IPv4 Address Space Transfers

I recently assisted a North American client with an agreement for the purchase of more than 15,000 Internet addresses. The addresses are unused and valid on networks employing Internet Protocol version 4 (IPv4). They were originally assigned to the seller by a predecessor to the American Registry for Internet Numbers (ARIN). This open-market approach is a response to the shrinking pool of available IPv4 addresses.

Internet Protocol version 4 (IPv4) routes most traffic on the Internet. IPv4 addresses are 32-bit (four-byte) addresses. This limits the total address space to only 4,294,967,296 (232) unique addresses. This must have seemed like a very large number of addresses in the early days of the Internet, but by the 1990s it was clear that the pool of available IPv4 address numbers would be exhausted. Exhaustion occurred in early 2011. As a result of this limitation, and for other reasons, IPv6 was developed. IPv6 is a 128-bit protocol that creates a vastly larger address pool.

The world is migrating to IPv6, but hosts that employ only that protocol cannot directly communicate with IPv4 hosts. For the time being there is a need for parties to acquire IPv4 addresses. This is done in private sales with the (conditional) blessing of the Internet registries, including ARIN.

ARIN makes resources and services available in order to facilitate the transfer of IPv4 addresses between organizations. According to ARIN, IPv4 address space issued by ARIN or its predecessors may be transferred to another organization only under two circumstances. First, as a part of the acquisition of assets that use IPv4 addresses via a merger, asset acquisition, or similar transaction. Second, an organization with unused IPv4 address space may release the space to a recipient specified to ARIN who qualifies for it under ARIN policy. ARIN policy requires, among other things, that the recipient organization provide ARIN with evidence of its need for the addresses. More information about so-called Merger and Acquisition Transfers and Specified Recipient Transfers may be found at the ARIN website.

Any prudent North American buyer wishing to purchase unused IPv4 address space on the open market under ARIN’s Specified Recipient Transfer rubric should either obtain pre-approval from ARIN as a qualified recipient before entering into a purchase and sale agreement, or, alternatively, enter into a purchase and sale agreement with a closing (and payment) contingent upon receipt of such approval.