The European Commission issued a stark warning today that there will soon be no room left in cyberspace.
The Internet has been such a success that the four thousand million user "addresses"available when it was conceived in the 70s will be exhausted by 2005, the commission said.
Now EU governments must gear up for the next electronic advances or lose out to global competition, warned industry commissioner Mr Erkki Liikanen.
Every computer connected to the Internet has an Internet Protocol (IP) address _ the IPv4.
And experts who thought four thousand million such addresses would be enough for decades to come have been proved wrong.
The fact that three-quarters of all Internet addresses are assigned to American organisations has made matters worse for Europe.
Two US universities - Stanford and the Massachussets Institute of Technology - each have more addresses than China.
The answer, Mr Liikanen said today, is IPv6 - bigger and better than IPv4 and capable of coping with future developments, including machines which "talk" to each other and their users, such as fridges that can warn householders they are running out of food and order it themselves.
The capabilities of IPv6 are mind-boggling _ just as those of IPv4 seemed thirty years ago. IPv6, said the Commission, is so powerful it can create more addresses than there are grains of sand on the world's beaches.
"Without the IPv6 upgrade, the Internet will inevitably degrade under the mounting pressure of new users and growing traffic, while new innovations critical to European competitiveness will be stifled", said Mr Liikanen.
The problem will be studied by EU leaders at a summit in Barcelona next month.
AP