Invisible Hands, was Re: Multihoming sites and ARIN

[davidk at ISI.EDU]

Scott,

> Scott Huddle writes :
> 
> 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".

Note that IPv4 space in itself is limited and that alone can distort
market forces. In many situations where supplies are limited, prices get
set artificially high and there is no guarantee that this could not
happen with IPv4 address space.

Ooh, and what does Jon do with the money? Or do you want to give away the
address space for free and then some lucky people can make huge profits
or you divide it very democratically among the current Internet users
which will be even a better recipe for disaster.
 
> > 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.

Note that a free market system can do the same. And there are no methods
to fix it ...

The current registry system is not perfect but there is no evidence that
current allocation policies are destroying the routing system. In fact,
the policies are defined by consultation with the users of the address
space to avoid just that.

> 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) 

And what happens if a free market registry sells one address block too
much?

> I assert that a free market would determine the demand and supply
> curves and an equilibrium point for a default free routing table.

And what if demand is bigger then supply ?

And what if the equilibrium price for an allocation is much higher then
the current price ?

And what if the equilibrium point for the number of route entries is much
higher ?

The free market will certainly solve these problems but it could turn out
to be more expensive then our current system.

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

> 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)

Yes, and when supply is limited, evil greedy bastards can work together
to artificically set a price (talk to OPEC).

Don't get me wrong, I am not a supporter of bureacratic solutions over a
free market economy and would prefer any free market solution. However,
there is no proof whatsoever, that a free market will indeed work better
then the current system, and even worse then that, if this turn out to be
the case, we cannot go back anymore. Therefore, it might be the time for
an experiment with a limited amount of address space to test (part of)
the free market theories because a free market solution indeed has a lot
of potential and could indeed turn out to work better, as you claim it
will, then the current approach. But then, this is not the topic of the
ARIN list but <piara at apnic.net>, so please reply on that list only,

David K.
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