The hidden standards war: economic factors affecting IPv6 deployment

Abstract

Purpose The data communications protocol supporting the internet protocol version 4 (IPv4) is almost 40 years old, and its 32-bit address space is too small for the internet. A “next-generation” internet protocol version 6 (IPv6), has a much larger, 128-bit address space. However, IPv6 is not backward compatible with the existing internet. For 20 years, the internet technical community has attempted to migrate the entire internet to the new standard. This study aims to address important but overlooked questions about the internet’s technical evolution: will the world converge on IPv6? Will IPv6 die out? or will we live in a mixed world for the foreseeable future? Design/methodology/approach The research offers an economically-grounded study of IPv6’s progress and prospects. Many promoters of IPv6 sincerely believe that the new standard must succeed if the internet is to grow, and assume that the transition is inevitable because of the presumed depletion of the IPv4 address resources. However, by examining the associated network effects, developing the economic parameters for transition, and modeling the underlying economic forces, which impact network operator decisions, the study paints a more complex, nuanced picture. Findings The report concludes that legacy IPv4 will coexist with IPv6 indefinitely. IPv6 is unlikely to become an orphan. For some network operators that need to grow, particularly mobile networks where the software and hardware ecosystem is mostly converted, IPv6 deployment can make economic sense. However, the lack of backward compatibility with non-deployers eliminates many network effects that would create pressure to convert to IPv6. A variety of conversion technologies, and more efficient use of IPv4 addresses using network address translation, will support a “mixed world” of the two standards for the foreseeable future. Originality/value The authors’ conceptualization and observations provide a clearer understanding of the economic factors affecting the transition to IPv6.

The economics of standards: A literature review

“…The research on standards and network effects has focused more on the information and high‐tech industries. Compatibility, technology locking, and standard competition are hot topics, including studies on standards and network effects (Swann, 2010; Uotila et al., 2017), and digital and information standards (Hänninen et al., 2021; Kuerbis & Mueller, 2020). With the acceleration of digitization, the effects of global standards and local standards on innovation are palpable and complex.…”

The Making of International Communication Standards: Towards a Theory of Power in Standardization

“…Even an industry-wide agreement on a particular standard does by no means guarantee its quick adoption, as seen with the slow uptake of IPv6 despite industry-wide consensus (DeNardis 2009; Dourish 2018). Ironically, agreement on adoption can lead to market inertia because no one wants to bear the burden of the costs of the first adopter (Kuerbis and Mueller 2020). This leads to what Meek observed already in 1993: 'there are both too many standards and too few ' (1993, 35).…”