What can be done about the worsening IP address shortage?

What would happen if the world were to run out of internet? It is a difficult hypothetical to imagine and yet, for the last thirty years, we have known that an essential component for internet access – internet protocol (IP) addresses – have been running out.

When the most widely-used standard, IPv4, was introduced in 1981, four billion IP addresses probably seemed nearly infinite. But owing to the exponential growth in internet use, IP addresses are now in short supply. Global internet use, however, shows no sign of slowing. At the MPLS, SD & AI Net World congress held last week in Paris, speakers highlighted that the continued and rapid growth of the Internet of Things (IoT) means there will likely be tens of billions of IoT devices by 2030 due to the rise of smart devices, each of which needs an IP address to function.

Internet providers have so far circumvented the issue by transferring unused, or obsolete, IPv4 addresses amongst themselves. However, the global shortage in IPv4 addresses has caused prices to rapidly rise. In 2015, IPv4 addresses could be bought for around $6 each. On today’s market, those same addresses cost up to $32 each, with the price projected to nearly double by the end of the decade.

A shortage of IP addresses

A solution to the global shortage of IPv4 addresses is already available in the form of a newer protocol called IPv6. However, despite having been created over 25 years ago, IPv6 addresses are yet to be adopted by the majority of internet users. One of the reasons why firms continue to stick to the older IPs is that there is no compatibility between IPv4 and IPv6 protocols, making the transition particularly unpalatable to firms that still rely on the former.

However, the continued reliance on the old protocol has led large companies to stock up on IPv4 addresses to meet demand until the IPv6 protocol is implemented across the board. For instance, according to a recent report, Amazon used its deep pockets to finance the purchase of over 100 million IPv4 addresses for an estimated $2.5 billion. Naturally, with big companies starting to stockpile, the number of available IP addresses keep getting smaller.

Finding creative solutions

Until now, the exhaustion of IPv4 addresses has been mitigated through reliance on quick and easily implementable fixes. One such solution is using carrier-grade NAT (CGNAT), which allows one IP address to be used across thousands of devices, most commonly at ratio of 32:1 or 64:1, and significantly prolonging the life of IPv4. However, this a short-term solution, as CGNAT can’t be expanded infinitely, and scaling it up brings stability problems, potentially affecting thousands of users in the case of network failure.

Another workaround comes from the IP leasing market. Instead of having to acquire IPv4 addresses at increasingly unaffordable rates, small and medium businesses are increasingly turning to cloud providers to lease IPv4 addresses at affordable rates. However, the effectiveness of this solution is being undermined by Regional Internet Registries (RIRs), which are organisations initially established to allocate and keep a record of the distribution of IPv4 addresses.

The exhaustion of IPv4 addresses from the central free pool and their entrance into the free market, however, has made RIRs’ role as a distributor obsolete. Despite this, RIRs continue to make their presence known by restricting access to IPv4 addresses or controlling their allocation, which has had the effect of worsening existing shortages. This has naturally placed RIRs on a collision course with several experts and industry stakeholders. For instance, LARUS – an IP solutions provider –unequivocally suggests in their recent White Paper that the role of RIRs needs to be fundamentally reimagined in order to curb their authority over who gets access to the dwindling number of IP addresses.

Looking at the long-term

If it is to be addressed effectively in the long-term, the global shortage in IPv4 addresses requires a two-pronged response. The first is to expedite the transition to IPv6 protocols. There are several benefits to adopting IPv6, all of which are important for future innovation and economic growth on a global scale. IPv6 implementation will support the growth of a huge range of services and products that use the internet, not least by catalyzing the Internet of Things. In order to encourage growth in the internet economy, which could open up new markets and opportunities, making internet access sustainable and affordable through implementation of the IPv6 protocol must remain a long term priority.

However, because of the general reticence to move away from IPv4, it is equally important to continue making the old protocol accessible. Given the shortage of IPv4 addresses, we must rely on all available solutions – from leasing IPv4s to using NAT – to enable continued access to the internet. At the same time, it is important to curtail the influence of institutions such as RIRs who may, through their actions, worsen the effects of the IPv4 shortage. Only by taking both long and short-term action will it be possible to ensure nobody runs out of internet.

This article does not necessarily reflect the opinions of the editors or management of EconoTimes