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NANOG Meeting Presentation Abstract

Research Forum: Predicting Public Internet Growth With Classical Economic Theory, or, The Wealth of Networks
Meeting: NANOG31
Date / Time: 2004-05-24 4:00pm - 5:00pm
Room: Grand Ballroom
Presenters: Speakers:
Tom Vest, eyeconomics.com.
Abstract: Like the fixed telecom infrastructure that connects most users to the Internet, the international distribution of publicly routed IPv4 addresses (based on the national registration of their originating AS, using partially corrected/updated whois data) is fairly closely predicted by national gross domestic product (GDP). This statistical observation is consistent with well-known facts about the extra-national use (i.e., outside of their country of reported allocation) of IP and AS numbers across highly developed countries because, like \"national\" IP and AS accounting, \"national\" GDP calculations implicitly encompass many of the international productive assets of locally incorporated firms. Additionally, inter-domain routing for public Internet services remains highly nation-centric in heavily regulated telecommunications markets. In such cases (still the norm in many parts of the world), the extension of national telecom monopoly control to layer 3 effectively creates national Autonomous Routing Domains (ARDs), with the national telecom monopoly serving as a barrier between domestic and international inter-domain routing.

National GDP is not a good predictor of public AS numbers. However, a simple two-variable interaction model using national GDP and national AS numbers very closely parallels the global landscape of publicly routed IP. All things (e.g., GDP, fixed telecom infrastructure) remaining equal, more AS numbers in use by a national economy leads nonlinearly to the accumulation of more Internet resources by those same Autonomous Systems, as measured by public routed IP.

One interpretation of this statistical observation is that ASes introduce the element of specialization into the global Internet growth equation. This is intuitively plausible since ASes enable network operators to exercise beneficial control over shared and wholly-owned telecom resources, assembling them into logical systems to achieve specific institutional (usually commercial) goals.

The role of specialization, exchange, and competition in facilitating resource accumulation was first observed by Adam Smith in The Wealth of Nations (1776). Smith theorized that systems of specialized, interacting, and competing units constitute a more efficient form of economic organization than unicellular and undifferentiated systems of similar size. This efficiency takes the form of accelerated capital formation and accumulation, which in turn contributes to further innovation and specialization, and to higher standards or living. The global distribution of Internet resources seems to be consistent with Smith\'s vision of economic organization.

A variety of factors may complicate or contradict this finding. For example, the use of IPv4 address and AS number accounting to quantify Internet resource production could be disputed on a variety of empirical grounds (varying national patterns of NAT and IPv6, the existence of ARDs larger and smaller than individual AS numbers, etc.). The author hopes to solicit operationally-grounded comments from the NANOG community to inform ongoing work on a general theory of IP economics.
Files: youtubePredicting Public Internet Growth With Classical Economic Theory, or,
Sponsors: None.

Back to NANOG31 agenda.

NANOG31 Abstracts

  • Happy Packets - Initial Results
    Speakers:
    Randy Bush, IIJ; Tim GriffinIntel Research; .
    Zhuoqing MaoUniversity of Michigan; .
    Eric PurpusUniversity of Oregon; .
    Dan StutzbachUniversity of Oregon; .
  • Happy Packets - Initial Results
    Speakers:
    Randy Bush, IIJ; Tim GriffinIntel Research; .
    Zhuoqing MaoUniversity of Michigan; .
    Eric PurpusUniversity of Oregon; .
    Dan StutzbachUniversity of Oregon; .
  • Happy Packets - Initial Results
    Speakers:
    Randy Bush, IIJ; Tim GriffinIntel Research; .
    Zhuoqing MaoUniversity of Michigan; .
    Eric PurpusUniversity of Oregon; .
    Dan StutzbachUniversity of Oregon; .
  • Happy Packets - Initial Results
    Speakers:
    Randy Bush, IIJ; Tim GriffinIntel Research; .
    Zhuoqing MaoUniversity of Michigan; .
    Eric PurpusUniversity of Oregon; .
    Dan StutzbachUniversity of Oregon; .
  • Happy Packets - Initial Results
    Speakers:
    Randy Bush, IIJ; Tim GriffinIntel Research; .
    Zhuoqing MaoUniversity of Michigan; .
    Eric PurpusUniversity of Oregon; .
    Dan StutzbachUniversity of Oregon; .

 

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