[arin-ppml] Offer to buy IP address block (was Spectrum and IP address reservations)

michael.dillon at bt.com michael.dillon at bt.com
Wed Jul 22 11:18:00 EDT 2009

> More specifically, in this context I think that the tendency 
> to assume that market mechanisms would infallibly convert the 
> fact/existence/ supply of additional loose (de-assignable, 
> transferable, etc.) IPv4 into the enduring condition of 
> greater openness to aspiring new entrants is based on the 
> widespread (mis)perception of individual IPv4 addresses and 
> prefixes as "things" (assets, commodities, etc.), when in 
> fact they actually represent something more like discrete 
> instances of a "generalized  privilege"  or "license" (as in 
> "creative license"  
> even more than "driver's license").

The minimum ARIN allocation to a new ISP is currently a /20.
Someone recently offered an American ISP 6 figures for a 
/20 block that was acquired as part of a corporate acquisition. 
The ISP declined the offer and returned the block to ARIN.

This could mean that the value of a /20 on the open market is
100,000 USD. Since a /20 has 16 /24 equivalents in it, that would
place the value of a /24 at 6250 USD. According to
in the first 6 months of 2009, ARIN issued 99,285 /24 equivalents
to ISPs. That means that ARIN issued 620,531,250 USD worth
of IP addresses. Over the course of 2009 we can expect some
1.2 billion dollars worth of IPv4 addresses to be allocated
to ISPs, or $103 million per month.

Where is the industry going to find 1.2 billion dollars to sustain
growth of the network after IPv4 runout? And where is a new entrant
going to find $100,000 to buy their first allocation, assuming that
the price doesn't rise even higher when the free alternative no 
longer exists?

Will the prices in Europe be any different than in America?

--Michael Dillon

P.S. note that there are more predictable costs to an ISP 
in deploying either carrier-grade NAT or transitioning to IPv6. 
How will this impact IP address block prices and why?

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