The IPocalypse is upon us. On the 3rd of February, 2011, IANA allocated the last five /8 IPv4 address blocks, one each, to the five Regional Internet Registries (RIRs).

As of that day, there are no more. Oh woe is us!

Or perhaps we could take a closer look at the situation. There are a bunch of ways that we can measure IP address space usage. They include:

1. The number of addresses available. Formally, this is 2³² minus the 588,514,560 addresses that are assigned for special uses (multicast, reserved, private addressing etc), leaving 3,706,452,736 addresses (or the equivalent of a little under 221 /8 blocks) available for present or future end-user assignment.
2. The amount of addresses assigned by IANA to RIRs for allocation. As of the 3rd of February, that would be all of it.
3. The amount of address space allocated by RIRs to RIR members. According to Geoff Huston, Chief Scientist at APNIC, this is likely, at current rates of assignment, to run out in mid 2011 for APNIC, with the other two large RIRs (RIPE NCC and ARIN) over the following 12 months. The two smaller RIRs (LANIC and AfriNIC) will take a few more years.
4. The amount of address space that is actually advertised to the Internet. Right now, a little under two thirds of the allocatable address space (that is, excluding private, multicast and reserved address space) is actually advertised to the global routing table. That’s right, one third of the IP address space is unequivocally dark.
5. The amount of address space actually allocated to infrastructure and end users. Now things get murky. Is a /8 advertisement actually representing a /8 worth of allocation? Or is the holder of that /8 advertising it simply because they can?
6. The amount of address space actually in use within allocated address space. This too is largely unmeasurable. Many advertisements, especially smaller ones. are to achieve multi-homing, in which case a /24 may have very small numbers of hosts actually assigned to it. The nature of IP address assignment is that you always have to allocate a larger subnet than you plan to use, unless you can do single IP address per client allocations.

Measurements 1 through 4 are easy. 5 and 6 are hard. All we can say for sure is that each measurement will give a smaller number of addresses in use than the one above. If an address appears on the global routing table, we can follow it to its associated autonomous system, but beyond that, we have to look at individual addresses, and even then an assigned and in-use address my be behind a firewall, making it effectively invisible but no less actively in play.

So, the question of when IP address space will run out remains difficult to answer. Geoff Huston’s IPv4 Address Report shows a curve in address advertisements (figure 11) which,although initially exponential, seems to have settled to a linear growth of about 176,000,000 addresses per year in actual advertisements since 2006. If that rate is maintained, the 1.3 billion or so unadvertised addresses should run out in about seven years.

But I suspect that as RIR space becomes unavailable, we’ll start to see address space that is currently advertised but not actually in use being re-allocated (read: sold). For starters, there are about 200 million addresses tied up in non-carrier addresses that are currently advertised as /8s. Admittedly, a large proportion of that space may actually be in use, but one suspects that much of it isn’t. There are a lot of equally historical /16 assignments and smaller blocks assigned under multi-homing policies that are similarly underutilised, and which could be reduced and the balance re-allocated as their holders discover that the space is worth more to them in someone else’s hands than in their own.

So I’m going to lick my finger and stick it in the wind. I think we have ten years or so before we really, genuinely run out of IPv4 addresses, and that’s ignoring the transition to IPv6 completely. In reality, as IPv4 addresses become scarce (read: expensive), we’ll see folks making do with less and looking harder at IPv6 transition, so I doubt we’ll ever actually run out. Sure, there’s a whole bunch of stuff you can’t do without lots of addresses, but those applications will simply have to developed using IPv6 and instead of IPv4.

Don’t get me wrong; I’m not suggesting for a moment that we don’t have to worry. The single thing that will prevent exhaustion is money. Scarce resources have value; the more scarcity, the more value. RIRs have some really hard choices ahead of them; they’re going to be in the firing line to manage the emerging market in IPv4 address space. Pretending that organisations don’t “own” their address space will stop being an option; the court cases haven’t started in earnest yet, but unless the RIRs urgently awake from the fantasy that IP address space is not a tradeable asset, they will. Similarly, claims that restrictive policies will prevent hoarding are demonstrably fallacious. One third of the available address space is already being hoarded, leading directly to the conclusion that policies intended to prevent hoarding have already failed, and new, less restrictive policy is required to release that hoarded space for use.

Either the RIRs will rise to this challenge, or they’ll swept into irrelevance. I rather hope for the former rather than the  latter, because the latter means anarchy. The best we can hope for is that enough wiser heads prevail to ensure that the emerging IP address bourses have sufficient support to ensure that the fabric of the Internet isn’t torn apart by the conflict between those who long for the non-commercial Internet of old, and the immediate needs of a market where folks need to get stuff done.

Post Scriptum

I wrote most of this article in December, prior to the last /8 IANA blocks being allocated, but I have been predicting that IP address exhaustion would and must ultimately be addressed by the market for over a decade, often to the derision of fellow industry types. However, it was with a sense of vindication that I welcomed the news that Microsoft had successfully bid for a large block of address space held by the bankrupt carcass of Nortel Networks.

Personally, over the last decade, I have seen many examples of IP address space being treated as a business asset, often at the sharp end where the “ownership” of the “asset” was a subject of discussion or even dispute. IP address space regularly shows up on lists of assets to be transferred in corporate transactions. However, in none of these cases has anyone been so bold as to actually put a monetary value on address space in isolation.

Now, in the process of asset-stripping a once-proud telecommunications equipment vendor, we see public acknowledgement of that value. The price, approximately NZ$15 per address, is fairly reasonable – amortised over five years, it represents about 30c/month, a tiny proportion of the revenue that any service requiring an IP address can generate.

Less heartening was the reaction from John Curran, President and CEO of ARIN, hinting that ARIN could yet block the transfer if it is not in compliance with “the community-developed policies by which we maintain the ARIN Whois database”. What that means in practice remains to be seen, but if the transfer is blocked, we can be fairly sure that the address space won’t be made available to Internet users. At least, not officially.