Thread: Can an IPv4 stock market stave off address depletion, IPv6?

There are many uncertainties surrounding the depletion of the IPv4 address space and the move to IPv6. Currently, five Regional Internet Registries give out address space to anyone who can show a reasonable need for it and pays some administration costs. If nothing changes, that practice will end around 2012 when we run out of unused IPv4 addresses. One possible solution is creating an IP address space market, allowing people who need IPv4 addresses can buy them from those who have a surplus, so that IPv4 address space remains available for a few more years.

Ideally, by the time we run out of IPv4 addresses, we'll all be using IPv6. At the rate IPv6 takeup is happening now, however, a full-scale switch to IPv6 seems highly unlikely. After the IPv4 address space has been depleted, new Internet users will only be able to get IPv6 address space, while existing users are still only connected through IPv4.

Network World has an article speculating about additional delays in rolling out IPv6 if a proposed IPv4 address trading policy is adopted by ARIN. The American Registry for Internet Numbers is responsible for giving out IP addresses in North America. Its policies "are developed in an open and transparent manner by the Internet community," according to the Internet Resource Policy Evaluation Process. An important aspect of that process is that anyone can submit a policy proposal, so the mere existence of a proposal doesn't mean all that much.

The issue of address trading comes up more frequently as we come closer to running out of IPv4 address space. Efforts to reclaim some of the large IPv4 address blocks that have been given out as "legacy assignments" long ago haven't proven all that successful. According to an ICANN blog entry, four blocks of 16.78 million addresses were reclaimed last year: blocks 14, 46, 49, and 50. In reality it was only one: blocks 49 and 50 were marked as "Returned to IANA Mar 98" previously, but is now "Reserved" (unused)—no real change. Block 14 had only some 129 addresses used; nice to have the whole block back, but 129 addresses isn't going to make much of a difference. Even the full 16.78 million addresses in block 46 only give us an extra month's worth of IPv4 address space: we're now using up around 12 of those blocks per year. Did I mention that that was the good news? The not so good news: "Despite this windfall we are unlikely to see any more whole /8s returned to the IANA free pool," notes ICANN. "Our investigations indicate that the other legacy 'Class A' assignments are all at least partially used. Recovering the space in those blocks would require large companies to engage in expensive renumbering exercises."



The feasibility of an open IPv4 market

The question is: will a little money make those renumbering exercises more palpable, so that address space that couldn't be recovered for free will enter the market? That's one of the many questions that surrounds a future IP address market. On the one hand, it's possible that organizations that hold large amounts of address space—most notably, the US government with 150 million or so addresses and HP with 33 million—will spend the time and money to free up parts of their address space and put it on the market. The hard part here is that this address space has been around for a long time, which almost guarantees that it's hardcoded in places. As a result, freeing it up probably means extensive system audits. On the other hand, it's entirely possible that such audits prove to be too much trouble or too expensive to bother with, so very little address space would enter the newly created market. Large ISPs need millions of addresses to connect new customers, addresses which they basically get for free today. Even a cost of $1 per address may be prohibitive, pushing those ISPs to implement address conservation techniques—and, ideally, IPv6—instead of buying address space at market prices.

It could be even worse: if demand outstrips supply, the price for IPv4 addresses could skyrocket, where it's attractive for sellers to wait for prices to get even higher before selling. If I were a domain squatter, I would certainly diversify my business in the direction of address squatting while address space is still easy to get.

And what about the rest of the world? The US holds more than half of the currently given out address space, twice as much as the rest of the developed world put together. Of the developing world, only China has a significant amount of address space. So poor countries would have to go to rich, American organizations to buy address space. This isn't likely to be popular in much of the world.

An IPv4 market could work in both directions: a run on the bank could mean that we're effectively out of IPv4 address space one or two years sooner than the currently speculated end date of 2012, or a market with good liquidity could recover, say, 50 percent of the legacy address blocks, more than doubling the still available IPv4 address space and the time that we have. However, the North American Network Operators aren't waiting for that: during their meeting this week, they'll have an IPv6 hour where IPv4 will be turned off temporarily. The Internet Engineering Task Force is planning to do the same during its meeting next month. Time to go either short or long IPv4 addresses in anticipation of the results.

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