Scaling ARIN proposal for small ISPs - and economic reality

[David Hakala]

-- [ From: David Hakala * EMC.Ver #2.5.02 ] --

?? > > The pricing for this service MUST be brought down to a level that the
average 'mom & pop' ISP can deal with.

MB > The notion that the infrastructure should be tailored to the typical
underequipped shoestring "ISP" such as those that have sprung up over the
past couple years is debatable, IMHO.

OK, I'll debate this one - since I barely have a clue as to what most of the
other posts are about. (Thanks to everyone who cleared up /16 and /24 for us
!)

Mark, you switched the grounds of the argument in your reply to this unknown
person. He/she's talking about price of entry, while you're talking about
"infrastructure," the thing to which entry is sought. Of course I want a
network that can handle a gazillion bits per second, even though my own ISP
may only have a 256K pipe. But that's not the issue.

Asphalt highways cost billions to build and maintain, but the cost of entry
to the highway system is the price of a running car (let's ignore public
transportation, bicycles and shoes, OK?). Would you restrict public highways
to those who can afford a new Mercedes? If so, the diesel fuel tax will have
to increase a thousandfold to pay for the maintenance of the roads those
cars drive.

The initial ARIN proposal contained a minimum fee of $2500/yr. for a /24
block of 256 IP addresses. That's astoundingly wasteful - like saying I have
to buy a 256-seat bus in order to start a limo service!

I thought the purpose of charging fees for IP addresses is to discourage
such waste? If not, just what IS the purpose of this proposal? I don't find
a clear statement of purpose in ARIN's initial proposal, just the vague
platitude that "The stability of the Internet relies on the careful
management of the IP addresses." Peddling them in lots of 256 or more
doesn't even meet that goal.

This arbitrarily high barrier to entry into the ISP market is
anticompetitive on its face, and will never pass legal muster. If the mom-n-
pop ISPs don't kill it, the Justice Dept. will.

The average cost of an IP address drops precipitously under ARIN's initial
proposal. For $2500 I can get 256 addresses or 8,192 addresses - a drop from
about $9.76 each to under $0.31 each. The slope of the cost/address curve
gets even worse as you get into the "medium and higher categories. This is
stupid economics.

Since public IP addresses are a finite resource, each additional address you
want should cost *more* than the last one. That's how the real estate market
works. As land becomes scarce, the price of a lot goes up. Why not license
IP addresses one at a time for $10 each, 10 for $110, 50 for $1000, etc.?


--
David Hakala
Editor In Chief
Cyber Week
dhakala at ossinc.net
303-755-6985