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Sales of unused IPv4 addresses gathering steam

ISPs hedge bets on IPv6; snap up unused IPv4 address space from bankrupt tech firms

By , Network World
May 24, 2012 07:26 AM ET

Page 3 of 3

"Certain companies may be touting their IPv6 deployments, but for the most part the Web hosting providers, tier 1 and tier 2 ISPs are not making material investments in doing full dual-stack IPv4 and IPv6 environments," said Marc Lindsey, a partner with Washington law firm Levine, Blaszak, Block & Boothby, who represents companies selling IPv4 address space. ``They are continuing to assume they will serve customers with IPv4.''

Sellers of IPv4 address space are primarily defunct tech, e-retail and educational companies.

"There's a woman in California who has a /16 [with 65,536 IPv4 addresses]," Thimmesch says. "She was trying to do a charter school in Riverside aimed at addressing the digital divide, and she got a /16 back in 1993 ... Her company closed down. We've resuscitated all the paperwork. She's in her 70s, and she's going to have a windfall."

Lindsey says the most common unit of IPv4 addresses for sale right now are /16s, such as the California woman has for sale. ``The unit of measurement of value is a /16," he says. "The range I've seen for a single /16 is anywhere from $8 to $13 per address."

Thimmesch estimates that 1.2 billion IPv4 addresses are currently allocated and unused, creating a huge potential market for resale. He scoffs at the idea that the Internet is nearing IPv4 exhaustion as promulgated by Internet policymakers and standards bodies.

"We believe the transfer market is extending the viable life of IPv4 by decades," Thimmesch says, adding that he believes the African regional registry won't run out of IPv4 addresses until 2028.

RELATED: IPv6 due for wide deployment in 2012, experts say

Indeed, Addrex is currently marketing an entire /8 IPv4 address space for sale, which could have a significant impact on the IPv4 resale market. He estimates this /8 IPv4 address block will be worth anywhere from $500 million to $1.5 billion

"We will not say who the seller is, but it is an American publicly traded company," Thimmesch says, adding that he considers this a "material event" for the IPv4 commodity marketplace that Addrex is creating. "This is the same thing as an asset sale."

If Addrex is successful at facilitating the /8 sale, "rest assured that it is going to disturb the status quo of the regional registry regime," Lindsey says. "There are a variety of /8 holders that are participating in the secondary market. There is more than one who I am advising in different stages of participation."

Lindsey points out that for many North American network operators, the choice between IPv4 and IPv6 is not an either-or decision. It's a necessity that they support both protocols for many years into the future.

"It will be a slow, natural progression forward, with a lot of legacy IPv4 content and assets lying around," Lindsey says. "A lot of IPv4 buyers are looking to build up their inventory to keep going as long as possible. They want a three-to-five year hedge."

Read more about lans & wans in Network World's LANs & WANs section.

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