Got unused IPv4 addresses? You could cash in on them soon.

Internet registries plan an aftermarket for unused IPv4 address space

Hang onto that IPv4 address space you’re not using; it might become valuable soon.

The organization that handles North American Internet registries is planning for a sort of yard sale in which unused and slightly used addresses could play the part of old baseball cards that are suddenly in demand. No, there probably aren’t any Willie Mays rookie cards in there – they’re just addresses, after all – but they’ll likely be worth something.

As the pool of unallocated IPv4 addresses dries up, an aftermarket for the space is expected to develop among organization that want to continue using IPv4 addresses, even if they have to pay for them.

“We don’t expect that to heat up for another six months or so, because we still have IPv4 address space,” said John Curran, president and CEO of the American Registry for Internet Numbers, which handles the distribution of Internet addresses to organizations in the North American region.

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But ARIN and the other Regional Internet Registries (RIRs) are making plans for an aftermarket for the addresses, to enable organizations with sizable amounts of unused address space to transfer it — at a price, if they wish — to other organizations.

You won’t have to feel guilty about buying up some slightly used addresses.

“It’s not a black market,” Curran said. “It’s a legitimate market,” and North American buyers will have to meet ARIN requirements for receiving addresses. It is unlikely any kind of black market could develop because the IPv4 addresses are not physical property; they exist only as entries in registry databases. “If they don’t conform to policy, ARIN can’t update the directories.”

But the aftermarket is only a stopgap measure to help ease the transition from the dwindling pool of IPv4 addresses to the new, almost unlimited supply of IPv6 addresses. Curran said the market could last for years, but he expects it to “drop off very quickly” once the old addresses become scarce and it becomes more cost-effective to transition to the next generation of the Internet Protocols.

IP addresses are the numerical designations that identify end points under the Internet Protocols, the set of rules that govern how computers communicate to form the Internet. The rapid growth of the Internet over the past 20 years has used up most of the addresses specified under the current version of the protocols, IPv4. The Internet Assigned Numbers Authority last month allocated the last unused blocks of address space to the regional registries, which now are in the process of doling them out to service providers and other large organizations.

Version 6 of the protocols is being enabled on the Internet, and a much larger pool of IPv6 addresses is available. But because most of the Internet now is running more or less smoothly on IPv4, it is expected that many organizations will want to get all the use they can out of that generation of addresses.

There is believed to be a lot of unused address space out there, in part because distribution was not very efficient, especially in the early days of the Internet, Currant said. The original allocations were made in three classes. The smallest contained 256 addresses. If you needed more than that, you had to take about 65,000 addresses. The next jump up was up to about 16 million addresses. That changed in the early 1990s to allow distribution of address blocks in multiples of 256.

ARIN has always had a policy to allow the return of unused addresses. “We have had addresses that have been returned to us by the Department of Defense,” and other organizations, including Stanford University and BBN Technologies, which helped to develop packet switching. “That’s the only reason the address pool lasted as long as it did.”

In addition to the return of unused addresses, ARIN also has developed a policy for the specified transfer of addresses from one party to another. Recipients must conform to ARIN policies for receiving addresses, which includes demonstrating a need for them and limiting them to one year’s supply at a time. The holders of the address are free to charge for them if they want to, Curran said. “ARIN is not a party to that,” he said. “That’s between you and the recipient.”

But it can be a facilitator. ARIN last year set up a listing service for organizations that have made approved requests for address space and for those that might be able to make addresses available for transfer. Brokers could also appear to bring parties together.

To date, this aftermarket has been used very little because there has been no demand for it. Until February, regional registries were handing out a year’s worth of addresses at a time. But since the last allocation of IPv4 addresses by IANA, ARIN now is doling out only three months’ worth at a time. So it has been only in the last month that organizations needed addresses have started feeling a pinch.

Organizations holding unused addresses can charge to transfer them, because it is not necessarily free to give them away. Addressing schemes often distribute addresses sparsely, as blocks are assigned across an organization and only a few addresses are used from each block. This means that available addresses are in small bunches that would complicate routing tables if reassigned, so that an organization could have to re-architect its addressing scheme in order to consolidate the unused addresses in usable blocks.

Other organizations might be willing to pay for recycled IPv4 addresses rather than get free IPv6 addresses from RIRs because they want to extend the life of their IPv4 investment as far as possible and to buy time for enabling IPv6 in their networks.

Each of the five RIRs has its own policies for transferring unused addresses, but in general they follow the ARIN policy of requiring that transfer recipients meet registry requirements for receiving addresses. Policies are being developed for inter-registry transfers, Curran said.

The amount of IPv6 traffic on the Internet has been minuscule to date, but it is slowly growing, and future growth is expected to increasingly be in the IPv6 space as more addresses are assigned and infrastructure is enabled to use the new protocols.

Because the two protocols are not interoperable, both versions will have to be enabled on the existing Internet infrastructure for the foreseeable future to allow all users to have access to online resources. In September, the Office of Management and Budget directed civilian agencies to upgrade public-facing servers and services to handle IPv6 traffic by the end of fiscal 2012. Internal IP applications and systems must be upgraded by the end of fiscal 2014.

At some point in the not-too-distant future, it will become more cost-effective for most users to acquire and use free IPv6 addresses than to buy legacy addresses, and the bottom will quickly fall out of the IPv4 aftermarket, Curran said.


About the Author

William Jackson is a Maryland-based freelance writer.


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