Increasing demand for Internet based services means that there would not be enough addresses to support this expected growth, if no action is taken. Encouraging internet users and providers to adopt the latest Internet Protocol (IP version 6 or IPv6) will provide a massive increase in address space, much in the same way as telephone numbers were lengthened in the 20th century. The European Commission set Europe a target of getting 25% of EU industry, public authorities and households to use IPv6 by 2010, calling for concerted action at European level to get all actors prepared for a timely, efficient change to avoid extra costs for consumers and give innovative European companies a competitive advantage.

"This is very much a case of a stitch in time saves nine", said Viviane Reding, EU Commissioner for Information Society and Media. "In the short term, businesses and public authorities might be tempted to try to squeeze their needs into the strait jacket of the old system, but this would mean Europe is badly placed to take advantage of the latest internet technology, and could face a crisis when the old system runs out of addresses. IPv6 provides more addresses in cyberspace than there are grains of sand on the world's beaches. If Europeans are to use the latest internet devices such as smart tags in shops, factories and airports, intelligent heating and lighting systems that save energy, and in-car networks and navigation systems, then we already face a thousand-fold increase in demand for IP addresses. I call on Member States to make sure that public authorities and industry have IPv6 widely sown up by 2010."

IPv4, used since 1984, provides 4.3 billion addresses, of which only about 700 million or 16% remain free and available for new connections. The new Internet protocol, IPv6, will make an almost unlimited amount of IP-addresses available and so support new applications using devices that are too numerous or costly for IPv4. This will make it much easier for home users to build their own private networks and connect them to the Internet.

IPv6 will encourage more innovative Internet applications, in particular those based on networking huge numbers of small and simple devices. For example, energy management for street lighting and intelligent buildings could be improved, and the Internet could cheaply and reliably connect remote control sensors in everyday household appliances. This in turn will provide an incentive and opportunity for companies to innovate still further, and so produce the next generation of internet applications.

Most new computers and servers being sold by major manufacturers are already IPv6 compatible, but are only reachable through their old IPv4 addresses. Europe's 'backbone' Internet network for research "GEANT" is already 100% IPv6 compatible and has led to Europe having the highest take-up of IPv6 addresses of any region in the world. However, this improvement has yet to filter through to the public internet. Concerted action across Europe by all industry players is therefore required to ensure that IPv6 usage grows rapidly, with 'backbone' internet networks supporting both IPv4 and IPv6.

Meanwhile, in Japan, NTT (Nippon Telecom and Telegraph) already has a public IPv6 'backbone' and China plans to implement networks that are both IPv4 and IPv6 compatible before the Beijing Olympics. The US government is demanding IPv6 as a requirement for public procurement, but on the ground their internet technology remains similar to that in the EU.

The Commission called for Member States to put the European public sector at the forefront of deployment by migrating their own internet networks, public sector websites and eGovernment services to IPv6. The Commission also wants the most important websites of Europe to take the lead and aims to receive commitments from at least 100 top European website operators, such as broadcasters or online news services, before the end of 2008. The EU's own website "europa.eu", managed by the Commission, will be IPv6 accessible by 2010. To encourage the European IT industry to move forward, Member States should make the use of IPv6 a condition for a public procurement, (as the European Commission and the US Government have already done), raise awareness of businesses and organisations and help them with the transition.