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The number of class A and B addresses that are available for allocation to new networks has been steadily diminishing over time and is now virtually exhausted. In the late 1980s nearly all of the new networks assigned were class B, and in 1990 it became apparent that class B networks would run out by 1994 if the trend continued. Class C addresses (with a maximum of 254 hosts) were hardly being used because they were too small to be useful for most organizations, while class B networks were too large to be densely populated by any but the largest organizations.
The network number allocation policies of the InterNIC were changed in 1990, to avert the class B address exhaustion. If you apply for a network number, you are likely to be assigned a set of several contiguous class C network addresses or a single subnetted class C network address, rather than a single class B address. Which of these you receive will depend on the number of hosts that will exist on your network(s).
Where an organization has a range of class C network numbers, the range provided is assigned as a bit-wise contiguous range of network numbers, and the number of networks in the range is a power of 2. All IP addresses in the range have a common prefix, and every address with that prefix is within the range. For example, an organization requiring about 1000 IP addresses would be assigned four class C network numbers. A range of addresses satisfying these rules would be 195.34.136 through 195.34.139, in which case the range would consist of all the IP addresses with the 22-bit prefix 195.34.136. This is represented by the notation 195.34.136/22 (with the trailing zeros removed). ``Subnetting with CIDR'' illustrates this scheme.
Subnetting with CIDR
However, the problem with this situation is that each network has to be routed separately as standard IP routing only understands class A, B and C network addresses. The result of using a range of class C addresses is a routing table explosion problem: a class B network of 3000 hosts requires one routing table entry, whereas the same network if it was addressed as a range of class C networks would require 16 entries.
To overcome the routing table explosion problem, a scheme known as Classless Interdomain Routing (CIDR or ``supernetting'') is used to implement address assignment. CIDR does not route according to the class of the network number, but instead routes according to the high order bits of the IP address (the ``IP prefix''). The process of combining multiple networks into a single entry is called supernetting because routing is based on network masks that are shorter than the natural network mask of an IP address.
The details of CIDR may be found in RFC 1518 and RFC 1519. As the main purpose of CIDR is to reduce the size of the routing tables for the Internet, these documents will not usually be of interest to you unless you are a service provider or you maintain Internet routing tables on your system.