"The probability of black market growth depends on how run-out of IPv4 addresses is handled by the regional registries," Oberman says. "A black market is uncontrolled by definition. If you have a commodity that has value and is required for commerce, the price will rise to whatever willing buyers will pay."
Currently, Oberman notes, IPv4 addresses are still relatively easy to get, because significant anti-fraud measures haven't yet been put in place by registries such as ARIN.
"Most of the current black market is a matter of convenience, because ARIN's IPv4 costs, and those of other registries, are low for large organizations. But if you're a small company, the expense can be fairly high," Oberman says. "If the survival of your business depends on getting IPv4 addresses, you'll be willing to pay for them, even if you have to skirt the rules."
Oberman believes that regional registries such as ARIN should head off a potentially deleterious black market by creating a "white market" with established rules for trading IPv4 addresses at market-established costs.
"If people have legitimate rules that permit address transfers, they'll use them instead of a black market," Oberman says.
IPv6, which uses 128-bit addresses, can support an essentially unlimited address space: 2 to the 128th power, or 34 with 37 zeros after it. But the opportunity to cleanly switch from IPv4 to IPv6 passed many years ago. The current transition strategy, called "dual stack," requires businesses to remain connected to both IPv4 and IPv6 networks until most of the Internet gets to "the other side" -- a process expected to take at least five years. Until then, the cost ramifications of IPv4 exhaustion will be widespread.
IPv4 black market: The rising cost of scarcity
ARIN's Jimmerson agrees that an accelerating black market for IPv4 addresses is possible. Yet ARIN's membership has been proactive about providing at least limited address transfer opportunities to mitigate that problem, Jimmerson says.
"ARIN is a member-driven organization, but even non-members from the Internet community at large can participate in the policy development process," Jimmerson notes. "That community has proposed a policy change, which ARIN recently adopted, to permit an IPv4 registrant to transfer numbers to another party."
Under that new rule, a company can return IPv4 numbers to ARIN and designate the intended recipient. ARIN isn't involved in any financial transaction that may occur between the parties, and only promises the recipient will receive the addresses if the recipient first files, and ARIN approves under its transfer guidelines, the necessary usage justification forms.
"There may still be black market activity, but with this policy, it's more likely that people will transfer numbers out in the open," says Jimmerson. "The important thing is that IPv4 registration records accurately identify the registrant who has authority over each allocation."