As IPv4 address space dwindles, there is a debate as to whether an exchange for trading unused address blocks should be created, and ars technical has asked two of its contributors, Iljitsch van Beijnum and Timothy Lee, to argue the case for and against. Timothy Lee argues an exchange for trading IPv4 address blocks is the way to go, saying “there are still a lot of unused and underused IP addresses in the hands of various private organizations. All that is needed is an incentive for them to part with their unused addresses voluntarily. In other words, what’s needed is a market in IP addresses.” Lee says large companies with unused address blocks are unlikely to relinquish them, so an incentive needs to be created. But Lee notes, “the American Registry for Internet Numbers … has resisted the emergence of a market for IP addresses — at least one it doesn’t control. The organization insists that IP addresses are not property and that address blocks can only be transferred with its approval.” On the fairness of a market for IPv4 addresses, Lee notes “critics of selling IP addresses on the open market worry about the egalitarian implications of asking relatively poor countries like India to pay millions of dollars to rich countries like the United States for additional IP addresses. But this objection gets the issue precisely backwards.” He then says “so the alternative to Indian ISPs paying Westerners for IP addresses isn’t that they get them for free. It’s that they don’t get them at all. No one is arguing that Indian ISPs should be forced to buy IPv4 addresses. If they can go straight to IPv6, more power to them. But it would be paternalistic to try to block Indians from buying IPv4 addresses if they think that’s in their interest.” Arguing the no case, Iljitsch van Beijnum states that “US holds about four IPv4 addresses per capita, and most of Western Europe has one or two. But many other parts of the world have much less than that. China has been using up IPv4 address space like it was going out of style, going from having about 8 million addresses around the turn of the millennium to 330 million now. India, on the other hand, has almost as many people but only 35 million IPv4 addresses. Should the poorest countries in the world be forced to buy IP addresses from the West, providing a windfall to some of the richest American companies just because those participated in an e-landgrab at the right moment?” Buying up IPv4 addresses in a market will see companies like large ISPs with highly fragmented small blocks of addresses and that “just dealing with so many different contracts will be a nightmare.” So van Beijnum says his “prediction is that at the ISP level, a functioning market won’t form at all, or will break down very quickly after it forms. All the while, address trading will take away resources, monetary and otherwise, from implementing the long-term solution: IPv6. With no new supply of IPv4 addresses and an increasing number of potential address users (we’ve been using up 200 million new IPv4 addresses per year recently), an address market will be prone to bubbles. Bubbles can also easily burst as service providers move to address-conserving technologies such as NAT and IPv6. Of course the US government can always bail out service providers using the nearly 200 million legacy IPv4 addresses that it has on its books.” “If address trading happens in non-trivial volumes, the address space will also fragment as organizations sell off only part of their address space. Due to the power-of-two limitation, doing this easily adds a handful of entries to the routing tables of routers throughout the world. The IPv4 Internet will become less reliable as older routers operate at peak capacity and routing protocols are stressed. Unless the RIRs throw all their policies out the window and rubber-stamp all address transfers, it will become harder to trace back an address to its user, giving free reign to spammers and other shady outfits.” Both of these articles are available in full on the ars technica website. The article by Iljitsch van Beijnum is available at arstechnica.com/tech-policy/news/2011/08/trading-ipv4-addresses-will-end-in-tears.ars while Timothy Lee’s article is available at arstechnica.com/tech-policy/news/2011/08/the-case-for-a-free-market-in-ipv4-addresses.ars .
