IP shortage leads to increased Black Market demand

A severe shortage of IPv4 addresses has reportedly “raised the specter” of companies eventually being forced to obtain an address from the nascent IPv4 black market.

According to Internet engineer R. Kevin Oberman, such a black market already exists, if only on a small, relatively unnoticed scale.

“The probability of black market growth depends on how run-out of IPv4 addresses is handled by the regional registries. A black market is uncontrolled by definition. If you have a commodity that has value and is required for commerce, the price will rise to whatever willing buyers will pay,” Oberman told InfoWorld.

“Most of the current black market is a matter of convenience, because ARIN’s (American Registry for Internet Numbers) IPv4 costs, and those of other registries, are low for large organizations. But if you’re a small company, the expense can be fairly high. If the survival of your business depends on getting IPv4 addresses, you’ll be willing to pay for them, even if you have to skirt the rules.”

Oberman also proposed that ARIN work to mitigate the effects of the growing black market by establishing a “white market” with clear rules for trading IPv4 addresses at set costs.

“If people have legitimate rules that permit address transfers, they’ll use them instead of a black market. [But] the problem is big enough that you’ll never have 100 percent enforcement, which is why we have a small black market today. People could start speculating, and that will drive prices up on both black and white markets,” Oberman added.

But what about IPv6? Could the next-gen standard help alleviate a chronic IPv4 shortage?

Indeed, ICANN (Internet Corporation for Assigned Names and Numbers) added IPv6 to its root name servers in 2004, while Federal agencies managed to meet a mid-2008 deadline to support IPv6 – which first became operational on the Internet that year.

“All major server and desktop operating systems – Windows, Unix, Linux, and Mac OS X – have supported IPv6 for several years, as have major Internet client applications such as Internet Explorer, Safari, Chrome, and others,” explained InfoWorld’s Mel Beckman.

“Most network equipment has IPv6 built-in. Thus, nothing stands between business and the exodus to IPv6…But can we get out in time?”