IPV4 as a Commodity for Profit

Tom Vest tvest at eyeconomics.com
Sat Feb 23 22:25:35 UTC 2008



On Feb 23, 2008, at 1:54 PM, Stephen Sprunk wrote:

> Thus spake "Tom Vest" <tvest at eyeconomics.com>
>>> I agree, to a point.  My prediction is that when the handful of
>>> mega-ISPs are unable to get the massive quantities of IPv4   
>>> addresses
>>> they need (a few dozen account for 90% of all
>>> consumption in the ARIN region)...
>>
>> I keep reading assertions like this. Is there any public,   
>> authoritative
>> evidence to support this claim?
>
> Rechecking my own post to PPML, 73 Xtra Large orgs held 79.28% of  
> ARIN's address space as of May 07; my apology for a faulty memory,  
> but it's not off by enough to invalidate the point.
>
> The statistics came from ARIN Member Services in response to an email
> inquiry.  I don't believe they publish such things anywhere (other  
> than what's in WHOIS), but you can verify yourself if you wish;  
> they were quite willing to
> give me any stats I asked for if they had the necessary data  
> available.

Thanks for the information Stephen.
In order to be perfectly clear on how to interpret this, it would be  
good to know whether this sum includes the pre-ARIN delegations, or  
just reflects what has happened since ARIN was established.

Then, if the distribution is deemed to be of real significance, e.g.,  
to understand the past, or better understand what to do next, the  
best/simplest metric for such evaluations is probably the Herfindahl- 
Hirschman Index (HHI), which attempts to capture both dimensions of  
concentration/diffusion in a single unidimensional scale. This is  
probably the most common tool that economists and policymakers use to  
evaluate such things when necessary (e.g., before approving very  
large mergers) in other sectors.

The standard interpretations for HHI results may not be ideal for  
this sector, but if one has access to time series data, it does  
provide a really nice way of evaluating concentration/diffusion  
trends over time. To my mind, concerns about the distribution of PA  
are pretty analogous to concerns about the distribution of access to  
goods in general, while PA+PI together could be interpreted as the  
distribution of final goods themselves (e.g., think airports or  
airlines vs. individual passenger-flights). Since we're not talking  
about goods that are strongly bound to geography, the fact that ARIN  
members don't all "compete" for the same kinds of customers or over  
the same market territories doesn't really matter, as it would in  
more conventional contexts.

More on HHI here:
http://en.wikipedia.org/wiki/Herfindahl_index

Bottom line: if people believe that the kind of de facto  
concentration/diffusion claims that have been circulating are  
important, a bit more effort should probably be devoted to  
understanding how to sensibly interpret such things.

TV

>> If there is, is this 90% figure a new development, or rather the   
>> product
>> of changes in ownership (e.g., MCI-VZ-UU, SBC-ATT, etc.),  changes in
>> behavior (a run on the bank), some combination of the two,  or  
>> something
>> else altogether?
>
> Most of the orgs in the Xtra Large class were already there before the
> mega-mergers started; after all, you only need >/14 to be Xtra  
> Large.  Given
> how most tend to operate in silos, they might still be separate  
> orgs as far
> as ARIN is concerned...





> S
>
> Stephen Sprunk         "God does not play dice."  --Albert Einstein
> CCIE #3723         "God is an inveterate gambler, and He throws the
> K5SSS        dice at every possible opportunity." --Stephen Hawking




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