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The Battle Over Africa's Great Untapped Resource: IP Addresses

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1 week 1 day ago
In his mid-20s, Lu Heng "got an idea that has made him a lot richer," writes the Wall Street Journal. He scooped up 10 million unused IP addresses, mostly form Africa, and then leases them to companies, mostly outside Africa, "that need them badly." [A]round half of internet traffic continues to use IPv4, because changing to IPv6 can be expensive and complex and many older devices still need IPv4. Companies including Amazon, Microsoft and Google still want IPv4 addresses because their cloud-hosting businesses need them as bridges between the IPv4 and IPv6 worlds... Africa, which has been slower to develop internet infrastructure than the rest of the world, is the only region that still has some of the older addresses to dole out... He searches for IPv4 addresses that aren't being used — by ISPs or anyone else that holds them — and uses his Hong Kong-based company, Larus, to lease them out to others. In 2013, Lu registered a new company in the Seychelles, an African archipelago in the Indian Ocean, to apply for IP addresses from Africa's internet registry, called the African Network Information Centre, or Afrinic. Between 2013 and 2016, Afrinic granted that company, Cloud Innovation, 6.2 million IPv4 addresses. That's more addresses than are assigned to Nigeria, Africa's most populous nation. A single IPv4 address can be worth about $50 on its transfer to a company like Larus, which leases it onward for around 5% to 10% of that value annually. Larus and its affiliate companies, Lu said, control just over 10 million IPv4 addresses. The architects of the internet don't appear to have contemplated the possibility that anyone would seek to monetize IP addresses... Lu's activities triggered a showdown with Africa's internet registry. In 2020, after what it said was an internal review, Afrinic sent letters to Lu and others seeking to reclaim the IP addresses they held. In Lu's case, Afrinic said he shouldn't be using the addresses outside Africa. Lu responded that he wasn't violating rules in place when he got the addresses... After some back-and-forth, Lu sued Afrinic in Mauritius to keep his allocated addresses, eventually filing dozens of lawsuits... One of the lawsuits that Lu filed in Mauritius prompted a court there to freeze Afrinic's bank accounts in July 2021, effectively paralyzing the organization and eventually sending it into receivership. The receivership choked off distributions of new IPv4 addresses, leaving the continent's service providers struggling to expand capacity... In September, Afrinic elected a new board. Since then, some internet-service providers have been granted IPv4 addresses.

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