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Need IPv4 addresses? Get 'em here

Brokers set up shop to trade IPv4 addresses; policymakers clarify trading rules

By , Network World
April 25, 2011 01:27 PM ET

Network World - A vibrant market for buying and selling IPv4 addresses is emerging, and policymakers are clarifying the rules associated with how network operators can monetize this precious Internet addressing resource.

At least four websites -- www.depository.net, www.denuo.com, www.addrex.net and www.tradeipv4.com -- are serving as brokers for organizations that want to sell or lease IPv4 address space.

Martin von Loewis, a German entrepreneur, launched the www.tradeipv4.com website on April 15, immediately following the Asian regional registry's announcement that it was out of its regular pool of IPv4 addresses. The website is a trading platform for sellers of IPv4 address space to solicit bids from buyers, with von Loewis functioning as the broker for sales. He hasn't brokered any sales yet.

"I do see a market for IPv4 addresses emerging ... but people are somewhat hesitant to use the service because many believe it's illegal or black market or gray market,'' von Loewis says. "That actually affects the sellers more than the buyers."

The IPv4 address space resale market is evolving in light of Nortel's recent sale of 666,624 IPv4 addresses to Microsoft for $7.5 million, or $11.25 per address.

BY THE NUMBERS: Microsoft pays Nortel $7.5 million for IPv4 addresses

"Microsoft's acquisition of Nortel's IPv4 address space: That's a fascinating milestone,'' says Craig Labovitz, chief scientist at Arbor Networks, which studies Internet traffic trends. "Now there's a price on [IPv4 addresses]. It's really the beginning of an economic incentive to support IPv6 over IPv4."

The IPv4 resale market is evolving because the Internet is running out of IPv4 address space.

IPv4 uses 32-bit addresses and can support 4.3 billion devices connected directly to the Internet. IPv6, on the other hand, uses 128-bit addresses and supports a virtually unlimited number of devices -- 2 to the 128th power.

The free pool of unassigned IPv4 addresses was depleted in February, and the Asia Pacific regional Internet registry announced last week that it has doled out all but its last 16.7 million IPv4 addresses which are being held in reserve for startup network operators.

BACKGROUND: Asia out of IPv4 addresses

Von Loewis anticipates that most of his initial customers will come from Asia. "I expect people will only use this service in regions where IPv4 is already exhausted," von Loewis says. "If they can get addresses free from RIPE [the European registry, which still has IPv4 addresses], why buy them?"

Von Loewis says he has been contacted by a number of potential buyers. He has established a minimum block of 256 IPv4 addresses -- known as a /24 -- for his trading site. He expects most of the sales on his site will be for blocks of address space ranging from 256 addresses to 4,000 addresses, which is known as a /20.

"People do want to buy the larger blocks of addresses and they are not sure yet on how to do it," von Loewis says. "The policies are evolving all the time ... It's somewhat complicated."

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