Beware the black market rising for IP addresses

IPv4 depletion is happening faster than expected; a black market could jump the price of an Internet presence
Organizations slow to adopt IPv6 take heed: Surging requests for IPv4 addresses are quickly drying up the available store, raising the specter of an IPv4 black market that could dramatically increase the cost of obtaining a presence on today's Internet.

Previous predictions pegged late 2011 as the anticipated date of IPv4 address exhaustion. But a sudden turnaround in the rate of allocation for IPv4 addresses this year has consumed an alarming number of "/8" IPv4 address blocks -- /8 being the unit of allocation to Regional Internet Registries (RIRs).

IPv4 black market: A matter of supply and demand The coming IPv4 shortage has been foreseen for years, but organizations needing an Internet presence -- businesses, educational institutions, government agencies, and the like -- have largely been in denial about the inevitability of IPv4 exhaustion.

At last October's dual celebration of ARPAnet (the Advanced Research Projects Agency Network that preceded the Internet) and the 125th anniversary of event sponsor IEEE, Internet pioneer Vincent Cerf urged immediate IPv6 adoption because Internet growth is not slowing: "We are going to see billions and billions of devices on the Net. The Internet, for its part, has invited many people to contribute content."

In a more recent interview, ARIN's Jimmerson says, "Yes, there was a dip [of IPv4 assignments] in 2009, but 2010 is accelerating. Lots of new applications -- next-gen Wi-Fi, cloud services, and smart grid -- are taking off, and regions such as Asia and South America are coming online rapidly."

IPv4, which uses 32-bit addresses, is capable of supporting 4.3 billion total addresses, but severe fragmentation makes utilization of the full range of IP addresses inefficient. Worse, many consider reclaiming unused IP space a far too complex and expensive undertaking. As such, when the last IPv4 /8 is allocated, new Internet players could find high prices and a black market the only practical means of getting IPv4 addresses.