Benson Schliesser bensons at queuefull.net
Tue Apr 12 15:26:41 EDT 2011

Hi, Eliot and Larry.

On Apr 12, 2011, at 1:01 PM, Eliot Lear wrote:

> Coming back to the issue at hand, seems to me the value of RFC 2050 has
> to do with preventing hoarding, and that it is as relevant today as it
> was when it was written.  I agree with Benson and Milton that a
> financial incentive to get address space to those who would buy it is
> important.  But who would buy an asset if they couldn't show need?  Only
> those who intend to sell it for more later.  I would be concerned about
> how that appeared to new entrants.

I'm not an economist, but: (a) I understand that speculation brings liquidity, and liquidity is good for markets.  Address markets will make addresses available to those with need, even after RIR exhaustion.  Thus, a pure "needs-based" system may not be desirable.  (b) On the other hand, as you point out, we want to ensure that people get addresses when needed.  It is possible that speculators might accumulate large holdings, making addresses less-available (untenably more expensive) to those with need.  This would be undesirable.

If we can agree on the above, then RFC2050 is not necessarily the correct conclusion.

On Apr 12, 2011, at 1:02 PM, Larry Ash wrote:

> Careful, I am a free market capitalist but even I would caution that the classical
> supply/demand curve has some build it assumptions. One of those is that as price
> goes up they will build more. In a market where the overall supply is strictly fixed
> no matter how high the price goes,  higher prices can attract speculators and attempts
> to corner the market which pushes demand. Under speculative pressure, demand can
> greatly outpace the increased supply. One only has to look at the current oil markets
> to see the effect of run away speculation.

On the other hand, we have CGN and IPv6 as relief to very expensive IPv4 addresses.  These aren't perfect alternatives, but may form a ceiling on IPv4 prices.  In other words, very high IPv4 costs will result in faster IPv6 transition, in-turn resulting in lower IPv4 address values.

> "Need" has always made me nervous because it's so subjective, but "no need"
> is just not acceptable.

I agree with your underlying sentiment, that hoarding would be bad.  But I'm not convinced that "need" is the only way to prevent this.  And if it harms the availability of addresses and/or ARIN's role in an address market, then "need" should perhaps be replaced with another mechanism.

As Geoff Huston recommended in the ARIN meeting yesterday, we might be well-served by working with real economists (such as OECD and/or others) to figure this out.


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