Technical and Economic Assessment of
Internet Protocol, Version 6 (IPv6)

National Telecommunications and Information Administration
National Institute of Standards and Technology

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The transition to IPv6 will likely be a long process and may never attain complete penetration before the protocol becomes obsolete. Some experts predict that in 20 years most Internet users will be using IPv6, but that pockets of IPv4 will still exist as parts of legacy systems. [ 203 ] Some firms may not find it cost-effective to convert large segments of their existing systems. Hardware and software interoperability is, therefore, a key requirement for interconnecting networks across heterogeneous environments and thus will be a major consideration in an enterprise’s decision to adopt IPv6.

The developers of IPv6 recognize the prospect of a lengthy transition period from IPv4 to the new protocol and have attempted to accommodate that fact. [ 204] They have created several mechanisms (e.g., dual-stack, tunneling, and translation) to enable networks using either or both versions of IP to communicate with each other. Those mechanisms are intended to eliminate deployment dependencies between and among vendors and networks and thereby to allow enterprises to decide when to adopt IPv6, if at all, based upon their own needs and goals, without regard to the decisions of other enterprises. [ 205 ] Interoperability will likely not be completely seamless in practice. Firms will have to address a number of issues in order to minimize interoperability problems during the transition from IPv4 to IPv6.

4.1 Interoperability Between IPv6 Hardware and Software Applications

Because IPv6 is an industry standard, hardware and software applications produced by different vendors in accordance with that standard should be interoperable. Put another way, there is nothing inherent in the protocol that should create an interoperability barrier. In general, experts believe that with international cooperation most implementation differences can be avoided, and in the long run, interoperability problems will be minimal because producers will quickly adjust to avoid any productivity losses from interoperability problems. To date, experience shows that no obvious problems arise in implementing the IETF standards for IPv6 because major operating system and router vendors already have implemented and periodically demonstrated interoperability. [ 206 ]

However, some experts believe that, in the short run, differences in the implementation of IPv6 could potentially lead to interoperability problems in some areas. [ 207 ] For example, the protocol allows proprietary functions to be incorporated in optional headers that could lead to incompatibility. Conformance questions, therefore, will need to be addressed. Experts believe that additional test beds and activities (such as testing activities currently being conducted as part of the Moonv6 test bed) are needed. In the absence of such action, future IPv6 products developed in one company might not be able to interact with those developed in another under the same general standards. [ 208 ] For these reasons, organizations should emphasize interoperability in any transition plan to minimize costs and efficiency losses.

4.2 Interoperability Between IPv4 and IPv6 Hardware and Software Applications

Interaction or intercommunication between IPv6-only and IPv4-only hardware and software applications creates potential interoperability problems. Before a host on one network can communicate with a host on another network, the originating host will first have to determine which protocol(s) the receiving host supports and then make the necessary arrangements to send a recognizable message. While to some extent these issues can be addressed through proper configuration and use of DNS entries and responses (e.g., identifying which hosts support IPv6, IPv4, and dual stacks), complexities in determining viable combinations of application, network protocol and transition mechanisms to use for a specific instance of communication still remain. While careful, robust application designs can resolve many of these issues, this process could increase delays or decrease network efficiency. Both networks could mitigate these interoperability problems by deploying dual-stack capability. The IETF has reported, however, that dual-stack equipment does not eliminate interoperability concerns. If an IPv6 node is placed in a mixed IPv6/IPv4 environment, it may encounter problems that lead to connection delays, poor connectivity, and network insecurity. [ 209 ]

Tunneling can facilitate interoperability between IPv6 and IPv4 networks, but it also increases packet overhead. Although that would not create undue hardship for network routers, it would increase processing time and network overhead costs. [ 210 ] The interoperability benefits likely outweigh the additional costs, however. Most importantly, interoperability mechanisms, such as tunneling, allow an enterprise to transition to IPv6 at its own pace, lowering hardware and software costs, and minimizing the impact on existing operations. [ 211 ] Nevertheless, a company must keep the costs of interoperability in mind, as it decides when and how to deploy IPv6.

4.3 International Interoperability

Interoperability issues also have an international dimension, including different levels of conformance and implementation strategies across countries and regions and the legal and privacy implications of encryption restrictions across countries. International interoperability issues associated with dual IPv4 and IPv6 network capabilities should be minimal because IPv4 is well-established globally and can be used as a network foundation; interoperability between IPv6 applications needs to be tested more extensively in an international context, however. Of particular significance to an international discussion is the impact of interoperability, or a lack thereof, on U.S. competitiveness both in Internet hardware and software and in other industries.

4.3.1 Interoperability Implications for U.S. Competitiveness in Internet Hardware and Software Markets

International interoperability problems generated by local standardization tactics of individual countries can create market barriers for U.S. hardware and software suppliers by raising the cost for U.S. companies to compete in international markets. As a result, at least one commenter suggested that U.S. government agencies must be prepared to defend the interests of U.S. firms by ensuring that IPv6 or IPv6-related standards established or implemented by other nations are open, transparent, and not anticompetitive. [ 212 ]

Even in a world where the international community cooperates to minimize interoperability problems, parallel ongoing development activities in Asia, Europe, and America will inevitably lead to interoperability issues, and companies that are active early in the process will have the opportunity to influence solutions and gain valuable experience. For example, to compete effectively in global markets for Internet router equipment, U.S. suppliers will need to provide leading-edge support for IPv6 both domestically and internationally. The development of the needed IPv6 capabilities may be constrained, however, if U.S. networks and services remain predominately IPv4-based.

One commenter suggested that to compete in a global market with interoperability issues, IPv6 deployment should be encouraged domestically so that American vendors can move up the learning curve more quickly and be competitive in international markets where IPv6 will be even more heavily (or more obviously) emphasized. [ 213 ] In other words, adoption of standards as a means of reducing interoperability problems, coupled with potential learning economies, are possible rationales for a more rapid transition to IPv6 in the United States.

4.3.2 Implications for U.S. Competitiveness of Market Timing Decisions

For U.S. vendors, the costs of developing and deploying products and services could be lower in a scenario where the early deployment issues are encountered and resolved in foreign countries. [ 214 ] Furthermore, continued reliance on an embedded base of IPv4 equipment should not preclude the United States from realizing the benefits of foreign IPv6 deployment, as long as a means exists to connect embedded IPv4 networks and applications to newly deployed IPv6 networks and applications. The developers of IPv6 have attempted to accomplish that goal by making IPv6 backwardly compatible with IPv4 via interoperability mechanisms.

However, some commenters indicated that an embedded base of IPv4 equipment and applications could function as a barrier that would isolate the United States from the benefits of foreign IPv6 deployments and/or test beds. [ 215 ] Forward-thinking entrepreneurs might not be able to develop new services based on IPv6 or may simply participate in the new markets emerging in other areas.

With respect to domestic innovation incentives, small and medium U.S. businesses have limited resources. Thus, if they encounter high costs due to partial IPv6 deployment domestically, or if foreign competition benefiting from learning economies elsewhere in the world penetrates the U.S. market, barriers to domestic innovation efforts could be significant. Incomplete deployment also may send inaccurate market signals and result in premature introduction of IPv6 products, which could be damaging to small and medium firms. [ 216 ]

Finally, in the transition to IPv6, one of the most important interoperability objectives is to ensure the security and stability of IP networks around the world. Therefore, any transition to IPv6 should move forward in a cautious and technology-sensitive way to minimize adverse effects for users. International standards development and coordination bodies should be used to vet technical issues pertaining to IPv6 migration and the coordination of interoperability issues.

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[203] March Streck Interview, supra note 82. See also “Domain addresses limitless, expert says,” Toronto Star, July 21, 2004, at E4 (Vint Cerf suggests that IPv6 will run parallel with IPv4 for about 20 years).

[204] See, e.g., Hain Comments at 10, 12.

[205] See id. at 10.

[206] See Cisco Comments at 17.

[207] See Hain Comments at 19; Lockheed Comments at 4-5; Motorola Comments at 9-10. Some commenters expressed the concern that flexibility in how IPsec is implemented could limit its effectiveness. See Hain Comments at 3-4; NAv6TF Comments at 35-36.

[208] See NAv6TF Comments at 24.

[209] See Roy, Durand, and Paugh, supra note 199, at 1.

[210] See Hain Comments at 10 (tunneling increases overhead by 10 percent).

[211] See Cisco Comments at 12-13.

[212] See Public Meeting Transcript, supra note 41, at 136 (remarks of Rick White, TechNet).

[213] See Alcatel Comments at 2.

[214] See BellSouth Comments at 6.

[215] See, e.g., Alcatel Comments at 2, 4-5.

[216] See Cisco Comments at 16.

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