📄 rfc1744.txt
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RFC 1744 Management of Internet Address Space December 1994 from time to time to accommodate longer term address usage trends). It is also reasonable to predict a strengthening market for dynamic address translation technologies, as an alternate client strategy to the purchase of large address blocks from the trading market (this scenario is the use of a private, potentially non-unique address space within the client network, and the dynamic translation of end host addresses into a smaller unique Internet routed address pool to support external end-to-end sessions), and also the strengthened market for firewall boundary technologies which also admit the use of private address space within the client domain. While it is not possible to accurately predict specific outcomes, it would appear to be the case that increasing overall efficiency of address utilisation will be most visible only after unallocated address pool exhaustion has occurred, as there is then a consequent strong economic motivation for such activity across all the entire Internet address space. As perhaps a cautionary comment regarding evolutionary technologies for IPv4, it would also appear to be the case that evolutionary technologies will not assume a quantum increase in economic viability simply because of unallocated address pool exhaustion. Such technologies will only lever additional advantage over IPv4 once the marginal cost of increased IPv4 address space deployment efficiency exceeds the marginal cost of deployment of new technologies, a situation which may not occur for some considerable time after unallocated address pool exhaustion.3. Modification of Current Internet Address Management Policies The three major attributes of the current address allocation procedures from the unallocated pool are "first come first served" (FCFS) and allocation on a "once and for all" (OAFA) basis, and the absence of any charge for address allocation (FREE). As noted above, the outcomes of such a process, when constrained by the finite quantity of the resource in question, ultimately leads to a secondary market in the resource, where initially allocated resources are subsequently traded at their market valuation. This secondary trade benefits only those entities who established a primary position from the unallocated pool, and it is noted with concern that the optimal behaviour while the unallocated pool exists is to hoard allocated addresses on the basis that the secondary market will come into existence once the pool is exhausted. Such a market does not benefit the original address management operation, nor does it necessarily benefit the wider community of current and potential interested parties in the Internet community.Huston [Page 5]RFC 1744 Management of Internet Address Space December 1994 It is also noted that the outcome of a free address allocation policy is the vesting of the management of the address space to the larger Internet Service Providers, on the basis that in the absence of end client address allocation charging policies which have the capability of ensuring an independent address management function, those entities who have the greatest vested interest in the quality of the address allocation and registration function will inevitably fund such an operation in the absence of any other mechanism. The risk within this scenario is that placing the major asset of any communications medium into the sphere of interest of the current entities trading within that medium acts to increase the risk of anti-competitive monopolistic trading practices. An alternate address management strategy is one of allocation and recovery, where the allocation of an address is restricted to a defined period, so that the allocation can be regarded as a lease of the resource. In such an environment pricing of the resource is a potential tool to achieve an efficient and dynamic address allocation mechanism (although it is immediately asserted that pricing alone may be insufficient to ensure a fair, equitable and rational outcome of address accessibility and subsequent exploitation, and consequently pricing and associated allocation policies would be a normative approach to such a public resource management issue). It is noted that pricing as a component of a public resource management framework is a very common practice, where price and policy are used together to ensure equitable access, efficient utilisation and availability for reallocation after use. Pricing practices which include features of higher cost for larger address blocks assist with equitable access to a diversity of entities who desire address allocation (in effect a scarcity premium), and pricing practices can be devised to encourage provider-based dynamic address allocation and reallocation environments. In the same fashion as a conventional lease, the leasee would have the first option for renewal of the lease at the termination of the lease period, allowing the lease to be developed and maintain a market value. Such pricing policies would effectively imply a differential cost for deployment of a uniquely addressed host with potential full Internet peering and reachability (including local reachability) and deployment of a host with a locally defined (and potentially non-unique) address and consequent restriction to local reachability. It is also observed that pricing policies can encourage efficient address space utilisation through factors of opportunity cost of unused space, balanced by the potential cost of host renumbering practices or the cost of deployment of dynamic address allocation orHuston [Page 6]RFC 1744 Management of Internet Address Space December 1994 translation technologies. There are a number of anticipated outcomes of a management mechanism which including pricing elements for the IPv4 address space Firstly current address space utilisation projections (anticipated useful lifetime for the pool of unallocated addresses) would extend further into the future due to the factors of cost pressure for more efficient address utilisation, and the additional cost of issuing a local resource with a globally unique address and the opportunity cost of extravagant use of global addresses with purely local domains. Secondly dynamic host address binding technologies, and dynamic network address translation technologies would be anticipated to be widely deployed, based on the perceived cost opportunities of using such technologies as an alternative to extensive static host address binding using globally unique addresses. Use of such technologies would imply further extension of the lifetime of the address pool. Such pricing practices could be applied on a basis of all future address allocations, leaving those entities with already allocated address blocks outside of the lease mechanism. Alternatively such previous allocations could be converted to leases, applying a single management policy across the entire address space and accordingly levering the maximal benefit from such pricing policies in terms of maximising the lifetime of the address space and maximising the value of the address space. In such a situation of conversion some level of recognition of previous implicit OAFA allocation policies can be offset through delay of conversion to lease and also through conversion of such previously allocated addresses to the lease, waiving the lease purchase costs in such cases.4. Internet Environment Considerations Pricing for IPv4 addresses as a component of the overall address management framework is by no means a novel concept, and despite the advantages such pricing policies may offer in terms of outcomes of efficiency of utilisation, fair and equitable access, security of allocation and consequent market value, and despite the address pool exhaustion time offsets such policies offer, it is the undeniable case that no explicit pricing policies have been successfully introduced into the Internet address allocation processes to date. There are two predominate reasons offered in this analysis. The first is the somewhat uncertain nature of the exact origin of primary ownership of the IPv4 address space, and the unallocated address pool in particular. The address pool has been administered according toHuston [Page 7]RFC 1744 Management of Internet Address Space December 1994 policies drafted by the Internet Assigned Numbers Authority (IANA). The policies drafted by IANA are effectively policies which are the outcome of the same consensus seeking approach used within the Internet Standards process, and it is noted that within such an environment unilateral declarations of ownership and related assertions of policy control have difficulty in asserting an effective role within the Internet community and such declarations are generally incapable of gathering consensus support (It can be argued that "ownership" is not a relevant concept within this domain, as the essential attribute of such address elements are their uniqueness within the global domain, and such an attribute is only feasible through common recognition of a coordinated and reliable management environment rather than the historical origin of the resource in question). Secondly there is no formal recognition of the address space as being a shared international resource which sits within the purview of national public resource management policies and administrative entities of each nation, nor is there a recognition of the address space as a private resource owned and administered by a single entity. Recent policy changes, whereby large segments of the unallocated address pool have been assigned to international bodies on a regional basis, with further assignment to bodies within national contexts, have been undertaken with a constant address allocation policy of FCFS, OAFA and FREE, and although some effort has been made to increase the deployment efficiency through explicit allocation policy enumeration, the general characteristics of address allocation are unchanged to date (those characteristics being of course FCFS, OAFA and FREE). One potential scenario is to speculate that pricing processes imposed by the address allocation agency are not feasible within the current Internet environment to the extent that any such policies could significantly motivate increased address deployment efficiency to the levels required for longer term unallocated address pool lifetime extension. The lack of capability to employ pricing as a managerial mechanism, even to the extent of cost recovery of the allocation and subsequent registry maintenance function has a number of possible longer term outcomes: a) such functions will be restructured and operated from duly authorised national administrative bodies for each nation. Here the observation that the address pool delegation sequence within the current Internet environment has not to date been aligned with recognised national public communications resource administrative entities is an expression of the major problem that the unallocated address pool is not recognised as being intrinsically the same public resource entity as the radioHuston [Page 8]RFC 1744 Management of Internet Address Space December 1994
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