The Internet Service Provider (ISP) community is carefully watching the impending depletion of the unassigned IPv4 address pool. Most estimates place the depletion of the central pool of unassigned IPv4 addresses by mid-2011. After that, each Regional Internet Registry (RIR) will continue to satisfy requests for additional IPv4 space for a limited time (depending on the rate of incoming requests and the amount of address space on hand in the RIR at the time of central pool depletion).

To continue growing, ISPs require access to a steady stream of IP addresses to connect new customers. In ARIN’s service region (Canada, the United States, and parts of the Caribbean), allocation policies have resulted in growing ISPs requesting additional IP addresses every 6 to 12 months. These policies emphasize that addresses are available based on documented need per community-developed criteria; similar policies exist in the four RIRs serving the other regions of the globe.

As the available supply of IPv4 address space dwindles, ISPs are encouraged to deploy IP version 6 (IPv6), which is the successor protocol to IPv4 developed by the Internet Engineering Task Force (IETF). All of the application protocols that make the Internet a great success (e.g. HTTP for the world wide web, SMTP for email, etc.) work over IPv6, so it is predominantly a network change resulting in a new Internet that still looks to the end-user just like the IPv4 Internet today.

However, organizations looking to deploy IPv6 may be undertaking their most significant network change to date. While IPv6 has similar routing and performance properties when it comes to connecting new customers, the need to interoperate with the existing IPv4 Internet requires that ISPs must also provide IPv6/IPv4 address translation of customers’ traffic. This interoperability requirement creates a number of engineering and capital challenges that are of great concern to ISPs across the globe.

Because of these challenges, ISPs are also interested in alternatives to deploying IPv6, or ways to defer their IPv6 initiatives until a time they deem most appropriate. This is reasonable, as ISPs are businesses that must manage their resources as efficiently as possible to stay competitive, and each faces unique issues regarding the optimal time for additional infrastructure investment and deployment.

ISPs wishing to use IPv4 to continue connecting new customers for a short time post-depletion do have an option: to get usable IPv4 address space via a third-party. This approach may temporarily allow deferring the technical and capital challenges associated with introducing IPv6 infrastructure, but substitutes other potential costs and risks that may be manageable from the ISP’s perspective.

In the ARIN region, a transfer of IPv4 address space to a specified recipient is possible due to a relatively new policy that was formulated and endorsed by the community. The “Transfers to Specified Recipients” policy (contained in section 8.3 of the ARIN Number Resource Policy Manual – NRPM) recognizes that some organizations may wish to release IPv4 address space to ARIN for reassignment to a specified party that has documented need.

Since Internet number resource assignments ‘are valid as long as the criteria continues to be met’ (per IETF RFC 2050), address holders who no longer need their IPv4 addresses have always been encouraged to return them to the RIR system so that they can be assigned to those with need. In fact, many organizations (including the US Dept of Defense, BBN, and Stanford University) have returned significant amounts of IPv4 address space for the benefit of the Internet community.

It is relatively straightforward for organizations to return entire address blocks, but years of mergers, reorganizations, and equipment upgrades often result in organizations using addresses that are sparsely allocated out of many address blocks. Those that want to do the right thing and renumber to free up address space for return may face a formidable task, depending on the complexity and scale of their operation. One of the most significant benefits of the transfer policy is that it provides an incentive for the return of address space which otherwise would remain underutilized.

There are several things for organizations to consider before using this policy. First, the Specified Transfer policy provides a way of getting IPv4 address space once your need has been documented and approved by ARIN, per the normal IPv4 address space request process. (From a practical perspective, there’s very little reason for ISPs to use the Specified Transfer policy as long as ARIN has available resources for approved IPv4 requests). Second, any address space to be transferred must be under a registration services agreement with ARIN, as the process of bringing it under agreement allows for address holder verification. Later this year, ARIN will provide a listing service for organizations that have approved requests for address space and for those that may be able to make resources available for transfer.

ISPs considering extending their existing model with this approach have one additional item to consider: while continuing to use IPv4 for customer connections may be expedient in the immediate future, the cost-effectiveness of this approach will quickly diminish with the growth of IPv6-based Internet capabilities. ISPs deferring their transition to IPv6-based services will eventually have to compete with those who faced the challenge and built their IPv6 capabilities from the beginning.

Written by John Curran, President and CEO at American Registry for Internet Numbers (ARIN)