North America set to allow IPv4 address transfers

The Internet address registry for North America expects to start allowing transfers of IPv4 addresses to qualified users in Asia by the end of this month, possibly providing an escape valve for pent-up demand in that region.

Carriers, enterprises, universities and other entities in the Asia-Pacific region would be able to get unused IPv4 addresses from users in North America as long as they qualify under the rules of Asia-Pacific Network Information Center (APNIC), according to John Curran, president and CEO of American Registry for Internet Numbers (ARIN). Curran said his organization is doing a final evaluation of APNIC’s policies, but it expects to begin allowing transfers by the end of the month.

ARIN is one of five RIRs (regional Internet registries) around the world. Each has its own pool of IP addresses, which servers, routers, PCs and other devices need to communicate on the Internet. Addresses based on IPv4, the version of Internet Protocol still used by most systems, are becoming more scarce. Those addresses were assigned to the RIRs by the global Internet Assigned Numbers Authority (IANA), which handed out its last blocks of unused addresses to the regional bodies last year.

Up to now, IPv4 addresses have largely had to stay within their regions. But recently, ARIN and APNIC each decided to allow transfers to other parts of the world that have policies compatible with their own, Curran said. Both ARIN and APNIC require applicants that want more addresses to prove they need them, partly to prevent hoarding and speculation. Last August, APNIC modified its procedures so users requesting transfers have to show why they need them, said APNIC Director General Paul Wilson.

North America has a dwindling supply of never-used IPv4 addresses: approximately three so-called /8 blocks, each of which has about 16 million addresses, according to ARIN’s chief technical officer Mark Kosters. That’s down from five such blocks in March, he said. ARIN is expected to exhaust those next year. By contrast, APNIC stopped doing conventional allocations last April and is now strictly rationing addresses, according to Wilson. Its region has about half the world’s population and rapidly growing Internet economies, Wilson said.

Until recently, applicants in any region have been able to get fresh, never-used addresses from the regional registry itself.

“Since every region has had IP address space available to it, there hasn’t been a lot of demand for inter-regional transfers,” Curran said.

ARIN won’t transfer any of its remaining fresh blocks to Asia, Curran said. The so-called inter-regional transfers will only be for already assigned addresses that a third party in North America has to give up or wants to unload. There is an established system for doing those transactions, which must be approved and carried out by the RIR. So-called facilitators act as brokers for the addresses, matching up sellers and buyers and helping them negotiate prices. A page at ARIN’s website lists more than 90 IPv4 blocks that have been transferred.

Most of that activity has been driven by bankruptcies, because qualified applicants in North America can still get new addresses directly from ARIN, according to Curran. He expects inter-regional transfers to accelerate the activity.

One facilitator, Kalorama Group, said the new policy will make its job easier and may affect the market for IPv4 addresses.

“Today, when we have a demand party coming from a region outside of ARIN, we need to match them with supply in their own region,” said Josh Bourne, Kalorama’s managing director. Opening up transfers should make more potential partners available.

But the change may also even out prices between different regions, Bourne said. Prices within North America have changed little since Microsoft’s purchase of 666,624 IPv4 addresses from Nortel Networks last year, one of few such deals made public. The price Microsoft paid came out to approximately $11.25 per address.

Prices in Asia-Pacific are between 50 per cent and 100 per cent higher than in North America because of greater scarcity, according to Bourne. Inter-regional transfers could lower the cost for buyers in Asia, while driving it up for those in North America, he said.

If extended more widely, inter-regional transfers could become a global phenomenon. ARIN and APNIC are just the first RIRs to approve them, and all the other RIRs — for Africa, Latin America, and Europe and the Middle East — are discussing such policies, APNIC’s Wilson said.

But both Curran and Wilson said snapping up IPv4 addresses only makes sense as part of a transition to IPv6. There are only about 4.3 billion IPv4 addresses, less than one for every person in the world. IPv6 offers many orders of magnitude more addresses.

“We probably need 40 or 50 billion IP addresses,” Curran said. “So we can move around the v4 ones to better use them, but I don’t know if a lot of companies are going to invest significantly in them, because it’s recognized that there’s only so much life left in that engine.”

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