North American Network Operators Group

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Re: Market-based address allocation

  • From: Bill Nickless
  • Date: Thu May 01 17:28:41 2003

These two things have to happen at the same time:

1. ISPs start charging for the service of advertising each
prefix upstream and/or to peers.

2. Customers can purchase netblocks on an open market.

With both #1 and #2, customers can decide (based on financial incentives) whether to

(a) pay for the service of advertising lots of small netblocks,

(b) buy "big-enough" netblocks and renumber into them to save
on per-advertisement service fees, or

(c) use provider-based addressing and bear the risk/costs of
renumbering when changing providers.

Without #1 above, there's no financial incentive for customers to renumber into better aggregated netblocks. As I understand Randy's argument, this is a flaw in the Internet economic model, because the costs are borne by the service providers but the benefits accrue to other networks' customers.

Without #2 above, it's much harder to put a dollar value on the cost of (b): the price is difficult to determine in advance due to the utilization review uncertainties.

Using my institution (AS 683) as an example, we advertise about seven /16s and a pre-CIDR block of swamp /24s. As much as I would like to aggregate everything into a larger netblock, there are some obstacles that I can't overcome by "community pressure" or "doing the right thing."

I wish I could put dollar figures on the asset valuation of the various netblocks, the capital cost of larger netblocks, and the recurring cost to my institution of making 14 advertisements. Today I can't do that.

At 01:25 PM 5/1/2003 -0700, David Conrad wrote:

So, lets say we go ahead a float IP address space and anyone can buy whatever prefix they think need and have the cash for.

What happens to the routing tables?

The reason the BOF back in '96 was entitled "Pricing of Internet Addresses and Routing Announcements' was that the folks who seriously considered the idea realized that in the IPv4 CIDR world we live in, selling address space without somehow tying those sales into some sort of market for routing prefixes was a recipe for "fun", or at least lots of prefix length filters and subsequently more unhappiness.

If someone can figure out how to get the ISPs of the world to participate in a routing prefix market, then it might be worth revisiting this idea. Note that there is nothing stopping establishing a routing prefix market now, so it could be done prior to changing address allocation policies.


Bill Nickless      +1 630 252 7390
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