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Freeing up unused IP addresses - an update

Posted by: , Posted on: - Categories: Technology Transformation

In February, I introduced our discovery work with the Department of Work and Pensions (DWP) on the potential of freeing up their IPv4 network addresses. We had two aims: to release IPv4 addresses for networks that aren’t ready to move to IPv6, and to release some value to reduce the deficit and help with the public finances.

Moving into alpha

The discovery phase went well. DWP hold a class A block of IPv4 addresses, much of which they used in their internal networks. Following some planning, we released 40 of the 256 class B blocks without disruption to any key services.

To minimise the impact on DWP’s services, we explored alternative network structures like Network Address Translation and IPv6, our future need for IPv4 addresses and how best to keep things stable during a transition. Protecting DWP’s networks and services in light of each of these factors carries a cost, so we wanted to see if we could bring in more proceeds than the exercise would cost us.

We treated the addresses as an asset, and as with any commodity, their price was developed from market conditions, demand and asset size on the basis of advice from Ernst & Young and IPv4 Market Group.

There was significant demand for the addresses, confirming our hypothesis that others might find them useful. We also found that market interest for those 40 class Bs did cover the work we had to do, plus a tidy profit — making this exercise a successful learning experience for us.

What’s next

We’ve been happy to discover that we can do some good with IP addresses: both by releasing them for others to use, and by generating revenue to help fund public spending. We think there may be more opportunities like this, and will continue to investigate further sales of IP addresses.

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  1. Comment by Philip Virgo posted on

    The funds raised from selling surplus IPV4 addresses should be used to help prepare for the transition to IPV6 because the more this is planning in advance, with new applications being enabled with the necessary address lengths etc., the cheaper it is. Interestingly Sky has just started its consumer trials: 250,000 customers in one geographic area. Others such as Vodafone and Virgin has already done trials with business customers so that the latter can develop new systems as native IPV6.

  2. Comment by Tim posted on


    I wonder how much was set aside to cover the increased operational costs, increased operational and security risks, and increased costs of exit, of any extra NAT.

    I know from work that I've undertaken in global banks that even the extra cost of managing security in a NAT environment can be hard to measure - not least since there are vested interests in using NAT - and surprisingly large.