One of the ways to support the development of the IT sector is to effectively use the existing address space of the IPv4 protocol. Currently, due to the rapid growth of information technologies and the large number of objects connected to the Internet, the IP addresses of the old but reliably functioning IPv4 protocol have become scarce. However, the introduction of the new IPv6 protocol is associated with a number of technical and organizational difficulties and is still postponed for many years.
The shortage of IPv4 addresses is directly linked to the technological limitations.
The lack of IPv4 addresses is directly linked to the technological limitations of the 32-bit IPv4 protocol code, where only 4.3 billion number combinations are possible. However, this has long been insufficient for the modern IT sector, where the number of nodes in information networks is growing exponentially. There are several ways to solve the problem of scarcity. For example, all participants in the IT services market could switch to the IPv6 protocol. They could also use NAT (Network Address Translation) technology or other methods. However, in the IPv6 protocol, for example, information security issues are not always properly solved and the introduction of this protocol requires high acquisition costs of new equipment. In addition, NAT cannot be used in all existing systems. At the same time, there are always shortcomings associated with the implementation periods as well as the acquisition costs of new equipment. In our opinion, there are several alternative ways to solve the current problem of scarcity so that the lifetime of the IPv4 protocol and the equipment used with it is extended without significant investment in new equipment as well as in the disposal of old equipment, and a gradual transition to the IPv6 address space is made possible. The focus of these methods is a sustainable way of dealing with the existing address space of the IPv4 protocol.
It appears that there is a global shortage of free IPv4 address space in the world.
In addition, internet government organizations have announced that IPv4 addresses have run out… The world’s supply is exhausted! One solution would be to introduce new networks using the new IPv6 protocol, which offers an infinite number of IP addresses. However, the introduction of new networks according to the new IPv6 protocol is associated with objective difficulties:
1) There are still significant gaps in the IPv6 protocol in terms of information security
The introduction of the new IPv6 protocol requires enormous financial expenditures for new equipment and facilities, as existing equipment is not compatible with the new IPv6 protocol. So the cost of IPv4 resources keeps growing because of the deficit created. In fact, there is actually no shortage! The reality is that more than 30% of the existing IPv4 address space is frozen and unused.
2) IP-address space is frozen and unused and about the same number of addresses only appear to be in use. This is true for the entire IPv4 address space used in Europe. A good example of the situation in Germany today is the fact that some companies have a shortage of IPv4 addresses and the others have a surplus of free addresses, but there are practically no transactions for address redistribution between the companies, so-called transfer agreements.
Let’s take a closer look.
First, let’s go back thirty years, when the distribution of Internet address space among information exchange participants was just beginning. At that time, the potential shortcoming of the IPv4 protocol was not obvious and address space was allocated to any organization that requested it, regardless of their current needs. In cases when a network of /24 (256 addresses) would be more than sufficient, a network of /16(65512 addresses) was allocated. No one counted the resources allocated because it was felt that they would be enough for everyone and for a long time. In the first instance, it was research institutes, government agencies and universities that obtained IP addresses in this way. After that, IP addresses were distributed among large companies and corporations. The blocks allocated at that time could never be fully used, because the Internet participants did not have so many nodes in the networks at that time. These IP addresses ended up “on dusty storage shelves” and were safely forgotten. With the commercialization of the Internet, the distribution of IP addresses between Internet service providers began, and the degree of use of IP addresses was already much higher. But a large number of blocks were once handed over to those who never planned to use them. As a result, up to 30% of the world’s IP addresses available to various LIRs (Local Internet Registries), equivalent to almost 1.3-1.4 billion, are now frozen and effectively are not used in the global address space. In Germany alone, about 40 million IP addresses are apparently unused and managed by the LIRs, which do not really fulfil their function of allocation, according to a presentation by RIPE NCC (Réseaux IP Européens Network Coordination Centre – the European IP address management company.)[1]. Most of these unallocated resources have LEGACY [2] or PI status [3].The remaining 70 percent of the IP address also facing issues. It is no secret to anyone involved in IT that many companies had chaos in the allocation of address space during their development phase. A simple example – a company has a network of size /16, which consists of 256 networks /24, and each of these has 256 IP addresses. It was common for system administrators to assign a /24 network for each new project without really thinking about how many nodes it would serve in the local infrastructure. In the end, the project unit actually used only 5-10 IP addresses, but since the route had been set for the entire network, the entire /24 network was marked as busy in the system. Due to the peculiarities of the utilization inventory of networks in the Regional Internet Registry (RIR), their distribution cannot be traced deeper than /24, so such a network is recognized by the outside as fully occupied and thus not recorded in the reports of the world statistics. There are numerous examples of such unsustainable use of IP resources. A large German company, whose name we do not want to mention here, started a new project and needed a /24 network for it. It turned out that although the company had at least 500 such networks, none of them could be assigned to the project because they were all “occupied”. In the end, it turned out that the IT admins of this company always allocated at least one whole /24 network (256 addresses) for each new project or department opened, although only 5-10 IP addresses could actually be used within this network. Moreover, these addresses were themselves assigned chaotically and could be distributed randomly, not optimally, within the assigned network.
It seems that large companies can actually only use 15-20% of the total available address space, even though their networks are considered full. The rest of the IP addresses are as good as dead load. And it is extremely difficult to correct this situation; optimizing networks by rearranging network nodes scattered across the IT landscape into one network is a global, hard-to-solve problem for any enterprise system. According to reports, there is a shortage of IPv4 addresses, but in reality, there is no shortage, there are only organizations that use their IPv4 resources inefficiently and unsustainably.
Where can one find possible solutions to this problem?
First and foremost in the sustainability principle, which has recently gained importance in Germany. First of all, it is necessary to reach owners of unused networks to get their networks out of the “frozen” state and to distribute the unused IP address ranges profitably for the owner, as well as to procure needed address ranges for buyers. The analysis we conducted on existing IP resources revealed that many owners of IP resources did not have the knowledge of their ownership. Perhaps this is because these resources seem to have been forgotten by them over time. How to find unused IP networks in an organization is the subject of another great article. Here we briefly tell what anyone who has unexpectedly discovered idle networks in their possession can do with them. IP addresses can easily be monetized these days. They can be sold or rented out.
For example, an IP network /16 (65,512 addresses) can earn its owner about €30,000 a month when rented out. Many owners of such networks do not know on what treasures they own.For renting, special trading platforms, so-called, Market Places can be used effectively. Such platforms exist in the USA, in England and in China. The only trading platform in the European Union is the German marketplace Interlir.com, which was developed by our company Interlir GmbH. With the help of our platform, you can rent out your unused IPv4 resources to those who actually need them.
In our opinion, it is possible to involve the state itself in the process of sustainable redistribution of IP resources, in that the state could legally support this approach and invite owners who have surplus resources to engage in such redistribution. Furthermore, the participating institutions – owners of IP resources – can save themselves a lot of money for the exchange of equipment. For example, there are already universities in the US that fund their current activities by renting out surplus address space. The release of new address space will have a positive impact on the development of the IT market in Germany and also across Europe and will enable developing as well as already established companies to save considerable funds for the purchase of expensive equipment or new IP address networks on the free market.
Another option is to conduct a global audit of the use of address space by universities, government agencies and corporations and develop a detailed plan to reallocate and consolidate existing IP resources at each audited company, freeing up new address space and making it available again. There are only a few companies in the world that have unique experience in such an audit. It is interesting to note that quite a large number of IP addresses are managed by government agencies, so government can play a crucial role in this process. The released address space can also be distributed among all participants in the IP market via the European platform Interlir.com. In this case, consumers will be relieved of the need to purchase necessary address capacity from spontaneously emerging IP brokers as well as third party and foreign companies at implausible as well as sometimes non-market prices. The obvious advantage of using the system for redistribution of address space makes our platform applicable also at the state level, for example, for market and price regulation of such resources.
Considering that our system offers free access to IP resources to any market participant due to unique technologies, it can be used for the development of national as well as cross-state systems of market regulation of the IPv4 protocol in Europe.
Further links:
https://www.bakermckenzie-kompass.de/2018/02/02/ip-adressen-einknappes-und-wertvolles-gut/
https://www.arin.net/resources/guide/legacy/
https://labs.ripe.net/documents/137/
[1] RIPE NCC Germany Country Report [2019], https://labs.ripe.net/documents/137/RIPENCC_GermanyCountryReport_2019.pdf
[2] Legacy resources are those Internet number resources obtained prior to or otherwise outside the current hierarchical Internet registry system.
[3] A provider-independent address space (PI) is a block of IP addresses assigned by a regional Internet registry (RIR) directly to an enduser organisation. The user must contract with a local Internet registry (LIR) through an Internet service provider to obtain routing of the address block within the Internet.
