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Recent signals point to escalating jitters for IPv4 market

By Greg Nachtwey, Director, Berkeley Research Group (BRG), special to Network World
March 04, 2013 12:02 AM ET

Network World - This vendor-written tech primer has been edited by Network World to eliminate product promotion, but readers should note it will likely favor the submitter's approach.

Publications discussing the transition to the IPv6 addressing system have revealed mounting anxiety regarding the economics and service impact of the global shortage of IPv4 addresses. Common concerns have implications for the top and bottom lines of ISPs, clouds, hosting services and other service providers for interconnected pathways. Taken together, the following perceptions suggest a growing appetite for transfers of increasingly scarce IPv4 addresses:

1. The transition to IPv6 will take years, or even more than a decade, and IPv4 will be necessary until then.

2. As more global regions run out of their "free" pools, the allocation of increased IPv4 costs between businesses and customers will increase prices throughout the distribution chain.

3. Although some service providers have been charging consumers for provisioning IPv4 addresses for quite some time, this is expected to increase.

4. There is no adequate replacement for highly functional but increasingly scarce IPv4 addresses until IPv6 is more widely - if not nearly universally -- adopted.

5. Pairing of dual-stacked IPv4 + IPv6 addresses is viewed as the best among a few strategies to ensure optimal functionality.

6. Imperfect solutions include NATS and Carrier Grade NATS, which allow multiple users to access through a single IPv4 address but in turn seriously degrades functionality (such as making it far more difficult for law enforcement to effectively police the Internet terrain.)

7. Buyers of IPv4 addresses are beginning to distinguish between the value of "legacy" and non-legacy addresses.

8. Public policy issues, principally impacted by the governance of the Internet through interconnected RIRs, will both encourage and dictate process for transfer of unused IPv4 addresses to enterprises who can use them.

9. As a result, while one can expect creative deal-making to be an aspect of IPv4 transfer transactions, this creativity will be limited by public policy and regulatory requirements, principally relating to the need and utilization plan that the proposed transferee/buyer can demonstrate to the RIRs.

As these concerns have been given voice, some of the more active pundits on Internet Protocol transition have begun to speculate about how certain buyers will decide on whether and how to use NATS, CGNATS, or whether and how to acquire IPv4 addresses to ensure optimal functionality until the transition is complete.

[QUIZ: Are you ready for IPv6?]

One such commentator, Lee Howard (Time Warner Cable) has recently suggested that in the short term, a cost of $40 per year for each CGN user is likely. In Internet Access Pricing in a Post-IPv4 Runout World, Howard flatly suggests that "until (IPv4) addresses reach $40 per IPV4 address, there is no reason to deploy CGN." He appears to envision prices of IPv4 addresses reaching at least $70 per address.

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