Microsoft Pays Bankrupt Nortel $7.5m For 666,624 IP Addresses

With IPv4 addresses becoming scarce, prices are booming. One consequence of this is Microsoft recently agreeing to buy almost two-thirds of a million IPv4 addresses for $7.5 million, or $11.25 per address, through a Delaware bankruptcy court from Nortel. The announcement came in the 23 March edition of the Dow Jones Daily Bankruptcy Report writes Milton Mueller on the Internet Governance blog.The sale, while not finalised yet, has approval from the Delaware bankruptcy court to proceed and subject to ARIN’s compliance process. And it signals a market value for IPv4 addresses says Bill St. Arnaud, described as one of Canada’s most prominent technology visionaries, writing on Network World.”Accountants and lawyers will now be scrambling to include address space as a new asset class in an organization’s balance sheet and debating how fungible IPv4 addresses actually are. Universities, research institutions and R&E networks, particularly in North America and Western Europe, who have a large number of unallocated address blocks will discover that their net worth has increased significantly overnight,” writes St Arnaud.”However, I would argue that this does not represent the total value of an IPv4 address. It is much closer to $200 or more per IP address. In reality IPv4 address represent energy consumption and can be expressed in energy equivalence of Kwh. In general a fixed IP address is used for servers such as web hosting, databases, computing etc.”While dynamic IP addresses are assigned to client computers such as PCs. A reasonable assumption is that each fixed and dynamic IP address is a proxy for 100W consumption. Servers will consume more power per IP address, but one must take into account that there are multiple addresses per server such as loopback addresses, etc. At 100 watts consumption, assuming 10 cents per KwH over a 3 year life span of a server represents a cost in excess of $200.”To read more of Bill St. Arnaud’s posting, see www.networkworld.com/community/node/72501.