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Can't Sell Your IPv4 Numbers? Try Leasing Them

Brenden Kuerbis

In a "policy implementation and experience report” presented at ARIN 31 in Barbados, ARIN's staff noted that they are seeing "circumstances" related to the leasing of IPv4 number blocks. At the recent INET in Denver, ARIN's Director John Curran alleged that there is a "correlation" between address leasing activity and organizations that have been unable to complete specified transfers through the ARIN process, which requires needs-based justification.

The issue of leasing — or rather sub-leasing, because ARIN is already leasing the addresses to its members — is yet another symptom of the growing scarcity of IPv4 addresses. Subleasing is interesting, however, as another example of the way RIR's bureaucratic control of transactions between willing sellers and buyers can lead to workarounds that make the Whois directory less accurate.

It's unclear exactly how ARIN is aware of this nominally private activity. Perhaps someone involved is tipping ARIN off, or maybe its staff is observing instances where the ASN information associated with a routed block is changing while the contact information in the ARIN Whois directory remains the same. In either case, a greater degree of transparency about refused transfers and the basis for ARIN's determination would be welcome. On a related note, we sought to shed some light on the emerging transfer market in a paper last year.

What is troubling, for ARIN at least, is that the subleasing of addresses is taking place outside of the RIR address governance regime. It is understandable that ARIN would react to something that might undermine its control over address space. Part of ARIN's power stems from its ability to identify who is allocated or assigned what address block(s) via its Whois Directory Service. Practically, the Whois has also been used to identify the party actually routing an address block, although technically this is a distinct activity over which ARIN claims no control.

From an operational perspective, if the organization actually routing an address block is unable to be contacted this could be detrimental to administrators attempting to resolve networking issues, and to parties seeking to use the Whois for law enforcement or related policy matters. However, at this point it is unclear if lessees are actually unreachable. In fact, one could argue that lessors are in a better position to keep accurate lessee contact records than the address registry — they are invoicing their lessees, we assume! Whether, and under what conditions, they would release contact information is basically unknown at this point.

For now, ARIN does not seem to be too alarmed. It suggests three potential policy solutions:

  1. Decide this is not an issue for ARIN to deal with
  2. Create new policy requiring that the actual party using the addresses be listed as an operational contact in Whois
  3. Create new policy that would prevent leasing of address space without needs based justification.

Again, absent any data on leasing, it is hard to say which way ARIN or its membership might go, although the third option seems increasingly unlikely as ARIN moves closer to IPv4 exhaustion and the RIPE region is contemplating elimination of needs based justification entirely.

It may just turn out that private subleasing transforms the address transfer market. As Addrex's Charles Lee pointed out at INET in Denver, all kinds of parties lease assets (including ARIN leasing addresses to its own customers). It serves a useful business purpose and is not a bad thing per se. The entry of large subleasing companies without any Internet operations, Lee noted, might transform the address market. It could create entirely new ways of allocating addresses and provisioning post allocation services. It might lead to innovative product offerings such as providing means to mitigate the technological obsolescence of IPv4. We just don't know. What we know for sure is that it will create governance dilemmas.

By Brenden Kuerbis, Internet Governance Researcher & Policy Analyst at Georgia Tech
Related topics: IP Addressing
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Additional metrics on transfers are available John Curran  –  Apr 29, 2013 1:17 PM PST

Brenden –

A fairly good summary of the report and related issues. You do note that

In either case, a greater degree of transparency about refused transfers and the basis for ARIN’s determination would be welcome.

While probably not meeting all of your requirements, we have been providing increased information about transfer requests, including metrics on those pending and denied, in our periodic reporting. This was presented as well as ARIN 31, in the Update on Resource Transfers presentation that I gave, which is available here: Update on Resource Transfers

FYI,
/John

John Curran
President and CEO
ARIN

Routability Frank Bulk  –  Apr 29, 2013 5:18 PM PST

Similar to netblocks that are sold outside the RIR process, or netblocks that are stolen, the leasing of netblocks is only as effective as the transit and peer networks that are willing to accept them into their routing tables.  If LOA's are required and vetted against the RIR entries each time an organization wants a prefix to be advertised, then leasing may remain minor activity.

the term of art is "allocate" Eric Brunner-Williams  –  Apr 30, 2013 6:54 PM PST

you use of the term "lease" is misleading, possibly intentionally, to suggest that the relationship between arin — the current allocator — allocating out of its subset of the address space — that is — the post-legacy space, as subsequently modified by delegations to subsequent, and disjoint allocators — e.g., ripe ncc, etc., and the allocatee, is commercial.

while current allocations of address resources are associated with a fee, the fee is not uniform in time, scope and condition.

the references to "control" and "power" are not useful.

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Promoted Post

Buying or Selling IPv4 Addresses?

Watch this video to discover how ACCELR/8, a transformative trading platform developed by industry veterans Marc Lindsey and Janine Goodman, enables organizations to buy or sell IPv4 blocks as small as /20s.