Invisible Hands, was Re: Multihoming sites and ARIN

[Scott Huddle]

John Stewart (jstewart at isi.edu) wrote
> you might be able to convince me of [market based distribution]
> for space that is already allocated.  but what do we do about 
> currently *un*allocated space? 

In a sence there is no unallocated space.  The IANA sits on all
of the space, they can delegate this space to their own close
personal friends as they see fit, or they can delegate to the 
registries, who then delegate according to whatever arbitrary
policies they see fit to employ.  :)

The question you ask seems to be "how much space should the IANA 
hold in reserve?" perhaps for meritorious use or perhaps for 
deployment to their own close personal friends. :)

Note that whatever amount the IANA picks you basically are attempting
to control the market supply in such a way that either 
artificially raises or lowers prices for IP space, this seems to me 
to be a bad thing, though I see that it might be a social good to 
reserve some amount of space, but I expect that amount should be 
"not much".

> do different registries on the supply-side of the market just 
> pick randomly and hope for uniqueness?

The role of registries is to record allocations, not make them.  
Lets have lots and lots and lots of competing registries, similar
to the IAHC proposal for domain names.  

> if address assignment isn't [at least] loosely correlated with 
> topology, then a market-driven allocation system in a vacuum with
> respect to routing could end up destroying the routing
> system.  

Note that the current allocation schemes can destroy the routing
system and there are no methods to fix it.  For example, say
ARIN follows the InterNIC guidelines and dispense addresss space 
along topological bounds as it has, low and behold later this year 
we hit The Magic Limit for routing slots and we're full.  People 
can still go ARIN and ask for space but the space can't be
used on the global Net.  How do we go forward?  

Clearly, a market based scheme insists on making things work
(else why buy the slot or pay for the space)  While good intentioned,
it's not clear to me if procedural delegation can guarantee this
and it fact it is more likely that procedural delegation would
destroy the routing system than a market based scheme.

> however, i claim that *if* i knew exactly what "full" meant for 
> a default-free routing table 

Then you would exactly know the supply curve in a market based
allocation :) BTW, how well do the current registries know this?
Don't they need to make the same sorts of assessments in making
policy on their allocation schemes?

I assert that a free market would determine the demand and supply
curves and an equilibrium point for a default free routing table.
Some Econ 101 attached at the end.  Note well, the example about 
creation of route slots by the introduction of new technology.

Further, I assert that any group, however well intentioned, and
regardless of the qualifications of it's Board of Directors, that 
attempts to manage a scarce resource will *not* find the 
equilibrium point, resulting in either scarcity or waste.

> *if* i had the ability to control what routing announcements i 
> hear win (i.e., get a slot) and which ones loose (i.e., get dropped 
> on the floor), then it might be more possible to separate 
> allocation and routing 

I'm not sure of your point here, but I'll grant that this could
require some additional knobs in routers, though I kinda think
not.  Clarification?  In the end, allocation and routing are already
seperate, i.e. ARIN allocates IP space, it does't route.

ARIN won't guarantee routability and won't guarantee that the routing 
table will not fall over.  Market mechanisms would.

best regards,

-scott

Some casual background, this is Econ 101

The Demand Curve,
	o	changes in price move you along the curve (at a high
			price, low demand, at low price high demand)
	o	changes in aggregate demand shift the curve

$ |
  |\     \
  | \  -> \
  |  \     \
  |   \     \
   -------------
        Q

The Supply Curve, 
	o	changes in price move you along the curve (at a high
			price, high supply, at low price low supply)
	o	innovations in technology shift the curve right

$|     /     /
 |    /     /
 |   / ->  /
 |  /     /  
 | /     /
  -------------
        Q

The Great Truth
	o	The "invisible hand" of a competitive market will find 
			an equilibrium point, where supply *exactly* equals 
			demand at some price, P
			(at any other point, Evil Greedy Bastards arbitrage
			 to exploit market inequalities and move to
			 the equilibrium)

$ |     /  
  |\   /     
  | \ / 
P |  *       
  | / \    
   -------------
        Q

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