[arin-ppml] Internet Fairness blah blah

[lar at mwtcorp.net]

On Mon, 22 Dec 2014 19:57:22 +0000
  Milton L Mueller <mueller at syr.edu> wrote:
> Please. Will all the amateur economists announcing that markets don't work for finite resources take a look at 
> 
> a) radio spectrum auctions

:RANT ON:

Absolutely. If your in a truly lightly populated rural part of the country the radio spectrum
auctions have been a disaster. - A spectrum analyzer shows vast amounts of unused commercial
spectrum. It's been auctioned off in a manner to maximize revenue to the FCC. Many of the players
buying this spectrum have warehoused it so as to not make it available for potential competitors for
use. Sometimes it has been deployed in a single market to satisfy use it or loose it provisions.
A handful of companies are slowly creating a cartel potentially strangling the wireless data markets
by taking control of the spectrum itself. Small competitive companies that could serve to innovate
and put downward pressure on prices have been pushed to unlicensed frequencies. Now national and
multinational companies are starting to deploy radios on those frequencies. In some cases hundreds
of access points have been deployed in markets without a significant user base.

So why not just "lease" some spectrum from a license holder. Well, I've tried to approach at
lease one license holder about that and I was told that I would have to pay thousands of dollars for
an "application fee" and then they would consider it. (At that time no application was available.)
I took that as a polite "go away kid don't bother me" answer and not a legitimate process based on
the lack of structure about the process.

Many of us have been trying to convince the FCC that a meaningful needs test for radio spectrum is
critical to allow a competitive marketplace to survive. Of course all they seem to be able to see
is the fat checks they are getting from the Big Boys. On occasion the FCC has been willing to throw
scraps to to the rest of us but so far by the time they get through the rule making process they
remember that the BB's need most of that too, and are willing to pay for it. (See TV white space,
ongoing 3.5 Ghz rulemaking.)

Removing needs tests by ARIN when we've seen what has happened in the radio spectrum
seems to me to be lunacy.

:RANT OFF: (sorry)

> b) land/real estate markets
Land use planning and zoning seriously affect the free and open market here.
  
> c) ipv4 numbers in RIPE region, where needs tests for transfers were basically abolished
Are we sure how this is going to come out?

> d) stock markets (there are a fixed number of shares for most companies)

Again highly regulated. As you know there are entire shelves in the library dedicated
to who has an unfair advantage. The number of outstanding shares are not fixed in
the long term. Short sales can affect the number in the short term also. If an issue
price gets too high the company can lower it with a stock split. If the price gets
to low a reverse split can be used to affect that also.

> e) ....about 150 other examples one could provide if one wanted to waste further time
> 
> we've had this debate over and over again, for the past 6 years. It's boring and mostly useless. 
> Nearly all ISPs outside of North Korea exist in a market economy. Ipv4 number markets are here. They are not going away unless 
>scarcity goes away.
> 
> Useful discussions of this topic focus will on a particular policy proposal (e.g., 2014-14), will base their arguments for or 
>against particular provisions of a policy on sound techno-economic analysis and not on opinions regarding "fairness" or 
>"capitalism," and will take account of real things happening in the real world (such as ipv4 number block leases, RIPE policies, 
>etc.). 
> 
> Rant over. :-)
> 
> --MM
> 
>> -----Original Message-----
>> From: arin-ppml-bounces at arin.net [mailto:arin-ppml-bounces at arin.net]
>> On Behalf Of Frank Bulk
>> Sent: Saturday, December 20, 2014 9:38 AM
>> To: 'Adam Thompson'; Randy Carpenter; ARIN-PPML at arin.net
>> Subject: Re: [arin-ppml] Internet Fairness
>> 
>> For those of us in the "NAT is bad"
>> (https://www.youtube.com/watch?v=v26BAlfWBm8) camp, the risk I
>> perceive with a purely capitalistic model is that many organizations will sell
>> their IPv4 address space to the highest bidder (who may hoard it) and even
>> more NAT will be deployed.  While the effects of CGN are documented (i.e.
>> https://tools.ietf.org/html/rfc7021), I think that many network operators will
>> (choose to) ignore those (to the detriment of their end users) or capitalize on
>> that by charging extra to those who don't want to go through CGN.  In
>> reaction, applications and services will be further modified to address CGN,
>> the opposite of my preferred approach towards end-to-end communication.
>> 
>> Frank
>> 
>> -----Original Message-----
>> From: arin-ppml-bounces at arin.net [mailto:arin-ppml-bounces at arin.net]
>> On Behalf Of Adam Thompson
>> Sent: Friday, December 19, 2014 9:43 PM
>> To: Randy Carpenter; ARIN-PPML at arin.net
>> Subject: Re: [arin-ppml] Internet Fairness
>> 
>> On 14-12-19 08:02 PM, Randy Carpenter wrote:
>> > A capitalistic model does not work for a finite resource like IP
>> addresses.
>> I'm not even a Smithian capitalist, and I see the first problem here:
>> 
>> Why doesn't it work?
>> 
>> Market stability will be reached according to every economic theory I've read,
>> regardless of whether the resources are finite or not. It may be that stability
>> means a gradually-increasing price for a while followed by rapid inflation, but
>> estimates I've heard posit that IPv6 deployment will be widespread by the
>> time the market price would otherwise skyrocket.
>> 
>> > All that would happen is that a large company could just buy up all of
>> > the
>> space, and then set its own price for everyone else.
>> Really?  How many universities and large organizations have /8s, /9s, and
>> /10s, that they would almost immediately start the process of monetizing?
>> It's "easy" (*cough*) - switch to NAT'd private addresses, switch to IPv6,
>> whatever.  Heck, simple disaggregation of large blocks would release tons of
>> /16 and longer prefixes based on the usage patterns I've seen at most large
>> organizations.  ISPs are not generally included in this, they tend to use what
>> they have. IBM, HP/Compaq/DEC, MIT, Princeton, Harvard, etc., etc.,
>> however, are the poster children for low usage.  They just don't have a big
>> enough incentive to worry about it yet.
>> 
>> Also, see my previous posts for references to academic treatment of the fact
>> that hoarding *isn't a bad thing* in the free market.  Of course, this isn't a
>> free market yet, so there's an argument to be made there...
>> 
>> > How's that for "fairness" ?? I don't see how you can argue for
>> > treating
>> smaller orgs more fairly by proposing to allow large companies to set
>> whatever ridiculous price they want.
>> The playing field is then level - all new entrants get to simply pay the going
>> rate, with no (perceived?) favouritism towards incumbents or large entrants.
>> This assumes there's a reasonable relationship between the price of a /16
>> and the price of a /24, of course. Smith's "invisible hand" should, in theory,
>> assure this...
>> 
>> > I still don't get the needs argument at all. If an org can't show that
>> > it
>> needs the addresses, then why do they need the addresses?
>> Why should I have to disclose to a third party exactly what my plans are?
>> Even the IRS (or CRA, here) doesn't need that level of detail.
>> I'm sure the NSA knows exactly what my plans are, but if I have deep enough
>> pockets, I don't see why this resource - almost alone among all common
>> resources both natural and artificial - should be forbidden to me.
>> 
>> The only other example I can think of that is widely-known is New York (and
>> elsewhere) Taxicab licenses... and almost everyone except taxicab license
>> owners thinks that system is, shall we say, suboptimal.
>> 
>> 
>> 
>> All of the points above here are posited on the fact that the US is, at least
>> supposedly, a Smithian capitalist society that embraces the free market.
>> I happen to think capitalism is fundamentally broken, but at the same time
>> I'd rather let the market control what I can and can't do rather than a
>> handful of regulators who I *know* don't have my interests at heart.  (Nor is
>> that their mandate, I don't mean they're behaving
>> maliciously!)
>> 
>> 
>> 
>> 
>> In essence, above is theory, below is practical.
>> 
>> 
>> 
>> 
>> Moving on to problems in the areas of policy, bias, and technical:
>> > I agree that in the past it was difficult for small non-multihomed
>> > orgs to
>> get space. But now that the minimum is a /24, it is so ridiculously easy.
>> Does multihoming, per se, meet the (v4) needs test after the policy changes
>> in 2014?  If yes, I can live with the situation.  If no, then small entities are still
>> getting screwed.
>> As a small-to-medium-sized enterprise, I probably NAT my entire company
>> behind one or two (possibly not even contiguous) IP addresses, with maybe
>> another half dozen publicly-visible servers. But if I want to be multi-homed, I
>> must first use >64 public IPs, and come up with a reason to use >128 public
>> IPs within a year. What if I just need those 6 or 7 IPs to be highly available?
>> 
>> Under the current NRPM, the only apparent way a small org can multi-home
>> (v4) is to get a reassignment from an ISP, at which point they're stuck with
>> that ISP pretty much forever, barring a painful and expensive renumbering
>> process (say, ~1000 incoming static VPN tunnels, not all of which are under
>> their direct control?).
>> 
>> (I also note that the multihoming justification for IPv6 direct assignment is
>> still there, even as the IPv4 justification is gone.)
>> 
>> This is the primary example today of how the NRPM is heavily biased
>> towards large organizations and SPs in the end-stages of IPv4 runout.
>> Meanwhile, if there were no needs test for /24s, and a healthy transfer
>> market, the organization would have the *choice* of paying for PI space or
>> choosing alternate workarounds with higher TCO (e.g. DNS-based load-
>> balancing, manual load-balancing, etc.). Right now, the small organization
>> that doesn't wish to become a sharecropper for their incumbent SP is - as far
>> as I can tell from reading the NRPM tonight - S.O.L.
>> 
>> The fact they can still get a direct IPv6 allocation is meaningless until IPv6
>> deployment reaches some reasonable density of penetration (>40%,
>> roughly), and I don't hear anyone here claiming that will happen until we
>> actually run out of IPv4 space, and SPs are no longer able to acquire v4 space
>> on demand.  Small organizations already can't acquire
>> v4 space on demand - but they don't carry much weight with SPs.
>> 
>> Yes, the reasoning here is *partially* circular, because there are two related
>> problems converging to screw the small organization (which group includes
>> most of my customers, and in fact, most businesses in Canada).
>> 
>> Another way to view this, which has some relevancy to the problem
>> (mentioned earlier today) with separation between ARIN and NANOG, unlike
>> APNIC and RIPE which largely combine those functions, is that this wouldn't
>> be an issue if global routing tables carried prefixes longer than /24.  The main
>> reason that's the case today - as far as I can tell
>> - is TCAM space on hardware routers, which directly translates into: Money.
>> 
>> [Rant about certain short-sighted & self-centered ISPs removed, didn't add
>> any value to the discussion, no matter how much it made me feel better.]
>> 
>> Right now we have this mixture of regulatory oversight and "market"
>> forces that indirectly control said regulatory oversight... this isn't IMHO a
>> healthy model, and any steps we can take to move either to a pure
>> regulatory function *or* a pure market-driven regime should improve the
>> situation.  Given that ARIN is located in the U.S., a pure market-driven regime
>> seems like a better idea right now.
>> 
>> Regardless, small organizations are - right now - impossibly disadvantaged if
>> they want PI space for any reason, especially multi-homing.
>> 
>> 
>> If I've misread the NRPM v2014.4 (2014-Sep-17), feel free to correct my
>> interpretation... the only provision for low-usage multihoming of IPv4 I
>> could find is 4.2.3.6, which is commercially punitive, at least in my
>> region.
>> 
>> --
>> -Adam Thompson
>>   athompso at athompso.net
>>   Cell: +1 204 291-7950
>>   Fax: +1 204 489-6515
>> 
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Larry Ash
Senior Network Engineer
Mountain West Telephone
123 W 1st St.
Casper, WY 82601
Office 307 233-8387