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Re: "It's the end of the world as we know it" -- REM
From: Chris Grundemann <cgrundemann () gmail com>
Date: Fri, 26 Apr 2013 10:23:41 -0400

On Fri, Apr 26, 2013 at 3:12 AM, Geoff Huston <gih () apnic net> wrote:

On 26/04/2013, at 4:27 PM, joel jaeggli <joelja () bogus com> wrote:


I also find it a bit strange that the runout in APNIC and RIPE was very different. APNIC address allocation rate 
accelerated at the end, whereas RIPE exhaustion date kept creeping forward in time instead of closer in time, 
giving me the impression that there wasn't any panic there.

apnic allocation reserved  the final /8 for /22 maximal allocations. Couple that with some qualifying very large 
assignments towards the end of stage two e.g between feb 1 and april 14 2011 7 provider assignments combined soaked 
up more than 2 /8s and you get rapid runout towards the endgame.



APNIC used a 12 month allocation window right up to the point of exhaustion, while RIPE was operating on a 3 month 
window, as is ARIN. That may be a contributing factor in explaining the differences in behaviour in the final months 
/ weeks.

But its not just that.

Other factors include large developing countries with massive DSL deployments underway (China, India) mean that in 
the APNIC region we were not looking at a wired infrastructure market sector that was already saturated. Quite the 
opposite. Similarly the wireless market in Asia was / is expanding rapidly for much the same reason (wireless is 
cheaper to deploy than wired if you have absolutely no pre-installed wireless infrastructure). i.e. the unmet demand 
overhang as compared to the available address pools was massive in Asia. Now that does not imply that Europe and the 
Middle East has no demand overhang, but perhaps not on the same scale as was experienced by APNIC in early 2011.

Also in September last year the European financial situation was still impacting on the problems of the service 
industry (and still is in many countries). So the underlying capital-driven demand factors were different between 
Europe and Asia. Perhaps it was more challenging for European entities to demonstrate an expansion of their Internet 
service infrastructure over rolling 3 months windows due to a slow down in consumer demand in parts of Europe.

What factors will play out in the North American market? It might be interesting to look at address allocations by 
country by year. One such table of the top 10 countries in terms of IPv4 allocations since 2007 is at 
http://www.potaroo.net/ispcol/2013-01/2012.html, table 3.The peak US year was 2007 with 48M addresses. in 2011 ARIN 
introduced the 3 month allocation window, and allocating that year halved from the previous year. Last year they were 
a little higher at 28M addresses. What drove last year's numbers in ARIN was a total of 16M addresses allocated to 
Canadian entities. So to what extent is this a saturated market already in terms of the deployment of service 
infrastructure? To what extent are new devices simply replacing old, and to what extent are the dynamics of the 
market in that region driven by provider churn as distinct from greenfields expansion? Obviously the answers to such 
questions have a strong impact on the underlying model of overall demand for more addresses in the region.

One interesting twist in all of this is that several of these new
"slow-start" players in the ARIN region seem to be servicing customers
outside of the region with equipment and services hosted here inside
the ARIN region (see slide 12 on the ARIN 31 "Policy Implementation
and Experience Report"
https://www.arin.net/participate/meetings/reports/ARIN_31/PDF/monday/nobile_policy.pdf).
This fact may negate the market saturation affect completely.

Cheers,
~Chris

And of course one of the hardest factors of all: Panic is extremely difficult to model. Most forms of predictive 
modelling reach back in time and then use that date to push forward. but panic is of course different. It does not 
drive off past behaviour but feeds off itself. The APNIC runout was exceptionally hard to model at the time because 
the incidence of large allocations rose very quickly in March. Yes, I'd ascribe that to panic. That reaction was not 
so evident in RIPE in August / September last year. So it appears that panic, or the level of panic, is not a 
constant factor. Different regions at different times appear to elicit different responses to impending exhaustion.


Geoff


--
@ChrisGrundemann
http://chrisgrundemann.com


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