As IPv4 addresses run low, fears of IP cybersquatting increase

Psst! Wanna buy a used IP address? In as little as 18 months, the world may run out of IP addresses, which could lead to the emergence of an illicit market in IP address trafficking, says John Curran, president of the American Registry for Internet Numbers (ARIN), a regional Internet registry that controls the distribution of Internet addresses for most of North America.

With 90% of IP version 4 addresses already given out, Curran warns about the very real possibility of a rough transition to its successor, IPv6, and talks about what businesses should be doing now in a recent Computerworld interview.

The problem is that the 32-bit format for today's IP addresses does not allow for enough unique numbers to satisfy burgeoning demand. The IETF foresaw this problem more than a decade ago and developed a new address format known as IP version 6.

Unfortunately, almost no one is supporting it yet. In fact, only about 3% of Web sites currently support IPv6, Curran says. That's a problem because devices that get issued an IP address in the new format can't access Web servers that recognize only IPv4. To get around that, ISPs have developed shared gateways that do address translation. But protocol translation is computer-intensive, and those shared gateways could easily bog down, making IPv6 addresses less desirable until the world upgrades its Web server infrastructure. (It could also be a competitive advantage for Web sites that adopt IPv6 early, since users will choose competing sites if they have better, native IPv6 performance).

A creeping crisis

The problem, when it comes, will creep in under the radar. Initially, ISPs or large companies will ask for a new block of IPv4 addresses and will be told "Sorry, there are none," Curran says. They'll get IPv6-formatted addresses instead. "It's going to be an interesting event. And it's going to create a lot of pressure for people to try to make the most of their IPv4 Internet numbers."

Large organizations receive IP addresses in large blocks. Technically, unused numbers are supposed to be returned to ARIN. But the shortage could lead organizations to hoard those unused numbers and then try to profit by selling them to the highest bidder. In other words, IP cyber squatting.

"We're going to see a similar circumstance [to domain name cyber squatting] to some extent. Certainly there will be a lot of pressure for companies to hold onto their IPv4 addresses even if they don't need them because they can monetize them. That's what we're looking at as a potential scenario," he says.

Things could get even crazier. For example, a company that goes out of business may leave a block of IP addresses up for grabs. "We may have people show up that try to claim that they are the long lost heirs in order to get at those Internet numbers," Curran says.

Curran says the registries are carefully monitoring consumption of the remaining IP addresses. This countdown clock decrements the total in real time and estimates approximately when we will run out. As of today, it looks like the transition will take place somewhere around September 17, 2011.

Then what? The easiest solution would be for all Web site owners to turn on support for the longer IPv6 address format. More likely, however, organizations will be slow to catch up. That could lead to a rising tide of chaos and confusion until everyone finally transitions.

ARIN Giveth...

ARIN hopes to head off the problem by encouraging businesses with Web sites to make the transition now to IPv6 — and to turn in unused IP addresses to help with the transition. "The Internet is based on cooperation. Internet numbers are issued according to policies that say if you don't have a need for IP addresses you should return them," he says.

And if they don't? "There's a chance that they'll be able to monetize them someday," Curran acknowledges. "But there's also a chance that, if the Internet community requires it, we'll do an audit of those unused addresses and pull them in."

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