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North American Network Operators Group Date Prev | Date Next | Date Index | Thread Index | Author Index | Historical Re: IPV4 as a Commodity for Profit
It's good that this discussion is happening now. To make the discussion as productive as possible, it's probably a good idea to clarify assumptions and terms. We all know what "market" means -- but in all likelihood many of the things we all "know" do not overlap, and some are probably mutually contradictory. If thinking about IPv4 addresses as a "commodity" has any validity, it comes from the assumption that making them subject to "market pricing" will increase supply, i.e., incentive current surplus holders to make that surplus available to would-be buyers. In other "commodity" markets, the connection between market pricing and increased supply is *production* -- i.e., when the revealed price of a commodity goes up, those who are capable of making it are motivated to make more, or to jump into the market for the first time. In other commodity markets, that motivation is bounded by the threat of alternative suppliers, by the impracticality of hoarding, and by the inability of the potential seller to use more of the commodity directly. In other words, the existence or potential emergence of alternative producers/suppliers tends to discourage hoarding to maximize prices (because there's no guarantee that prices will stay high, much less go even higher), and the lack of direct "use value" reduces any countervailing incentive that the prospective seller to just hold the assets in perpetuity, until they can be used in-house. In the case of IPv4 addressing, none of these bounding conditions apply. No more IPv4 addresses can be produced, and they're almost certain to have unique (if not irreplaceable) use value, at least for some classes of ISPs that exist today, for at least a decade or more (or as long as those kinds of ISPs exist, whichever is shortest). That means the potential price is always going to be higher tomorrow than it is today, right up to the day before the last day that IPv4 becomes useless. Which means hoarding is going to continue to be the most sensible behavior for all surplus holders -- even those that no longer have any Internet-related ops or business interests. This countervailing incentive is much stronger for surplus holders that *do* still have such interests. Knowing that IPv4 addresses that they might need in the future will certainly cost more (maybe lots more) than whatever price they could command for surplus IPv4 today, growing ISPs are not likely to contribute much to the salable, "liquid" address pool. Worse still, so long as IPv4 continues to be a non-substitutable, must-have input for certain kinds of ISPs, ISPs like that will know that the threat of competition from existing or hypothetical future competitors will be absolutely limited by the availability of IPv4 address space. For them, making IPv4 address space unavailable to competitors is a perfectly sensible "use", and one with quite a lot of value. An unmediated market is not going to "work", for almost any meaning of that term. Get over it. Anyone who disagrees should point out anything disputable in the above, or else clarify what they actually think/hope that an IPv4 address market will achieve. TV On Feb 19, 2008, at 12:04 PM, Rod Beck wrote: I am not sure it's a perfectly functioning market.
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