In IP networks, as well as in telephone networks, there is always a trade-off between the ownership of an address space and the routing efficiency of a global network.
If the address space of an organization is independent of the provider, often called portable addresses, then the provider has to announce that address space to the Internet. If all organizations own their address space, then the number of route entries in the global routing table is equal to the number of organizations, which may be a very large number in the long run. This is generally considered as non-scalable or at least a difficult engineering challenge.
The way to decrease this global routing problem is to keep the ownership of the organization's address space in the hands of the provider. In other words, an organization receives its address space from its provider. If the organization changes provider, then it receives a new address space from the new provider and the former provider reassigns the old address space to other customers. There are at least two implications: the minimization of the global routing table since the number of route entries would be somewhat proportional to the number of providers, and so orders of magnitude smaller than if all organizations owned their address space; the trouble and inconvenience of renumbering the network of the organization when it changes provider.
Until the mid-1990s, the IPv4 addresses were allocated to organizations so they owned ...