Nortel sells IPv4 numbers to Microsoft

Squeezing the last drops of value out of its remaining assets, fading giant Nortel this week won approval to sell its block of IPv4 addresses to Microsoft for an estimated $7.5m.

The numbers consist of 666,000 or so IPv4 addresses of a 1981 vintage and are pretty hard to come by these days. It’s not clear why Microsoft wants the numbers, but exchanges of this type are expected to be more commonplace since IPv4 is all but exhausted.

On February 1 of this year, the global internet address authority IANA (the Internet Assigned Numbers Authority) handed out two of the last blocks of freely available IPv4 addresses. The move triggered an automatic distribution of the remaining five blocks to each of the regional registries.

Now there is a scramble to adopt IPv6, which includes a modern numbering system that provides a much larger address pool than IPv4, as when devices come online en masse— the so called Internet of Things—only IPv6 will be able to provide a sufficient number of addresses.

Read the interview with Axel Pawlik, managing director of the RIPE NCC

With the depletion of unissued IPv4 addresses looming globally, internet registries including the American Registry for Internet Numbers (ARIN) have been forced to develop transfer policies designed to permit those with unneeded address space to transfer their right to use them to other organisations that can demonstrate the need for the resources.

In this case, Microsoft had to receive approval of the US Bankruptcy Court in Delaware to buy the Nortel numbers, which will be placed under a registration services agreement between ARIN and Microsoft.

There has been talk of a “black market” appearing as IPv4 addresses run into increasingly short supply, but Axel Pawlik, managing director of the RIPE NCC, is sceptical of such a deveopment. As long as those address transfers are registered according to agreed policies, then these transfers can’t become part of a black market.

“Imagine for a moment that that registration would not happen, then the transfer as far as we are concerned never happened, with all side effects that would have. It would become increasingly difficult to get such address space routed, by the upstreams. In the end, with increased uptake of certification, I believe such blocks would be rendered useless,” Pawlik said.