The Impending Internet Address Shortage

Sometime in the next six years, the Internet will run out of space. Expediting the migration to
IPv6 is the solution to the impending crisis, says ARIN.
By Thomas Claburn
InformationWeek
May 21, 2007 09:45 PM

The coming shortage of Internet Protocol addresses prompted the American Registry for Internet
Numbers (ARIN) on Monday to call for a faster migration to the new Internet Protocol, IPv6.

The current version, IPv4, allows for more than 4 billion (2^32) Internet addresses. Only 19% of
the IPv4 address space remains. Somewhere around 2012-13, the last Internet address bloc will
be assigned and the Internet will be full, in a manner of speaking.

"We must prepare for IPv4's depletion, and ARIN's resolution to encourage that migration to
IPv6 may be the impetus for more organizations to start the planning process," said John Curran,
chairman of ARIN's Board of Trustees, in a statement.

IPv6 promises some 16 billion-billion possible addresses (2^128).

IP numbers are used to route traffic around the Internet. They're not the same thing as Internet
domain names, which get mapped to IP numbers through the Domain Name System (DNS)
because it's much easier to remember "Amazon.com" than "72.21.203.1."

"Unless action is taken now, a quiet technical crisis will occur, not unlike Y2K in its
complications, but without a fixed date or high level public attention," wrote Stephen M. Ryan, a
partner at McDermott Will & Emery LLP and ARIN's general counsel, and Raymond A. Plzak,
CEO and president of ARIN, in a forthcoming policy paper.

Ryan and Plzak foresee potential legal problems arising as address scarcity leads to a new black
market in IP numbers.

IP numbers are not, like Internet domain names, seen as property by U.S. courts as a
consequence of Gary Kremen's litigation to recover the Sex.com domain. In the course of that
dispute, Kremen in 2001 was awarded the assets of an ISP that defendant Stephen Cohen had
acquired, which included IP numbers.

Kremen then engaged in litigation with ARIN to obtain his IP numbers without signing the
ARIN registration service agreement. In essence, he claimed ownership rights in the IP numbers
rather than the more limited set of rights governed by ARIN's contract. The U.S. District Court in
San Jose, Calif., rejected Kremen's claim last year, upholding ARIN's regulatory power over IP
numbers.

But a number of companies, organizations, and individuals hold IP numbers that predate ARIN's
arrival on the scene in 1997. Holders of IP address blocs awarded during the Internet's early days
may be sitting on a gold mine. Because they're not bound by an ARIN contract, they're
theoretically free to sell their IP numbers. They haven't done so because, among other things,
there's no money in it at the moment. But if the IPv6 migration continues to lag and IP addresses
become scarce, holders of legacy IP address blocs could find it profitable to sell their numbers.

"The characteristics of such a market are yet to form," said Ryan and Plzak in their
paper, Legal And Policy Aspects Of Internet Number Resources. "It could, for
example, result in delivering 'windfall' profits to those who early on obtained legacy
address blocs. Corporate assets will instantly be more valuable if they have such
blocs as 'assets.' "

Karl Auerbach, former member of the board of directors of ICANN, former Cisco researcher,
CTO of InterWorking Labs, and an attorney, happens to be someone who obtained a legacy IP
bloc back when professor Jon Postel ran the Internet.

"I've had people who want to acquire my spaces, some for some pretty hefty amounts," Auerbach
said in an e-mail, noting than the legal status of IP numbers remains muddy. "Those deals fell
through due to uncertainty about whether routing ISPs would honor the deal and accept routing
announcements. Without the cooperation of the ISPs, an attempt to transfer space can be futile."
Auerbach said he has loaned IP address numbers to friends on a short-term basis. "But that kind
of thing is from the spirit of the Internet of the '70s and '80s but certainly not the commercialized
Net of today," he explained. "But don't 'cha think that in many ways the old ways are a nice
residual from a more halcyon and more cooperative era?"

As for making a legitimate market for IP address space, Auerbach supports the idea. He also
agrees that IPv6 transition won't be easy.

One controversial method for dealing with the IP address shortage has been the increasing use of
Network Address Translation (NAT), which effectively creates a private network within a given
IP address.

"The issue of NATs has been underappreciated -- they are awful things that cause great trouble,"
Auerbach said. "But we've learned to live with 'em and new protocols are even being designed in
anticipation of NATs. So perhaps the Net of the future might evolve as an IPv4 public mesh
connecting private spaces behind NATs. For that we have enough IPv4 space for decades. That
scenario runs into trouble when those private spaces try to directly interconnect. But, like Scarlett
O'Hara, most of us will think about that tomorrow."