There are many views of the Internet, including perspectives from applications and services, devices, cables and infrastructure, or from traffic profiles. As a Regional Internet Registry, APNIC operates an IP address registry. What can this address registry tell us about the state of the Internet?
The past five years of address allocations has shown that the Internet is now an integral part of the portfolio of conventional communications sector business activity across the world, and the deployment of internet services and the opening up of markets through deployment of Internet services is subject to the same economic opportunities and constraints as any other business activity. Those economies that were adversely impacted by the global financial situation saw a drop in the expansion of new Internet services and a drop in their demands for IP address allocations across 2009-2011, while other economies that managed to avoid the worst impacts of a financial recession continued to see growth in new Internet markets across those years.
This period has been dominated by the mass marketing of mobile internet services, and the address allocation growth rates for 2013 and 2014 perhaps might have been the highest so far recorded were it not for the exhaustion of the IPv4 address pool. In address terms, this growth in the IPv4 Internet is being masked by the use of Carrier Grade NATs in the mobile service provider environment, so the resultant demands for public addresses in IPv4 are quite low and the real underlying growth rates in the network are occluded by these NATs.
In theory, there is no such requirement for IPv6 to use NATS, and if the mobile world were deploying dual stack ubiquitously then this would be evident in the IPv6 address allocation data. Unfortunately, no such very broad scale of deployment of IPv6 was evident in the address statistics for 2014. This points to a mobile Internet whose continued growth in 2014 remains, for the most part, highly reliant on NATs, and this, in turn, points to some longer-term elements of concern for the continued ability of the Internet to support further innovation and diversification in its portfolio of applications and services.
Over the coming few months we will witness the final stages of address exhaustion in IPv4 in North America. It would be heartening to think that at the same time we are going to see some further significant moves in the deployment of IPv6, building upon the 2014 initiatives in mass deployment of IPv6 access services by Comcast, AT&T, Deutsche Telecom and Verizon, fuelled by this increasing pressure of address scarcity. However, while there are now visible signs of IPv6 deployment in some of the largest access providers, the momentum has yet to extend to others, and much of the current 3% of Internet users who can use IPv6 do so due to the efforts of just some 25 major ISPs around the Internet.
From a larger perspective, we are witnessing an industry that is no longer using technical innovation, openness and diversification as its primary means of propulsion. The widespread use of NATs in IPv4 limit the technical substrate of the Internet to a very restricted model of simple client/server interactions using TCP and UDP. The use of NATs force the interactions into client-initiated transactions, and the model of an open network with considerable flexibility in the way in which communications take place is no longer being sustained in today’s network.
The scarcity of addresses leads to greater levels of uncertainty in the industry and that leads to investor nervousness. So, the incumbents entrench their position, and innovation and entrepreneurialism are taking a back seat while we wait out this entire IPv4/IPv6 transition process. Would that there was a way to speed this up and get through this entire process within a couple of years, rather than this protracted agony of ever-stranger and ever more complex ways of trying to keep IPv4 alive while at the same time tying ourselves in convoluted knots over dual stack support.
The evolving aggregation within market sector that service the Internet industry has quite profound implications in terms of network neutrality, the separation of functions of carriage and service provision, investment profiles and expectations of risk and returns on infrastructure investments, and on the openness of the Internet itself. The focus now is turning to the regulatory agenda, and in some countries, notably in the United States, these issues have reached all the way to the Executive. Given the economies of volume in this industry, it was always going to be challenging to sustain an efficient, fully open and competitive industry, but the degree of challenge in this agenda is multiplied many-fold when the underlying platform has run out of the basic currency of IP addresses. The pressures on the larger players within these markets to leverage their incumbency into overarching control gains traction when the stream of new entrants with competitive offerings dries up, and the solutions in such scenarios typically involve some form of public sector intervention directed to restore effective competition and revive the impetus for more efficient and effective offerings in the market. As the Internet continues to evolve, it is no longer the technically innovative challenger to an old and venerable incumbency in the forms of the traditional industries of telephony, print newspapers, television entertainment and social interaction. It is now the established norm. The days when the Internet was touted as a poster child of disruption are long since over, and these days we appear to be increasingly looking further afield for a regulatory and governance framework that can continue to challenge the increasing complacency of the newly-established incumbents. It is unclear how successful we will be in this search. But at this point in time we can but wait and see.
A detailed report on the status of addressing within the Internet and the allocations in 2014 can be found at APNIC Labs, or listen to Geoff speaking at ICANN 52.
The views expressed by the authors of this blog are their own and do not necessarily reflect the views of APNIC. Please note a Code of Conduct applies to this blog.