Could IP address plan mean another IPv6 delay?

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• Will it create a financial market for IPv4 address space? (Read what the Internet Assigned Numbers Authority has to say about the potential for an IP address black market.)

• Will it delay the transition to IPv6 because more IPv4 addresses will come available?

• Will IPv4 address transfers swamp the Internet's core routers with too many routing table announcements from ISPs?

"We don't know whether some of the side effects of such a policy makes sense for the Internet," admits John Curran, chairman of the ARIN Board of Trustees. Curran is chief technology and operating officer at ServerVault, a Dulles, Va., managed security services provider.

If IPv4 address trading is permitted, the likely beneficiaries are the U.S. federal agencies, universities and companies that received massive blocks of IPv4 address space at the dawn of the Internet. Back then, no one realized that IPv4 addresses would become a precious commodity. So they didn't assign IPv4 addresses efficiently across their wiring closets, buildings and campuses.

Until now, these organizations have lacked a financial incentive to renumber their networks to free up IPv4 addresses. It is rare for an organization to return extra IPv4 addresses. Notably, Stanford returned more than 16 million IPv4 addresses in 2000.

With an IPv4 address shortage looming, policymakers are stepping up their efforts to recover unused IPv4 address space. This week, the Internet Corporation for Assigned Names and Numbers (ICANN) announced that it had recovered 16 million IPv4 addresses from Net-14, which was originally used to connect older packet data networks.

ARIN's proposed IPv4 transfer policy would provide an economic incentive for organizations to free up IPv4 addresses.

"Hypothetically, a large company with excess IPv4 address space could get compensated for the work of freeing up that space," Curran says.

ARIN's proposal wouldn't allow speculation on IP addresses as has occurred with domain names because it requires IPv4 address space that gets transferred to be used.

No one knows if sizeable profits could be made from transferring excess IPv4 address space.

"Now we're telling people that [returning unused IPv4 address space] is the right thing to do without compensation," Curran says. "When you set up a process where an organization can be compensated so it can free up address space that others might not have, it's very hard to say how that system will actually behave."

The U.S. Defense Department, for example, is sitting on a mother lode of IPv4 addresses. Could this become a sale-able asset for the Department of Defense, akin to a wireless spectrum auction? Experts say that scenario is unlikely.

"It's fairly difficult to imagine circumstances where the receipts for such a transfer policy would be so large as to incent someone who was using the address space to actually stop using it," Curran says.

Experts agree that allowing the transfer of IPv4 addresses would likely delay the transition to IPv6 by several more years.