Governance
IP address market under scrutiny: Critics call purchases a ‘scam’ and hint at trillion-dollar telecom potential
Critics say buying IPv4 addresses is a lease, not true ownership, raising questions about governance and trillions in telecom asset value.
Headline
Critics say buying IPv4 addresses is a lease, not true ownership, raising questions about governance and trillions in telecom asset value.
Context
Lu Heng is the CEO of LARUS Limited and the founder of the LARUS Foundation. His work focuses on the intersection of internet infrastructure, IP address markets and global internet governance, informed by direct engagement with all five Regional Internet Registries. His analysis seeks to clarify how internet number resources are governed in practice and to promote more accountable and resilient frameworks for managing critical IP assets. An influential analysis by Lu Heng has sparked debate in the internet infrastructure sector by arguing that acquiring IPv4 addresses in today’s market resembles a mispriced lease more than an actual purchase. According to Heng’s interpretation of Regional Internet Registry (RIR) policies, organisations such as cloud providers and telecom operators do not own the IP addresses they spend hundreds of millions on; what they acquire is a registration recorded in a database controlled by the five RIR bodies, subject to policy change and possible revocation.
Evidence
Pending intelligence enrichment.
Analysis
The argument centres on the structural nature of IPv4 address assignment. Since the last of the roughly 4.3 billion IPv4 addresses were allocated over a decade ago, organisations depend on a secondary market to obtain additional address space, usually at high prices. These transactions, Heng claims, are built on the assumption of ownership that legal frameworks governing the RIRs do not support, meaning companies may be overpaying for a renewable lease with uncertain long-term rights. Market data confirms the scarcity and rising costs of IPv4 blocks, with secondary market prices estimated around $35-$60 per address. The shortage has also led to complex practices such as leasing, sub-leasing and speculative trading, which further blur formal rights and economic value. Critics of the current model also point to risks that come with high prices, including fraud, blacklisted blocks and legal complications in transactions. Also read: Interview with Lu Heng: The man who wants to decentralise IP addresses and save the internet Also read: How many Regional Internet Registries (RIRs) are there? The controversy highlights deeper questions about how critical internet resources are governed and valued. With IPv4 supply effectively exhausted, the current system places control of these unique digital identifiers in the hands of a handful of registry bodies and market intermediaries.
Key Points
- Industry expert argues that buying IP addresses today is effectively leasing under registry control, not true ownership
- Scarcity of IPv4 addresses and restrictive governance could mask immense hidden value in telecom and cloud infrastructure assets
Actions
Pending intelligence enrichment.
