[arin-ppml] 2008-6: Emergency Transfer Policy for IPv4 Addresses
jcurran at istaff.org
Mon Oct 6 09:25:19 EDT 2008
On Oct 1, 2008, at 4:32 PM, Matthew Wilder wrote:
> 2) Externality:
> In economic terms, externality is the cost is incurred outside of a
> closed transaction. Liberalized IP Address Transfer would result in
> considerable externality outside of the parties who transfer the
> resources. Not to mention that there are at least two transfers in
> the case of successful brokerages who will firstly buy a resource,
> then secondly sell that resource off. Or what if they buy a single /
> 16 and split it up into 16 /20 subnet, which results in 17
> transactions from one original resource, not to mention the routing
> table explosion it causes. Will the bystanders be compensated for
> their incurred cost?
There's little doubt that in a perfect world, a free market will
an efficient distribution of resources. Of course, under such
one could claim that a benevolent dictatorship or planned economy
work just as well.
The significant issue with straight free market approach to IP
distribution is precisely the externality point you cite above.
the actual cost incurred from making use of a particular address
not clearly passed back to those receiving the benefit. Making
use of an
IP address block in the public Internet requires routing it, and
results in costs to every default-free network in the Internet,
there is no
system in place to provide settlement of these additional costs,
and it is
instead handled indirectly by providers through peering
Combine this with the underlying requirement of hierarchical
allows Internet routing to work (to the extent that we call it
and we're got a system which can't survive deaggregation but lacks
feedback mechanism back to those who wish to obtain (and route!) a
but unique IPv4 address block.
Turning on a free market for IPv4 address blocks requires some
faith that the ISP community will either not allow use of smaller
blocks or will quickly establish some corresponding system for
resulting external routing costs.
(my personal view only)
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