Comments on ARIN proposal

[Jeremiah Kristal]

On Wed, 22 Jan 1997, Mark Richmond wrote:

> Geez, Michael.  Nobody said MCI was swahili for Satan.
> The fact is, MCI is a *business*, and a very successful one.  They got that way because the work to make a *profit*.  Both of these concepts are foreign to the 'net intellegentsia, so I'll explain.  Businesses make a profit by selling goods or services for MORE than the COST of them.

Of course MCI is a business, just like everyone else here.  I think that
almost every one of us is in this to make money.  We may have other
reasons too, but I think just about all of the people here understand the
basics of economics.
 >
> If MCI or any other right-thinking business buys blocks of addresses for $X, they will sell them for $X+profit.
>
> You continue to imply that large providers will simply reduce their profits in order to absorb the cost.  Why in the world would you think that?

I don't think anyone said that.  I expect that you haven't fully thought
this through, otherwise you might remember a little piece about the free
market.  I seem to recall a bit about supply and demand and an invisible
hand.  There are enough ISPs around that I'll be you can find one in every
area that is willing to give you a block of IP addresses for a nominal
charge.  If what you say is true, then internet pricing would be going up
not down.  We've increased our backbone network speeds from T1 to 10Meg to
T3 within the past year, I know for a fact that our dial-up costs have not
increased 1500%.  In fact they have dropped, because other providers
dropped their prices.
We also never charged a fee for the intial block of IP addresses, even
though it does cost us something to keep the records and deal with the
SWIPS.  We only charged a small (<$100) fee for additional allocations in
the past, even though it involved looking at the customer's network
diagrams, offering suggestions, and often explaining CIDR, IP subnet-zero,
IP classless, etc.  We didn't make anything off of this, and in fact it
usually cost us in terms of manpower to teach the customer.  We took a
long-term view though and justified it because it led to increased
customer satisfaction, lighter loads on our routers, and is a generally
accepted benefit to the internet.  I guess we're just a bunch of Godless
Communists who are in this as part of our plot to take over the world.
Damn, and I thought we had hidden that fairly well.
> This being said, I will refrain from further comments on the economic realities and misconceptions thereof.
>
> Obviously there sill always be those in the "Internet Community" for whom economics was *not* a required class.
>
Obviously there will always be those in the "Internet Community" who see
everything new as some sort of conspiracy, including software that does
automatic line wraps.

Jeremiah
      ________
      \______/                  Jeremiah Kristal
       \____/                   Senior Network Integrator
        \__/                    IDT Internet Services
         \/                     jeremiah at hq.idt.net
                                201-928-4454