[arin-ppml] Revised -- Policy Proposal 2009-4: IPv4 RecoveryFund

[Tom Vest]

On Apr 13, 2009, at 5:55 PM, John Schnizlein wrote:

> It seems to me that the "bounty" a network operator could realize by
> converting to IPv6 in order to release a block of IPv4 addresses is
> exactly what would hasten deployment of IPv6.  Because this "bounty"
> will obviously go to zero when IPv6 is widely enough deployed that
> nobody needs any more IPv4 addresses, such an operator knows that
> holding off too long ruins the chance for any bounty at all.

Assuming that the profit motive will be sufficient to motivate some  
IPv4 holders to sell some IPv4, does it make sense to assume that it  
will not also be strong enough to make the sellers structure their  
sales in a way that perpetuates this particular commercial opportunity  
for as long as possible? Isn't it more internally consistent --  
doesn't it make more sense (commercial, common, et al.) -- to assume  
that this opportunity will be cultivated for as long as possible?  
Given the myriad strategies that would permit a profit-maximizing  
incumbent operator (or middleman/market maker) to capitalize on the  
IPv4 sales opportunity without reducing in any way the ultimate  
requirement for (some) IPv4, why does it make sense to assume that the  
day when "nobody needs any more IPv4 addresses" will ever come?

> What would be even more beneficial is that a network operator trying
> to decide if a new deployment should use IPv4 or IPv6 would see
> (discouraging) variable and increasing costs of using IPv4 that it
> could compare to the (hopefully decreasing) costs of deploying IPv6.

Incumbent IPv4-based operators -- i.e., those that could be IPv4  
sellers if they so chose -- will likely experience these cost  
dynamics, eventually.
Even so, aspiring post-runout new entrants will never experience those  
cost dynamics, unless/until the preponderance of incumbents make  
themselves equally accessible to native IPv6-based third parties as  
they are to their current IPv4-based peers -- i.e., until we get very  
close to that that fateful day when "nobody needs any more IPv4  
addresses."

> Part of the problem with deployment of IPv6 is that the cost of the
> transition from IPv4 to IPv6 is hidden - or visible only to the far-
> sighted who realize that it will be necessary when the number of hosts
> on the Internet doubles again, but not now.

A transition from IPv4-based growth to IPv6-based growth may  
eventually become necessary for those that start off with lots of IPv4,
but that does not entail that the absolute demand for (some) IPv4  
among aspiring post-runout new entrants will be eliminated.

We may hope that it works out that way, but it is not inevitable.

Lucrative businesses often take root in gaps like this; what's going  
to prevent them from doing so in this case?
More to the point, what's going to motivate the new market makers to  
accept a near-term closure of this particular gap, given the  
possibility of keeping it open indefinitely?

We are betting the continued openness* of the industry on the answers  
to these questions.
I hope somebody has thought of some good ones...

TV

*If this seems to soft and fuzzy, replace with "freedom from antitrust- 
related intervention."



> John
>
> On 2009Apr13, at 5:26 PM, Ted Mittelstaedt wrote:
>>
>>> [mailto:arin-ppml-bounces at arin.net] On Behalf Of David Farmer
>>> ...
>>>
>>> Each bidder wants to minimize or maximize in a particular
>>> transaction depending on the role they are playing.  But I
>>> think the community overall wants/needs some assurance that
>>> the system is fair and functioning properly.  Some minimal
>>> transparency is probably the best way to allow the community
>>> to evaluate how the system is functioning or not.
>>
>> I just see no point to publicizing the figure, and a lot
>> of time-wasting and diverting-from-IPv6-focus happening if
>> the figure is published.
>>
>> ...
>>
>> We need to be encouraging people to go to IPv6.  Publicizing the
>> current "bounty" for free IPv4 just draws attention to
>> IPv4 at the expense of IPv6.  If members of the community think
>> that ARIN's non-publically-disclosed pricing is unfair, then
>> I have a simple solution for them - don't buy IPv4.
>
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