These /8s Are Now Diamonds

The end times are upon us.  According to many reliable sources, the allocation of IPv4 addresses is quickly reaching it’s conclusion.  Of the final seven /8s available to be allocated by IANA, APNIC is about to exercise its option on two of them.  When that happens, the final 5 will be allocated as planned to each of the 5 Regional Internet Registrars (RIRs) and completely deplete the source pool of allocatable IPv4 addresses.  Now, before Chicken Little starts screaming about what this means, let’s take a step back and examine things.

I liken the total allocation addresses from IANA to the RIRs to a resource exhaustion.  For the sake of discussion, lets pretend the IPv4 addresses are diamonds.  The announcement of of total allocation would be like De Beers announcing that all of the diamonds in the earth’s crust have been mined and there are no more available.  That doesn’t necessarily mean that all the engagement rings and tennis bracelets for sale will disappear tomorrow.  What it means is the primary source for this resource is now depleted.  Just like we can’t manufacture any more IPv4 addresses, in this example we can’t mine any more diamonds.  So what happens next?

Usually, when a resource starts becoming scarce, the cost to acquire that resource will be driven up.  In this particular case, people like Greg Ferro have already suggested that there will be a “run” on addresses.  Again, this is a behavior that is typically seen when the announcement is made that a resource is becoming hard to come by.  I think that the RIRs will start putting policies in place to prevent ISPs and other parties from requesting more IPv4 addresses than they currently need.  That will prevent the pool that the RIRs currently possess from becoming depleted faster than necessary.  It will also hopefully stave off the resale of these addresses on the black market, which is a distant possibility but possible nonetheless.  Just like in our fictional diamond example, the price of the diamonds at the jewelry store will go up, and most stores will implement policies restricting the sale of large numbers of stones to single parties, so as to prevent hoarding and help keep prices high.  This will also stave off the onset of a diamond secondary market, where speculators will sell stockpiles of stones for exorbitant prices.

So, now that IANA has run out of addresses, what’s next?  Well, the next countdown becomes the date the first RIR runs out of it’s allocation.  Right now, that’s projected to be APNIC sometime in October 2011.  APNIC has been burning through its addressing at blinding speed, and so they find themselves at the head of the IPv4 exhaustion line.  Once APNIC runs out of addresses, the only thing they can offer their customers going forward is IPv6 address space.  For some customers, this will be rather unsavory.  These types of customers will feel that IPv6 hasn’t penetrated deep enough into the market.  They’ll pay any price for those precious v4 prefixes.  So, I imagine that APNIC and the other RIRs will hold a small portion of IPv4 address blocks in reserve for those customers that are willing to pay big bucks for them.  For the customers without the pocketbook or that don’t care about the address space they receive, they’ll get IPv6 and likely won’t think twice about it.  Just like in our diamond example, when the first jewelry supply runs out of stones purchased from De Beers the price will start going up.  Perhaps they’ll offer lab-created diamonds of similar quality.  But there will be customers that feel the lab-created stones are inferior and those same customers will pay a significant amount of money to get the “real” stones.  In these cases, the smart jewelry supplier will hold back some of the best gems in order to get a much better price for them.

Once the first RIR runs out of address, things will accelerate from there.  Depending on the level of IPv6 preparedness in the market, you may start seeing customers hosting equipment in locations where RIRs still have address space to assign.  I would sincerely hope that by the end of 2011 that most everyone has either begun their IPv6 prep in earnest or completed it with flying colors.  Otherwise, I predict there will be a migration of data centers to locations served by AfriNIC, which is the RIR with the largest block of unallocated /8s.  The final exhaustion of IPv4 addresses isn’t predicted to occur until July 2012.  That gives customers and plenty of time to decide how to implement IPv6 rather than moving data centers around to mop up what little IPv4 address space remains.  In our fictional example, as the jewelery suppliers start running out of diamonds to give to their customers, their customers will begin shopping around to find suppliers that still have stock, even if they have to start importing stock from supplies located overseas.

Once the last RIR runs out of addresses to give to its customers, then it will be a matter of time before the last of the IPv4 addresses are allocated to the final end users by the ISPs and other middle men.  Customers that deal directly with ARIN and RIPE and the other RIRs will be out of luck, instead needing to move to IPv6 to continue growing their Internet presence.  Hopefully by the time this occurs in late 2012, IPv6 will be firmly entrenched and the drive to allocate the final IPv4 address space will be greatly lessened.  With end users concentrating on their shiny new IPv6 address blocks, the last of the IPv4 addresses can be handed out to those truly in need.  After that, the Internet can go forward operating on a dual-stack of IPv4 and IPv6 until the last of the IPv4-only hosts go dark, leaving us totally on IPv6.  I doubt that day will ever truly come, but it’s a possibility that’s out there.  And in our fictional diamond example, people will still show off their fancy jewelry, but the world at large will start to turn to the next precious stone like rubies or sapphires.  While diamonds will never truly be gone, the demand for that which can no longer be obtained will be lessened greatly, only pursued by those with the resources to expend to obtain something so expensive.

The final and total allocation of IPv4 isn’t something that’s going to happen overnight.  It will be a death by degrees.  Just like boiling a frog one degree at a time, there was a time we might not have known what was going on until it was too late.  Thankfully, enough people have been getting the word out to cause everyone to start making their plans early and get ready for what is coming.  This was no more apparent to me as when I contacted a local technology group putting on a conference to request a presentation slot to speak about IPv4 exhaustion and IPv6 planning.  The person on the other end of the phone was a rather technical person, yet I had to spend some time explaining just what IPv6 was and why getting the word out was so important.  So, to those of you that have influence on communication and/or blogging and tweeting avenues, keep talking about what’s going on with IPv4 depletion as we approach the true end of the address space.  That way, we don’t find ourselves scrambling for diamonds at the last minute or wondering if we need to upgrade to Diamondv6.

3 thoughts on “These /8s Are Now Diamonds

  1. Aren’t the RIR policies decided and voted upon by the RIR’s members, the LIRs – that is the service providers?

    Do you think the service providers will vote for rules that make it more difficult for themselves to acquire IP addresses? Or will they just game the existing system and try to stockpile before their competitors?

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