Sprint's route filters and Europe

Tue Jun 18 09:52:59 UTC 1996

Try again. exmh ate the last one.

David R. Conrad" <davidc at apnic.net> wrote:
> >> 	A) The socalist approach
> >> 	B) The capitalist approach
> >The argument appears to be more well-rehearsed than that. 
> 
> "Well-rehearsed"?

= economists have covered a more general case of this argument many
times before.

> >In essence it seems similar to the name-space argument. 
> 
> If you mean the domain name-space, then I would disagree.  For all intents
> and purposes, the domain name space can be considered infinite.

Domain space is different in that varies considerably in usefulness.
Though the whole space is infinite, the useful parts aren't. For instance
names which do, or might, represent company/corporate names are much
more valued than those that don't. Having just spent a long time looking into
how we are going to change the UK namespace around, this is definitely
the prevailing opinion here anyway. Recent litigation in the US
seems to imply the same thing applies to .com.

> >The main issue is that we
> >have a single supply (noone can go and set up another IP address space),
> >and the cost price is apparently zero. 
> 
> How much does water cost?

To consumers in the UK? Quite a lot. I guess you are making the point
(which I'd agree with) in that the cost is in the infrastructure. So
the water companies add value to a 'free' raw material, and then charge
for nice clean water delivered in a pipe. The difference here is that
it's the registry who gets paid, but the large ISPs who pay for the
infrastructure, so the economics gets skewed. AFAIK the registries don't
fund the ISPs proportionately to how many prefixes they give out. Indeed
to some extent the reverse is true.

> >> 	3) if you charge, then poor organizations can't connect
> >> 	   to the Internet (so who's paying for their connectivity?)
> >Specific case of the merit good argument.
> 
> Good argument?  If an organization wants to connect to the Internet, it is
> almost certain the address cost will be so far down in the noise as to be
> undetectable.  If address costs were a significant portion of the total
> costs, there is always NAT/ALG.

Crossed wires. I meant the "merit good" argument. Most countries still
agree, for instance, that funding healthcare is a good thing to
varying extents: by subsidizing treatment of poorer people's infectious
diseases, those who can aford to pay are less likely to get them themselves.
Thus we have little cholera in the west. If we believe that subsidizing
"poor organizations" connectivity to the internet is (economically) in
all our interest, then there is an economic justification for subsidy
by the "merit good" argument. We might, for instance, feel that not
getting poorer sections of society connected is likely to disenfrachize them.
Or we might not.

> >Historically the way to prevent such market disfunction has been
> >regulation of this sort. 
> 
> What dysfunction are you trying to prevent?

Suboptimal distribution - i.e. lack of a pareto-optimum. The price
mechanism only produces pareto-optimality (i.e. the best result)
under certain circumstances. Monopoly is one dysfunction that will
stop it doing so. As, I gues, is the wierd cost curve we have. However
my economics is too rusty to prove it, though it would probably
make a fair thesis for someone.

> >Which is exactly what Internic, RIPE, etc. do. 
> 
> No, that might be what the could do, but it isn't what they do now.

They replace the price mechanism with an imposed system of distribution.
Whether you like it or not is another argument. I think they do a fair
job.

Alex Bligh
Xara Networks