IPv4 Address Exhaustion

When TCP/IP version 4 was published in 1981 (RFC 791-3) the four byte 4.2 billion addresses seemed like a limitless resource in our nascent networked world.  The standard had only three sizes of addresses class A (16 million), B (65k) and C (254) that were allocated to members.  But the member club was limited and the enormous space allocations were not an issue.

But by the end of the decade engineers noticed the serious limits on growth this classfull method of allocation was having on the system.  RFC 1519 published in 1993 created the CIDR (Classless Inter Domain Routing) block system that allows the very flexible allocation of addresses in blocks starting with 1 and doubling in size as they march up the chain.  This created the system we still use to more accurately allocate the actually necessary size of address space for connectivity.

Even with this method of address conservation, engineers realized that further economies could be realized.  A large number of netowrk connected devices did not need to have a direct presence on the global internet.  And companies could benefit by having a stable of addresses that could be used at will in private networks that would not need to be routable on the internet.  RFC 1918 published in 1996 allocated three address blocks for such private networks;;  The concept of NAT (network address translation) then allows these private addresses to communicate with the public internet.

These two innovations on IPv4, CIDR and Private Addressing, enables the internet to connect over 20 billion network devices using the 4.2 billion scope of IPv4 address space.  A remarkable and enduring accomplishment for a network technology defined in 1980 with only two major revisions in scope.  But there is a limited resource in those 4.2 billion addresses and an apparent continuing upward trajectory of connected devices.

ARIN Countdown To IPv4 Exhaustion

But as efficient as the system of IPv4 address allocation is, there is still an actual limit on the number of available addresses for use in each region of the world.  The North American registry, ARIN announced their 4 phase IPv4 address exhaustion countdown plan in in February of 2011.  This marked when ARIN received the last /8 space that they would ever get from IANA.  Phase 2 began in September 2012 when ARIN had only 3 /8 remaining in inventory.  Phase 3 began in August 2013 when only 2 /8 remained in inventory. Phase 4 began April 2014 with only 1 /8 remaining in inventory.  Finally in September 2015 the last available IPv4 block in ARIN inventory was allocated leaving nothing remaining.

ARIN still accepts requests for additional IPv4 blocks and maintains a waiting list of such requests.  The waiting list currently has over 300 requests.  ARIN continues to review these requests and grant approvals for address blocks that companies can justify the need for the ip space.

Managing Limited resources

Now that there are no more addresses available from ARIN directly ISPs (Internet Service Providers), like DQE Communications, have to both manage the allocations they have judiciously and search for new ways to replenish their allocations from alternative sources.  As we approach the end of available IPv4 addresses both recovery of unused addressing within existing allocations and finding new sources for unused address blocks are important actions.

When assigning address blocks initially, ISPs work with customers to identify the public address space needs that are anticipated on the services.  Now on a regular basis we are verifying that address space is actually used and still needed by customers.  Should needs of usage shrink or not fill the requirements of the allocated space, the ip ranges can be adjusted and the unused address space recovered for use by other customers.  As ip space becomes more limited the recovery of unused space becomes more important.

Over the years as the limitations on ip space have become more apparent, a private marketplace for IPv4 address space transfers has developed.  Here those companies that were given large allocations by the regional authorities like ARIN are collecting a fee per ip address to transfer the unused space to a company that needs more than they currently have.

The authorities like ARIN have made it clear that legally an IPv4 allocation is NOT property transfered to the company by ARIN.  So IPv4 space is NOT an asset that can be sold like real or intellectual property.  This retains ARIN’s right to ownership of address space for the future.  But ARIN does not prevent these transactions from occurring and will update the address allocation database to the new company under certain circumstances.

The have ARIN honor an IPv4 block transfer, the receiving company must apply for the matching or larger block size and be approved by ARIN as needing the address space.  ARIN currently puts a two year usage period on these requests for transfer.  Thus you can only acquire by fee address space you will use within the next two years.  For the foreseeable future this private market of fee based IPv4 block transfers will be the only method to aquire new address space in the ARIN region.

Likely there are still a great many IPv4 blocks that were previously allocated to large companies many years or decades ago that are not currently in active use or needed.  These address blocks will likely fill the growing needs of ISPs in the ARIN region for some time to come.  As the market tightens, ARIN and other regional authorities may step in to more directly manage the limited resources.  And we can expect costs for IPv4 address blocks to rise as the availability of transfers diminish.

As each two year period comes up, ISPs will need to get new approved requests by ARIN for address blocks and budget for the fees necessary to actually acquire the address space that will be needed.

Originally Posted 23-Apr-16 09:24