IP address exhaustion refers to the decreasing availability of publicly available IPv4 IP addresses. This has been a concern that has spanned decades since the 1980s. As a result, this has been the driving factor in creating and adopting several new technologies, including classful networks, CIDR addressing, and IPv6 and has been significant in the wide adoption of Network Address Translation (NAT).

As of 2007, IPv6 is typically seen as the only long-term solution for IPv4 address exhaustion, but is only being adopted very slowly. As the deadline for IPv4 address exhaustion approaches, most ISPs and equipment vendors are only just starting to consider widespread deployment of IPv6.

Synopsis

Main article: IP Address

Every host on a network, such as a computer or networked printer, is assigned a unique IP address that is used to communicate with other hosts on that network normally expressed in dotted decimal format (for example 66.230.200.110). Each octet, or part of the address, must be a number from 0 to 255 and therefore there is a logical maximum of 4,294,967,296 addresses available for use. However large numbers of addresses are reserved for local use and are unavailable for Internet use.

There are insufficient publicly routable IPv4 addresses to give a distinct address to every IPv4 speaker (which include desktop computers, mobile phones, embedded devices, and virtual hosts). This problem is mitigated by network address translation (NAT), whereby a single public Internet IP address can be shared by multiple internal local area network (LAN) hosts. Data sent by individual hosts to the Internet states its source address as the public IP address used, and the router providing the access is able to keep track of which host originated the traffic inside the network and forward replies accordingly. This is similar to multiple office telephones that share one phone number, and each have an extension number to distinguish individual telephones.

Causes

Several forces threaten the Internet with address exhaustion. Each of them drastically increases the demand on the limited supply of 32-bit addresses, often in ways unanticipated by the original designers of the network.

Mobile devices

Just as IPv4 has become the de facto standard for networked communication, the cost of embedding substantial computing power into handheld devices has plummeted. As a result, formerly "dumb" mass-market devices such as mobile phones have become potential IPv4 speakers. With mobile phone market penetration approaching 100% across the world, the result is a plausible scenario in which every person on the planet could be IP-addressable.

Always-on connections

Throughout the 1990s, the predominant mode of consumer Internet access was dialup Internet access. Dialup access reduces pressure on IP addresses, because dialup links are typically disconnected andthereforedo not require IP addresses. By 2007, however, broadband Internet access had begun to exceed 50% penetration in many markets. Broadband connections remain constantly active, and even when dynamically addressed, still require a persistent IP address.

Internet demographics

There are hundreds of millions of households in the developed world. In 1990, only a bare fraction of these had Internet connectivity. Just 15 years later, almost half of them had persistent broadband connections.

Inefficient address use

Organizations that obtained IP addresses in the 1980s were often allocated far more addresses than they actually required. For example, large companies or universities were given class A address blocks, each of which contained 16 million IPv4 addresses. Many organisations continue to utilise public IP addresses for devices not accessible outside their local network and would be well served by a NAT based implementation, releasing potentially large ranges of IP addresses for re-allocation. Some organisations also have large ranges of IP addresses currently not utilised but which have not been released back to the allocation authorities for various reasons.

Due to inefficiencies caused by subnetting, it is very difficult to use all the addresses in a block. The Host-Density ratio, as defined in RFC 3194, is an intuitive metric for utilization of IP address blocks.

Mitigation

Some things that can be done to mitigate the IPv4 address exhaustion are (not mutually exclusive):

Network address translation (NAT)

Use of private networks

Dynamic Host Configuration Protocol (DHCP)

Name-based virtual hosting

Tighter control by regional Internet registries on the allocation of addresses to local Internet registries

Network renumbering to reclaim large blocks of address space allocated in the early days of the Internet

Conservation

"Conservation" is another method used to preserve available IP addresses. Upon conception of the Internet it was never envisaged that it would require anywhere near as many IP addresses as it now does; therefore they were frequently allocated in 'blocks' of 255, 65536, or 16777216 addresses for use. To this day several organisations have been assigned 16 million IP addresses of which they use a comparative handful. These days organisations accountable for allocation of public IP addresses are much more reluctant to assign large groups.

Subnetting

Subnetting is again another method used to get more use out of IP addresses generally, in short the dotted decimal notation is a user-friendly method of representing binary addresses such as 01000010111001101100100001101110 (again 66.230.200.110). These addresses are subnetted by applying a subnet mask which denotes which portion of the address is the network portion and which is the host portion; this is analogous to the area code and subscriber number of a telephone number, the phone number (212) 555-9293 is uniquely identifiable from (213) 555-9293. This allows the same numbers to be used in multiple locations with only some minor extra consideration.

Reclaiming unused IPv4 space

In the early days of the Internet, before the creation of classful networks and later CIDR addressing, large blocks of IP addresses were allocated to individual companies and organizations. IANA could potentially reclaim these ranges and reissue the addresses to others. However, it can cost a great deal of time and money to renumber a network so these organizations will likely object, quite possibly to the point of filing lawsuits. Moreover, at the current rate of IPv4 address consumption, even if all of these could be reclaimed, it would result in only extending the address exhaustion date back a year or two.

Similarly, many IP address have been allocated to companies that no longer exist or were never used. Unfortunately, the stricter accounting of IP address allocation currently in place was not always in place and it would take quite a bit of effort to track down which addresses really are unused. Many IP addresses that do not show up in the public BGP routing tables are actually in use on intranets. Again, it is likely that more time would be spent tracking down which IP address could be reclaimed than would extend the exhaustion date.

Finally, it may be possible to use IP addresses that are currently reserved by IANA. There are proposals to reclaim the class E network addresses; unfortunately, several operating systems and many types of routers would need to be modified or upgraded to make use of these addresses. Many operating systems' TCP/IP stacks, including Microsoft's widely deployed personal computer TCP/IP stack, disallow the use of class E IP addresses, resulting in configuration errors when attempting to assign the address to a host and refusing to communicate with hosts utilizing such an address. Similar TCP/IP implementations in many switches and routers also prohibit the use of the class E space. For this reason, the proposal seeks not to redesignate the class E space for public assignment, but instead looks to change the status of the class E range from "Reserved" to "Limited Use for Large Private Internets." This would allow the use of the class E space on large, private networks that require more address space than is currently available through RFC1918.

ISP wide NAT

Similar to how many companies use NAT for most employee computers, ISP can use NAT for most customers instead of giving them publicly routable dynamically assigned IP addresses. This has many cost-saving and revenue-enhancing advantages to the ISP, including dramatically reducing their need for IPv4 addresses, easier blocking of 'unauthorized' servers running on customer computers such as file sharing systems, the use of web proxies to reduce bandwidth usage and add new banner ads, control of which enhanced services are allowed such as VoIP and games, benefits of customer-wide firewalls, enforcement of laws covering content and tracking, etc. ISPs may allow customers to purchase, at an extra cost, publicly routable dynamic IP addresses similar to how they currently allow, at an extra cost, static IP addresses.

On the other hand, this creates a burden for the ISP to run the NAT services in a law conforming way. Many countries have strict laws on monitoring the users traffic and behavior (data protection act). Implementing anything more than a pure NAT service, even if it is only with basic traffic logging facility, could put the ISP on the losing end in terms of lawful behavior. The ISP does not want to be the Internet Police, nor has it the authority to be that. Its role is the forwarding service of data packets, like the traditional telco does for phone calls. An implementation of ISP wide NAT would require considerable amount of legal consulting to not harm the ISP, which makes this idea difficult to implement.

Markets in IP addresses

The creation of markets to buy and sell IPv4 addresses has been proposed many times as an efficient means of allocation. The primary benefit of an address market would be that IPv4 addresses would continue to be available, although the market price of addresses would be expected to rise over time. These schemes have major drawbacks[Neutrality disputed - See talk page] that have prevented their implementation, as outlined in RFC 2008:

The creation of a market in IPv4 addresses would only delay the practical exhaustion of the IPv4 address space for a comparatively short time, as absolute exhaustion of the IPv4 space would follow within at most a couple of years after the exhaustion of addresses for new allocations.[Neutrality disputed - See talk page]

The concept of legal "ownership" of IP addresses as property is questionable and it is not even clear which country's legal system lawsuits would be resolved in.

The administration of such a scheme would be incompatible with current working practices.

Ad-hoc trading in addresses would lead to fragmented patterns of allocation that would vastly expand the routing table[dubious – discuss], resulting in severe routing problems for many networks which still use older routers with limited FIB memory or low-powered routing processors. This large cost placed on everyone who uses the internet by those that buy/sell IP addresses is a negative economic externality that any market would need to correct for.

Trading in IP blocks that are large enough to prevent fragmentation problems would reduce the number of potentially tradeable goods to a few million at most[dubious – discuss].

The cost of changing for one set of IP addresses to another is very high. reducing the market liquidity. Organizations that can potentially reorganize their IP addresses usage to free them up so that they can be sold will demand a high price and once bought, will not be resold without a large profit. The cost of renumbering an organization's IP address space each time is comparable to the cost of switching to IPv6 once.

IP addresses are just numbers[dubious – discuss], so there is no intrinsic value of an IP address. Trading in goods with no intrinsic value (e.g. paper money) instead of goods with extrinsic value (e.g. gold coins) can be risky and requires a stable market.

Creation of a market requires a critical mass of buyers and sellers. Without that, there will not be price stability. And without an expectation of price stability, it is unlikely that companies will support formation of such a market.

Exhaustion date

Exhaustion will occur on all continents at the same time, as all registries follow similar allocation policies, with for about 12 to 18 months stock allocated at each request. Only specific organisations which requested addresses in the pre-CIDR or pre-RIR era's possibly have a significant stock left.

As of December 2007, Geoff Huston of APNIC predicts with detailed simulations an exhaustion of the unallocated IANA pool in April 2011. Tony Hain of networking equipment manufacturer Cisco Systems predicts the exhaustion date to be around July 2010.[dubious – discuss] These predictions are derived from current trends, and do not take into account any last chance rush to acquire the last available addresses. After the IANA pool exhaustion, during 16 months each individual regional Internet registry (RIR) will be able to supply with their last assigned addresses. These dates lie within a depreciation time of five years of network equipment that is currently being acquired.

On May 21, 2007, the American Registry for Internet Numbers (ARIN), the North American RIR, advised the internet community that due to the expected exhaustion in 2010 "migration to IPv6 numbering resources is necessary for any applications which require ongoing availability from ARIN of contiguous IP numbering resources". It should be noted that "applications" include general connectivity between devices on the Internet, as some devices only have an IPv6 address allocated.

On June 20, 2007, the Latin American and Caribbean Internet Addresses Registry (LACNIC), the South American RIR, advised "preparing its regional networks for IPv6" by January 1, 2011 for the exhaustion of IPv4 addresses "in three years time".

On June 26, 2007, the Asia-Pacific Network Information Centre (APNIC), the RIR for the Pacific and Asia, endorsed a statement by the Japan Network Information Center (JPNIC) that to continue the expansion and development of the Internet a move towards an IPv6-based Internet is advised. This with an eye on the expected exhaustion around 2010 which will create a great restriction on the Internet.

Less than four years until the first RIR exhaustion is a short time for the entire industry to transition to IPv6. This situation is aggravated by the fact that until exhaustion there will be no significant demand. David Conrad, the general manager of IANA acknowledges, "I suspect we are actually beyond a reasonable time frame where there won't be some disruption. Now it's more a question of how much." Geoff Huston claims we should have started the transition to IPv6 much earlier, such that by the exhaustion date it would be completed.

IPv6 as a long-term solution

IPv6 is intended to be the long-term solution to the IPv4 address shortage. Instead of a 32 bit address, with 4.3 billion possibilities, IPv6 represents addresses as 128 bit addresses, providing 3.4x1038 or logically 50 octillion for each of the roughly 6.5 billion people on Earth.

IPv6 readiness

The issues of IPv6 adoption are:

legacy equipment where

the manufacturer no longer exists to give support

the software is not upgradeable, being in permanent ROM

the device has insufficient resources to handle the IPv6 stack (typically a lack of ROM & RAM)

manufacturers investing resources to upgrade legacy product software and make available at zero or low cost

manufacturers ensuring new equipment has sufficient resources to handle IPv6

manufacturers investing in developing new software for IPv6 support

publicity to persuade end-users to prepare to upgrade existing equipment

publicity to inform end-users to create demand for IPv6-capable equipment

ISPs not investing technical resources into preparing for IPv6

There are two distinct classes of users of networking equipment, informed (mainly commercial and professional), and uninformed (mainly consumer). The former understand that network devices are specialist computers which may need software upgrades for security and performance fixes. The latter typically treat their networking equipment as appliances, which are configured only when first unboxed, if at all, and only ever undergo firmware upgrades when absolutely necessary. Inevitably it is the latter group who have no knowledge of IPv4 or v6, but who are most likely to suffer when their equipment has to be replaced, since commercial grade equipment has typically handled IPv6 for quite a few years.

Most equipment such as hosts and routers require explicit IPv6 support. The main exception is equipment which only does low-level transport, such as cables, most ethernet adapters, and most layer 2 switches.

As of 2007, IPv6 readiness is currently not considered in most consumer purchasing decisions. If such equipment is not IPv6-capable, it might need to be upgraded or replaced prematurely if connectivity from or to new users and to servers using IPv6 addresses is required.

As with the year-2000 compatibility, IPv6 compatibility is mainly a software/firmware issue. However, unlike the year-2000 issue, there seems to be virtually no effort to ensure compatibility of older equipment and software by manufacturers. Furthermore, even compatibility of products now available is unlikely for many types of software and equipment. This is caused by only a recent realisation that IPv4 exhaustion is imminent, and the hope that we will be able to get by for a comparatively long time with a combined IPv4/IPv6 situation. There is a tug-of-war going on in the internet community whether the transition will/should be rapid or long. Specifically, an important question is whether almost all internet servers should be ready to serve to new IPv6-only clients by 2012.

Most equipment would be fully IPv6 capable with a software/firmware update - IF the device has sufficient code and data space to support the extra protocol stack. However, as with 64-bit windows and Wi-Fi Protected Access support, manufacturers are likely try to save on development cost for hardware which they are no longer selling, and try to get more sales from new "IPv6-ready" equipment. Even when chipset makers develop new drivers for their chipsets, device manufacturers might not pass these on to the consumers. Moreover, as IPv6 gets implemented, optional features might become really important, such as IPv6 mobile. It is therefore vital to check your supplier on its support record, and get guarantees if you can or need to. Instances of equipment which currently typically are not IPv6 ready, are home routers. As for the CableLabs consortium, the 160 Mbit/s DOCSIS 3.0 IPv6-ready specification for cable modems has only been issued in August 2006. IPv6 capable Docsis 2.0b was skipped. It is expected that only 60% of cable modems' servers and 40% of cable modems will be IPv6-ready by 2011 . Other equipment which is typically not ipv6-ready range from skype and sip phones to oscilloscopes and printers. Professional network routers in use should be IPv6-ready. Most personal computers should also be IPv6-ready, because the network stack resides in the operating system. Most applications with network capabilities are not ready, but could be upgraded with support from the developers. Since February 2002, with J2SE 1.4, all applications that are 100% java have implicit support for IPv6 addresses.

For ADSL services, a problem can be that the access networks of the incumbent telephone connection are not IPv6 compatible, such that independent ADSL providers can't provide native IPv6 connectivity.