IPv4 link-local (“IPv4LL”) addresses

(For the moment, there may be some further information at: IPv4 automatic addressing: section on link-local addresses.)

Limitation: Non-forwarding

Although IPv4 link-local addresses may be easier to set up, such addresses are supposed to be non-routable. Devices can generally communicate with each other using IPv4 link-local addresses as long as they are all using IPv4 addresses and as long as there is no need for the traffic to be routed. Internet traffic requires routing. Devices that route traffic include routers, firewalls, DSL modems, and cable modems, so traffic that involves those devices might be traffic that is routed and so will not work.

There may be some exceptions that do foward such traffic: Microsoft Windows Internet Connection Sharing (“ICS”) is noted in appendix RFC 3927 (“Dynamic Configuration of IPv4 Link-Local Addresses): (Page 29) Appendix A.3 (“Microsoft Windows 98/98SE”) and notes similar behavior in Appendix A.4 (Microsoft “Windows XP, 2000, and ME”). However, such exceptions should be considered non-standard. If the goal is a simple network that follows standards and generally works well, then it is generally recommended to not try to work around such limitations.

Address range

The address range reserved for use by link-local addresses is 169.254.1.0 through 169.254.254.255.

The most authoritate reference for an assignment of reserved IPv4 addresses is IANA's IPv4 assignments page. That page shows that 169.254/16 address range is reserved for (IPv4) “Link Local” and references RFC 5735 (BCP 153: Special Use IPv4 Addresses (e.g. RFC 5735)). Page 3 of that RFC shows 169.254/16 is reserved for RFC 3927. However, RFC 3927 (“Dynamic Configuration of IPv4 Link-Local Addresses”) (page 10) Section 2.1 (“Link-Local Address Selection”) says “The first 256 and last 256 addresses in the 169.254/16 prefix are reserved for future use and MUST NOT be” used to select addresses from when following the standard for IPv4 link-local addresses.

Support
Microsoft Windows 98 and 98SE
RFC 3927 (“Dynamic Configuration of IPv4 Link-Local Addresses): (Page 29) Appendix A.3 (“Microsoft Windows 98/98SE”) documents these operating systems. This RFC notes, “Autoconfigured Windows 98/98SE systems check for the presence of a DHCP server every five minutes.” Continuing to try to get a DHCP lease may initially sound nice, however, the text goes on to say, “If Windows 98/98SE is successful at obtaining a new lease, it drops all existing connections without warning. This may cause users to lose sessions in progress.”