In Europe, the organization called RIPE is responsible for IP address allocation. The process is nontrivial, but in essence, what happens is this:
If you’re an ISP, you can reserve a block of IP addresses, even a a huge block - perhaps 128 class C networks. This is a tricky process - you have to convince RIPE that you will indeed need those IP addresses, specify how many you need now, in a year, in two years etc. Actually, just having the IP addresses isn’t enough - to communicate on the Internet backbone, you have to run a routing protocol called BGP, and this protocol is based on a concept called Autonomous Systems, so you’ll need an AS-number as well.
The addresses will be reserved to your AS, but are not yet allocated. When you start building your network and getting customers, you allocate addresses from your reserved block. Allocations have to be approved by RIPE. If you’re a good boy and convince RIPE that you’re not wasting addresses, you might eventually earn the right to allocate smaller networks without prior notification - but you still have to do the paperwork (well, it’s electronic now) for each network, and RIPE can still overrule your decisions, perform audits etc.
Right - when your ISP has built a network, established upstream connections and established BGP routing to the rest of the world, in effect telling the rest of the Internet that “we’ll handle traffic to those addresses”, it’s time to attach customers, get some traffic and write some bills. A company customer might be allocated (for instance) 32 IP addresses from your reserved address space.
These IP addresses still belong to the ISP - if the customer moves to another ISP, he’ll have to stop using the addresses.
This is done to minimize the size of the address tables in the backbone routers (although the tables are certainly big enough).
So - RIPE has registered that the customer is currently using the addresses, and that your ISP is responsible for handling the traffic. Internally, you make sure that your routers know where to lead the traffic. Externally, you announce the addresses to the world at large via BGP.
And that’s more or less it. Of course, the customer will want DNS entries etc., but that’s another story.
Did that make sense at all ?
S. Norman