An Economic Perspective on the Transition to IPv6
description
Transcript of An Economic Perspective on the Transition to IPv6
![Page 1: An Economic Perspective on the Transition to IPv6](https://reader030.fdocuments.in/reader030/viewer/2022012919/56816843550346895dde188a/html5/thumbnails/1.jpg)
An Economic Perspective onthe Transition to IPv6
Geoff HustonAPNIC R&D
October 2010
The Fine Print: I am not a economist in terms of my professional qualifications or by virtue of my work experience. Worse still, I think I fit in to the category of amateur economic dilettante! So most of what I offer here I do so tentatively, as it probably needs a little more rigor and precision in basic economic terms than I am able to provide! Geoff
![Page 2: An Economic Perspective on the Transition to IPv6](https://reader030.fdocuments.in/reader030/viewer/2022012919/56816843550346895dde188a/html5/thumbnails/2.jpg)
“The minister for communications and information technology does not believe that regulatory intervention is appropriate. Adoption of IPv6 needs to be lead by the private sector. The private sector must recognise that adopting IPv6 is in their own best interests to protect their investment in online capabilities into the future. Issues of advantages and disadvantages, costs, risks, timing, methodology etc, have to be for each enterprise to assess for itself.”
Statement by the New Zealand Minister for Communications24 August 2009
A “conventional” view of IPv6 transition:
![Page 3: An Economic Perspective on the Transition to IPv6](https://reader030.fdocuments.in/reader030/viewer/2022012919/56816843550346895dde188a/html5/thumbnails/3.jpg)
In other words:Self interest on the part of consumers and producers will cause the market to sustain the transition to IPv6
This is not an instance of a “market failure”
There is no need for public sector intervention in the operation of the Internet, nor in this transition in particular
![Page 4: An Economic Perspective on the Transition to IPv6](https://reader030.fdocuments.in/reader030/viewer/2022012919/56816843550346895dde188a/html5/thumbnails/4.jpg)
Lets explore these assertions with:some data some experiencesome perspectivesand a little economic theory
![Page 5: An Economic Perspective on the Transition to IPv6](https://reader030.fdocuments.in/reader030/viewer/2022012919/56816843550346895dde188a/html5/thumbnails/5.jpg)
The IPv6 Transition Plan
IPv6 Deployment
Time
IPv6 Transition – Dual Stack
IPv4 Pool Size
Size of the Internet
![Page 6: An Economic Perspective on the Transition to IPv6](https://reader030.fdocuments.in/reader030/viewer/2022012919/56816843550346895dde188a/html5/thumbnails/6.jpg)
Obligatory IPv4 Exhaustion Slide
IPv4 Allocated Addresses
IPv4 Advertised Addresses
IANA Free Pool
IANA ExhaustionJune 2011 First RIR Exhaustion
January 2012
![Page 7: An Economic Perspective on the Transition to IPv6](https://reader030.fdocuments.in/reader030/viewer/2022012919/56816843550346895dde188a/html5/thumbnails/7.jpg)
Measured IPv6 Deployment
3%
2%2%
1%
2004 2006 2008 2010
Data from http://www.apnic.net
![Page 8: An Economic Perspective on the Transition to IPv6](https://reader030.fdocuments.in/reader030/viewer/2022012919/56816843550346895dde188a/html5/thumbnails/8.jpg)
Measured IPv6 Deployment - 2010
From http://www.potaroo.net/stats/1x1
5%
3%
1%
7%
April June August October
![Page 9: An Economic Perspective on the Transition to IPv6](https://reader030.fdocuments.in/reader030/viewer/2022012919/56816843550346895dde188a/html5/thumbnails/9.jpg)
What is this telling us?
• If we want to avoid the “hard edge” of exhaustion of IPv4 addresses we need to complete the transition to IPv6 across most of the network before we run out of the unallocated pool
• We need to get end system and service IPv6 capability up from ~5% of the network today to ~90 % by January 2012
![Page 10: An Economic Perspective on the Transition to IPv6](https://reader030.fdocuments.in/reader030/viewer/2022012919/56816843550346895dde188a/html5/thumbnails/10.jpg)
The IPv6 Transition Plan - V2.0
IPv6 Deployment
2004
IPv6 Transition – Dual Stack
IPv4 Pool Size
Size of the Internet
2006 2008 2010 2012Date
18 months!
![Page 11: An Economic Perspective on the Transition to IPv6](https://reader030.fdocuments.in/reader030/viewer/2022012919/56816843550346895dde188a/html5/thumbnails/11.jpg)
The IPv6 Transition Plan - V2.1
IPv6 Deployment
2004
IPv6 Transition – Dual Stack
IPv4 Pool Size
Size of the Internet
2006 2008 2010 2012Date
12 months!
![Page 12: An Economic Perspective on the Transition to IPv6](https://reader030.fdocuments.in/reader030/viewer/2022012919/56816843550346895dde188a/html5/thumbnails/12.jpg)
Is this Plan Feasible?
Deploy IPv6 across some 1.7 billion users, with more than a billion end hosts.
![Page 13: An Economic Perspective on the Transition to IPv6](https://reader030.fdocuments.in/reader030/viewer/2022012919/56816843550346895dde188a/html5/thumbnails/13.jpg)
Is this Plan Feasible?
Deploy IPv6 across some 1.7 billion users, with more than a billion end hosts, and upgrade hundreds of millions of routers, firewalls and middleware units.
![Page 14: An Economic Perspective on the Transition to IPv6](https://reader030.fdocuments.in/reader030/viewer/2022012919/56816843550346895dde188a/html5/thumbnails/14.jpg)
Is this Plan Feasible?
Deploy IPv6 across some 1.7 billion users, with more than a billion end hosts, hundreds of millions of routers, firewalls and middleware units, and audit billions of lines of configuration codes and filters.
![Page 15: An Economic Perspective on the Transition to IPv6](https://reader030.fdocuments.in/reader030/viewer/2022012919/56816843550346895dde188a/html5/thumbnails/15.jpg)
Is this Plan Feasible?
Deploy IPv6 across some 1.7 billion users, with more than a billion end hosts, hundreds of millions of routers, firewalls and middleware units, audit billions of lines of configuration codes and filters, and audit hundreds of millions of ancillary support systems.
![Page 16: An Economic Perspective on the Transition to IPv6](https://reader030.fdocuments.in/reader030/viewer/2022012919/56816843550346895dde188a/html5/thumbnails/16.jpg)
Is this Plan Feasible?
Deploy IPv6 across some 1.7 billion users, with more than a billion end hosts, hundreds of millions of routers, firewalls and middleware units, audit billions of lines of configuration codes and filters, and audit hundreds of millions of ancillary support systems - all within the next 360 days.
![Page 17: An Economic Perspective on the Transition to IPv6](https://reader030.fdocuments.in/reader030/viewer/2022012919/56816843550346895dde188a/html5/thumbnails/17.jpg)
What is Feasible?
![Page 18: An Economic Perspective on the Transition to IPv6](https://reader030.fdocuments.in/reader030/viewer/2022012919/56816843550346895dde188a/html5/thumbnails/18.jpg)
What is Feasible?
What about if we remove the time constraint?
What if we let the unallocated IPv4 address pool run out while we still remain critically dependant on IPv4 in the Internet?
![Page 19: An Economic Perspective on the Transition to IPv6](https://reader030.fdocuments.in/reader030/viewer/2022012919/56816843550346895dde188a/html5/thumbnails/19.jpg)
What is Feasible?What about if we remove the time constraint?
What if we let the unallocated IPv4 address pool run out while we still remain critically dependant on IPv4 in the Internet?
Does adding the factor of a fully depleted IPv4 address pool make this transition harder or does it provide additional incentive for industry players?
![Page 20: An Economic Perspective on the Transition to IPv6](https://reader030.fdocuments.in/reader030/viewer/2022012919/56816843550346895dde188a/html5/thumbnails/20.jpg)
Added Impetus?
Will the potential pressure from IPv4 address exhaustion provide sufficient pressure for transition?
Or will we need to encounter the reality of a fully depleted environment and take on the additional risk of added elements of supply disruption into the transition scenario?
![Page 21: An Economic Perspective on the Transition to IPv6](https://reader030.fdocuments.in/reader030/viewer/2022012919/56816843550346895dde188a/html5/thumbnails/21.jpg)
Risk Factors
Investors tend towards current risk aversion:– will chose a lower risk alternative when presented
with otherwise equivalent choices– willing to accept a lower return with a higher
degree of certainty– willing to defer choosing a high risk strategy even
if deferral implies higher total cost
![Page 22: An Economic Perspective on the Transition to IPv6](https://reader030.fdocuments.in/reader030/viewer/2022012919/56816843550346895dde188a/html5/thumbnails/22.jpg)
The IPv6 Transition PlanWhat Happened?
IPv6 Deployment
Time
IPv6 Transition – Dual Stack
IPv4 Pool Size
Size of the Internet
This is a case of Risk Deferral!
![Page 23: An Economic Perspective on the Transition to IPv6](https://reader030.fdocuments.in/reader030/viewer/2022012919/56816843550346895dde188a/html5/thumbnails/23.jpg)
Lessons from the Past
If this transition to IPv6 is proving challenging, then how did we ever get the IPv4 Internet up and running in the first place?
![Page 24: An Economic Perspective on the Transition to IPv6](https://reader030.fdocuments.in/reader030/viewer/2022012919/56816843550346895dde188a/html5/thumbnails/24.jpg)
IPv4 Deployment Lessons
Technology: packet switching vs circuit switching– lower network costs though pushing of
functionality and cost to end systems exposed a new demand schedule for communications services
![Page 25: An Economic Perspective on the Transition to IPv6](https://reader030.fdocuments.in/reader030/viewer/2022012919/56816843550346895dde188a/html5/thumbnails/25.jpg)
The Demand Schedule
Quantity
Pric
e
![Page 26: An Economic Perspective on the Transition to IPv6](https://reader030.fdocuments.in/reader030/viewer/2022012919/56816843550346895dde188a/html5/thumbnails/26.jpg)
The Demand Schedule: Consumers
Quantity
Pric
e demand(Circuits)
![Page 27: An Economic Perspective on the Transition to IPv6](https://reader030.fdocuments.in/reader030/viewer/2022012919/56816843550346895dde188a/html5/thumbnails/27.jpg)
The Demand Schedule: Producers
Quantity
Pric
esupply(Circuits)
![Page 28: An Economic Perspective on the Transition to IPv6](https://reader030.fdocuments.in/reader030/viewer/2022012919/56816843550346895dde188a/html5/thumbnails/28.jpg)
The Demand Schedule:Equilibrium Point
Quantity
Pric
e
q(Circuits)
p(Circuits)
s(C)d(C)
Market equilibrium point of supply and demand
![Page 29: An Economic Perspective on the Transition to IPv6](https://reader030.fdocuments.in/reader030/viewer/2022012919/56816843550346895dde188a/html5/thumbnails/29.jpg)
Circuits to Packets: The Demand Schedule Shift
Quantity
Pric
e
q(Circuits)
p(Circuits)
reduced cost of supply
s(IP)
s(C)d(C)
![Page 30: An Economic Perspective on the Transition to IPv6](https://reader030.fdocuments.in/reader030/viewer/2022012919/56816843550346895dde188a/html5/thumbnails/30.jpg)
Circuits to Packets: The Demand Schedule Shift
Quantity
Pric
e
q(Circuits)
p(Circuits)
s(C)
d(IP)d(C)
increased perception of value
![Page 31: An Economic Perspective on the Transition to IPv6](https://reader030.fdocuments.in/reader030/viewer/2022012919/56816843550346895dde188a/html5/thumbnails/31.jpg)
Circuits to Packets: The Demand Schedule Shift
Quantity
Pric
e
q(Circuits) q(IP)
p(IP)
p(Circuits)
reduced cost ofsupply, and increasedperception of value,resulting in a newequilibrium point withhigher quantity andlower unit price
s(IP)
s(C)
d(IP)d(C)
![Page 32: An Economic Perspective on the Transition to IPv6](https://reader030.fdocuments.in/reader030/viewer/2022012919/56816843550346895dde188a/html5/thumbnails/32.jpg)
IPv4 Deployment Lessons
Technology: packet switching vs circuit switching– lower network costs though pushing of functionality
and cost to end systems exposed a new demand schedule for communications services
i.e. packet switching was far cheaper than circuit switching. This drop in cost exposed new market opportunities for emergent ISPs
![Page 33: An Economic Perspective on the Transition to IPv6](https://reader030.fdocuments.in/reader030/viewer/2022012919/56816843550346895dde188a/html5/thumbnails/33.jpg)
IPv4 DeploymentBusiness: exposed new market opportunity in a market that was
actively shedding many regulatory constraints– exposed new market opportunities via arbitrage of circuits
• buy a circuit, resell it as packets– presence of agile high-risk entrepreneur capital willing to exploit short
term market opportunities exposed through this form of arbitrage– volume-based suppliers initially unable to redeploy capital and
process to meet new demand• unable to cannibalize existing markets• unwilling to make high risk investments
![Page 34: An Economic Perspective on the Transition to IPv6](https://reader030.fdocuments.in/reader030/viewer/2022012919/56816843550346895dde188a/html5/thumbnails/34.jpg)
The Internet has often been portrayed as the “poster child” for deregulation in the telecommunications sector in the 1990’s.
The rapid proliferation of new services, the creation of new markets, and the intense level of competition in every aspect of the Internet is seen as a successful outcome of this policy of deliberate disengagement by the regulator.
![Page 35: An Economic Perspective on the Transition to IPv6](https://reader030.fdocuments.in/reader030/viewer/2022012919/56816843550346895dde188a/html5/thumbnails/35.jpg)
But is this still true today?
![Page 36: An Economic Perspective on the Transition to IPv6](https://reader030.fdocuments.in/reader030/viewer/2022012919/56816843550346895dde188a/html5/thumbnails/36.jpg)
Do we still see intense competition in this industry? Is there still strong impetus for innovation and entrepreneurial enterprise? Will this propel the transition to IPv6?
![Page 37: An Economic Perspective on the Transition to IPv6](https://reader030.fdocuments.in/reader030/viewer/2022012919/56816843550346895dde188a/html5/thumbnails/37.jpg)
Do we still see intense competition in this industry? Is there still strong impetus for innovation and entrepreneurial enterprise? Will this propel the transition to IPv6?
Or is this industry lapsing back into a mode of local monopolies, vertical bundling and strong resistance to further change and innovation?
![Page 38: An Economic Perspective on the Transition to IPv6](https://reader030.fdocuments.in/reader030/viewer/2022012919/56816843550346895dde188a/html5/thumbnails/38.jpg)
How “Balanced” is this industry?
A diverse connectionof large and small
ISP enterprisesA small number of verylarge enterprises and
some very smallindependent players left hanging on for the ride
OR
![Page 39: An Economic Perspective on the Transition to IPv6](https://reader030.fdocuments.in/reader030/viewer/2022012919/56816843550346895dde188a/html5/thumbnails/39.jpg)
What can IPv4 address allocation data tell us about this industry?
![Page 40: An Economic Perspective on the Transition to IPv6](https://reader030.fdocuments.in/reader030/viewer/2022012919/56816843550346895dde188a/html5/thumbnails/40.jpg)
How “Big” is this Industry?
The Internet’s major growth has happened AFTER the Intenet“boom” of 1999 to 2001
200 millionnew servicesper year
![Page 41: An Economic Perspective on the Transition to IPv6](https://reader030.fdocuments.in/reader030/viewer/2022012919/56816843550346895dde188a/html5/thumbnails/41.jpg)
Who got all those addresses in 2009?Rank Company IPv4 addresses (M)1 CN China Mobile Communications Corporation 8.39
2 US AT&T Internet Services 6.82
3 CN China TieTong Telecommunications Corporation 4.19
4 CN Chinanet Guandong Province Network 4.19
5 KR Korea Telecom 4.19
6 CN North Star Information Hi.tech Ltd. Co. 4.19
7 JP NTT Communications Corporation 4.19
8 US Verizon Internet Services Inc. 3.78
9 US Sprint Wireless 3.54
10 CN China Unicom Shandong Province Network 2.10
11 CN Chinanet Jiangsu Province Network 2.10
12 CN Chinanet Zhejiang Province Network 2.10
13 FR LDCOM Networks (France) 2.10
14 IT Telecom Italia 2.10
15 US Comcast 1.90
![Page 42: An Economic Perspective on the Transition to IPv6](https://reader030.fdocuments.in/reader030/viewer/2022012919/56816843550346895dde188a/html5/thumbnails/42.jpg)
Who got all those addresses in 2009?Rank Company IPv4 addresses (M)1 CN China Mobile Communications Corporation 8.39
2 US AT&T Internet Services 6.82
3 CN China TieTong Telecommunications Corporation 4.19
4 CN Chinanet Guandong Province Network 4.19
5 KR Korea Telecom 4.19
6 CN North Star Information Hi.tech Ltd. Co. 4.19
7 JP NTT Communications Corporation 4.19
8 US Verizon Internet Services Inc. 3.78
9 US Sprint Wireless 3.54
10 CN China Unicom Shandong Province Network 2.10
11 CN Chinanet Jiangsu Province Network 2.10
12 CN Chinanet Zhejiang Province Network 2.10
13 FR LDCOM Networks (France) 2.10
14 IT Telecom Italia 2.10
15 US Comcast 1.90
25% of all the IPv4 addresses allocated in
2009 went to just 15 ISP enterprises
![Page 43: An Economic Perspective on the Transition to IPv6](https://reader030.fdocuments.in/reader030/viewer/2022012919/56816843550346895dde188a/html5/thumbnails/43.jpg)
How “Balanced” is this Industry?
![Page 44: An Economic Perspective on the Transition to IPv6](https://reader030.fdocuments.in/reader030/viewer/2022012919/56816843550346895dde188a/html5/thumbnails/44.jpg)
How “Balanced” is this Industry?
Massive consolidation in this industry appears to have been in place since 2005
![Page 45: An Economic Perspective on the Transition to IPv6](https://reader030.fdocuments.in/reader030/viewer/2022012919/56816843550346895dde188a/html5/thumbnails/45.jpg)
How “Balanced” is this industry?
A small number of verylarge enterprises and
some very smallindependent players lefthanging on for the ride
![Page 46: An Economic Perspective on the Transition to IPv6](https://reader030.fdocuments.in/reader030/viewer/2022012919/56816843550346895dde188a/html5/thumbnails/46.jpg)
IPv4 Deployment Then
Time
Size
of t
he In
tern
et
~1990 ~2000
High Volume Provider Industry(Telco Sector)
Small ISP(Entrepreneur Sector)
~1995
![Page 47: An Economic Perspective on the Transition to IPv6](https://reader030.fdocuments.in/reader030/viewer/2022012919/56816843550346895dde188a/html5/thumbnails/47.jpg)
IPv4 DeploymentBusiness: exposed new market opportunity in a market that
was actively shedding many regulatory constraints– exposed new market opportunities via arbitrage of circuits
• buy a circuit, resell it as packets– presence of agile high-risk entrepreneur capital willing to exploit
short term market opportunities exposed through this form of arbitrage
– volume-based suppliers initially unable to redeploy capital and process to meet new demand
• unable to cannibalize existing markets• unwilling to make high risk investments
• the maturing market represented an opportunity for large scale investment that could operate on even lower cost bases through economies of scale
![Page 48: An Economic Perspective on the Transition to IPv6](https://reader030.fdocuments.in/reader030/viewer/2022012919/56816843550346895dde188a/html5/thumbnails/48.jpg)
IPv4 Deployment Now
Time
Size
of t
he In
tern
et
High Volume Provider Industry(Telco Sector)
Small ISP(Entrepreneur Sector)
~1990 ~2005
![Page 49: An Economic Perspective on the Transition to IPv6](https://reader030.fdocuments.in/reader030/viewer/2022012919/56816843550346895dde188a/html5/thumbnails/49.jpg)
Back to IPv6 Transition…
![Page 50: An Economic Perspective on the Transition to IPv6](https://reader030.fdocuments.in/reader030/viewer/2022012919/56816843550346895dde188a/html5/thumbnails/50.jpg)
What about IPv6 Transition?
Will the same technology, cost and regulatory factors that drove the deployment of the IPv4 Internet also drive this industry through the transition from IPv4 to IPv6?
![Page 51: An Economic Perspective on the Transition to IPv6](https://reader030.fdocuments.in/reader030/viewer/2022012919/56816843550346895dde188a/html5/thumbnails/51.jpg)
IPv6 vs IPv4
Are there competitive differentiators?✗ cost4 = cost6
✗ functionality4 = functionality6
no inherent consumer-visible differenceno visible consumer demandno visible competitive differentiators other than future risk
![Page 52: An Economic Perspective on the Transition to IPv6](https://reader030.fdocuments.in/reader030/viewer/2022012919/56816843550346895dde188a/html5/thumbnails/52.jpg)
IPv4 to Dual Stack:The Demand Schedule Shift
Quantity
Pric
e
QV4
PV4
SV4
DV4
QDualStack
![Page 53: An Economic Perspective on the Transition to IPv6](https://reader030.fdocuments.in/reader030/viewer/2022012919/56816843550346895dde188a/html5/thumbnails/53.jpg)
IPv4 to Dual Stack:The Demand Schedule Shift
Quantity
Pric
e
QV4
PV4
SV4
SDualStack
DV4
Supply side cost increase due to Dual Stack operation
![Page 54: An Economic Perspective on the Transition to IPv6](https://reader030.fdocuments.in/reader030/viewer/2022012919/56816843550346895dde188a/html5/thumbnails/54.jpg)
IPv4 to Dual Stack:The Demand Schedule Shift
Quantity
Pric
e
QV4
PV4
SV4
SDualStackSupply side cost increase due to Dual Stack operation
No change in perception of value, so demand schedule is unaltered
DV4 / DualStack
![Page 55: An Economic Perspective on the Transition to IPv6](https://reader030.fdocuments.in/reader030/viewer/2022012919/56816843550346895dde188a/html5/thumbnails/55.jpg)
IPv4 to Dual Stack:The Demand Schedule Shift
Quantity
Pric
e
QV4
PV4
SV4
SDualStack
DV4 / DualStack
PDualStack
QDualStack
Supply side cost increase due to Dual Stack operation
No change in perception of value, so demand schedule is unaltered
Equilibrium point is at a lower quantity if Dual Stack supply costs
are passed on to customers
![Page 56: An Economic Perspective on the Transition to IPv6](https://reader030.fdocuments.in/reader030/viewer/2022012919/56816843550346895dde188a/html5/thumbnails/56.jpg)
“Market Failure”
Wikinomics:“In economics, a market failure exists when the production or use of goods and services by the market is not efficient. That is, there exists another outcome where market participants' overall gains from the new outcome outweigh their losses (even if some participants lose under the new arrangement). Market failures can be viewed as scenarios where individuals' pursuit of pure self-interest leads to results that are not efficient – that can be improved upon from the societal point-of-view. The first known use of the term by economists was in 1958, but the concept has been traced back to the Victorian philosopher Henry Sidgwick.”
http://en.wikipedia.org/wiki/Market_failure
![Page 57: An Economic Perspective on the Transition to IPv6](https://reader030.fdocuments.in/reader030/viewer/2022012919/56816843550346895dde188a/html5/thumbnails/57.jpg)
The Transition to IPv6
Alternatively, is this transition an instance of a market failure?
Individual self-interest leads to inefficient supply outcomes, as self-interest does not lead the installed based of consumers and suppliers to underwrite the cost of dual stack operation within the transition
![Page 58: An Economic Perspective on the Transition to IPv6](https://reader030.fdocuments.in/reader030/viewer/2022012919/56816843550346895dde188a/html5/thumbnails/58.jpg)
IPv6 Transition as a Public Good?Is the transition to IPv6 is non-excludable and non-rivalrous? In which case this transition issue parallels that of a public good
With an implication that conventional market dynamics in a deregulated environment will not lead to this transition being undertakenAnd a corollary that if this transition is considered to be necessary or essential then some form of public good solution needs to be considered
![Page 59: An Economic Perspective on the Transition to IPv6](https://reader030.fdocuments.in/reader030/viewer/2022012919/56816843550346895dde188a/html5/thumbnails/59.jpg)
Public Good “solutions”
There are a number of conventional approaches to the distribution of a public good:– Assurance contracts– Coasian solutions– Government enterprise provisioning– Tariffs– Subsidies– Taxation remedies– Regulatory impost
![Page 60: An Economic Perspective on the Transition to IPv6](https://reader030.fdocuments.in/reader030/viewer/2022012919/56816843550346895dde188a/html5/thumbnails/60.jpg)
Regulatory Impost
• A regulatory constraint is placed on the ISP carrier licence holders that IPv6 services are to be provided by a given deadline – as has happened with digital television in many
regulatory regimes. • This regulatory constraint acts a form of a
assurance contract, where all providers are in effect bound to produce a particular solution
![Page 61: An Economic Perspective on the Transition to IPv6](https://reader030.fdocuments.in/reader030/viewer/2022012919/56816843550346895dde188a/html5/thumbnails/61.jpg)
Government Purchase Contracts• Where the public sector collectively require the provision in
IPv6 in all their service contracts. • This is a form of a coasian solution where a group of potential
beneficiaries pool together their willingness to pay for the public good. – We have seen this approach in the past with the Government OSI
Profiles (GOSIP) of the late 1980's when the approach proved ineffectual.
– There is no assurance that such collective actions on the part of the public sector have sufficient mass and momentum to create a broader sustainable market that will impel the private sector to undertake the transition.
![Page 62: An Economic Perspective on the Transition to IPv6](https://reader030.fdocuments.in/reader030/viewer/2022012919/56816843550346895dde188a/html5/thumbnails/62.jpg)
Subsidies and Incentives• Where the production of the good is subsidised in some
fashion by public funds– This can be in the form of direct payments to service providers, or in
the form of vouchers to consumers which can be redeemed only in exchange for the supply of a specified service.
• Related incentive measures include the use of taxation incentives related to infrastructure investment, where the investment in a certain class of infrastructure or in a certain sector can be provided with advantaged taxation treatment.
![Page 63: An Economic Perspective on the Transition to IPv6](https://reader030.fdocuments.in/reader030/viewer/2022012919/56816843550346895dde188a/html5/thumbnails/63.jpg)
Public Provision• Where the service is provided by a publically-owned
enterprise.• The funding for such an enterprise can be provided by
government-backed investment bonds, or directly from public revenues, and operating losses are underwritten by the public purse. – This measure was used for most national telephone service providers
for a significant part of the twentieth century, so it is not exactly a completely foreign concept for this industry.
![Page 64: An Economic Perspective on the Transition to IPv6](https://reader030.fdocuments.in/reader030/viewer/2022012919/56816843550346895dde188a/html5/thumbnails/64.jpg)
Post-Exhaustion:Adding CGNs to IPv4
Quantity
Pric
e
QV4
PV4
SV4
SCGNsSupply side cost increase due to Dual Stack operation
CGNs reduce functionality andimpair the performance of some applications
DV4
DCGNs
PCGNs
QCGNs
CGNs represent higher cost and lower value for customers
![Page 65: An Economic Perspective on the Transition to IPv6](https://reader030.fdocuments.in/reader030/viewer/2022012919/56816843550346895dde188a/html5/thumbnails/65.jpg)
IPv4/CGNs + Dual StackThe Demand Schedule Shift over Time
Quantity
Pric
e
QV4
SV4
SCGNs
DV4
DCGNs
QCGNs
As NAT compression becomes more intense the IPv4 CGN approach become decreasingly viable
IPv4CGN
![Page 66: An Economic Perspective on the Transition to IPv6](https://reader030.fdocuments.in/reader030/viewer/2022012919/56816843550346895dde188a/html5/thumbnails/66.jpg)
What is Happening Here?• Given that Dual Stack requires IPv4, and IPv4 is the critically
scarce good here, are we wedging ourselves?
• Are there alternate directions for this industry that represent lower risk and/or increased opportunities for the larger class of actors?
• What factors will determine the common direction of providers and consumers?
• Is IPv6 a stable point of relative compromise between individual aspirations?
![Page 67: An Economic Perspective on the Transition to IPv6](https://reader030.fdocuments.in/reader030/viewer/2022012919/56816843550346895dde188a/html5/thumbnails/67.jpg)
Your Thoughts?
![Page 68: An Economic Perspective on the Transition to IPv6](https://reader030.fdocuments.in/reader030/viewer/2022012919/56816843550346895dde188a/html5/thumbnails/68.jpg)
Thank You