Say you run IP address allocation, now what?

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The other controversial resource that ICANN currently manages is IP address allocation. The background here is that every packet transmitted on the Internet needs to go from a specific source IP address to a specific destination IP address. There are only 2^32 (about 4 billion) possible such addresses, so there's obviously some contention for them. At this point, nearly 2/3 of the address space is allocated or otherwise unavailable. Opinions vary about how much time we have left before the address space crunch gets really bad (see articles by Tony Hain and Geoff Huston), but we're already at the point where people can't get all the addresses they want. IPv6 was supposed to fix this but deployment has so far been glacial (more on that another time).

The way that addresses get allocated is that IANA (which is part of ICANN) allocates them to the regional Routing Information Registries (RIRs), who allocate them to networks (generally ISPs, but sometimes to large enough end-user networks). Naturally, the RIRs are frequently in the position of denying requests for space, which doesn't please end-users.

To make matters worse, the addresses have been assigned extremely unevenly--a number of the early players in the Internet have address blocks far larger than they could ever plausibly use. Xerox for instance, is holding a block of 2^24 (16 million) addresses each. It's not clear how much of this address space is practically reclaimable, but it's a source of resentment for Third Worlders (and even Europeans and Japanese) who are having trouble getting addresses.

Unfair it may be, but it's not really clear what to do about it. Although many of these allocations are overlarge, many of them are still being used by entities who are not going to want to give them up. It's going to be hard enough to reclaim an address chunk from Halliburton (one /8) but even harder to reclaim it from the Defense Information Systems Agency (3 /8s). That's not something the US government is going to let go easily.

So, even if the EU/UN/ITU took over IP address allocation, they might be able to reclaim some of the address space, but mostly they'd be able to affect new allocations. Even then, it's not clear the extent to which they would be able to make those allocations different from the current policies. IANA's policies are defined in RFC 2050, which appears to be pretty neutral, so if you wanted to balance the final allocation state you'd have to take explicit action to disfavor the incumbent address holding countries (principally the US) in future allocations.

This may seem superficially fair, but remember that those addresses are being used by private entities. Xerox may have a lot of addresses but they're not giving me any (indeed, the RIR rules make it extremely difficult to transfer addresses. Indeed, it's explicitly forbidden to sell them, though there are some clumsy ways around this). So, it's not clear that an allocation policy which disfavored US entities would really be any fairer than the current policy.

One possibility, of course, would be to make it much easier to transfer addresses, indeed to create a market in them. This would have the effect of freeing up some of the unused address space and generally produce a more efficient allocation, but would of course be even more favorable to developed world entities who can afford to pay more than those in the developing world. That's probably not what the UN and ITU have in mind when they talk about taking control of the Internet.