Market-based address allocation

Wed Apr 30 21:38:54 UTC 2003

Bill Nickless wrote:
>   - Treat IPv4 netblocks as a commodity
>   - Recover costs on a per-advertisement basis
>     (in addition to bandwidth charges)
> 

> No, IP address blocks should be treated as a commodity.  Carrying a 
> routing advertisement should be a paid-for service, or part of a peering 
> settlement.

Routing advertisement ratios have always been capable of being in 
peering agreements. Perhaps they exist in some. Who knows? Money doesn't 
have to exchange hands to setup policies for your network.

> Exactly right.  That's precisely the incentive we desire, because it 
> would encourage people to use provider-based addressing when possible.  

Ummm. Let's see. Have you checked blacklists lately? While many are 
pertaining to spam, the fact is that they are not "spam blacklists" but 
"IP blacklists". Many of the largest networks have contaminated space, 
and it's a crap shoot renumbering into them. There's also another issue. 
Renumbering to new provider space means that you have to maintain 
connectivity for both providers until the renumber is complete. With 
large networks, this is cost prohibitive. Get a customer on your IPs and 
they are loathe to ever leave you. Your proposal only makes ripping 
off^W^Wkeeping the customer much easier.

> It would also allow people to be multi-homed, but if they want it they 
> will have to pay something for it.  The downstreams would pass along the 
> costs of carrying the advertisement to the customer, where it belongs.

Okay. Here's my issue and where I don't get it. I have my own space. I 
interlink with multiple networks with and without export. I have to 
handle the routes of all the networks, received from all peers. So do I 
send out 120,000 invoices each month, or when I multi-home to I mandate 
that my providers have to pay me for all of these advertisements that 
*I* need to make routing decisions while I'm only contributing a measly 
1-8 aggregates? Or is it because I'm the small guy, that I don't count. 
I can be billed, but I don't get to receive money.

> Outrageous pricing assumes scarcity.  Are IPv4 addresses really that 
> scarce?  And would they be scarce if people could buy and sell them on 
> the open market?
> 
How are you going to handle the billing? Do you pay residually for the 
networks or just pay a single fee? If you pay residually, do legacy 
networks also get charged? If you pay a single fee, ATT, C&W, Qwest, 
Microsoft, and a thousand other large networks will snatch up every last 
one in bulk and then resell at whatever prices they wanted. Remember, 
you can't manufacture more IPv4 addresses. In fact, we haven't even 
instituted reclaiming processes for networks that can't show 
utilization. We only slow down the consumption of what is left by 
requiring such documentation.

So you look at the financials. You either make it so expensive that 
companies can't stockpile the addresses, or Microsoft buys a /4 here and 
a /1 there while AT&T is buying a /4 here and a /1 there. If you set it 
too high, people who have valid need of the addresses may not be able to 
afford them.

-Jack