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Borders, In Bankruptcy, Aims To Sell 65,536 IPv4 Addresses at $12/Address

Dan York

Image source: WikipediaWith IPv4 address exhaustion upon us, it appears that the going market rate for IPv4 addresses is now $12/address. Over at the Register, Kevin Murphy reports on a bankruptcy filing from Borders seeking to sell a /16 block of to healthcare software vendor Cerner for a total of $786,432. At $12 per IPv4 address, this sets a new public record given that the previous high was Microsoft's acquisition of a block of Nortel IPv4 addresses back in April 2011 for $11.25/address.

Over on his own Domain Incite blog, Murphy also provides a PDF of the court document relating to the actual sale. The document includes this note about the actual addresses which I found interesting in the justification for the sale:

The Internet Addresses consist of one /16 legacy block of 65,536 IPv4 Internet Protocol Numbers (the "Internet Addresses"). Computers and their devices, to connect to the internet, require unique internet addresses. The current Internet Address pool is IPv4 (which stands for version 4) which addresses consist of 32 bits — limiting the number of available Internet Addresses to 4.3 Billion. IPv4 addresses have been depleted and availability is scarce. A new version IPv6 has emerged which will make availability almost infinite. However until IPv6 is fully transitioned, there is still a need for IPv4 addresses.

The court document also includes this indication that the sale is contingent upon approval from ARIN:

Since late 1997, internet addresses in North America are distributed and administered through the American Registry of Internet Numbers ("ARIN"). The address blocks being sold were acquired by the Debtors before ARIN's appointment, which results in the classification of the block as a "legacy block." ARIN offers various services to holders of IP Addresses including publication in their WHOIS directory and many holders of legacy IP Addresses have agreed to sign agreements with ARIN to insure compliance with ARIN policies in exchange for the services. ARIN has indicated to the Debtors that they believe that the legacy Internet Addresses fall within ARIN's jurisdiction. While the Debtors believe that this Court has the authority to authorize the sale of the Internet Addresses over any such objection by ARIN, the IA Sale contains a condition of ARIN's consent and the proposed order incorporates various protections of ARIN's rights, which moots any need to consider any of these issues.

There will be a hearing on December 20th by the bankruptcy court to approve the sale, presumably based on ARIN's consent. (Should ARIN choose NOT to give consent, it will be interesting to see what the court would then do.)

What do you think? Should ARIN give its consent and allow the sale to go forward? And given this sale at $12/address, how high do you expect the next sale to go?

By Dan York, Author and Speaker on Internet technologies. Dan is employed as a Senior Content Strategist with the Internet Society but opinions posted on CircleID are entirely his own. Visit the blog maintained by Dan York here.

Related topics: IP Addressing, IPv6

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Comments

"Should" is the wrong question perhaps... McTim  –  Dec 06, 2011 4:19 AM PDT

If the recipient can meet the requirements of ARIN's Specified Transfer Listing Policy (I assume it will fall under STLS), then ARIN will approve the transfer.

ARIN Approval of IP Address Transfers John Curran  –  Dec 06, 2011 6:54 AM PDT

As should be expected, ARIN will provide consent if the transaction complies with the community-developed transfer policies that have been adopted.  (The STLS is simply an optional listing service; any IP address transfers will occur under NRPM Section 8

FYI,
/John

John Curran
President and CEO
ARIN

John,Thanks for chiming in here with the Dan York  –  Dec 07, 2011 8:35 AM PDT

John,

Thanks for chiming in here with the ARIN perspective.

Dan

Thanks for the clarification! McTim  –  Dec 06, 2011 8:11 AM PDT

and thanks for the transparency reporting re: transfers done under Section 8: https://www.arin.net/knowledge/statistics/transfers_8_3.html

This is just "tip of iceberg" as many transactions are not public (per se) Richard Donaldson  –  Dec 06, 2011 12:03 PM PDT

I further suggest that this "public" trade will only hasten v4's total exhaustion - I have not idea who Cerner is (never heard of them till now) and a great follow up would be to hear why they thought they needed these addresses vs engineering a v6 strategy and 6to4 or 4to6 or other translation service - makes for an interesting market place though and will continue throughout 2012!

RE: This is just "tip of iceberg" as many transactions are not public (per se) John Curran  –  Dec 06, 2011 12:19 PM PDT

Richard - If a proposed transaction isn't updating the Internet number registry, I'd advocate some caution (since you're effectively just purchasing some integers and anyone can sell any of them...)
It might actually be a bona fide address holder just trying to be expeditious, or it could be lookalike fraudulent party.

FYI,
/John

John Curran
President and CEO
ARIN

Excellent point John! Richard Donaldson  –  Dec 06, 2011 12:25 PM PDT

Absolutely agreed with verification via RIR policies (and RIR db integrity) - there will be fraud I am sure (how much is hard to tell) and what ARIN has in place will allow for transactional integrity and should be followed to ensure legitimate transactions.

I was positing that we will see more and more of these transactions in 2012 and that given these two more "public" transactions, there are a lot of private conversations going on concurrently (as I am sure you can attest) - in the end, 2012 will see a very large rise in v6 adoption and usage

Agreed - One of the benefits of John Curran  –  Dec 06, 2011 12:43 PM PDT

Agreed - One of the benefits of the limited IPv4 transfer market is increased publicity on the IPv4 depletion issue, and a first glimpse into the on-going costs that organizations can expect in order to continue to grow via IPv4.

/John

John Curran
President and CEO
ARIN

Agreed again - you raise another interesting question too! Richard Donaldson  –  Dec 06, 2011 12:58 PM PDT

Besides the obvious cost associated with buying IPv4 address space - have you encountered anything else that is the big #2 costs of operating a legacy network? (e.g., connection issues as a result of Carrier Grade NAT, etc)

I've taken a slightly different tact and that a significant upside of v6 adoption is that you will realize first mover technical advantages of internalizing the "as yet" discovered benefits of running v6 - could be security, could be better granularity in monitoring, could be improved application performance - however, if I were to roll clock back to early days of Internet (v4) adoption, many firms who adopted or took to the early Internet gained competitive advantages over those that did not - I think that v6 is the exact same opportunity presenting itself to those that see the inevitability of v6!

Richard Donaldson
CEO
6connect

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