ISOC warns on dangers of IPv4 address trading

Stuart Corner
Wednesday, 20 April 2011 09:05

IT Policy - Regulation

As with anything a scarcity of supply creates a potentially lucrative market - white, grey or black, and IPv4 addresses are no exception, with prices as high as $US11 being reported. ISOC however is urging that established guidelines for address transfers be followed.

Last week the Asia Pacific Network Information Centre (APNIC) announced that it had reached the last significant block of IPv4 addresses in its available pool - making the Asia Pacific region the first to reach the point of being unable to meet regular IPv4 demand. This was the result of unprecedented fixed and mobile network growth the region.

APNIC activated a pre-established rationing scheme, but for those with unsatisfied demand, purchase is an option. According to ISOC: "Among the possible coping strategies, it is expected some will choose to pay to acquire rights to use IPv4 addresses from others - an expensive undertaking given recent estimates of approx $US11US per address." And it added: "We urge that such transfers be effected per appropriate Regional Internet Registry processes."

In an open letter on the transfer of IPv4 addresses, ISOC said: "IPv4 addresses will remain critical to the continued functioning of the Internet for years or decades to come, and network operators will avail themselves of previously-used blocks of IPv4 addresses.

"For the continued smooth operation of the Internet, including its security and stability, it is imperative that these re-used addresses are administered responsibly. The Internet Society therefore recognises and supports the work of the five Regional Internet Registry (RIR) open policy forums on the matters of administration and management of IP addresses in the case of transfers."

It warns that "If addresses are transferred outside the scope of the processes defined by the RIRs, it could negatively impact Internet routing table sizes as transfers cause de-aggregation of address blocks.

"Also, accurate and timely registration of administrative information pertaining to address block use is important for facilitating resolution of operational and security issues. Anonymous address space is a target for abuse and spoofing (eg for botnets), and resolving who has the right to use (route) a particular address block is impossible without proper administration."

To avoid these problems the RIRs have developed policies for handling the registration of legacy address space and the appropriate way to transfer address blocks. APNIC published its transfer policy in February 2010.

Online market for IPv4 addresses
Meanwhile, at least one online marketplace has been set up to capitalise on the emerging market for IPv4 addresses. tradeipv4 (http://tradeipv4.com) claims to be "providing an open market for IPv4 addresses."

tradeIpv4 says it is "organised similar to a stock exchange: resource holders can place offers to sell or lease address space, and service providers can bid for this address space. The trading price is determined for each of the service regions, separately for sales and leases."

It notes that "transfer across regions is currently not supported by the policies, but changing policies in this respect is under discussion," and that: "certain aspects are unregulated; for example, whether or not legacy (pre-RIR) allocations can be transferred across regions is a grey zone."

These addresses were allocated before 1997 and, tradeIpv4 says: "Formally, many of the resource holders are not in a contractual relationship with their region's RIR, which often is interpreted as allowing them to transfer addresses freely."