For online users, a looming shortage of IP addresses

The seemingly boundless Internet is running out of a key resource: new IP addresses.

IP addresses, which are somewhat like telephone numbers, allow machines in homes and offices to locate and communicate with one another over the global network. The evaporating supply of new addresses – which some estimates say could dry up in about three years – could drive up the price of Internet access as well as disrupt the growth and performance of the network, warn some experts.

Worried that opportunists will hoard addresses to speculatively sell them, the organization responsible for handing out addresses in North America announced Wednesday that it would try to regulate the emerging trade. And in recent months, Internet administrators have been more forcefully urging software vendors, Internet service providers (ISPs), and major content providers to transition to a new addressing system.

Because upgrading can take years, the time to act is now, some experts say. "I suspect we are actually beyond a reasonable time frame where there won't be some disruption. It's just a question of how much," says David Conrad, general manager for the Internet Assigned Numbers Authority (IANA), the top body that allocates IP addresses. "The largest impact to most people would be that there's no way out of paying higher prices for Internet service."

As the pool of new addresses shrinks, explains Mr. Conrad, organizations and companies with surplus addresses are likely to make them available – for a price. That cost will be passed along to consumers when they order Internet access.

Shortsighted programming

The reason for the problem stems from shortsighted programming, as was the case with the Y2K bug at the turn of the millennium. Addresses under the current standard, known as IPv4, are made up of four integers between 0 and 255. That allows for roughly 4.3 billion addresses – not enough to keep pace with expanding Internet access in India and China as well as the variety of devices going online.

Newer IPv6 addresses are made up of sixteen integers instead of four, allowing trillions of trillions of new addresses. [Editor's note: The original version misstated the number of integers in IPv6 addresses.]

Also similar to the Y2K transition, the amount of work involved is not trivial.

Randy Bush, a scientist based in Hawaii who helped a Japanese ISP become the first to make the switch, says it took the company several years of work as well as significant government incentives.

Few companies have followed suit. Less than 1 percent of Internet traffic uses IPv6. The reason: Consumers aren't clamoring for it, so there is no immediate, compelling business reason to upgrade.

"From the user's point of view, they wouldn't know if it was IPv6 or V8 juice. They just want their MTV," says Mr. Bush.

There's some disagreement about whether fewer available addresses will pose real problems. For years, people have predicted that IP addresses were close to running out, says Douglas Comer, an early developer of the Internet and a professor at Purdue University in West Lafayette, Ind. Various workarounds staved off shortages.

"There are lots of alternatives to just giving everybody their own IP address for every device, and those alternatives seem to be working pretty well," says Dr. Comer.

ISPs have found ways to use fewer IP addresses to service entry-level Web users – those who aren't interested in setting up their own website or sharing files. As these users desire more functionality, such as the ability to write a blog, services like Flickr or website hosts can meet their needs while still economizing on IPv4 space. The prevalence of service fees, he says, may eventually stimulate user demand for IPv6.

Conrad argues against this laissez faire approach because it curbs the democratic promise of the Internet in favor of a "retrograde" broadcast model with only a few producers and many consumers. He also worries that procrastination will force a rushed transition at the last moment, something that could mean more Internet congestion and greater cost to companies.

There's also concern that a shortage of addresses could stifle new technologies such as Web-enabled home appliances and cellphones.

Governmental involvement

Some experts are urging governments to step in as Japan did to provide monetary incentives, rather than waiting years for businesses to see a short-term rationale for upgrading to IPv6. Other governments, and the US Department of Defense, are now mandating contractors to upgrade.

While still a matter of considerable debate, one of the most widely cited projections on when the last new IP addresses will be allocated comes from Geoff Huston, chief scientist with the Asia Pacific Network Information Centre. Currently, the IANA gives out IP addresses on the basis of demonstrated need. Those handouts will start running out in parts of the world in 2011, according to projections last month by Mr. Huston [Editor's note: The original version misstated who Mr. Huston's current employer is.]

However, Huston says that doesn't factor in the IANA growing more stingy, nor does it factor in hoarding by those seeing the shortage of remaining addresses. Both those scenarios are likely, particularly a run on the bank, says Bill Woodcock, research director of the Packet Clearing House, an institute in San Francisco dealing with Internet development.