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How Romania's patchwork Internet helped spawn an IP address industry

Stephen Lawson | April 9, 2015
The Eastern European country is helping satisfy demand for scarce IPv4 addresses.

If you need an IPv4 address, which is an increasingly rare commodity, there are some people in Romania who may be able to help you.

The onetime Communist country has become the place to go in Europe, Russia and the Middle East for IPv4 (Internet Protocol version 4) addresses, which were free and easy to get until the Internet grew as big as it has. New rules expected later this year may see address-hungry users in Asia and North America turning to the Romanians, too.

The roots of the Romanian IP address trade lie in the country's peculiar Internet history. When commercial Internet service began in Romania around 2000, it was totally unplanned and unregulated. People started ISPs by pulling cables from one house to the next.

"The center of Bucharest was a mesh of wires for many years," said Elvis Velea, the Romanian-born CEO of global IP address brokerage V4Escrow. (Yes, Elvis' company is based in Las Vegas.)

Soon a few bigger players started buying out the many small ISPs (and burying the wires), but they didn't use the old IP addresses. Instead, they got fresh addresses from RIPE NCC, the regional Internet registry (RIR) for Europe, Russia and the Middle East.

That left a lot of unused IP addresses floating around Romania, which meant nothing until 2012, when RIPE and others recognized that IPv4 addresses were becoming a scarce commodity. Suddenly all those old numbers had value.

Also, for years many companies and organizations in Romania didn't know how to request IP addresses from RIPE, so they let someone else register the addresses and lend them out, Velea said. Come 2012, the owner of those addresses had a valuable asset. It became a company called Jump Management, which is still responsible for many of the sales and leases of Romanian IP addresses across Europe and the Middle East.

Out of all this grew an industry of investing in and selling IP addresses, Velea said. Some Romanian companies now buy addresses from one country and sell them in another, either working through a broker or going it alone, Velea said.

"The guys there have understood the system, so they're basically working it and making a profit out of it," he said.

RIRs gave out big blocks of fresh IPv4 addresses for years until they started running out. Now the RIRs assign them much more carefully while keeping track of all the addresses that are already in use. But as long as all transfers follow the regional rules, the registries don't mind if money changes hands.

Recent transfers within RIPE have come from myriad sources including a Finnish hosting company, a Greek technical institute, and a Turkish collocation center. But Romania's Jump is a recurring character, and addresses frequently have gone to users in the Middle East.

 

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