Limited or no connectivity error in Windows XP with DSL or Cable Modem Connection

August 16, 2007 by Mark Marucot 

Today I was alarmed that the the network’s Internet Connection Sharing is not working and all of the computers in the network cannot connect to the internet. When I checked the status of the Local Area Network of the server, the error is “Limited or no connectivity: The connection has limited or no connectivity. You might not be able to access the Internet or some network resources.”. I tried to setup the internet connection sharing server using the Network Setup Wizard.


After doing the reconfiguration using the Network Setup Wizard, the computers still can’t connect to the internet. Below are the causes of this problem1.

When a Point-to-Point over Ethernet (PPPoE) connection is created in Windows XP, Windows XP creates both a local connection and a broadband connection. Because Windows XP creates the two connections by design, and because the Automatic Private Internet Protocol Addressing (APIPA) address is expected, Windows XP should not indicate that the local connection has limited connectivity.
However, if your computer is not configured as a PPPoE client computer and the computer obtains an APIPA address, that is a situation where limited connectivity exists. Therefore, Windows XP should indicate that the local connection has limited connectivity. For example, this might occur if a Dynamic Host Configuration Protocol (DHCP) server is not available on your network.
You may also receive this message when one or more of the following conditions are true:
1. Your DHCP server is down on a hardwired network. On a home network, this server could be your Internet service provider’s server, your personal router, or your DHCP provider.
2. Your DHCP server is down on a wireless network. On a home network, this server could be your ISP’s server, your personal router, or your DHCP provider.
3. On a wireless network, this message may appear when you use an incorrect Wired Equivalent Privacy (WEP) key or if you do not have a WEP key.
4. You may not have an IP address, or your TCP/IP settings may be corrupted.
5. You may be experiencing other issues that are related to your Internet connection.

How do I know if my system is affected by this bug?
If you have installed Windows XP Service Pack 2 and are experiencing any of the following symptoms, this bug is affecting your system.

  • After installing Windows XP SP2, your network connection reports a problem with “Limited or No Connectivity”
  • You have trouble connecting to the Internet or your local area network after installing Windows XP Service Pack 2.
  • Your network connection gets stuck “Acquiring IP Address”

What Steps Can I Take to Fix This Problem?
If you are receiving this error, you should run the Microsoft patch (KB884020) for it. Follow the instructions below to do this. Alternatively, you can download a zip file with the patch, registry file, and instructions by clicking here2.

  1. Download the patch from Microsoft’s site
  2. Run the update to install it
  3. Run this short Registry fix to complete the update. Type the following lines in Notepad and save the file as FixReg.reg on your desktop, then double click on it to install into your registry.
    CODE:
    1. Windows Registry Editor Version 5.00
    2. [HKEY_LOCAL_MACHINE\SYSTEM\CurrentControlSet\Services\IPSec]
    3. “AssumeUDPEncapsulationContextOnSendRule”=dword:00000002

  4. Reboot your computer

If you experience the error message again, reboot your computer first. In most cases this will solve many connectivity issues that are not associated with this SP2 bug.

After I tried it, I entered the server’s IP address manually and the computer’s can connect to the internet.

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