 5: Most of the world has 'moved on' to exclusively the next generation
	  solution. There is an abundance of IPv4 addresses available, either
	  via voluntary return to ARIN, or in private transactions with a 
	  'cost' component that is 'near zero'.  More than enough for all of
	  those who can work in a 'pure legacy' environment -- *without* the
	  need for 'complete' connectivity to the rest of the Internet.

	  The "recovery fund" is obsolete, and can be closed out. :)

>
> If we ignore the black market in the current situation the white
> market effectively goes from Phase 1 to Phase 3 on run out.  All
> of these transition policies create Phase 2, and make it exist for
> some period of time.  It would seem to prudent thing is to make
> phase 2 as cost effective to the industry as a whole as possible,
> and to make it last as long as possible.

Yup.  Modulo differences of opinion as to _what_ the 'most cost effective'
approach (and -how- one measures it) is.  <wry grin>

> At least, that is the basis on which I evaluate all of the transfer
> proposals.

[[ lots of *GOOD* reasoning, that I agree with the economic realities of, ]]
[[ snipped                                                                ]]

> I see some wins to this proposal, the question now is, how does the
> rest of the community feel?

It is definite, to me, that there are far fewer drawbacks to this proposal 
than to any of the other formally-proposed policy alternatives.

I also believe it is better than the 'do nothing' alternative that would 
result from voting down all the current proposals.

There is some tweaking needed, but the base concept appears sound to me.