[address-policy-wg] On "commons" and "common pool resources" [ was "In favor of 2012-01"]

On Apr 11, 2012, at 4:04 PM, Milton L Mueller wrote:

>> this is exactly the problem. this implies that the ip space is an asset of the
>> seller, which it is not. it is a commons, and if it is sparse, as any one has the
>> same right to it, it is to be redistributed according to need, fair and equally.
> 
> The IP address space is not and never has been a commons. Not for those of us who actually understand the vocabulary of resource economics and know what the term "commons" means.
> For IP addresses to be a "commons" they all would have to be available for use for anyone at any time; i.e., there would have to be no exclusive occupation of it. And of course that doesn't work technically, does it? IP address blocks have to be uniquely and exclusively assigned to specific users to function on the internet. Which means the address pool is not a commons - end of story.

Hi Milton, 

I appreciate that you're trying to educate the address policy community about an field of academic inquiry that some members may not be familiar with, but in your haste to scold I think you may have added more to confusion than clarity. If the goal was to inform, it probably would have made more sense to start out by highlighting the fact that Chris' claim was perfectly sensible with respect to "common pool resources" even if it might be somewhat inapt when describing the abstract class "commons" -- instead of just obliquely acknowledging that fact later, as you do below. 

Regardless, as Elinor Ostron said in her Annual IEA Hayek Memorial Lecture two weeks ago, there are many different kinds of "commons," just as there are many different kinds of markets and "command and control" mechanisms. 

> Because IP addresses are exclusively assigned, they can be governed either as common pool resources (in which a governance agency establishes rules regulating the extraction of resource units from a free pool) or as tradeable property (in which holders allocate the resources by making trades among themselves) or some combination of both. All that matters is which method is more efficient and produces more benefits for Internet users. 

For those who would like to learn more about the analytical framework that Milton is using here, I would recommend his very interesting 2007 paper, "Property and Commons in Internet Governance." [http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1828102] 

FWIW, I think that this claim about governance alternatives is perfectly reasonable -- at least for the kind of discrete, self-contained, non-interactive common pool resources that scholars like Garret Hardin and Elinor Ostrum have written about so extensively -- e.g., grazing lands, forests, fisheries, and other things that are composed of divisible elements which, once fractional portions have been separated and possessed by individual private parties, both cease to be dependent for 100% of their value on all of the other fractional elements of that original common pool, and also cease to represent a potential threat to the value of all of the fractional portions that are held by *other* private parties. 

However, when it comes to the kind of "intrinsically interactive" or "network-dependent" common pool resources that *do* continue to be sensitively dependent, for better or worse, on their "sibling" resources even *after* they have been withdrawn from the common pool and are privately controlled (or "owned"), there really is no clear alternative. Granted, common pool resources of this particular type are rare, but IP addresses are not the first or the only resource of this kind. The common pool resource that we typically call "money," and in particular the ability of private parties to unilaterally impact that pool by creating or withdrawing "credit" is another. History has clearly demonstrated that treating common pool resources of this rather unusual kind as if they were a uncoordinated, freely tradable resource is not a very good idea; every past effort to replace coordination mechanisms for this kind of resource with pure voluntary market mechanisms has ended in failure, not infrequently accompanied by widespread immiseration.

> Leave your religious beliefs behind.


Yellow card. Do we really want to go down this path again Milton? May I suggest that you henceforth dispense with the old ideological warfare rhetoric, so that I don't have to help clarify the context? 


> But after IPv4 exhaustion, common pool governance of v4 space breaks down completely and the best way to ensure efficient utilization of remaining v4 resources is to allow market-based transfers.

The first claim is speculative, and the second is just argument by assertion. 

> These transfers should be made as flexible and easy as possible. There is probably no need for holding periods, although they don't seem to do a lot of harm as long as they are 1 year or less. Needs assessment is increasingly arbitrary and pointless in such an environment. I know needs-basis is another item of religious faith in some circles,

Second yellow card.

> but the idea that RIR staff can accurately assess "need" given inherent uncertainty about time horizons and technical development, is just wrong. Organizations should be allowed to buy as much of an asset as they think they need, and can afford, in order to advance their business interests. Let the price system sort out who really needs what.

While the price system is perhaps the best possible mechanism for allocating almost everything (other than network-dependent common pool resources), under certain circumstances it seems to work quite badly. Markets work great when they look like neutral auctions, where every bidder knows exactly what they're bidding for, all buyers and sellers have access to the same information about past and present prices, and no single party or group has enough market power to distort aggregate prices. That said, in markets where pricing information is never publicly disclosed and thus never available to anyone even in average/aggregate form, it's not even clear to me that talking about the "price mechanism"  -- much less praising it as infallible -- makes sense. And matters are even worse in cases where the market that's hidden within such a "cloud of pricing unknowability" is dedicated to the trading of functional resources whose future function/value will continue to be sensitive to the future choices and non-trading behavior of the original seller (as well as every other potential sell-side market participant). Many of us are still suffering in one way or another from the damage caused by the implosion of the last market like this (i.e., for CDOs, CDSes, and other "interactive" synthetic financial instruments) -- do we really want to see our industry follow that path?

FWIW, If there is a consensus that some kind of voluntary resource redistribution mechanism(s) are needed, and that they should provide the means to move resources between parties that are associated with different registries, then I believe that there may be a great deal to be learned from past academic research on resource economics, and from scholars like Milton, and Elinor Ostrom, and many others. IMO it would be prudent to consider a broad range perspectives on how different kinds of common pool resources respond to different kinds of governance regime modifications before contemplating any policy changes that may be difficult or impossible to reconsider after the fact.

Speaking for myself alone,

TV