Many are not always aware of the significance of IP address block brokers in the market and how they generate value.
While chatting with a person I met at a recent major network technology conference, he expressed his concerns that the presence of brokers in the market was resulting in higher prices for addresses.
His point of view was understandable and is shared by others but it overlooks the various ways brokers actually add value to the market.
So I questioned if I could clarify how an IPv4 Block Broker may be able to help in improving the results of the industry.
He graciously agreed, and I proceeded to offer the following three points:
- Locate IPV4 Blocks
First, brokering includes digging and mining to find assigned but not in use blocks and bring them to the address market.
This increases supply which actually reduces price according to economics. To do their jobs, brokers trace the history of defunct organizations, cold call into companies to find the person who handles the network and ask about address ranges that are accessible and work with Registry employees to guarantee that the history of the address block does not involve fraud.
Hence, brokers ensure that there is a supply of clean IPv4 address in the marketplace.
- Insider to IPv4 Secondary Market
Second, brokers provide valuable information about prices that is more reliable than what you would get from other means, like posting to the local ‘NOG’ or ‘NIC’ email list to confirm if an offer you received is reasonable. Brokers post data on prices that go back several years and cover hundreds of transactions. By doing this, brokers provide support for those people in organizations who need to make cases for selling or buying addresses. Charts of data on sales of addresses provided by brokers have appeared on many investments memos and have been used to support requests to sell addresses.
- Transaction Facilitators
Third, brokers simplify the transaction process. From developing relationships with Regional Internet Registries to creating standardized documentation, brokers help save time, and thus money, for buyers. They also provide free escrow services. Many companies trade in the market just a few times. For them, developing in-house expertise is unnecessary and a waste of resources.
By performing the above mentioned tasks, IPv4 Brokers allow oranizations to concentrate on trading and promote their net work expansion process.
Rather than raising the prices of IPv4 addresses, they actually help to bring them down by increasing supply. At the same time, if the price of addresses was zero, there would be no incentive to mine for unused addresses and facilitate transfers. Since most companies do not want to expend their limited resources to create these capabilities, they are grateful for the services of a broker.
In the coming years, we look forward to bringing our expertise in the IPv4 transfer market to the networking community and work with them to address concerns as they arise.