APIPA – Automatic Private IP Addressing
For example, you get a new desktop computer and connect it directly to your modem. When you first access the internet through the modem the automatic private IP addressing protocol will automatically assign your computer an IP address. This IP address will range between 169.254.0.0 – 169.254.255.255.
These addresses are reserved by the internet assigned numbers authority for this specific purpose. The APIPA will use the address resolution protocol to make sure that the address it chooses is not already being used by another computer on the same network or any other network.
Once the computer has assigned itself an IP address it can function over the internet or over the LAN as any other computer would. Some internet providers have this on their systems as well. When you connect to one of their rented modems you are connected to their WAN (Wide area Netork).
Your computer when it tries to set its own IP address through their modem, the internet provider’s protocols will send back their IP address.
This will create a port for your computer. Your computer will have an IP address assigned to the internet provider, but have an individually assigned port number to be able to ensure that you receive the data that you request or is sent to your computer.