Black markets sprout in IPv4 addresses

Addresses continue to be traded behind closed doors

With only days passed since the Asia Pacific regional internet registry initiated a severely reduced allocation policy for Internet Protocol version 4 (IPv4), ‘black’ markets have begun to appear for operators and address holders to trade address between themselves. One such example, Trade IPv4, was established last Friday; the same day APNIC announced each member would only receive a single allotment of 1024 IPv4 address. The site purports to act as a public stock exchange, independent of regional registries for trading or leasing unused IPv4 addresses between operators at a set price, with the site’s founders taking a one per cent commission on all sales. In an email interview with Computerworld Australia, site operator Dr. Martin v. Löwis said TradeIPv4 was the first public trading site to his knowledge, though lent to reports of closed-door black market trading having been long-established in the industry. The site ultimately has ambitions to provide an automated price index based on use, but for the meantime would likely be traded at a fixed price of $US10 ($AUD9.45) per IPv4 address, a price determined largely by Microsoft’s recent agreement to purchase 660,000 addresses from ailing Canadian telco Nortel for $7.5 million. “For the regions in which you can still regularly apply for address, no price will be quoted for the foreseeable future,” v. Löwis said. The registries handling allocation of unique IPv4 addresses have long resigned themselves to the notion of secondary markets trading addresses once space became scarce. In an interview at the beginning of the year - prior to the “IPocalypse” - APNIC chief scientist, Geoff Huston, told Computerworld Australia that such a market was inevitable, but warned of the potential game of “roulette” those who traded behind closed doors would be playing. “If you have chaos in addressing... you don’t know who’s got that address on any particular day or if its even unique,” he said. “This network only works because addresses are unique.” The chief executive of the North American registry, John Curran, threatened a revocation of addresses from operators found guilty of violating registry policy on address transfers through closed-door negotiations. In an open letter released following the APNIC depletion, Internet Society president and chief executive, Lynn St Amour, urged operators to follow the established policies of their regional registry on transfers of addresses. “It is imperative that these re-used addresses are administered responsibly,” she wrote. “If addresses are transferred outside the scope of the processes defined by the RIRs, it could negatively impact internet routing table sizes as transfers cause de-aggregation of address blocks.” She argued improper use of anonymous address space was potentially insecure and a target for improper routing and corraling for botnets. However, despite attempts from regional registries to create an open “white market”, trading has begun to occur, even in public. The Microsoft-Nortel deal became one of the biggest known moves to capitalise on waning IP address space, but talks of address “hoarding” from some of the more established operators has been to occur even through legitimate means. APNIC reported income from IP applications peaking at nearly $1.2 million in 2009; a significant jump on the $351,188 spent on address space in the region five years earlier in 2004. Huston, too, warned that any form of address trading, even through company acquisitions, was unlikely to meet growing demand for address space. “I’m rolling out a network to support even next month’s requirements for broadband services, I’m in a rather difficult place in that even anything I can buy on the market won’t meet my requirements; I need more,” he said. In an effort to “play by the rules”, the TradeIPv4 market also outlines the up-to-date policies on address transfers. All five registries lack a coherent policy on leasing addresses, though some have become stronger than others when addressing transfers between regions or outside of the registry itself. V. Löwis argued registries had become unwilling to prohibit secondary trading markets. “Reality has settled in that people would be doing black-market trading in the absence of policies,” he said. “We hope that our customers will also recognise the value of making the actual transfer public, although the negotiated price and other conditions remain private.”

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Tags ipv4tradeipv4Martin v. Löwis

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