How to set up a direct Bluetooth connection in Windows XP?

Internet Connection Sharing (2)

20. Now the Internet connection has been shared and you are ready to share it every time the ICS host goes online. You can verify your ICS configuration by reviewing the Details tab on the left pane of Network Connections. The Bluetooth adapter on the ICS host (the second computer) is given a default gateway private IP address (192.168.0.1) while the adapter on the ICS client (the first computer) is assigned by the DHCP server (on the ICS host) another IP address (i.e. the first three decimals are 192.168.0 and the last decimal randomly from 2 to 254).

tshared dial-up Internet connection on the ICS host

Figure: Bluetooth adapter on the ICS host is assigned a gateway private IP address.
Look, the dial-up Internet connection is now shared.

Internet gateway on the ICS client-Network Connections

Figure: Bluetooth adapter on the ICS client is assigned a private IP address by the DHCP.
See that the ICS host appears as the Internet Gateway.

If one or both Bluetooth adapters still have IP addresses in this format 169.254.x.y (APIPA address) then you must repair the connection by right clicking the Bluetooth connection name (PAN/LAN) on Network Connections folder. Then select "Repair". To enable automatic IP address assignment, you must make sure the Bluetooth adapter's TCP/IP properties to obtain IP address and DNS address automatically which is the default configuration. Do this by right clicking your Bluetooth connection and select Properties. On the General tab, select Internet Protocol (TCP/IP) Properties.

Closing notes

On the next test, we plan to connect a PANU to another PANU and a PANU to a NAP. In the meantime, enjoy your Bluetooth network. It's a network in the real sense with the capability to run any kind of network functions (including playing a network game and streaming music or movie) but remember if you compare it to an Ethernet connection, it's slow.

This network is suitable for mobile professionals who often travel with their notebooks and meet clients or coworkers. In the meeting venue, when the need to collaborate and share some files arises, an ad hoc network over Bluetooth is an alternative solution if there is no network infrastructure available or simply for the convenience of being personal. For home networking, other established solutions such as Ethernet or Wi-Fi are more viable.

Since more portable and mobile devices (e.g. PDAs and smart phones) incorporate PAN services over time, personal area networking might be more commonplace. But the software setup must be more intuitive, with a few simple steps.

 
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