New RIPE Policy will Join the RIPE, ARIN and APNIC IPv4 Markets

RIPE NCC published a policy yesterday (April 9th) that will link the ARIN, RIPE and APNIC IPv4 markets.  Ripe-644 allows inter-RIR transfers between the RIPE service region and other RIR regions, which will facilitate IPv4 sales between companies across regions.

In February of 2011, APNIC implemented the first inter-RIR transfer policy. At the time, there were no reciprocating RIRs. After ARIN implemented its inter-RIR transfer policy in July 2012, buyers and sellers in the ARIN and APNIC regions were able to transact and record their trades in RIR databases. Up until yesterday, no other RIRs allowed registration transfers into or out of their region.

Under the new RIPE inter-RIR policy, registrations for both legacy and non-legacy numbers can be transferred out of and into RIPE, provided that the transfers comply with RIPE policies. The policy also includes needs-based criteria that will apply to any RIPE recipient seeking to transfer numbers registered with an RIR that requires need justification as a precondition to allowing inter-RIR registration transfers. Specifically, a RIPE –based buyer procuring numbers from a seller registered in the ARIN or APNIC regions will have to demonstrate to RIPE that at least 50% of the numbers will be used within 5 years.

According to RIPE’s impact analysis for the policy, both ARIN and APNIC confirmed that the new policy is compatible with their inter-RIR transfer polices. ARIN went on record to say that the policy “meets the ‘needs based’ requirement that is explicitly stated in ARIN’s policy.” To implement the new policy, RIPE must create new documentation, check lists and processes in coordination with ARIN and APNIC. It expects to complete the work by August of 2015.

Currently, there is a shortage of supply in the RIPE market. As a result, prices have floated between $8 and $10 per number over the last year (with a negative correlation between price and block size). In contrast, prices in the ARIN region – where there is considerably more supply than demand – on average range from $5 to $7 due to the surplus (where large blocks have been purchased at the lower end of the range).

Shortly after the new RIPE policy is implemented, the balancing of supply and demand across the regions should cause prices in the RIPE and ARIN regions to stabilize somewhere in between these historic levels (possibly $7 to $9/number).  Over the longer-term horizon, the global supply in the IPv4 market will shrink materially, and prices are expected to rise more sharply – reaching (and potentially exceeding) $10/number within the next 2 years.