[address-policy-wg] Spectrum and IP address reservations

On Jul 20, 2009, at 4:38 AM, Milton L Mueller wrote:

> I forward information about a study conducted by NERA on spectrum  
> auctions.
> Not directly applicable to IP addresses, but has some relevance to  
> current discussions about attempts to reserve resources for new  
> entrants vs. incumbents. Bear in mind, of course, that the study was  
> produced by Telus, an incumbent operator, and discount for that; the  
> point is that we need to pay attention to the economic reasoning  
> underlying the finding; which is that policies designed to "help"  
> competitors can have unintended consequences that may encourage  
> conslidation and higher prices.

Hi Milton,

Clarifying question: what are you referring to exactly by "policies  
designed to 'help' competitors," and why are you choosing to reduce  
the question of routing and addressing system openness to this one  
narrow dimension? I (among others) have written a lot about the  
importances of keeping the door open for "new entrants," but not all  
new entrants are "competitors" -- nor is competition the only reason  
for incumbent service providers (and everybody else) to regard such  
openness as a critical institutional priority.

To illustrate, I've never heard anyone claim that the *only* reason  
why it was a good idea to move from NCP addressing to classful IP was  
to enable competition. Ditto, the move from classful IP to CIDR; then  
as before, the prospect of continuous competition (including  
competition by emerging new entrants) was just one of many reasons to  
support the preservation of addressing and routing system openness.  
I'm assuming that whatever you find persuasive in this NERA document  
would not also implicate those past policy choices, because I don't  
think you'd find much sympathy for the idea that the "unintended  
consequences" of those decisions were/are so bad that they outweigh  
they *intended* consequences (i.e., a future with max. 256 independent  
addressing and routing system participants).

Since most of the subscribers to these lists are not economists, it  
would be helpful if you could briefly summarize the "underlying  
economic reasoning" that you find particularly compelling in this  
study. If it was less onerous, I'd also request that you clarify what  
you regard to be the right way to balance intended vs. unintended  
policy choices, and "historically/experientially informed" vs.  
"idealized, theoretically informed" expectations about the future --  
but perhaps a sentence or two of clarification on the NERA "reasoning"  
would suffice.

Thanks,

TV