I predicted that IPv4 (Internet Protocol version 4) hungry companies would start shopping for IPv4 addresses and a market would be created. I was right. As part of Nortel's bankruptcy settlement, Microsoft has offered to buy Nortel 666,624 IPv4 addresses for $7.5 million (PDF Link).

Making this call didn't require me to be a Nostradamus. It's basic free-market economics. Internet IPv4 addresses are now in short supply and with no more ever coming down the pike and the demand for Internet addresses increasing it was only a matter of time and dollars. Of course, everyone should be switching over to IPv6, but given a choice between buying their way--for a while anyway--out of a problem or investing in a major network infrastructure, Microsoft, at least, is going for the buy option. It won't be the only one.

That's really rather odd since Microsoft in Windows 7 and Server 2008 R2 actually does an excellent job of not just supporting IPv6, but building on top of it. For example, if you use both on your network, it's really easy to set up Web-address based network Quality of Service (QoS) management.

Be that as it may, Microsoft is paying $11.25 per IPv4 address. The deal was put together for Nortel by Addrex. This rather mysterious company is one of the first, but most certainly not the last, IPv4 address brokers.

The Regional Internet Registries (RIRs) may be getting into the act as well. In a Government Computer News interview, John Curran, president and CEO of the American Registry for Internet Numbers, (ARIN) said, "We don't expect that to heat up for another six months or so, because we still have IPv4 address space," but come that day, ARIN will be setting up a "legitimate market" for addresses.

So what kind of market do we have now? Black? Gray? Polka dot!? Good question. Buyers, sellers and the RIRs are still working out what will be good answers.

IP addresses are virtual property, but ARIN has its own set of rules on how they can be transferred. A buyer has to show that they need the addresses and can only sell a year's supply at a time. As for the price, Curran said. "ARIN is not a party to that. That's between you and the recipient." Of course ARIN isn't the only Internet RIR and they may set other stricter or looser rules and conditions.

ARIN or no ARIN I think we're in for a brief--no more than two years-of wild and woolly IPv4 address trading. After that, we'll be well on our way to the IPv6-based Internet and we won't have to worry about running out of addresses until the Federation of Planets' interstellar Internet has been set up.

See Also:

Don’t Panic! It’s only the Internet running out of Addresses

Real Help for your Network’s IPv6 Transition

Use IPv6 in Windows 7 Today

Easy Network Quality of Service Management for Windows Users