[arin-ppml] Spectrum and IP address reservations / More from NERA

Ted Mittelstaedt tedm at ipinc.net
Mon Jul 20 13:48:21 EDT 2009

Hello!  Clue phone ringing!!!

The current global recession has destroyed the last 50 years
of economic theory.  According to the supply-siders, it couldn't
have happened.  According to all the other economists, we aren't
in a depression.

At this point, anyone citing economic theory of any kind as
justification for an argument immediately forfeits all credibility.


Milton L Mueller wrote:
> Hey, Tom,
> I'm glad after some years of purporting to be an economics researcher you've finally discovered the standard textbook definition of perfect competition. Looks like my reading recommendations are indeed helpful.
> If you want to bone up a bit more (the quote you cited was patronizing WB baby-talk for developing country regulators) here's a start: 
> http://en.wikipedia.org/wiki/Perfect_competition 
>> -----Original Message-----
>> From: Tom Vest [mailto:tvest at eyeconomics.com]
>> Sent: Monday, July 20, 2009 8:24 AM
>> To: Milton L Mueller
>> Subject: Re: [arin-ppml] Spectrum and IP address reservations / More from
>> Apropos my request for you to clarify, NERA also authored most of the
>> content for World Bank InfoDev's (ICT Division) Telecom and ICT
>> "regulation handbooks" and "toolkits". The former includes a section
>> COSTS," where I found the following, unabridged quote:
>> "This*, then, is the situation in the ideal competitive marketplace.
>> For this efficient ideal to be realized, the market must meet a number
>> of conditions. For instance, the market must have several sellers
>> (suppliers) and buyers (consumers), with none so large that it can
>> affect prices: no one can be dominant in the marketplace. In addition,
>> there must be no significant externalities, loosely defined as
>> spillover benefits or negative effects to/from other markets. There
>> should also be free entry to and exit from the market. Finally, as
>> mentioned above, this market should not be characterised by economies
>> of scale.
>> Where *all* [[emphasis mine]] the conditions mentioned above are not
>> present, the market will not generally produce socially-optimal
>> results."
>> *This = theoretical overview of what basic neoclassical economics says
>> about how supply and demand interact in a rule-free context.
>> Full file online at: http://www.infodev.org/en/Publication.22.html
>> TV
>> Begin forwarded message:
>>> From: tvest at eyeconomics.com
>>> Date: July 20, 2009 7:28:19 AM EDT
>>> To: Milton Mueller <mueller at syr.edu>
>>> Cc: address-policy-wg at ripe.net
>>> Subject: Re: [address-policy-wg] Spectrum and IP address reservations
>>> On Jul 20, 2009, at 4:38 AM, Milton L Mueller wrote:
>>>> I forward information about a study conducted by NERA on spectrum
>>>> auctions.
>>>> Not directly applicable to IP addresses, but has some relevance to
>>>> current discussions about attempts to reserve resources for new
>>>> entrants vs. incumbents. Bear in mind, of course, that the study
>>>> was produced by Telus, an incumbent operator, and discount for
>>>> that; the point is that we need to pay attention to the economic
>>>> reasoning underlying the finding; which is that policies designed
>>>> to "help" competitors can have unintended consequences that may
>>>> encourage conslidation and higher prices.
>>> Hi Milton,
>>> Clarifying question: what are you referring to exactly by "policies
>>> designed to 'help' competitors," and why are you choosing to reduce
>>> the question of routing and addressing system openness to this one
>>> narrow dimension? I (among others) have written a lot about the
>>> importances of keeping the door open for "new entrants," but not all
>>> new entrants are "competitors" -- nor is competition the only reason
>>> for incumbent service providers (and everybody else) to regard such
>>> openness as a critical institutional priority.
>>> To illustrate, I've never heard anyone claim that the *only* reason
>>> why it was a good idea to move from NCP addressing to classful IP
>>> was to enable competition. Ditto, the move from classful IP to CIDR;
>>> then as before, the prospect of continuous competition (including
>>> competition by emerging new entrants) was just one of many reasons
>>> to support the preservation of addressing and routing system
>>> openness. I'm assuming that whatever you find persuasive in this
>>> NERA document would not also implicate those past policy choices,
>>> because I don't think you'd find much sympathy for the idea that the
>>> "unintended consequences" of those decisions were/are so bad that
>>> they outweigh they *intended* consequences (i.e., a future with max.
>>> 256 independent addressing and routing system participants).
>>> Since most of the subscribers to these lists are not economists, it
>>> would be helpful if you could briefly summarize the "underlying
>>> economic reasoning" that you find particularly compelling in this
>>> study. If it was less onerous, I'd also request that you clarify
>>> what you regard to be the right way to balance intended vs.
>>> unintended policy choices, and "historically/experientially
>>> informed" vs. "idealized, theoretically informed" expectations about
>>> the future -- but perhaps a sentence or two of clarification on the
>>> NERA "reasoning" would suffice.
>>> Thanks,
>>> TV
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