Ownership of IPv4 Addresses — Property or Right of Use?
1. General Questions
IPv4, or Internet Protocol version 4, is one of the core technologies that ensures data exchange on the Internet. It was developed in 1980 and is still used as the standard method for addressing and routing network traffic. IPv4 defines the format of IP addresses, which looks like four decimal numbers separated by dots (e.g., 192.168.1.1). Each number can range from 0 to 255, allowing for 4.3 billion unique addresses.
Today, as the internet has become an integral part of our daily lives, the importance of such foundational technologies as IPv4 cannot be overstated. It works in the background, almost imperceptible to most users, yet it plays a crucial role in ensuring connectivity between devices worldwide. Every time you send a message or open a webpage, your computer uses an IP address to find and communicate with the appropriate server. It is akin to a “digital passport” that enables devices to understand where to send data.
However, the problem lies in the fact that the number of available IPv4 addresses is limited, and they are gradually running out. When IPv4 was developed in 1980, few could have imagined that in the near future, the number of network-connected devices would be measured in billions—from smartphones and computers to smart refrigerators and cars. As the number of connected devices has grown, it has become evident that 4.3 billion addresses would soon be fully exhausted, preventing new devices and users from being connected.
This led to the development of a new protocol—IPv6, which offers a much larger number of addresses thanks to 128-bit encryption (as opposed to 32-bit encryption in IPv4). However, despite the gradual adoption of this protocol, a complete replacement of IPv4 is unlikely to occur soon due to the vast number of existing IoT devices and infrastructure that only support IPv4.
As such, IPv4 remains an important part of internet infrastructure. This protocol currently ensures the existence of the network.
Different companies organize their infrastructure differently when it comes to using IPv4 addresses. Some prefer to lease addresses, which allows them to adapt flexibly to changing needs. Leasing addresses is a particularly popular approach among startups and smaller companies that do not need to own large address ranges. Leasing allows them to use addresses as needed, reducing costs and avoiding long-term commitments.
On the other hand, large corporations, such as telecommunications companies and internet service providers, often prefer to acquire IPv4 addresses as assets. For them, these addresses are a strategic asset that gives more control over resources. Ownership allows them to be independent of lessors and maintain stable infrastructure, especially in conditions where demand for IPv4 addresses remains high and the availability of new blocks is limited.
There is also a secondary market for IPv4 addresses where organizations can buy and sell address blocks. Some companies with surplus addresses choose to sell them to other organizations, which allows them to generate additional revenue. This is especially relevant for those who initially received large address ranges but no longer need them. Thus, the IPv4 market becomes a kind of investment field where resources can be bought and resold.
The process of transferring addresses is regulated by Regional Internet Registries (RIRs), which set rules to avoid speculation and ensure fair distribution of resources. Policies of different RIRs may vary: some support a free market, while others impose restrictions on the number of transfers and require certain conditions to be met. All of this creates a complex ecosystem in which each participant chooses their approach to using IPv4 resources depending on their goals and capabilities.
Given the above, an interesting question arises: what does IPv4 ownership mean? Are these addresses actual property that can be bought and sold, or are they simply rights to use, regulated by specific organizations? This is what we will discuss in the article.
2. Who Manages IPv4 Addresses?
The answer to this question lies in the structure of distribution and management of internet resources, which includes several levels.
At the highest, global level is the Internet Assigned Numbers Authority (IANA). IANA manages IP addresses and allocates the largest blocks of IP addresses to Regional Internet Registries (RIRs), which then distribute these addresses at a more local level.
There are five main RIRs: ARIN (for North America), RIPE NCC (for Europe, the Middle East, and parts of Central Asia), APNIC (for Asia and the Pacific region), LACNIC (for Latin America and the Caribbean), and AFRINIC (for Africa). These organizations manage IP address resources in their regions, including the allocation of addresses to ISPs, large companies, and other organizations.
RIRs are not only responsible for distribution but also for the registration of IP addresses to ensure transparency and traceability in the use of address space. When an organization receives a block of IP addresses from an RIR, this information is entered into a public registry, allowing anyone to track who owns which addresses and how they are used.
RIRs not only distribute the addresses, but also develop policies governing the use of IP addresses. These policies are developed through community consensus, involving representatives of various stakeholders—providers, businesses, and other organizations. This means that approaches to managing addresses can change depending on the region’s needs and the community’s opinions.
In addition to regional registries, there are National Internet Registries (NIRs) operating in some countries, such as China and Japan. These organizations act under the supervision of RIRs and manage the distribution of addresses at the national level, providing an additional level of management and accounting.
ISPs and large companies that receive IP addresses from RIRs or NIRs can then allocate them to their customers. Thus, the management of IPv4 addresses is a multi-level process involving global, regional, and sometimes national organizations.
As a result, the entire system of IPv4 address management is aimed at ensuring the efficient use of a limited resource. Regulation and distribution by RIRs help avoid situations where addresses end up in the hands of those who do not use them effectively and maintain the balance of supply and demand in each region.
3. Models of IPv4 Ownership
Models of IPv4 ownership vary depending on the approach and needs of organizations. In general, two main approaches can be identified—buying addresses and leasing them. These models reflect the differences in goals and resource management strategies among organizations of different sizes and areas of activity.
Leasing Addresses
Leasing provides the flexibility to manage resources. Organizations can lease addresses for a specific period and return them when they are no longer needed. This is convenient for projects with a limited lifespan or for temporary needs, such as testing or launching new services.
Thus, leasing IPv4 addresses is a more flexible and optimal solution for those who do not want or cannot invest significant funds in purchasing resources, as well as for those whose address space needs can significantly change in the short to medium term.
Buying Addresses
Some companies prefer to buy address blocks and treat them as property. This approach is particularly popular among large corporations and ISPs for whom owning IP addresses has strategic value. Acquiring addresses gives a company full freedom in managing this resource, minimizing dependence on external suppliers. Moreover, given the limited number of IPv4 addresses, owning them becomes an important asset that can be used for long-term planning and ensuring stable network infrastructure.
Buying addresses is also beneficial for those organizations that seek to invest in resources whose value may increase. In the context of IPv4 address scarcity, many companies view them as a strategic asset that can be sold in the future at a higher price. This is especially true for those who initially received large address ranges in the early days of the internet when resources were abundant.
Transfer processes for these resources are regulated by the corresponding RIRs, which establish rules and requirements to ensure fairness and transparency of transactions and also develop joint principles for transferring resources from one RIR to another.
In conditions of address scarcity, the secondary market offers additional opportunities for resource redistribution. The key for market participants is to choose reputable intermediary platforms to minimize possible legal and technical risks.
4. Policies of Different RIRs on Resource Transfers
The policies of various RIRs regarding the transfer of rights to IPv4 addresses differ significantly, which adds complexity to managing this resource. Depending on the region, RIRs may have different approaches to regulating transfers, which is related to market characteristics and legal norms operating in each particular region.
ARIN
The American registry adheres to strict rules aimed at preventing speculation and abuse in address transfers. Transfers are possible only under certain conditions, such as providing documentation justifying the need for the use of the given address space. This helps maintain a balance between supply and demand and prevents address accumulation by those who do not plan to use them effectively.
RIPE NCC
The European registry also develops its policies in close interaction with the community. Unlike ARIN, RIPE NCC places greater emphasis on freedom of transfer and minimal restrictions. However, there is still a requirement for mandatory registration of all transfers to ensure transparency and control over address use. Such flexibility contributes to a more active secondary IPv4 market in Europe.
APNIC
The registry for Asia and the Pacific region faces particular challenges due to high demand for IP addresses in densely populated countries. Therefore, APNIC pays special attention to planning and managing resources to meet the needs of both large and small users. Transfer policies also include requirements for justifying needs, which helps maintain fairness in distribution.
Since the APNIC regulatory zone also includes the aforementioned NIRs—National Internet Registries—the resource transfer processes are further complicated by NIR rules, and are sometimes entirely prohibited at their level.
LACNIC and AFRINIC
Regional registries for Latin America and Africa, respectively, have their own unique characteristics. In regions where internet access is still developing, it is important not only to ensure fair distribution of addresses but also to stimulate infrastructure development. The policies of these registries are aimed at supporting organizations that seek to develop internet services and improve access for the population. LACNIC and AFRINIC do not support the concept of full ownership of IP addresses. These addresses are considered resources provided for use under a license rather than private property. Registries reserve the right to withdraw addresses in case of non-compliance with usage conditions, such as non-payment or inefficient application of resources.
Thus, the differences in RIR policies are due to the need to consider regional specifics and user needs. Each registry strives to ensure the best use of limited resources based on the conditions of its region, which leads to diverse approaches and strategies. This, in turn, affects organizations that need to adapt their plans depending on the region in which they operate.
An important aspect is also the transparency and traceability of all address transfer transactions. All RIRs require mandatory registration of transfers, which helps prevent fraud and speculation. Public registries available on RIR websites allow anyone to know who currently owns a particular address range, which helps maintain trust within the community.
5. Ownership or Right of Use?
There are numerous practical and legal issues with the ownership of IPv4 addresses. Considering their rarity and rising secondary market value, several businesses view IP addresses as assets. Possessing IPv4 addresses gives these businesses a competitive edge since they can use, sell, or even lease them as they see fit. Large firms and ISPs, for whom controlling address blocks entails more autonomy and flexibility, should pay particular attention to this.
From a legal perspective, IPv4 addresses are not always recognized as full-fledged property. In most cases, IP addresses are issued to organizations for use under a license rather than transferred to their ownership in the full sense of the word. As mentioned earlier, RIRs, such as ARIN or RIPE NCC, regulate the allocation and transfer of addresses, and their policies limit the possibilities for free use. For example, ARIN or LACNIC consider IP addresses as temporarily granted usage rights that can be revoked if conditions are violated.
Organizations’ practical approach to IPv4 addresses frequently varies according to their size and strategic objectives. Addresses are valuable economic assets for large organizations who purchase them because they are seen as an essential component of their network architecture. However, leasing is preferred by startups, smaller businesses, and short-term projects because it enables them to save expenses and adjust to shifting market conditions.
Thus, the rights of IPv4 address holders occupy a unique position between property rights and rights of use. On the one hand, they can be bought and sold, making them similar to other types of assets. On the other hand, RIR regulations and legal norms impose restrictions on their use, implying more of a temporary right to exploitation rather than absolute ownership.
Conclusion
As a result, different approaches to IPv4 address ownership and use differ and are influenced by regional internet registries’ laws as well as the requirements and tactics of individual companies. There is ongoing debate over whether IPv4 addresses represent a right of use or full-fledged property. Leasing, purchasing, and secondary sales are some of the ownership options that give businesses flexibility in how they handle this finite resource. A balance between supply and demand is maintained by registries like ARIN, RIPE NCC, APNIC, LACNIC, and AFRINIC, which guarantee equity and openness in the usage of address space.